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GUJARAT STATE CONSUMER DISPUTES REDRESSAL COMMISSION, AHMEDABAD
I.D. Patel, Judicial Member and A.C. Raval, Member
H.D.B Financial Services Ltd. – Appellants
versus
Vishnubhai Motibhai Patel – Opponent
Appeal No.385 of 2018
Decided on 9.8.2023
Counsel for the Parties:
For the Appellants: Mr. K.R. Patel L.A.
For the Opponent: Mr. S.G. Shah L.A.
IMPORTANT POINT
Discharge of Loan – Bank cannot retain the title deeds or proceed with the properties which were offered as security in relation to an independent loan transaction, even after the borrower discharged the entire liability of borrower in connection with the loan which is secured by deposit of title deeds.
Headnote:
Consumer Protection Act, 1986 – Section 15[Consumer Protection Act, 2019 – Section 41] – Appeal – Services – Hire Purchase – Closure of Loan – Withholding of Originals – Deficiency of Service attributed – In the gist of the pending proceedings, the appellant – financial company cannot withhold the NOC of the vehicle loan of the complainant. The complainant has paid his loan as per the repayment schedule, hence, is entitled to the NOC on completion of the loan schedule – Bank cannot retain the title deeds or proceed with the properties which were offered as security in relation to an independent loan transaction, even after the borrower discharged the entire liability of borrower in connection with the loan which is secured by deposit of title deeds – Appeal dismissed, order confirmed. [Paras 5 to 7].
Result: Appeal dismissed.
JUDGMENT
A.C. Raval, Member—The appellants – original respondents have filed this appeal under section 15 of the consumer protection Act being aggrieved by and dissatisfied with the order dated 31.01.2018 passed by the learned District Consumer Disputes Redressal Forum (Additional), Surat (hereinafter referred to as “learned District Forum”) in Consumer Complaint No.266 of 2017.
2. Heard learned advocate Mr. K.R. Patel for the appellants – original respondents and also heard learned advocate Mr. S.G. Shah for the opponent – original complainant.
Case of the complainant:
3. It is the case of the complainant that the complainant had purchased one transport vehicle i.e., TATA Hyva Tipper bearing registration no.GJ-05-AV-6536 in the year 2012 and availed the loan of Rs.20,75,000/- from the opponent – financial company and hypothecated the vehicle with the opponent – financial company. As per the payment schedule, the complainant has to pay loan amount in total 42 installments of Rs.57,430/-. The complainant paid the entire amount on 18.08.2016 and requested to give No Objection Certificate (NOC) letter. The NOC was not given by the opponent, hence, the complainant gave legal notice on 09.09.2016, which was served upon the opponent – financial company on 12.09.2016. The legal notice was neither replied nor complied with. Therefore, the complainant preferred Consumer Case No.266 of 2017 before the learned District Consumer Disputes Redressal Forum (Additional), Surat, which was partly allowed vide order dated 31.01.2018.
Arguments of the Appellants:
4. The learned advocate appearing for the appellants – financial company argued that the learned District Forum has erroneously allowed the complaint by erroneously coming to the conclusion that as the documents produced by the complainant are not disputed by the appellants – financial company without appreciating the fact of the appellants – financial company that the appellants – financial company was not heard at all and the matter was proceeded ex-parte. The conduct of the appellants – financial company is as per the RBI guidelines. The complainant had signed the loan agreement, hence, the terms and conditions of the loan agreement are binding to the complainant. the loan taken by the complainant is fully paid. That fact is not in dispute, but the loan by another person namely Jitendrakumar Patel, where the complainant was a guarantor has not paid the loan and the execution is filed against the original borrower – Jitendrakumar Patel (deceased) and Vishnubhai Patel i.e. the present complainant. Hence, the NOC is withheld by the bank as per the clause-20 of the loan agreement. Clause-20 is about the set-off and lien. The bank is having the general lien over the properties of the complainant hypothecated and lying with the bank, hence, under the provisions of general lien, the complainant is not entitled to get the NOC for his paid-up loan. The order passed by the learned District Forum is against the principles of natural justice and against the facts and law, hence, the same is required to be quashed and set aside and the present appeal may be allowed.
Arguments of the Opponent:
5. The advocate appearing for the opponent argued that the appellants – financial company has chosen not to appear before the learned District Forum though the notice was served, hence, there is no infirmity in proceeding ex-parte in the complaint. The complaint has paid-up his loan as per the loan schedule on 18.08.2016, hence, is entitled to the NOC from the appellants – financial company. The appellants – bank cannot withhold the NOC against the paid-up loan taking shelter of the clause-20 of the loan agreement. The appellants – financial company has produced the loan agreement of Jitendrakumar Patel alongwith the documents attached with the said loan agreement and two proposal forms, one of the Jitendrakumar Patel and another of the complainant. These documents are produced without any application for fil
