OM PRAKASH SHASHTRI vs Ashok Leyland Finance Ltd.

THIS appeal has been filed by the appellant under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as ''1986 Act''), against the order dated 2.9.2003 passed by the learned District Forum, Jaipur-II, Jaipur whereby the complaint of the complainant-appellant was dismissed.

THE brief facts giving rise to this appeal are that the appellant had taken a loan of Rs. 19,836 from the respondents for purchase of a Bajaj Boxer motor cycle on 18.8.2001. THE repayment of this loan was to be made by the appellant in 12 equated monthly instalments and the appellant had given eight post-dated cheques of Rs. 2176 each to the respondents. THE appellant stated that he wanted to refund the entire amount and wrote letter to the respondents in October and November, 2001 but the respondents did not reply. THEreafter on 21.5.2002, the respondents sent a representative to recover the outstanding dues. On this the complainant paid a sum of Rs. 1000 to the representative in cash and the complainant paid an amount of Rs. 23,936 to the respondents on 24.5.2002. In this way, the respondents recovered an amount of Rs. 7,236 as interest from him. THE complainant alleged that he obtained the statement of account on 25.6.2002 which showed that the respondents had recovered an amount of Rs. 12,055 as excess but in fact, according to him, he had claimed an amount of Rs. 15,231. He, therefore, filed a complaint in the Forum below claiming refund of the above amount and also damages of Rs. 25,000. The respondents replied by way of an affidavit that a hire-purchase agreement was executed by and between the parties under which the appellant had agreed to pay equated monthly instalments regularly in time. The respondents maintained that the appellant has not made the payments according to the terms of the agreement and that four of his cheques issued for the months from February 2002 to May, 2002 were returned unpaid by his bankers. It was alleged that the appellant has not come up with clean hands and had concealed these facts from the Forum below. The respondents claimed that as on date an amount of Rs. 4894 is outstanding against the appellant. The respondents submitted that the appellant is not a consumer and the dispute raised by the appellant is such as can only be adjudicated upon by the Civil Courts and as such the complaint should be dismissed.

After hearing both the parties, the learned District Forum held that the appellant is not a consumer and the matter is triable by the Civil Court. As such, it dismissed the complaint. Aggrieved by this order the appellant has come up before us in appeal.

WE have heard the learned Counsel for the appellant, perused the impugned order passed by the learned District Forum and considered the materials placed on record. WE are in general agreement with the finding of the learned District Forum and as such it is not necessary for us either to restate the effect of the evidence or to reiterate the reasons given by the learned District Forum. The learned Counsel for the appellant has contended that the Forum below has committed an error in holding that the appellant is not a consumer and that it should have adjudicated upon the dispute on merits. On the other hand, the learned Counsel for the respondents has contended that the relation between the parties is that of a creditor and a debtor and as such the Forum below has rightly come to the conclusion that the dispute raised is not a consumer dispute. He has also contended that the appellant is guilty of suppression of material facts and as such he is not entitled for any relief.

WE have given our anxious thought to the contentions of the learned Counsel. It is an admitted fact that a hire-purchase agreement was executed by and between the parties on 18.8.2001 under which a loan of Rs. 23,000 was obtained by the appellant from the respondents. It is not in dispute that in violation of the said agreement, the appellant had not deposited the monthly instalments but had deposited some amount on 24.5.2002. In this case, there is evidence on record that the respondents have claimed additional finance charges in accordance with the terms of the hire purchase agreement. There is also evidence on record that the cheques given by the appellant to the respondents towards the above loan were returned unpaid by the bankers of the appellant. It was for the complainant to explain what happened to his particular cheques if the cheques were stated to have been dishonoured by the bankers of the complainant. There is evidence on record that the cheques given by the appellant were not cleared by his bankers. Thus, the complainant himself was a defaulter. In such circumstances, we are satisfied that there is no deficiency in service. It is also clear from the pleadings of the complainant and the affidavit of the respondents that the dispute presented by the complainant before the learned District Forum is essentially based on a private contract. It relates to the terms and conditions of an express agreement and account between the parties. The relationship between the appellant and the respondents is that of debtor and creditors and it is the alleged breach of contract which has given rise to cause of action to the appellant. The question for consideration in these circumstances is whether the complainant could move a Consumer Forum for redressal of his grievances arising out of breach of contract where the relationship between the parties is that of debtor and creditor. This question has been considered in the past by the Hon''ble National Commission and many of the State Commissions.

IN Aggarwal Dyeing INdustries v. Rajasthan Financial Corporation & Others, Appeal No. 2/1991 decided on 6.8.1991 the Hon''ble National Commission had held that the appellant cannot be regarded as consumer at all as per the definition of the said expression contained in the Act. He had only borrowed certain amounts from the Rajasthan Financial Corporation and the relationship is only that of borrower and debtor. The National Commission had further observed that it had already held in several cases that out of such a relationship a consumer dispute cannot arise.

