Karnataka

Bangalore 4th Additional

CC/15/1681

T.V. Nanjegowda - Complainant(s)

Versus

Kotak Mahindra Prime Limited, - Opp.Party(s)

19 Sep 2018

ORDER

Complaint filed on: 01.10.2015

                                                      Disposed on: 19.09.2018

 

BEFORE THE IV ADDL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

 1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H.ROAD, SHANTHINAGAR, BENGALURU – 560 027        

 

CC.No.1681/2015

DATED THIS THE 19^th SEPTEMBER OF 2018

 

PRESENT

 

SRI.S.L.PATIL, PRESIDENT

SMT.N.R.ROOPA, MEMBER

	Complainant/s	V/s	Opposite party/s
	T.V. Nanjegowda, No.168, Ganga Nilaya, Pillappa Compound, Shivashankar Block, Hebbal, Bengaluru-560 024.   In person		Kotak Mahindra Prime Limited., No.20, 3rd Floor, Uniworth Plaza, Sankey Road, Palace Guttahalli, Bengaluru-560 020.   By.Adv.S.A.Associates

 

PRESIDENT: SRI.S.L.PATIL

 

1.       The Complainant has filed this complaint as against the Opposite Party directing to return the excess EMI received with interest at 24% p.a., to award compensation of Rs.1,00,000/- for the harassment, mental agony, inconvenience caused for wrong deeds, to remove the deficiency in services, to award costs and to grant such other reliefs

   

2.       The brief facts of the case of the complainant are that the complainant purchased new Maruthi Swift VDI Car from Garuda Auto Craft Pvt. Ltd., during December 2012. At that time, the complainant was intended to raise loan of Rs.4,00,000/- from State Bank of Mysore, Cauvery Bhavan Branch, Bengaluru where he is having account since 20 years and he ascertained the rate of interest at 11.25% per annum for car loans. In the showroom, there is a finance section where representatives of different banks/financiers located and the representative of Kotak Mahindra Prime Ltd., by name Vinod has held talks with the complainant and he assured to grant loan at the same rate of interest at 11.25% p.a. and the said Vinod and the sales executive of the showroom both are in the same building. The complainant considering their assurance agreed to avail loan of Rs.4,00,000/- from Kotak Mahindra Prime Ltd., The complainant submits that on 10.12.2012, the said Vinod has obtained signatures of the complainant on the blank loan formats and also brought a cheque book of 10 cheque leaves of Kotak Mahindra Bank and he has taken 6 cheque leaves by obtaining signatures of the complainant towards security and the remaining 4 cheques handed over to the complainant and the complainant also made down payment on the same day. On 12.12.2012, the dealer got registered the car with Yeshwanthapura RTO bearing Reg.No.KA-04-ML-5360 in the name of the complainant and the vehicle is handed over to him on 14.12.2012. On 11.1.2013 when the complainant contacted the said Vinod at the showroom for payment of EMI, he took the complainant to their office in the 3^rd floor of the same building wherein verified his loan account and asked to pay cash of Rs.9,215/- at the cash counter. Accordingly, the complainant was paid first 10 EMIs there only and received SMS messages towards the same from the OP and at the time of paying 10^th EMI during October 2013, it was told to the complainant to pay the EMI at their bank. Accordingly, the complainant continued to pay EMI at their bank of Majestic Branch, regularly except December 2013 EMI which was paid through NEFT from State Bank of Mysore. It is submitted that from November 2014, the office bearers of the OP are started called the complainant demanding payment of outstanding dues for that the complainant stated he has paid EMI of Rs.9,215/- every month and there is no question of outstanding dues, this was continued for some