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CHANDIGARH CONSUMER DISPUTES REDRESSAL COMMISSION
Pritam Pal, President and Neena Sandhu, Member
LUXMI FINANCIAL SERVICES - Appellant
Versus
BHUPINDER SINGH AND ANR. - Respondents
Appeal Case No. 448 of 2009
Decided on : 21-07-2010
Mr. A.K. Sapehia, Advocate, for the Appellant; Mr. S.S. Chadha, Advocate, Mr. Sandeep Suri, Advocate, for the Respondent
The duty of financial service providers to provide accurate information and the consequences of unfair trade practices under the Consumer Protection Act, 1986.
Headnote:
Consumer Complaint - Loan Disbursement - Consumer Protection Act, 1986, Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 12, Section 14, Section 21, Section 27 - The court discussed the loan disbursement process, the obligations of the financial service provider, and the consumer's rights under the Consumer Protection Act, 1986. The court emphasized the duty of the financial service provider to provide accurate information and the consequences of unfair trade practices. The court's decision was influenced by the interpretation of the evidence presented and the application of the legal provisions to protect the consumer's rights.
Fact of the Case:
The appellant approached the complainant with a proposal of loan foreclosure and loan on used vehicles. The appellant released only a portion of the sanctioned loan amount, causing the complainant to face financial difficulties and harassment from recovery agents. The complainant filed a complaint alleging deficiency in service and unfair trade practices by the appellants.
Finding of the Court:
The court found that the complaint was not time-barred and that the dispute could be settled summarily. It also found that the appellant had not provided sufficient evidence to support their claims, and the compensation awarded to the complainant was justified but reduced the amounts of compensation and penalty.
Issues: The issues involved the time-barred nature of the complaint, the sufficiency of evidence, and the adequacy of the compensation awarded.
Ratio Decidendi: The court held that the complaint was not time-barred and could be settled summarily. It also emphasized the importance of providing sufficient evidence to support claims and justified the compensation awarded to the complainant.
Final Decision: The appeal was partly allowed, and the parties were left to bear their own costs.
ORDER
Pritam Pal, President - This appeal by M/s. Luxmi Financial Services - opposite party No. 2 is directed against the order dated 17.7.2009 passed by District Consumer Forum-I, U.T. Chandigarh whereby complaint bearing No. 1518 of 2008 filed by Bhupinder Singh, respondent No. 1/complainant was allowed in the following terms:
"OP-1 is directed to overhaul the account of the complainant by treating the loan amount as Rs. 4,50,000 paid to him on different dates. They shall also redraw the schedule of payment whereby the amount of instalment paid by the complainant would be decreased out of his total liability on each date of payment. The amount which has been received by OP-1 in excess shall be repaid to him along with a compensation of Rs. one lac for adopting this unfair trade practice and for being deficient in rendering proper service as referred to above. OP-2 shall also pay to the complainant Rs. one lac as penalty for causing him harassment and adopting unfair trade practice. The total amount shall be paid by both the OPs along with litigation costs of Rs. 10,000 within thirty days from the date of receipt of copy of the order failing which they would be liable to pay the same along with penal interest @ 12% per annum since the filing of the present complaint i.e. 19.12.2008 till the amount is actually paid to the complainant. The OP-1 would be free to recover the amount from OP-2 and/or from its officers who committed the default."
2. The parties hereinafter shall be referred to as per their status before the District Consumer Forum.
3. In nutshell, the facts as set out in the complaint are that in the month of December 2005, appellant/OP No. 2 approached the Complainant with a proposal of foreclosure of loan account/hypothecation of his vehicles i.e. Toyota Qualis bearing Regn. No. CH-03-5984 hypothecated with Karnataka Bank, Phase 3B-II Mohali and Honda City bearing Regn. No. Punjab-65-C-3916 hypothecated with Kotak Mahindra Prime Ltd. and further for getting loan on used vehicles from OP No. 1. In December 2005, he entered into loan agreements with OP No. 1 for his aforesaid vehicles through OP No. 2. Thereafter, OP No. 2 informed him that a loan of Rs. 8,22,000 was sanctioned for aforementioned used vehicles (i.e. Rs. 5,50,000 for Honda City and Rs. 2,72,000 for Toyota Qualis), with an assurance that the loan amount would be given as and when the same was disbursed by OP No. 1. Thereafter, OP No. 2 released the payment of Rs. 4,50,000 in total (i.e. Rs. 2,72,000 qua loan A/c of Toyota Qualis and Rs. 1,78,000 qua loan A/c of Honda City car) by way of three Cheques i.e. for Rs. 3.00 lacs, Rs. 1.40 lacs and Rs. 10,000 respectively. It was told by OP No. 2 that the remaining amount of Rs. 3.72 lacs had not been disbursed by OP No. 1 and the same would be released as soon as it was disbursed by OP No. 1. It was alleged that from the amount of loan released by OP No. 2, the Complainant got loan/hypothecation agreement qua one vehicle i.e. Toyota Qualis foreclosed from Karnataka Bank. But since the total amount of loan qua Honda City was not released, he was not able to get his loan/hypothecation agreement foreclosed from M/s. Kotak Mahindra Prime Ltd., due to which he had to pay the instalments to OP No. 1 @ Rs. 12,665 per month on the total loan amount qua A/c of Honda City car (i.e. including the amount of Rs. 3.72 lacs which was not released by the OPs) as well as to M/s. Kotak Mahindra Prime Ltd. @ Rs. 10,900 per month for the same vehicle i.e. Honda City. He paid instalments to M/s. Kotak Mahindra Prime up to April 2006 and thereafter, got the hypothecation/loan agreement foreclosed by paying Rs. 3,70,500 to M/s. Kotak Mahindra Prime from his own pocket. Thereafter, he approached OP No. 2 number of times and asked for release of remaining amount i.e. Rs. 3.72 lacs and for the details of his loan accounts but no plausible justification was ever given by OP No. 2. Complainant then approached OP No. 1 in the month of Apri
