CC.No.73/2009

Dated of this 10th day of November 2009

Present:

Sri.K.M.Thammaiah, President

Sri.D.Shivamahadevaiah Member

Smt.Girija Lady Member
Between:

M.K.Raghu s/o. Kariyappa,

Aged about 28 years,

R/o Kodipalya, Mathighatta post, Complainant

Handanakere hobli,

CN Halli Taluk, Tumkur district

(By Smt. T.N.Asha Kiran, Advocate)
AND

1. The Manager,

M/s. Shriram Transport Finance Co. Ltd,

Navodaya Circle, Mysore Road,

Channarayapatna, Hassan Dist.

2. The Manager,

M/s. Shriram Transport Finance Co. Ltd,

20/L, 20, Shivaji Road,

Near Ganesh temple, NR Mohalla, Opposite parties

Mysote-570007

3. The Manager,

M/s. Shriram Transport Finance Co. Ltd,

Opp. Govt. College,

Upstair Mayura Bakery,

Ashoka Nagara, Tumkur

4. The Manager,

M/s. Shriram Transport Finance Co. Ltd,

Ground floor, TCR towers,

Opp: Jonna iron Mat, Kamalanagara,

Ananthapura (AP)

(OPs No.1 to 4-By Sri.Anantkumar.S.Habib, Advocate)

ORDER

This is a complaint filed Under Section 12 of the Consumer Protection Act, 1986 (hereinafter called as Act for short)



2. Through this complaint, the complainant prays for an order against the Opposite Parties (hereinafter called as the OPs for short) as here under:

1. For cancellation of auction sale dated 15-1-2008 in respect of

both the vehicles conducted by the 4th OP to the complainant

2. For return of a sum of Rs.3,89,000/- alongwith interest at

12% p.a. from the date of payment made by the

complainant to the OPs No.1 and 2( the bid date 15-1-2008)

3. To return all the blank cheques of the complainant obtained by

the OPs

4. To pay compensation of Rs.1,00,000/- for monetory loss and

mental agony



3. The facts given rise to institute the complaint may be summarized as thus:

It is his grievance that, he purchased two TATA TIPPER LORRIES bearing Reg. No.KA-35-2086 of 1995 model and Reg.No.AP-21-T-4414 of 1996 model through an auction purchase, which was held on 15-1-2008 at Sri Ram Transport Finance Co. Ltd, Ground floor, TCR towers, Opp. Jonna Iron Mart, Kamalanagara, Ananthapura, at the instigation of the OPs No.1 and 2. It is further contended that, he was highest bidder in the auction purchase and purchased the above said vehicles for a total sum of Rs.3,89,700/-. It is further contended that, after auction purchase, the complainant being a bonafide purchaser has a paid a sum of Rs.1,50,000/- by cash and the remaining balance amount has been paid through two demand drafts to 4th OP after taking loan from OPs No.1 and 2.



4. It is further contended that, the complainant believing the words and promises made by the 1st OP has fulfilled all the formalities and the conditions of the 1st OP. After that, the complainant has taken possession of lorry bearing Reg. No.AP-21-T-4414 from the hands of the OPs No.1 and 2, but another lorry bearing Reg.No.KA-35-2086 was not handed over to him by the OPs No.1 and 2. Thus, the OPs No.1 and 2 have gone against the auction bid conditions.



5. It is further contended that, after repeated requests and demands made by the complainant, the lorry bearing Reg.No.AP-21-T-4414 of 1996 model has been delivered in the month of March 2008. But at that time, the above said vehicle was not in a condition to run on the road,. Therefore, he had spent a sum of Rs.85,000/- towards repair of body cabine, engine, painting etc and Rs.15,000/- for obtaining CC (clearance certificate) from the RTO. But, even today, the documents have not been changed in his name as the OPs No.1 and2 have failed send the relevant documents to the concerned authority. Unfortunately, the said vehicle was seized by the OPs No.1 and 2 in the month of March 2009 and the same is illegal, unlawful and not in accordance with law.



6. It is further contended that, due to the above act, the complainant has suffered huge loss and damages. The OPs No.1 and 2 have not taken any steps to deliver the vehicle bearing Reg. No.KA-32-2086 of 1995 model to the complainant even today. In respect of the same, the 1st OP had issued a letter dated 6-5-2008 addressed to one Shanthakumar, Branch Manager STFC, Ananthapura branch through this complainant. The complainant believing the words of the 1st OP had approached the Ananthapura branch alongwith GB Mahesh s/o. late Basavaraju r/o. Kodipalya, CN halli; KR Durgaraj s/o Rajanna Guruvapura, Huliyar hobli, CN halli and MK Panduranga s/o. Kariyappa r/o. Kodipalya, Kandanakere hobli, CN halli taluk with the letter of the 1st OP. But he was informed by the branch manager STFC, Ananthapura to pay upto date installments to take delivery of the vehicle. The same was intimated to the 1st OP for taking necessary steps regarding delivery of the above said vehicle in favour of the complainant.



