Ernakulam District Commission Holds Hinduja Leyland Liable For Deficiency In Service Due To Not Removing The Hypothecation On The Vehicle, Even After Loan Repayment

Brief Facts of the Case

The complaint hypothecated his vehicle with Hinduja Leyland Finance Ltd/Finance Company. The main issue here is the company's failure to remove the hypothecation on the complainant's vehicle despite full loan repayment by them. As a goods vehicle driver, this has caused significant financial loss and mental anguish for the complainant, who seeks compensation and the lifting of the hypothecation along with necessary document handover. Furthermore the complainant has highlighted that his successfully repaying loans counters claims of default.

Contentions of the Opposite Party

The company argued that the complaint lacked merit both legally and factually, labelling it as an abuse of the legal process and deserving of dismissal. The company asserted that they operate primarily on a hypothecation and guarantee basis and refute the claim of financial loss due to cheque handling as described by the complainant. The company contended that the complainant defaulted on monthly loan repayments and was unwilling to settle the debt despite repeated demands. They indicated plans to pursue arbitration as outlined in the loan agreement, suggesting that the complaint was filed to pressure the company and as a reaction to the initiation of arbitration proceedings. Furthermore, the company asserted that the commission lacks jurisdiction over the matter due to the arbitration clause within the loan agreement.

Observations by the Commission

The Commission observed that the statement of accounts issued by the company the statement of accounts from Union Bank of India, supported the complainant's claims regarding timely loan repayments and financial transactions. Additionally, the passbook from Syndicate Bank, further validated the complainant's assertions regarding the pledging of assets to alleviate financial difficulties.

The commission referred to the landmark judgment of Lucknow Development Authority vs. M.K.Gupta, wherein, the Supreme Court emphasized the protection of consumer rights against deficiencies in service and unfair trade practices and it was ruled that the failure of the company to fulfill contractual obligations and statutory duties amounted to a deficiency in service. The commission further highlighted that the complainant provided substantial evidence through, reinforcing the claim of full loan repayment and the right to have the hypothecation lifted. The defense presented by the company, mainly based on denial and lack of substantive evidence, failed to refute the complainant's case. The commission directed the company to lift the hypothecation on the vehicle and hand over all necessary documents to the complainant along with a payment of Rs. 1,00,000 as compensation for the financial loss, emotional distress, and mental agony suffered due to the deficiency of service as well as Rs. 20,000 towards the cost of the proceedings.

Case Title: Antony K V Vs. Hinduja Leyland Ltd.

Case Number: C.C No. 20/69

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