New Delhi: With around 20 lakh cheque-bounce cases choking the justice delivery system in the country, the Delhi State Consumer Commission has cracked the whip on finance companies for filing false cases against the consumers in their bid to recover loans.
The Commission has slapped a fine of Rs 50 lakh on Ashok Leyland Finance Ltd (now known as Indusind Bank Ltd) for filing two cheque-dishonour cases against a person, who said his trailer engine was also forcibly taken away by the company’s employees in June 2005, alleging defaults in repayment.
The Commission bench of NP Kaushik took a stern view of the fact that after repossessing the engine, the finance company misused the blank cheques handed over by the loanee at the time of disbursement of loan in 2004. The company, it noted, filled up two of such cheques fraudulently only to institute cheque-dishonour cases against the loanee.
Judicial Member Kaushik regretted that finance companies resorted to such wrongful tactics, burdening the judicial system with sham cases.
“It is a matter of common knowledge that the Indian Courts are flooded with cases under Section 138 of Negotiable Instruments Act (cheque-bounce). A large number of such cases are filed on false grounds… In the present case, OP (company) has filed two such false cases against the complainant. OP is a financer. Against how many borrowers it has filed false cases under Negotiable Instruments Act, is anybody’s guess,” noted the panel.
It then decided to impose an exemplary cost on the company to send out a message loud and clear against such practices. Besides, it also held that the cost so recovered could come to aid of several other consumers who could not approach the Commission due to various constraints.
“The Consumer Protection Act, 1986 provides for award of punitive damages against such service providers in respect of the aggrieved consumers, who have not come to the courts of law. Keeping in view the enormity of the business carried on by the OP, I am of the view that the ends of justice shall be met if the OP is directed to deposit an amount of Rs 50 lakh in Consumer Welfare Fund of the State maintained by this Commission,” said Kaushik.
The Commission directed the company to cough up Rs 50 lakh within 30 days.
Also, adjudicating the complaint on merits, the panel said that the company must pay him damages of Rs 5.1 lakh towards recovery of instalments paid by him, cost of driver's cabin and on account of mental agony and harassment. It underlined that the engine had already been sold by the company to a third party and therefore the complainant has to get back his instalments apart from a compensation.
“Admittedly, the complainant had to face two criminal proceedings under section 138 of Negotiable Instruments Act because of the misuse of the cheques by the OP. OP has not only misused the cheques but has also filed a false affidavit in this Court,” said the Commission, pointing out the company had falsely claimed that the cheques were given by the complainant to settle the loan amount.
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