Consumer Court Protects Borrower's Rights After Lender's Absence.
05 June 2024
Consumer Protection Act >> Consumer Rights
A borrower has won a revision petition against a State Consumer Disputes Redressal Commission (State Commission) order in a loan dispute. The State Commission had allowed the lender, who had failed to appear at the initial District Forum hearing, to contest the case.
The borrower (complainant) had secured a loan from the lender (opposite party) to purchase a vehicle. Following a disagreement over the final payment and issuance of a No Objection Certificate (NOC), the complainant approached the District Forum. The District Forum ruled in favor of the complainant, directing the return of the vehicle's registration certificate (RC) and issuance of the NOC.
However, the State Commission set aside the District Forum's order and remanded the case for fresh adjudication. This allowed the lender, who had been absent during the initial hearing despite receiving notice, to contest the case.
The borrower challenged this order, arguing that the State Commission erred in granting the lender an opportunity to defend themselves after failing to appear before the District Forum. They further contended that the State Commission's decision violated principles of natural justice and consumer protection, and that the well-reasoned order from the District Forum should be upheld.
The court agreed with the borrower's arguments. After reviewing the case, the court observed that the State Commission did not decide the appeal on its merits but instead allowed the lender to contest despite their absence at the initial hearing. Therefore, the court deemed the State Commission's order illegal and set it aside. Consequently, the District Forum's order was reinstated.
This decision highlights the importance of appearing at court hearings. The lender's failure to attend the initial District Forum hearing resulted in a loss of opportunity to contest the case and ultimately led to the court upholding the original order in favor of the borrower. The borrower was also awarded interest on the amount owed by the lender.