7. It is further contended that, the 3rd OP is the branch office of the 1st and 2nd OPs and the 4th OP is auction seller. It is further contended that, the complainant has paid installments to the OPs No.1 and 2. In this regard, the complainant had gone to Ananthapura branch for about 10 times, but they have neglected and refused to deliver the said vehicle as the upto date installments were not paid. Despite repeated demands and requests made by the complainant, the OPs have not taken any steps for the delivery of the vehicle and also have intentionally withheld the documents of AP registration lorry for transferring the documents in the name of the complainant. It is further contended that, due the acts of the OPs, the complainant has been seriously put to heavy damages and loss of earning.



8. Therefore the complainant issued a legal notice to the OPs. Despite service, the OPs have not replied nor taken any steps. The OPs have falsely induced the complainant to issue blank cheques (in the name of corporation bank, Uppina Angadi, DK) in their favour, at the time of giving loan to him though he had paid the balance auction purchase amount to Ananthapura branch. The complainant has approached the Handanakere police to register the case against the accused person, but they have refused even to issue an NCR. Hence this complaint.



9. The OPs who have been notified of the complaint entered appearance through their counsel and resisted the same by filing their written version. Written version filed by the 2nd OP came to be adopted by other OPs.



10. The gist of the written version of the OPs is as follows:

In the common written version filed by the OPs, it is contended that, the allegations made by the complainant are all false, frivolous and vexatious. The complainant has filed a false and dubious complaint knowing it to be false one with a sole intention to harass the financial institution.



11. It is further alleged that, the complainant had availed loan from the 1st OP to purchase 1995 and 1996 Models TATA lorry bearing Reg.No.KA-35/2086 and Reg. No. AP 21/T 4414 by executing Loan cum Hypothecation agreement dated 9-1-2008. In view of availment of loan from the 1st OP financial institution, the complainant is a borrower from the 1st OP. Therefore, “Borrower” is not a consumer within the meaning of Section 2 (1) (d) of the CP Act. Hence, this complaint is not maintainable.



12. It is further alleged that, he availed loan for the purchase of those lorry for his transport business. Since the complainant had availed the loan to purchase the vehicles for his commercial business, he is not a consumer within the meaning of Section 2 (1) (d) of the CP Act. Therefore, the dispute raised by the complainant cannot be adjudicated upon before this forum. Thus, the complaint is not maintainable.



13. It is further alleged that, the complainant has availed loan from the 1st OP at Channarayapatna branch i.e. within the jurisdiction of Hassan district. According to Article 3.1 i) of the loan cum hypothecation agreement, the complainant has agreed to pay all the sums due under agreement within the jurisdiction of Hassan District. Therefore, the alleged cause of action arose within the jurisdiction of Hassan district and as such this forum has no territorial jurisdiction.



14. It is further alleged that, according to Article 2.1 (iii) of the loan cum hypothecation agreement executed by the complainant, he has specifically agreed and undertaken as follows.

“The borrower(s) undertakes to get the endorsement of the lender made on the registration certificates of the vehicle within a period of thirty days from the date of delivery of the vehicle (s) to confirm and record the fact that the borrower (s) has hypothecated the vehicle (s) in favour of lender as per the provisions of this agreement. The parties hereto agree that the said endorsement on the registration certificate shall operate as conclusive evidence of such hypothecation”.



15. It is further alleged that, the complainant has acted contrary to the terms of agreement executed by him and till date, he has not endorsed the hypothecation of the 1st OP in the registration certificate of the vehicles. Thereby, the complainant has cheated and committed a breach of trust. It is further alleged that, the 1st OP has filed P.C.R.No.178/2009 against the complainant before principal civil judge (JD) and J.M.F.C. court of Channarayapatna under section 406 and 420 of IPC. The learned magistrate after hearing, referred the matter for investigation to the P.S.I, Channarayapatna town P.S. A criminal case is pending against the complainant. Thus, the complaint before the consumer forum is untenable, as subject matter of complaint amounts to subjudice.



16. It is further alleged that, the complainant has not paid R.T.O. expenses as well tax dues of the vehicles till date. Moreover, he has not paid monthly installments as per the terms of agreement. The dues payable by the complainant in respect of vehicle are as follows:



Vehicle Number Total dues of the complainant

As on 31-7-2009



1. KA 35/2086 Rs.2,99,034-00

2. AP 21/T 4414 Rs.2,47,725-00



17. These OPs while emphatically denying the complaint averments as false and untenable, interalia pleaded that, the complainant has made reckless allegations against the OP financial institution. The allegations made in the complaint require voluminous evidence. The same cannot be adjudicated in a summary trial by this forum. Hence the complaint is untenable before this forum. The complainant has sought relief of cancellation of auction and for recovery of money, which cannot be granted by the forum. The complainant is required either approach to civil court or the arbitrator of the OP company as required under article 10.14 of the agreement. The complainant has not at all disclosed the cause of action to file the complaint, hence complaint is not maintainable.



18. It is further alleged that, the complainant has filed a false compliant, contrary to the terms of loan cum hypothecation agreement. It is further alleged that, the obligation arising out of the agreement cannot be questioned by the complainant before this forum. Moreover, the rights and obligations which are conferred by the terms of the agreement cannot be construed as “Deficiency of service” within the meaning of section 2 (1) (c) of the CP Act. Therefore such disputes cannot be adjudicated upon by this forum. According, they pray for dismissal of the complaint with compensatory costs.



