DISTRICT CONSUMER DISPUTES REDRESSAL FORUM PALAKKAD

Dated this the 20^th  day of April  2013

Present : Smt.Seena H, President

            : Smt. Preetha.G. Nair, Member

            : Smt. Bhanumathi.A.K, Member           Date of filing: 18/01/2013

(C.C.No.18/2013)

M.K.Gireeshkumar

S/o.Manikkan,

Mattupara,

Nenmmara (PO),

Palakkad                                                       -       Complainant

(By Adv.V.Shanmuganandan) 

V/s

1.Anitha Rajagopalan,

   Manager,

   Kosamattom Finance Pvt.Ltd.,

   M.V.C.Building,

   Pollachi Road, Nenmmara

(By Adv.G.Ananthakrishnan)

2.Managing Director,

   Kosamattom Finance Pvt.Ltd.,

   M.K.C.Building Market Junction,

   M.L.Road, Kottayam.                                -        Opposite parties

  (By Adv.G.Ananthakrishnan)

O R D E R

By Smt.PREETHA G NAIR, MEMBER

The complainant had pledged gold on 3/12/2011 and availed loans of Rs.1,49,000/- and Rs.21,600/- vide loan A/c No.665 and 666. The interest of loans was fixed at 18 percentage p.a. at the time of borrowal and  the loan period was upto 1/01/2012. The opposite party has sent a letter dated 24/12/12 stating to take back the gold ornaments.  Thereafter  the  complainant approached 1^st opposite party to take back the gold and at that time they demanded  36 percentage interest. The 1^st opposite party has not functioning the guidelines issued to the Non banking institution by the Reserve Bank of India and is levying illegal interest. Thereafter the complainant had approached the Circle Inspector of Police, Nemmara and submitted complaint. The Circle Inspector summoned the opposite party and the complainant,  and directed the complainant to remit Rs.2,30,781/-. On 5/1/2013 the 1^st opposite party had agreed the terms and given in writing to pay Rs.2,30,781/-. As per the direction from the police, the complainant had went to 1^st opposite party on 7/1/2013 and 8/01/2013 to take back the gold ornaments. But he was sent back the 1^st opposite party stating various reasons. On 09/1/2013 the 1^st opposite party informed the complainant  that in order to get back the gold ornaments he should remit Rs.1,49,000/- and Rs.57,754/- as interest towards loan No.665 and Rs.21,600/- and Rs.8,436/- as interest in respect of Loan No.666 i.e. the grant total of Rs.2,66,826/- demanded by the opposite parties. If the complainant has not paid the amount the gold will not be returned.

The complainant had remitted Rs.1,49,000/- towards principal and Rs.57,754/- towards interest in respect of Loan A/c No.665. In loan No.666 the complainant had paid Rs.21,600/- towards principal and Rs.8,436/- towards interest and for payment the 1^st opposite party had issued receipt. The complainant is liable to pay Rs.26,860/- and Rs.3,888/- as interest   in A/c No.665 and 666. The opposite parties had received Rs.66,826/- towards interest. Amount of Rs.36,118/- as excess amount  has been collected illegally. The interest levied by opposite parties illegally. The act of opposite parties amounts to deficiency  in service. Hence, the complainant prays an order directing the opposite parties to pay Rs.36,118/- as the excess amount and Rs.50,000/- as compensation for deficiency in service with 18 percentage  interest.

Opposite parties filed version stating the following contentions. The complainant is not a consumer as defined under the Consumer Protection Act. The relationship between the complainant and opposite party was that of a debtor and creditor, which  has also ended  when the complainant paid the amounts and closed the loan account. The opposite party is a non banking financial company and strictly functioning as per the Reserve Bank of India. As per loan account Nos. 665 and 666 on 3/12/2011 the complainant was given Rs.1,49,000/- & Rs.21,600/- as gold loans. On 29/11/12 and 24/12/12 demand notice were issued to the complainant and he had remitted the loan amount and interest. So the loan accounts were closed and the gold ornaments were released to the complainant on  9/01/13.  No extra amount has been levied from the complainant. Interest was charged only according to the directions of Reserve Bank of India and loan agreement entered by the complainant. Hence the opposite parties prayed that dismiss the complaint with cost.

Both parties filed their chief affidavit. Ext.A1 to A5 marked on the side of complainant. Heard the matter.

Issues to be considered are  

1.    Whether the complaint is maintainable  under the provisions of Consumer Protection Act ?

2.    Whether there is any deficiency in service on the part of opposite parties   ?

3.     If so, what is the relief and cost ?

Issue No.1

The opposite parties stated that the complaint is not maintainable. The relationship between the complainant and opposite party was that of a debtor and creditor which has also ended when the complainant paid the amounts and closed the loan account. Section 2(1)(o) of the Consumer Protection Act states that banking comes under the definition of service. Hence the complaint is a consumer under the Consumer Protection Act. So the 1^st issue answered in favour of the complainant.