time and on 9.1.2015, the OP sent a notice through its counsel stating that “the complainant has failed to keep up his promise and his loan account is highly irregular and there is default in payment of EMI and the cheques issued have not been honoured, hence, terminating the loan agreement and called on the complainant to pay balance of Rs.3,22,141/-. The complainant replied to the said notice on 21.1.2015 stating that loan availed in December 2012 and from January 2013 regularly paying EMI of Rs.9,215/- there is no question of outstanding dues and which is the concoction and manipulation of the OP and also questioned the sanctity of the loan agreement. The OP collected first 10 EMIs at their office in cash and then informed to pay through bank, but from the beginning, they have started imposing cheque bounce charges, overdue interest and collection charges without the knowledge of the complainant. However, the OP prudently issued letter offering further pre-approved loan of Rs.2,10,000/- against existing car loan dt.27.9.2013. If the Op guided properly for payment of EMI at Bank from the beginning without collecting in cash at their office, it could not have resulted in imposing default charges and it is the intentional act of the OP for wrongful gain which is nothing but deficiency in services towards the customer. The complainant signed the loan formats on 10.12.2012, vehicle got registered on 12.12.2012 before registration of vehicle the dealer receives down payment and loan disbursement amount, but the loan agreement is dt.19.12.2012 i.e., after disbursement of loan amount, the OP enters into an agreement which is unknown to law. Thus it is very clear the loan agreement is created and concocted by the OP as per its whims and fancy after obtaining signatures of the complainant on the blank loan formats which is nothing but breach of trust reposed by the complainant. The complainant obtained loan of Rs.4,00,000/- and the OP shown loan amount as Rs.4,16,231/- for which purpose Rs.16,231/- added is not made known to the complainant and he has not opted for any insurance as shown. Further, the EMI for Rs.4,00,000/- at the rate of 11.25% interest is Rs.8,696/- as per the calculations made during negotiations. How it is calculated to arrive at Rs.9,215/- is not clarified by the office bearers of the OP inspite of repeated request by the complainant, even then the complainant paying Rs.9,215/- as EMI every month as per the alleged agreement under protest. Hence, the services agreed to be availed by the complainant suffers from deficiency in any respect. The complainant submits that though the complainant promptly paying EMI regularly the OP calculated default charges after misleading the complainant in payment of EMI from the beginning and as on August 2015, the default charges calculated at Rs.32,882/- which is an intentional act of the OP based on the created agreement which is nothing but the unfair practice and hazardous act for unscrupulous exploitation of consumer. Hence, the default charges calculated by the OP have to be construed as null and void. The complainant paying EMI at Rs.9,215/- as per the say of the OP and after receipt of legal notice, the complainant verified with the calculations of EMI made during negotiations and as per the calculations, the EMI payable for loan of Rs.4,00,000/- is Rs.8,696/-, but the OP wrongly calculated EMI at Rs.9,215/- based on manipulations. Hence, the difference amount collected in excess by the OP has to be refunded with interest and also damages has to be awarded as compensation to the complainant for the harassment and mental agony suffered by him from the OP. Hence, the complainant submits to allow the complaint.