19. In support of the case, the complainant and the OPs have filed their affidavits. The complainant and the OP have also pressed in to service of relevant documents and they have also filed written arguments. The documents of the complainant and the OPs came to be marked as Ex-C-1 to 8 and R-1 to R-6 respectively. We have heard the learned counsels appearing for the parties. We have also examined the materials available on record.



20. The questions that arise for our considerations are:

1. Whether this forum has got territorial jurisdiction to entertain the complaint?

2. Is the complaint maintainable?

3. Is there is any deficiency of service from the OPs?

4. Is the complainant entitled for the relief as prayed for?



21. Our findings on the above questions are here under:

Point No.1 Affirmative

Point No.2: Negative

Point No.3: Negative

Point No.4: As per order

REASONS



22. The OPs have challenged the claim of the complainant on three folds. Firstly, it is contended that, this forum is no jurisdiction to entertain this complaint. Secondly, it is the contention of the OPs that, the transaction being commercial and the complainant being a borrower cannot fall within the meaning of term “consumer”. Thirdly, it is contended that, there is no deficiency in service on the part of the OPs.



23. Therefore, let us examine the prime contention of the OPs regarding the jurisdiction of this forum. Section 11 of the Act reads as thus:

“11. Jurisdiction of the District Forum

(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed [does not exceed rupees [twenty lakhs]].

(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction-

(a) The opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or [carries on business, or has a branch office or] personally works for gain; or

(b) Any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or [carries on business or has a branch office, or personally works for gain;

PROVIDED that in such case either the permission of the District forum is given, or the opposite parties who do not reside, or [carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

(c) The cause of action, wholly or in part, arises”.

(Emphasis supplied)



24. Therefore, it is clear that, the complaint can be maintained in a place where the OPs resides or actually carries on his business or where the cause of action, wholly or in part arises. Undoubtedly, the alleged transaction took place at Ananthapura and at Channarayapattana of Hassan district. The complainant alleges that, he participated in the auction of the Lorries conducted by the 4th OP at Kamalanagara, Ananthapura and became a successful bidder. It is further alleged that, out of Rs.3,89,700/- he paid cash of Rs.1,50,000/- and remaining amount paid through DD after taking loan from the 1st and 2nd OPs. Admittedly, the 1st and 2nd OPs have got a branch office at Tumkur. Therefore, eventhough the cause of action had arisen at Ananthapura and at Channarayapatna of Hassan district still the complainant can maintain the compliant before this forum by virtue of the fact that, the branch office of the 1st and 2nd OPs is situated at Tumkur within the jurisdiction of this forum. Therefore, we hold that, this forum has got jurisdiction to try this complaint. Accordingly the point No.1 is answered.



25. At the very outset, we must point out that, a clear reading of the contentions of both the parties, it is crystal clear that, the complainant had availed loan from the OPs for the purpose of purchasing two lorries and executed necessary hypothecation agreement agreeing to repay the loan within 36 installments like the first installments from 1 to 35 at Rs.8,179/- per month and last installment at Rs.8185/-per month. Ex.No.R-1 and its loan schedule clearly established this fact. Therefore, from the nature of transaction it is seen that, the complainant is a borrower and the 1st and 2nd OP are the creditors.



26. It is pertinent note to that, in Smt.Revathi Kalyan Kumar –vs- K.S.F.C., a decision reported in 1995 (3) CPR 93, it is held by our Hon’ble State Consumer Disputes Redressal Commission, Bangalore, as here under:

“Where relation between Complainant & opp-party is that of borrower & creditor, complainant cannot be said to be a consumer in respect of loan transaction & cannot maintain complaint before consumer forum”.



27. Likewise, from the nature allegations, it is seen that, the complainant had purchased those two Lorries for the purpose of transportation business. This is fortified from the allegation of the complainant to the effect that, on account of the alleged deficiency in service, he has suffered loss of earning (at para 7 of the complaint).



28. The learned counsel appearing for the OP has placed reliance on a judgement reported in 1993 (I) CPR 392, wherein State Consumer Disputes Redressal Commission, Orissa has held thus:

“When the complainant purchased truck for transport business then purchase of vehicle being for commercial purposes complainant is not consumer”.



29. Contrary view taken by the Hon’ble National Commission or our Hon’ble State Consumer Disputes Redressal Commission, Bangalore on that point has not been pressed into service nor could, we place our hands on such decisions. Therefore, we hold that, the complaint is not sustainable. Thus, we hold that, the complaint is not maintainable.



30. From the documentary evidence placed on record, it is seen that, installments having not been properly paid, then vehicle in question came to be seized by virtue of terms of Hypothecation Agreement. Therefore, it cannot be said that, there is deficiency in service on part of the OPs. Accordingly, we hold that, this complaint lacks merits and it is liable to be rejected. Being that opinion, we proceed to pass the following:

ORDER


The complaint is dismissed but without costs.

Dictated to the stenographer, typed by him, corrected and pronounced on open forum this 10th day of November 2009.