Issue No.2 & 3

We perused relevant document on record. In Ext.A1 mentioned that the last date of payment of interest without penal was on 02/12/2011. Also mentioned the loan date was 3/12/2011. In the 2^nd receipt dated 3/12/11 mentioned that the last date of payment without penal was on 01/01/2012. So in the complaint also mentioned that the loan period was upto 01/01/2012. Admittedly as per loan account Nos.665 and 666 on 3/12/2011 the complainant was availed  Rs.1,49,000/- and Rs.21,600/- as gold loans. On 29/11/2012 and 24/12/2012 demand notice were issued to the complainant. It was evident from Ext.A2 that the opposite parties had sent letter stating  that Rs.1,49,000/- and Rs.21,600/- availed as gold loans and demanded to pay the loan amounts with interest.

According to the opposite parties the interest was charged only according to the directions of Reserve Bank of India  and loan agreement entered by complainant at the time of availing the loan. But the opposite parties had not produced evidence to show the agreement entered by the complainant. In Ext.A1 the two receipts also not mentioned the due dates and interest. According to the complainant the interest fixed at the rate of 18 percentage at the time of availing the loan. But the opposite parties had not produced evidence to show the interest and risk interest agreed by the complainant at the time of availing the loan. According to the opposite parties the complainant has remitted the loan amount with interest and loan accounts were closed and the gold ornaments were released to the complainant on 09/01/2013. In Ext.A4 attached the copy of register of petition shown that the 1^st opposite party admitted to settle the matter for an amount of Rs.2,30,781/- without penal interest. No contradictory evidence  produced by the opposite parties. Normally the laws against for imposing huge interest. In the present case the opposite parties had given the calculation statement of loan account with interest. But the opposite parties had not produced the agreement entered by the complainant. Moreover the opposite parties had not given the correct dates of payment in the receipts.

The opposite parties stated the details of loan availed by the complainant.

The opposite parties admitted that the loan amount along with interest remitted and the loan closed and the gold ornaments were released to the complainant on 09/1/2013. As per Ext.A1 the complainant pledged the gold ornaments on 3/12/11 and Ext.A5 shown that the complainant paid Rs.2,36,790/- on 9/01/13. The complainant  has not produced evidence to show that he has paid the entire amount before the due date. So the opposite parties had liable to demand the penal charge. Banks and Financial establishments are bound to follow the directions and circular issued by Reserve Bank of India while changing interest. A higher rate cannot believed by tactful application. The opposite parties had collected exonerated interest applying the name of risk interest. Collection of illegal interest is deficiency.

In Manager  Muthoot Finance Ltd. V. Muhammed Koya dated 30/03/2013. The Hon’ble State Commission held that the appellant was not able to explain which provision of law they are entitled to collect risk interest. As the respondent has not committed any default he is not bound to pay penal interest.

We hold that complainant is entitled  for refund of Rs.22,942/- (risk interest of gold loan No.665) and Rs.3,327/- (risk interest of gold loan No.666). The amount shall be paid with interest @10 percentage from the date of complaint to date of order.

In the above discussions we are of the view that there is deficiency in service on the part of opposite parties. In the result complaint partly allowed. We direct the opposite parties jointly and severally liable to pay the complainant an amount of Rs.26,269/- (Rupees Twenty six thousand two hundred and sixty nine only)  as  the risk interest of gold loans with  interest @10percentage  from the date of complaint to date of order and   pay Rs.1,000/-(Rupees One thousand only) as cost of the proceedings.

 Order shall be complied within one month from the date of receipt of order, failing which the whole amount shall carry 9 percentage interest per annum from the date of order, till realization.

Pronounced in the open court on this the 20^th day of April  2013.

                                                                       Sd/-

Seena H

President

    Sd/-

Preetha G Nair

Member

    Sd/-

Bhanumathi.A.K.

Member

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1  – Photocopy of receipt Nos.665 & 666 dtd.3/12/11

Ext.A2  – Notice issued by the opposite party to the complainant (2 nos)

Ext.A3  – Photocopy of complaint filed before the CI of Police, Nemmara

Ext.A4  – Reply given by State Public Information Office, Circle of Police Office,

             Nemmara to the complainant under RI Act.

Ext.A5  – Receipt issued by opposite party to the complainant (2 Nos)

Exhibits marked on the side of the opposite party

Nil

Cost

Rs. 1,000/-  allowed as cost of the proceedings.