    

3.       After the issuance of the notice, the OP did appear and filed the version. The sum and substance of the version filed by the OP is that the complaint is not maintainable either on facts or in law. The OP is represented by its Manager and power of attorney holder, Mr.Venkita Krishnan. The complainant is not a consumer, as per the provisions of CP Act, as the relationship between the complainant and Op is debtor and creditor. Therefore, on this count alone the complaint stands to be dismissed. The complaint is legally barred u/s 21-A of Banking Regulation Act. Accordingly, the rate of interest charged by banking companies cannot be subject to legal scrutiny on the claim that rate of interest charged by the bank is excessive in nature. This fact is upheld by Hon’ble Supreme Court in Corporation Bank, Bank of India Vs D.S.Gowda and Laws (SC) 1994-6-3. The complaint is liable to be dismissed in view of the clauses 5 and 8 of the Arbitration & Conciliation Act, 1996. The alleged loan transaction emerged out of contract entered into between the complainant and OP governed by loan agreement and obligations. The said loan agreement mandates that any dispute between the parties shall be resolved by the Arbitration, but the complainant in contravention of the arbitration agreement has filed this complaint. The OP submits that it undisputed fact that the complainant availed credit facility from OP to purchase an automobile by its model name Maruti Swift VD1 (diesel)  in its registration No.KA-04-ML-5360 vide loan account No.CF 8715329, dt.19.12.2012 for sum of Rs.4,16,231/- . As per the repayment schedule of the loan agreement, the said loan was repayable by the complainant in 60 EMI’s on fixed sum of R.9,215/- each respectively, in the loan tenure commencing from 10.1.2013 to 10.12.2017. The loan emerged out of an agreement subsisted between the complainant and the OP. the complainant availed loan agreeing to pay fixed type of interest @ 11.92% p.a. on equated monthly installments. Having agreed to discharge his debt liability paying stated interest rate, the complainant appended his signature to the loan agreement in token of his acceptance towards the same. It is emphasized that the complainant has appended his signature in agreement schedule-1 and also payment schedule of the loan agreement. The agreement schedule-1 reflects the interest rate as 11.92% p.a. and the payment schedule reveals that each EMI due fixed for Rs.9,215/-, which fact the complainant is quite aware and had also been paying such agreed EMI sum towards discharge of his debit liability. The complainant has falsely averred that the loan agreement is concocted and created. It is undisputed fact that the complainant submitted his loan application to OP on 10.12.2012. The Op in its endeavor to provide quick and efficient service to its customer/complainant disbursed the loan sum on prior date of the loan agreement and not with any malafide intention as averred. The complainant has made bald allegations against the OP without any merits. As averred had the complainant felt aggrieved, the complainant would have certainly raised objections immediately and not after lapse more than two years. The OP had informed the complainant has to bear expenses to be incurred towards loan processing charges such as documentation, verification etc., Agreeing to pay, the complainant applied for the loan and also paid loan processing charges sum of Rs.16,231/- on an understanding that such loan processing charges is non-refundable under any circumstances. Hence, claim of the complainant against loan processing charges is arbitrary and untenable. Since inception of loan tenure, the complainant many times failed to pay the EMI dues on tis due date followed by dishonor of cheques which was issued towards discharge of EMI dues, which fact is apparent from the statement of accounts. Such late payments and dishonor of cheques attracted late fee, cheque bounce charges other applicable charges accrued to the loan account of the complainant. The complainant’s failure to pay the overdue charges as on its date of accrual, such charges went on accumulating and carried forward to following months. Accordingly, as on August 2015, the complainant was due to pay overdue charges sum of Rs.32,882/- towards his loan account. Further, the complainant in loan agreement has entered into arbitration agreement agreeing to resolve any dispute arising out of the loan transaction through arbitration. But in contravention of terms of the agreement, the complainant has approached this Forum. The extract of arbitration clause as referred in loan agreement is reproduced bellows;

31.Arbitration:

“All disputes, differences and/or claim arising out of these presents or in any way touching or concerning the same or as to constructions, meaning or effect hereof or as to the rights and liabilities of the parties hereunder shall be settled by arbitration to be held in accordance with the provision of the Arbitration and Conciliation Act, 1996 or any statutory amendments thereof and shall be referred to the arbitration of sole arbitrator to be nominated by the lender. In the event of death, refusal, neglect inability of persons so appointed to act as an arbitrator the lender may appoint a new arbitrator. The award of the arbitrator that be final and binding on all parties concerned. The arbitration proceedings shall be conducted in English language and held at the place more particularly mentioned in the schedule of the present agreement under”

Further the interest charged on the loan account is reasonable and also in harmony with loan agreement and RBI Guidelines. The OP had been fair and reasonable in charging of interest towards loan account. It is respectfully submitted the dispute in question is beyond the ambit of this forum. The Section-21A of Banking Regulation Act, precludes courts from reviewing the interest rates charged by bank. Section 21-A is reproduced as below:

Section 21-A: Rates of interest charged by Banking Companies not to be subject to scrutiny by Court: Notwithstanding anything contained in the Usurious Loans Act, 1918 or any other law related to indebtedness in force in any state, a transaction between a banking company and its debtor shall not reopened by any court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive.”

The Hon’ble Apex Court in Corporation Bank, Bank of India Vs D.S.Gowda, Laws (SC) 1994-6-3 has held that the interest charged by banks cannot be reopened by the Courts unless it is contravention to RBI guidelines. From the stated facts above, it is clear that OP bank had structured the interest charges on agreed rate and had been charging the same till date, in adherence to RBI guidelines. Viewed from any angle, the OP has performed its obligation without there being any latches. On these grounds and other grounds, pray for dismissal of the complaint.

 

4. The Complainant to substantiate his case, filed his affidavit evidence and got marked as Ex-A1 to A54. Venkita Krishnan, Power of attorney of OP has filed affidavit evidence and got marked as Ex-B1 to B4. The Complainant as well as Opposite Party, filed their written arguments. Heard both sides.                                                                                                                                                                                                                                                                                                                                                                                              

 

5. The points that arise for our consideration are:

1) Whether the complaint filed by the complainant is

     maintainable?

