Case Study: Cholamandalam Investments v Suresh Kumar

Facts of the case:

  • Complainant, Suresh Kumar, had taken loans of Rs.8,50,000/- and Rs.4,85,000/- from the Opposite Party for purchasing trucks to earn a livelihood through self-employment.
  • Despite regular payments of the monthly installments, the complainant claimed that the opposite party had employed hooligans for forcible repossession of the truck that was delivering perishable goods. The purchaser had raised a condition that non-delivery of goods would allow him to a full claim of Rs.3,00,000/-
  • Compelled under the circumstance, the complainant signed blank documents. Instead of returning the vehicle, the opposite party sold it at a discounted rate. The complainant alleged his repeated demands to return the vehicle were also ignored. He filed a complaint at the District Forum and sought compensation.
  • The opposite party questioned the jurisdiction of the District Forum and claimed that the complainant wasn’t a consumer as he did not drive the truck personally. Despite oral as well as written notices, they further claimed that the complainant had continued to default after initial payments.
  • By a letter dated 05.01.2015, the opposite party had asked the complainant to deposit an amount of Rs. 5,16,000/- before selling the vehicle.
  • The opposite party declared the complaint as “totally wrong, baseless and false” and claimed recourse by repossession of the truck.


The District Forum concluded that it had jurisdiction over the case as the opposite party carried out business for the complainant from the same jurisdiction. It further found categorical evidence that the complainant used the vehicle for livelihood through self-employment and was thus concluded to be a consumer. As opposed to the claims of the opposite party, the complainant had defaulted only once.

The District Forum directed the opposite party to pay compensation of Rs.3,00,000/- along with interest @ 12% and Rs.10,000/- towards litigation costs.

Learnings from the case:

Debts usually become bad if it hasn’t been paid for three consecutive months. Before appointing recovery agents, the lender must check to see if the payment was forgotten or if it was unavoidable. They must also give sufficient time and notice before appointing agents to the client. Any other method to settle loan would be against the code of conduct laid down by the RBI. Appointment of hooligans and compelling the consumer is also against the policies laid down by the RBI.