SREEJA FINANCE vs SAUMINI

-THE order dated 20.1.2003 of the Consumer Disputes Redressal Forum, Malappuram in O.P. No. 246/2002 whereby the Forum has directed the 2nd opposite party to issue clearance certificate to the complainant in respect of a vehicle hypothecated by him with the 2nd opposite party, is being challenged in this appeal.

THE brief facts of the case are that the complainant had availed a loan of Rs. 60,000 (Rupees sixty thousand only) from the 2nd opposite party through the 1st opposite party in respect of an auto-rickshaw bearing Reg. No. KL-10J. 4690 by entering into an agreement. As per the agreement the loan amount had to be repaid in 30 instalments @ Rs. 2,000 before 22.7.2002 and according to the complainant she had repaid the full amount by 5.8.2002 and in spite of the full re-payment, the 2nd opposite party failed to issue the clearance certificate and as such the complaint before the Forum has filed for giving direction to issue the clearance certificate along with compensation and costs. In the version filed by the 2nd opposite party, the main contention taken was that the complaint was not maintainable before the Forum. However, the 1st opposite party remained absent and was set ex parte . The 2nd opposite party''s further contention was that as per the hire purchase agreement entered into by the complainant and the 2nd opposite party, the 2nd opposite party is the legal owner of the vehicle and the complainant was only allowed to ply the vehicle on monthly hire instalments. The complainant was liable to pay additional interest for the belated payments under Clauses 4 and 19 of the agreement as the complainant had not remitted the instalments on the due dates. It was also pleaded that the complainant was still a debtor to the 2nd opposite party and on payment of dues the 2nd opposite party was ready and willing to issue the clearance certificate.

We heard the Counsel for the appellant in detail and as the respondents were called absent though notices were issued and accepted, we perused the documents and other relevant papers submitted by both parties before the Forum.

THE learned Counsel for the appellant vehemently argued before us that the Forum had no jurisdiction to entertain the complaint filed by the complainant in O.P. 246/2002 since it is the settled position that a dispute involving hypothecation cannot be termed as a consumer dispute and cannot be adjudicated by the Forum. THE complainant was to remit Rs. 8,000 towards outstanding instalments and Rs. 2,692 towards interest and in such a position, the complainant''s position is that of a debtor and hence the order to issue clearance certificate is not sustainable. It is the strong case of the appellant that the Forum''s finding that the entire dues have been paid is wrong and the Forum ought not have arrived at such a conclusion on the admission of the complainant herself that she had paid the amounts by 5.8.2002 only though the last date was 22.7.2002. THE Counsel for the appellant has also attacked the finding of the Forum that the transaction is not one of hire purchase, but one of granting financial assistance with a power to seize the vehicle and further that the Forum has gone beyond its jurisdiction in the direction of communicating a copy of the order to the RTO to cancel the endorsement in respect of the vehicle of the 2nd opposite party failed to comply with the order of issuing clearance certificate within 3 weeks from the date of receipt of order. The arguments of the learned Counsel have been put to our anxious consideration. The materials on record also support the contention of the learned Counsel. Ext. R3 produced by the 2nd opposite party would clearly show that there was a hire purchase agreement between the parties entered into on 22.1.2001 and as per Schedule B, the payments @ Rs. 2,000 per month are to be made on specific dates which the complainant has also agreed and signed. Clause 19 of the agreement reads: "All sums due from the Hirer the Owner under this Agreement will carry interest at the rate of 36 (Thirty- six) percent per annum from the due date until the date of payment by the Hirer."

IT is seen that the complainant has not remitted the above said instalments on the due dates and even as per the complaint ( Para 7) the amounts are seen remitted on different dates and not as per the schedule dates. May be she might have remitted the whole amount of Rs. 60,000 but since she had not remitted as per the schedule dates the 2nd opposite party (owner as per the agreement) is empowered to charge additional interest and the hirer is liable to pay the same as per Clause 19 of the complaint. However, at this point we are not adjudicating on the matter of the amounts paid and the amounts due as the learned Counsel banks upon his arguments mainly on the question of jurisdiction of the Fora to sit in judgments on the question of the disputes involving hire purchase matters. He has invited our attention to the decision dated 13.2.2003 of the Hon''ble National Commission in Revision Petition No. 367 of 1998 wherein relying on an earlier decision in Manager, St. Mary''s Hire Purchase (P) Ltd. v. N.A. Jose, III (1995) CPJ 58 (NC), the Hon''ble Commission had found that the hirer (complainant) held the vehicle as a bailee of the owner and was not to have proprietary right or interest as purchaser and as per law on the subject 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 Consumer Protection Act. The some view was held by the Hon''ble National Commission in Ram Deshlahara v. Magma Leasing Ltd., III (2006) CPJ 247 (NC), where it was observed that under a hire purchase transaction the financier does not render any service within the meaning of the Consumer Protection Act and the hirer is thus not a consumer. In the case on hand we find that there existed a hire purchase agreement and in the agreement also it is shown that the 2nd opposite party is in the place of the owner and the complainant as hirer. The owner''s power to exercise his right in accordance with the terms and conditions of the hire purchase agreement cannot be considered as deficiency in service. The Forum''s finding that the transaction held between the complainant and the 2nd opposite party is not one of hire purchase but one of granting financial assistance only cannot also be accepted by us and hence we are unable to sustain the orders passed by the lower Forum. In the result the appeal is allowed setting aside the order of the Forum below and in the circumstances of the case the parties shall bear their respective costs. However, the complainant shall be free to pursue his remedy before any other Forum, if so advised. Appeal allowed.