2) Whether the Complainant proves the deficiency in service

    On the part of the OP, if so, whether he is entitled for

    the relief sought for?

          3) What Order?

                  

 

6.  Our answers to the above points are as under:

 

Point No.1: Negative

Point No.2: Does not survive for consideration

Point No.3: As per the final order for the following

REASONS

 

7. POINT NO.1 :   We have briefly stated the contents of the complaint as well as the version of the Opposite Party.

 

8.       The Complainant is an advocate who submits that he availed the loan from the OP for purchasing the car and the rate of interest is 11.25%. According to him, on 10.12.2012, one Vinod who is the sale executive of the OP showroom has obtained signatures of the complainant on the blank loan formats and also brought a cheque book of 10 cheque leaves of Kotak Mahindra Bank and he has taken 6 cheque leaves by obtaining signatures of the complainant towards security and the remaining 4 cheques handed over to the complainant and the complainant also made down payment on the same day. According to him, he has paid 10 EMIs and received the SMS messages towards the same from the OP and at the time of paying 10^th EMI during October 2013, it was told to the complainant to pay the EMI at their bank. Accordingly, he continued to pay EMI at their bank of Majestic Branch, regularly except December 2013 EMI which was paid through NEFT from State Bank of Mysore. It is also the case of the complainant that from November 2014, the office bearers of the OP are started calling him demanding payment of outstanding dues for that he has informed them that he has paid EMI of Rs.9,215/- every month and there is no question of outstanding dues and this was continued for some time and on 9.1.2015, the OP sent a notice through its counsel stating that “the complainant has failed to keep up his promise and his loan account is highly irregular and there is default in payment of EMI and the cheques issued have not been honoured, hence, terminating the loan agreement and called on the complainant to pay balance of Rs.3,22,141/- to which the complainant replied to the said notice on 21.1.2015 stating that loan availed in December 2012 and from January 2013 regularly paying EMI of Rs.9,215/-. Hence, there is no question of outstanding dues. Further the grievance of the complainant is that the OP collected first 10 EMIs at their office in cash and then informed to pay through bank, but from the beginning, they have started imposing cheque bounce charges, overdue interest and collection charges without the knowledge of the complainant. However, the OP prudently issued letter offering further pre-approved loan of Rs.2,10,000/- against existing car loan dt.27.9.2013. If the Op guided properly for payment of EMI at Bank from the beginning without collecting in cash at their office, it could not have resulted in imposing default charges and it is the intentional act of the OP for wrongful gain which is nothing but deficiency in services towards the customer. The another grievance of the complainant is that he signed the loan formats on 10.12.2012, vehicle got registered on 12.12.2012 before registration of vehicle the dealer receives down payment and loan disbursement amount, but the loan agreement is dt.19.12.2012 i.e., after disbursement of loan amount, the OP enters into an agreement which is unknown to law. Thus it is very clear the loan agreement is created and concocted by the OP as per its whims and fancy after obtaining signatures of the complainant on the blank loan formats which is nothing but breach of trust reposed by the complainant. Though he paid the EMI regularly, the OP calculated default charges after misleading the complainant in payment of EMI from the beginning and as on August 2015, the default charges calculated at Rs.32,882/- which is an intentional act of the OP based on the created agreement. Hence, he is entitled to excess EMI received with interest at 24% by the OP and compensation of Rs.1 Lakh. 

 

9.       The stand taken by the OP is that the complaint filed by the complainant is not maintainable stating that the complainant is not a consumer. Further submits that the relationship between the complainant and the OP is debtor and creditor. On these grounds, the complaint is liable to be dismissed. Further, the subject matter of this complaint is legally barred u/s 21-A of Banking Regulation Act, as the rate of interest charged by banking companies cannot be subject to legal scrutiny on the claim that rate of interest charged by the bank is excessive in nature. This fact is upheld by Hon’ble Supreme Court in Corporation Bank, Bank of India Vs D.S.Gowda and Laws (SC) 1994-6-3. Further, submits that the complaint is not maintainable in view of the arbitration clauses incorporated in the agreement. If any dispute arises between the complainant and the OP, the same is to be referred to the arbitration. Further stated that the complainant has not paid EMI regularly and also the overdue charges as on its date of accrual, such charges went on accumulating and carried forward to following months. Accordingly, as on August 2015, the complainant was due to pay overdue charges sum of Rs.32,882/- towards his loan account. It is also submitted that the interest charged on the loan account is reasonable and also in harmony with loan agreement and RBI Guidelines. The Section-21A of Banking Regulation Act, precludes courts from reviewing the interest rates charged by bank. Section 21-A which reads thus:

Section 21-A: Rates of interest charged by Banking Companies not to be subject to scrutiny by Court: Notwithstanding anything contained in the Usurious Loans Act, 1918 or any other law related to indebtedness in force in any state, a transaction between a banking company and its debtor shall not reopened by any court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive.”

