COMPLAINT NO.1702 OF 2009

H.Panchanna,

A/a 63 yrs,

S/o Late Honnappa,

R/at No.2, “Dasharathi”,

15th Cross, Ullal Main Road,

Bangalore – 560 056

…. Complainant.

V/s


Magma Fincorp Limited,

No.40, Foundation House, 4th Floor,

CKC Garden, 2nd Main, Mission Road,

Bangalore – 560 027.

Represented by its Manager

…. Opposite Party

-: ORDER:-


This complaint is for a direction to the Opposite Party to issue NOC in respect of the vehicle bearing No.KA-02/B-4499, to pay loss of Rs.1,00,000/- sustained on account of non using the vehicle and Rs.1,00,000/- as compensation for the mental agony and harassment, on the following grounds:-

2. The complainant has availed loan of Rs.2,80,000/- from the Opposite Party for purchasing the vehicle bearing No. KA-02/B-4499 for earning his livelihood as per the Hire Purchase Agreement dated 13/03/2001. He paid all the installments regularly and accordingly Hire Purchase Agreement expired on 16/02/2004. The last and final payment of Rs.21,102/- was made on 08/03/2004. After clearing of the loan, he approached the Opposite Party for issuance of NOC. But the officials of the Opposite Party did not respond properly and instead of issuing the NOC, the Opposite Party avoided the same by giving evasive answers. He issued legal notice dated 21/07/2008 as the NOC is necessary to produce before the RTO to renew the permit of the vehicle. On receipt of the legal notice, the Opposite Party gave untenable reply on 28/07/2008. On 09/06/2009 five unknown persons claiming to be the recovery officers of the Opposite Party came to his house and demanded Rs.50,000/- alleged to be due by the complainant and made an effort to take the complainant to the office of the Opposite Party. However, the complainant resisted the high handedness of the hired antisocial elements of the Opposite Party. Immediately he lodged a complaint with Jnanabharathi Police, but no action has been taken. Without NOC, the permit cannot be renewed and therefore the complainant cannot run the vehicle. For want of NOC he has been put to harassment, mental agony and torture and is forced to stop the vehicle and is deprived of the income.

3. In the version, the contention of the Opposite Party is as under:-

The Opposite Party was formerly known as MAGMA SHRACHI FINANCE LTD., and later the name of the company was changed to MAGMA FINCORP LTD., as per the certificate dated 01/07/2008 issued by the Registrar of the Companies. The complainant is not a Consumer and therefore the question of deficiency of service will not arise. The complainant had availed loan of Rs.2,80,000/- from the Opposite Party for purchase of a vehicle bearing No.KA-02/B-4499 and entered into Hire Purchase Agreement dated 16/03/2001 agreeing to re-pay the loan amount and other charges in 36 monthly installments. The last installment was to be paid on 16/02/2004. The vehicle is purchased for commercial purpose and therefore the complaint is not maintainable. The contention that the complainant has paid all the installments including the interest till completion of the installments is false. The allegation that the Opposite Party threatened and forced the complainant to pay excess amount is false. The allegations in Para-9 of the complaint are false. The complainant had defaulted in the payment of the installments on or before due dates and is still due Rs.2,17,752/-. The complainant is entitled for NOC and cancellation of hypothecation only on payment of the entire dues to be paid to Opposite Party. The complaint is very vague and the same is filed to drag on the matter to escape from the liability of clearing the balance amount of the loan. Hence, the complaint is liable to be dismissed.

4. In support of the respective contentions both parties have filed affidavits. We have heard the arguments on both side.

5. The points for consideration are:-



1. Whether the complainant has proved deficiency in service or on the part of Opposite Party?

2. Whether the complainant entitled to the relief prayed for in the complaint?

6. Our findings are:-

Point No(1) : In the Affirmative

Point No(2) : As per final order,

for the following:-

-:REASONS:-

7. At the outset we are unable to agree with the contention of the Opposite Party that the vehicle in question was purchased for commercial purpose and therefore the complaint is not maintainable. Admittedly the complainant has purchased only one vehicle and in Para-3 of the complaint, the complainant has stated that he has purchased the vehicle for his livelihood. If that is so, the complainant has purchased the vehicle for earning the livelihood by self-employment. In such circumstances, as provided in Section 2(1)(d) of the Consumer Protection Act, the person purchasing the vehicle even for commercial purpose is a Consumer since the purpose of purchasing the vehicle is for earning the livelihood by self-employment. Therefore, the complainant is a Consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act.

