Heard learned counsel for both the parties.

2.        Captioned appeal is filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.

3.        The case of the complainant in nutshell is that complainant has borrowed Rs. 91,800/- from the opposite party by mortgaging gold ornaments in total of 47.4 grams on different dates against different pledge numbers allotted by the opposite party. It is alleged inter alia that the complainant has been repaying towards principal and interest on various dates and obtained receipts thereof from the opposite party. The complainant alleges that the O.P. informed him to pay Rs.50,000/- towards principal amount at a time, but the complainant could be able to pay Rs.25,000/- in the month of November, 2014 and assured to pay the balance amount of Rs.25,000/- after some days. It is alleged that the opposite party did not issue any money receipt on receiving Rs.25000/- in spite of several request. The complainant personally approached the opposite party, but it was in vain. It is the case of the complainant that opposite party has sold the gold ornaments of the complainant by auction sale without intimation to him. When the complainant enquired into the matter, the opposite party informed the complainant that the gold ornaments have already been  sold by auction. Since without notice, the gold ornaments of the complainant has already been sold by the opposite party in auction, there is deficiency in service on the part of the opposite party.

4.        Per contra, the opposite party filed written version stating that the complaint is not maintainable under the Act. Further, it is stated that the transaction between the opposite party and the complainant is on the basis of principle of contract. As per condition of the loan application signed and accepted by the complainant with the O.P. all  dispute between the parties shall be referred to an Arbitrator appointed under Arbitration and Conciliation Act, 1996. Since the complainant did not pay the loan amount in spite of notice, they have sold away the gold ornaments of the complainant. The complainant was given opportunity to pay the loan amount but failed. Therefore, the opposite party sold the gold ornaments of the complainant incurring a loss of Rs. 28.522/-.

5.        After hearing the parties, learned District Forum passed the following order:-

              “xxx   xxx   xxx

              The case of the complainant is allowed on contest against the opposite party in part. The opposite party is directed to pay the amount to the complainant on the basis of present gold price of the gold ornaments in the market as per its weight i.e. 47.4 grams as sold on auction sale including the interest paid and making charge of each items for the mortgaged gold by deducting the principal amount of Rs.91,800/- against the gold loan account of the complainant. The remaining surplus amount shall be paid to the complainant along with compensation of Rs. 10,000/- and Rs. 2000/- towards cost of litigation to the complainant. The order shall be carried out within 30 days from the date of receipt of this order. Failure on the part of payment within the stipulated period will impose an additional interest @6% per annum over the amount will be calculated thereon.”

6.        Learned counsel for the appellant submitted that relationship between borrower and debtor cannot be disposed of by this Consumer Commission. According to him, the complainant had mortgaged gold ornaments of 47.4 grams and took the loan. The opposite party found the complainant defaulted in payment of loan for which they have sold out the gold ornaments in auction. Therefore, there is no deficiency in service on the part of the opposite party and accordingly, the appeal should be allowed.

7.        Learned counsel for the opposite party submitted that learned District Forum after applying judicial mind passed the impugned order. According to him, in case of loan default, an auction notice should have been issued to the complainant. Therefore, learned District Forum rightly passed the impugned order.

8.        Considered the submissions, perused the DFR including the impugned order.

9.        It is admitted fact that gold ornaments of the complainant was kept under pledge. It is also not in dispute that the complainant has received the loan amount with a condition to repay the same. It appears that no notice was issued by the opposite party demanding any loan amount. But at the same time, cash receipt shows that the complainant has paid the loan amount time to time although it is not regular one. No notice was issued to the complainant before the auction took place. It appears that notice was issued before the sale but the notice demanding the loan amount being not issued, notice for sale is not a proper service rendered to the complainant. We do not find any notice issued before the sale showing the exact amount which is outstanding against the complainant. Mere pre-sale notice is not a notice unless the complainant is served with notice of demand of outstanding amount. Therefore, there is deficiency in service on the part of the opposite party proved by the complainant. Now, the question arises as to whether the operation of the impugned order should be maintained. Learned District Forum has passed the order to pay the price of the gold ornaments pledged at the market rate on the date judgment was passed.

10.     We are of the view that the operation of the impugned order needs modification because market price of gold ornaments may be not the price of gold at that time. Hence, for the removal of deficiency in service, the opposite party is liable to pay compensation in stead of payment of the price of the gold ornaments weighing 47.4 grams. The opposite party has not filed any document as to how much amount was received for sale of gold ornaments in the auction. However, we hereby direct the opposite party to pay Rs.1,25,000/- (Rupees One Lakh Twenty Five Thousand) as compensation to the complainant for the sale of gold ornaments weighing 47.4 gram illegally instead of payment of market price of  gold ornaments within 45 days from today failing which it will carry interest 6% per annum from the date of impugned order till payment made. An amount of Rs. 91,800/- already received, should be deducted from the said compensation amount and the rest of amount should be paid to the complainant. The rest portion of the impugned order will remain unaltered.

11.     The appeal is disposed of accordingly. No cost.

DFR be sent back forthwith.

          Supply free copy of this order to the respective parties or the copy of this order be downloaded from Confonet or Website of this Commission to treat same as copy supplied from this Commission.