 

We have meticulously gone through the available materials on record, the complainant being an advocate how he has put his signature on the blank loan formats and also taken his signature on 6 cheque leaves. The complainant has specifically contended that the OP has created the agreement which is nothing but unfair trade practice. In our considered view, the claim of the complainant is in the form of recovery of the money making certain allegations against the OP in respect of obtaining the signature on the blank loan formats and also on the cheques. This needs to be detail enquiry by the competent civil court of law, but not in the summary procedure being adopted by this Forum to decide the consumer complaints. In this context, we placed reliance on the decision of II (1993) CPJ 777 in the case of M/s Supercon V/s Executive Director, Titagarh Steel Ltd., wherein at Para No.(iii) held as under:

 

(iii) Consumer Protection Act, 1986-Section 17-complaint-Money Claim-Complaint in nature of money claim-Complainant to file money suit in Civil Court.

 

Held: The complaint petition of the complainant is in the nature of money claim for which he is at liberty to file a money suit for realization of his claim in an appropriate Civil Court adducing proper evidences in support of his claim.

 

Hence, we come to the conclusion that the complaint filed by the complainant before this Forum is not maintainable. The other points raised by the OP in respect of arbitration as well as Section 21A of Banking Regulation Act are kept open. In this view of the matter, this Forum has no other go except to dismiss the complaint keeping with liberty to the complainant to approach the Civil Court to get redress his remedy by way of filing the suit by taking the aid on the decision reported in Laxmi Engineering works v. PSG Industrial Institute, II (1995) CPJ 1 (SC) on the question of limitation. Accordingly, we answered the Point No.1 in the negative.

 

10.     POINT NO.2:  In view of our finding on Point No.1, this issue does not arise for our consideration.

         

11.     POINT NO.3: In the result, we pass the following:

ORDER

 

The complaint filed by the Complainant is hereby dismissed as not maintainable. Anyhow, an option is left open to the Complainant to get redress his remedy by way of filing a suit before the competent court of law having got jurisdiction to try the same.

Looking into the circumstances of the case, we direct both the parties to bear their own costs.

Supply free copy of this order to both the parties.

           (Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the open Forum on 19^th September 2018).

 

 

(ROOPA.N.R)     MEMBER

(S.L.PATIL)     PRESIDENT

 

 

1. Witness examined on behalf of the complainant/s by way of affidavit:

 

T.V.Nanjegowda., who being Complainant was examined. 

Copies of Documents produced on behalf of Complainant/s:

 

Ex-A1 to A54	Loan agreement dt.19.12.2012
	EMI payment receipts
	Bank passbook
	Bank challan/deposit slip
	Letter issued by OP
	Legal notice issued by complainant dt.9.1.2015
	Reply notice issued by OP dt.21.1.2015
	Statement of account dt.13.8.2015
	Price list of the dealer
	Finance quote sheet showing calculations
	Down payment receipts
	Registration process of the dealer
	Registration certificate
	Loan release order dt.19.12.2012
	Rejoinder issued by OP
	Second legal notice
	Letter sent to Kotak Mahindra Bank dt.7.9.2015
	RPAD receipts and acknowledgement
	Bank passbook extract of complainant
	Statement of account issued by OP

 

 

 

 

2. Witness examined on behalf of the Opposite party/s Respondent/s by way of affidavit:

 

Venkita Krishnan, Power of attorney has filed affidavit evidence.

 

Ex-B1	Copy of authorization
Ex-B2	Copy of loan application form and loan agreement
Ex-B3	Copy of statement of accounts
Other documents	Copy of loan agreement along with repayment schedule
	Copy of release order

 

 

 

(ROOPA.N.R)       MEMBER

(S.L.PATIL)    PRESIDENT