8. It is not in dispute that the complainant had availed loan of Rs.2,80,000/- from the Opposite Party for purchase of the vehicle agreeing to repay the same in 36 equated monthly installments. Along with the complaint, the complainant has produced the statement of account furnished by the Opposite Party disclosing the payments made by the complainant towards installments. As per this statement, the amount was payable in 36 months commencing from 16/03/2001 till 16/03/2004. The total amount payable by the complainant is mentioned as Rs.3,58,140/- and the amount paid by the complainant is mentioned as Rs.3,37,278/-. The complainant has also produced the copy of the receipt dated 08/03/2004 for having paid Rs.21,102/- towards installments. Thus, the complainant states that he has paid the entire amount due under the Hire Purchase Agreement. This contention of the complainant finds support from the statement of account furnished by the Opposite Party and the receipt dated 08/03/2004. As against this, the contention of the Opposite Party is that the complainant is still due Rs.2,17,752/-. Before filing the complaint the complainant had issued legal notice dated 27/07/2008 calling upon the Opposite Party to issue NOC stating that he has repaid the entire loan amount. To this legal notice, the Opposite Party sent reply dated 28/07/2008, wherein it is stated that the complainant is still due Rs.84,384/-. Subsequent to the reply given by the Opposite Party, the complaint is filed on 21/07/2009. The Opposite Party filed the version on 08/09/2009 stating that the complainant is still due Rs.2,17,752/-. Considering the stand of the Opposite Party in the reply dated 28/07/2008 and in the version filed on 08/09/2009 it would appear that Rs.84,384/- due as on 28/07/2008 accumulated to Rs.2,17,725/- as on 08/09/2009 in about one year. To substantiate the contention that the complainant was due Rs.84,384/- as on 28/07/2008 or Rs.2,17,752/- as on 08/09/2009, the Opposite Party has not produced the statement of account disclosing how the arrears due and payable by the complainant has accumulated to Rs.2,17,752/-. In the absence of the statement of account supporting the claim of the Opposite Party, we are unable to support the above contention of the Opposite Party. Therefore, considering the documents placed on record, we have to accept the contention of the complainant that he has cleared the entire amount due to the Opposite Party towards the loan raised. If that is so, in spite of clearing the entire loan, the Opposite Party has withheld issuance of NOC and this act of the Opposite Party clearly amounts deficiency in service. When once the loan is discharged, it is the obligation of the financier to issue NOC so as to facilitate the borrower to get the hypothecation endorsement in the registration certificate cancelled.

9. Besides seeking direction to the Opposite Party to issue NOC, the complainant has claimed Rs.1,00,000/- towards loss of income on the ground that for want of NOC, he is unable to get the permit renew and therefore the vehicle is idling away. Therefore, the sum of Rs.1,00,000/- claimed is towards business loss which cannot be said to be a Consumer Dispute. If really the complainant has sustained loss of Rs.1,00,000/- towards income he has to file civil suit before the competent court. This dispute cannot be agitated under the provisions of the Consumer Protection Act.

10. The complainant has also claimed compensation of Rs.1,00,000/- for the mental agony and torture suffered by him. In view of the fact that though the loan was discharged as long back as in March-2004, the Opposite Party has withheld issuance of NOC till – 2009, the complainant appears to have suffered some amount of mental agony and inconvenience. As such, he needs to be compensated. However, the sum of Rs.1,00,000/- claimed towards compensation is on the higher side. Considering the facts and circumstances of the case, in our opinion, it is just and sufficient if the complainant is awarded compensation of Rs.10,000/-. In the result, we pass the following:-
-:ORDER:-

1. The complaint is allowed in part.

2. The Opposite Party is directed to issue NOC with regard to loan raised by the complainant for purchasing the vehicle and to pay compensation of Rs.10,000/- including the costs of the proceedings.

3. Compliance of this order shall be made within eight weeks from the date of communication.

4. Send a copy of this order to both parties free of costs, immediately.

5. Pronounced in the Open Forum on this the 11th Day of DECEMBER 2009.