Tata Finance Limited Vs. Panchanand Ojha - Court Judgment

D.P.S. Choudhary, President:

1. This appeal has been preferred by the O.P. against the order dated 29.7.2003 passed by District Forum, Bhojpur in Complaint Case No. 39/2003 whereby and whereunder the District Forum has directed the appellant to pay alleged excess money realized amount to Rs. 58,649/- to the complainant-respondent and also awarded a sum of Rs. 5,000/- by way of compensation and litigation cost.

2. The brief fact of the case is that complainant alleged that he had purchased chassis of mini bus on hire purchase basis from the O.P.-appellant and paid certain initial amount as per agreement. He was to pay Rs. 11,800/- in 36 months as hire purchase charge ending on 14.3.2003. The mini bus was purchased for self-employment as the complainant is an educated unemployed. The bus was plying in between Karnampur to Ara. It is further case that due to transport strike between July and September, 2002 he defaulted in payment of the monthly instalment and the vehicle was repossessed by the financier-appellant on 20.11.2002 and released on 21.12.2002 on the assurance that complainant agreed to pay and liquidate the entire amount along with interest. The appellant realised Rs. 58,643/- in excess which the complainant had paid because the amount was calculated on monthly basis to be paid in 36 months ending on 14.3.2003 but the entire amount including the above amount which includes interest till 14.3.2003 was realized by the appellant on 21.12.2002. It is also the case of the complainant that appellant-company has realized the insurance money to the tune of Rs. 24,800/- but paid to the Insurance Company only Rs. 17,100/- and thus saved Rs. 6,900/- on that score but neither it was refunded back to the complainant nor adjusted towards the loan amount. On these grounds the complainant alleged deficiency in service against the appellant and prayed for payment of Rs. 58,649/- excess realized by the appellant besides compensation for deficiency in service fore not issuing sale letters to the complainant and prayed for litigation cost as well.

3. The O.P.-Finance Company appeared and filed written statement and contested the claim made by the complainant. Its main contention was that case was not maintainable before the District Forum. There was arbitration clause in the agreement between the parties according to which all disputes have to be settled by arbitration at Mumbai. It was also agreed between the parties that all disputes shall be settled at Mumbai alone. There was hire purchase agreement in-between the parties and as such the complainant is not a consumer. The vehicle was used for commercial purpose, hence complaint is not maintainable on these grounds. The O.P. also disputed the accounts as mentioned by the complainant. Its contention was that agreement value was Rs. 4,14,851/- payable in 35 instalments and the rate of interest was 11.50% and not 13%. The balance amount of the insurance paid by the complainant was adjusted in the dues payable by the complainant to the O.P. The vehicle was repossessed by the O.P. on 2.11.2002. The O.P. admitted that complainant has paid all the amount due to the O.P. under hire purchase agreement but denied that any excess amount was realized from the complainant. The O.P. still ready to issue the sale letter but complainant has never approached for the same.

4. After hearing the parties and considering these facts on record in its detailed order the District Forum negatived the contention of the O.P. that complaint was not maintainable before the District Forum on the grounds: (i) there was arbitration clause in the agreement in-between the parties; (ii) all dispute is to be settled at Mumbai; (iii) the vehicle was used for commercial purpose; (iv) the complainant was not consumer as the purchase of the vehicle was on hire purchase agreement. On the admitted fact the District Forum held that complainant was required to clear the loan by 14.3.2003 under the hire purchase agreement but by the seizure of the bus by the O.P. the complainant was forced to make the entire payment by 20.12.2002 about three months before the agreed date. This fact is not in dispute. The District Forum held that the instalment was fixed after adding interest on the entire amount till the date 14.3.2003 but the complainant has paid the entire amount three months earlier. Therefore, the O.P. has realized excess amount towards interest on the entire amount and accordingly directed to pay Rs. 58,649/- which includes Rs. 6,900/- excess amount realized towards insurance of the vehicle by the O.P.

5. In appeal it was submitted on behalf of the appellant that complainant has not given in detail calculation to show how much excess amount was charged by the appellant but in spite of that the District Forum accepted the contention of the complainant in toto and order for refund thereof. On this account the order is bad both in fact as well as in law. It was for the complainant to produce the document of agreement arrived at between the parties but the District Forum held that it was for the O.P.-appellant to produce and non-production gives to adverse inference. This is against the basic principle of law that all the papers and documents are to be annexed along with the complaint petition by the complainant. It was also argued on behalf of the appellant that taking a bus on hire purchase did not amount to availing service and entitling the complainant to file complaint before the Consumer Forum. The District Forum has wrongly held that in spite of arbitration clause the complaint was maintainable. Similarly the District Forum wrongly did not accept the contention of the O.P. that all dispute between the parties was to be adjudicated at Mumbai Court only and not a Consumer Court, Ara. The O.P. has legally and rightly exercised its power and repossessed the bus on the ground of admitted default in payment of monthly hire charge. The agreement in-between the parties to pay the fixed amount as mentioned in the agreement deed, therefore, payment of the entire amount three months before does not amount that O.P. has realized excess amount from the complainant.