IN Ashok Leyland Finance Ltd. v. Himanshu S. Thumar, II (2005) CPJ 491, the Gujarat State Commission held that the dispute presented by the complainant essentially relates to the account between the parties and such dispute cannot be said to be a consumer dispute. It is essentially a Civil dispute. Hence, the complaint is not maintainable. In Arif Pasha v. Enfield Business Financiers Leasing Ltd., III (1995) CPJ 501, it was held by the Karnataka State Commission that the relationship between the parties is that of a borrower and creditor and that the National Commission in several cases has held that out of such a relationship a consumer dispute does not arise.

In Lancers Convent v. Source-one Office Automation Pvt. Ltd., III (1993) CPJ 1357, the Delhi State Commission held that there is dispute between the parties regarding accounts and this is such a matter which cannot be decided in summary proceedings. The Civil Court is the proper forum in deciding such matters.

IN the present case, the complainant has alleged breach of contract by the respondents. IN this connection, it was held by this Commission in Surendra Kumar Jain v. Hero Honda Motors Ltd. & Another, III (1995) CPJ 513 that where the complainant alleged breach of contract, a remedy lies in a Civil Court and not under the Consumer Protection Act, 1986. Again, in Om Prakash Bishnoi v. Ashoka Leyland Finance Ltd., Complaint Case No. 34/95 decided on 9.12.1999, this Commission had held that a dispute arising out of breach of a hire purchase agreement is not a consumer dispute under the Consumer Protection Act.

IN Kulwant Singh v. Singh Finance Pvt. Ltd., I (1998) CPJ 16, it was held by the J&K State Commission that the dispute between the parties essentially is based on a private contract and the financier was entitled to enforce the terms of the contract and if it has done so, there is no scope for entertaining such a complaint under the Consumer Protection Act. In Manager, St. Mary''s Hire Purchase (P) Ltd. v. N.A. Jose, III (1995) CPJ 58 (NC), where the complainant committed defaults in the payment of monthly hire giving a right to the opposite party to terminate the agreement, it was held by the Hon''ble National Commission that the exercise of right under the Hire Purchase Agreement cannot be construed as a deficiency in service and the complainant is free to pursue his remedy by way of suit or any other proceedings available to him in law. In Khairunnissa Begum v. Branch Manager (Finance), City Bank N.A., II (1999) CPJ 636, the Andhra Pradesh State Commission held that where the complainant committed default in payment of the instalment amounts of the loan amount according to the terms and conditions of the hypothecation agreement, the question of deficiency in service does not arise.

IN K.A. Murugesan v. Jaurilal Bafna & Another, II (2004) CPJ 300, the Tamil Nadu State Commission held that where the opposite party has done an act pursuant to the terms and conditions of the hire purchase agreement and because of the default committed by the complainant, a complaint under the Consumer Protection Act is not maintainable. The complainant cannot get over the terms of the hire purchase agreement by merely labelling the act of the opposite party as a deficiency in service and resort to the Consumer Forum. The proper remedy of the complainant would have been to approach the Civil Court.

IN Tata Finance Ltd. v. Marjan Hossan & Others (R.P. No. 367/1998 decided on 12.2.2003), the Hon''ble National Commission had held that where the complaianant had taken a vehicle on hire under the hire purchase agreement, he remained in the eyes of law a hirer and not a purchaser of vehicle and that it cannot be said that the complainant had hired the ''services'' of the petitioner to fall within the purview of ''consumer'' as defined in the Act. The legal position that emerges out of the above discussion is that when a complainant commits breach of a hire purchase contract by committing defaults in payment of equated monthly instalments in terms of that contract, and pursuant to that subsisting contract between the parties, an act is done by the opposite party the complainant cannot seek the remedy of the Consumer Forum. The complainant cannot get over the terms of the hire purchase agreement by merely labelling the act of the opposite party as a deficiency in service and resort to the Consumer Forum. The proper remedy of the complainant would have been to approach the Civil Court. This Commission hastens to add that this is not a case where the complaint had alleged any defect in the goods hired by him.

In view of the foregoing discussion, in the present case, the impugned order does not suffer from any infirmity. In our considered opinion, the appropriate remedy for the appellant was to seek redressal before a Civil Court of competent jurisdiction by way of filing an appropriate Civil Suit, or if there was an arbitration agreement, to resort to arbitration. But, as rightly held by the learned District Forum, the complaint made before the Forum below was not maintainable.

IN this case, the learned Counsel for the respondents has contended that the appellant has concealed the fact that few cheques given by the appellant were dishonoured by the bankers of the appellant. On the specific orders of the learned District Forum passed on 22.3.2003, the appellant had furnished a copy of his statement of bank account which has also proved this fact. Had this material fact not been suppressed it would have had an effect on the merits of the case. Therefore, the learned Counsel for the respondents has argued that in the light of the pronouncement of Their Lordships of Apex Court in SJS Business Enterprises (P) Ltd. v. State of Bihar, II (2004) SLT 735=2004 (5) Supreme 485, suppression of a material fact by a litigation disqualifies such litigant from obtaining any relief. There is no doubt that this rule has been evolved out of the need of the Courts to deter a litigant from abusing the process of Court by deceiving it. But in view of our finding that the appropriate remedy for the complainant is to seek redressal in a Civil Court, we are refraining ourselves from commenting on this aspect of the matter. Accordingly, the appeal lacks merit and is dismissed and the impugned order is maintained. No costs. Appeal dismissed.