6. The respondent-complainant filed rejoinder and it was submitted on his behalf that it is admitted fact that bus was purchased on hire purchase agreement for the self- employment of the complainant who is educated unemployed. The payment of entire amount as per agreement was made by the complainant three months before the date of payment as mentioned in the agreement deed is not in dispute. The rate of interest was calculated at 13% on the entire amount till the date of payment. Therefore, the payment made three months before and realizing the entire amount amounts to excess realization because it includes the interest upto the last date of payment, i.e., 14.3.2003. The District Forum has rightly held that Consumer Court has jurisdiction to try this case and arbitration clause does not ouster its jurisdiction besides there was no mandatory clause that all disputes in-between the parties shall be decided within the jurisdiction at Mumbai only.

7. We have considered the submissions made on behalf of the parties and scrutinized the materials available on record and also carefully gone through the impugned order of the District Forum. The complainant was the consumer because under the definition Clause 2(1)(d) Sub-clause-II of the Consumer Protection Act hirer of any service also becomes consumer. Sub-clause (O) to the Section 2 of the Consumer Protection Act includes financing service. Therefore, the District Forum has rightly held that complainant was a consumer because admittedly the entire amount has been paid to the O.P. before the filing of the complaint and the complainant has become absolute owner of the bus after liquidation of the loan amount. The case law relied on behalf of the O.P. before the District Forum in Tata Finance Ltd. v. Morjan Hossain and Others (supra) has been distinguished by the District Forum that case was related with hire purchase agreement and the case was filed when the loan amount was still due and in this context the National Commission has held that parties to agreement where hire purchase is applicable is not a consumer.

8. The appellant has challenged jurisdiction of the Consumer Forum on the ground that in the agreement between the parties there was clause that Mumbai Court alone shall have exclusive jurisdiction in respect of dispute between the parties and secondly that there was arbitration clause whereby all the dispute is to be settled by arbitration at Mumbai. It is settled law by now that existence of arbitration clause in the agreement between the parties to dispute will not bar the Consumer Redressal Agency for redressing dispute of deficiency in service. The District Forum has placed reliance on a decision of the Honble Supreme Court in the case of Sky Pack Couriers v. Tata Commercial Ltd. (supra). In view of these facts we are of the view that District Forum has rightly held that existence of arbitration clause is not barred the jurisdiction of the Consumer Redressal Forum. It is also settled law that a clause in the agreement in between the parties confer jurisdiction to a particular Court will not ipso facto constitute bar to any other Court. It is settled law that ouster of jurisdiction of other Court must be unambiguous. The ouster clause must contain the word only which is not pleading of the appellant in the instant case. The District Forum has rightly held that cause of action in this case shall be guided under the provision of Section 11(2)(c) of the Consumer Protection Act because the bus was seized in the jurisdiction of the Ara Forum and the entire payment of the loan amount was also made within the jurisdiction of Ara Forum.

9. We also do not find much substance in this contention of the appellant that the bus was being used for commercial purpose, hence the complaint was not maintainable. It is the consistent case of the complainant that he was unemployed educated youth and for the purpose of self-employment he purchased the bus on hire purchase system. To this effect and affidavit has also been filed by the complainant. This has not been denied by the appellant. Since the bus was purchased for self-employment, therefore, the complainant comes under the definition of consumer under the Consumer Protection Act.

10. From the facts mentioned above it is admitted case that complainant was required to clear the loan by 14.3.2003 but with the seizure of the bus the complainant was forced to make the entire payment by 20.12.2002, i.e., about three months prior to the agreed date. The calculation of the amount as per agreement with interest was made till the date of payment, i.e., 14.3.2003. It was the duty of the appellant to deduct the amount of interest of three months on the loan amount because the entire amount was paid on 20.12.2002. It is not the case of the appellant that the interest was not calculated till 14.3.2003. Even the details of account submitted on behalf of the appellant does not deny this fact. In the facts and circumstances we are of the view that District Forum has rightly allowed the claim of the complainant amounting to Rs. 58,649/- which includes Rs. 6,900/- as excess amount realized towards insurance money from the complainant. We do not find any irregularity in this part of the impugned order. The District Forum has further allowed a consolidated amount of Rs. 5,000/- by way of compensation and litigation cost. In our view the District Forum has awarded 9% interest on Rs. 58,649/- to be paid to the complainant from 21.12.2002 till the date of payment, therefore, a further award of compensation and litigation cost is not justified. This part of the order, i.e. payment of Rs. 5,000/- by the appellant to the complainant is set aside.

11. After considering the entire facts and circumstances of the case we are of the view that there is no merit in this appeal. In the result, the appeal is allowed. The impugned order is hereby confirmed with the above modification in the operative part of the order, i.e., payment of Rs. 5,000/- as compensation and litigation cost. However, there shall be no order as to cost. The appellant is directed to pay the above amount with 9% interest from 21.12.2003 till the date of payment within three months from the date of this order.

Appeal disposed of.