KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No. 248/2016

JUDGMENT DATED: 11.06.2019

(Against the Order in C.C. 09/2010 of CDRF, Kottayam)

PRESENT : 

SRI. T.S.P. MOOSATH                                                : JUDICIAL MEMBER

SRI. RANJIT. R                                                           : MEMBER

SMT. BEENA KUMARY. A                                       : MEMBER

APPELLANT:

Muthoot Finance Ltd., Kottayam K.K. Road Branch, Pin-686 001 represented by its Manager Sibi Aley Alex.

(By Adv. C.S. Rajmohan)

                                                Vs.

RESPONDENT:

Biju P. Mathew, S/o Mathew Kurian, Plaparambil, Kuzhimattom, Panachikkadu, Kottayam, Pin-686 920.

JUDGMENT

SRI. T.S.P. MOOSATH : JUDICIAL MEMBER

The opposite party in C.C. No. 09/2010 of the Consumer Disputes Redressal Forum, Kottayam, in short the district forum, has filed the appeal against the Order passed by the district forum by which they were directed to receive the loan amount with interest @ 12% per annum from the complainant and return the gold ornaments pledged by him and pay Rs. 2,000/- as cost to him. 

2.  The averments contained in the complaint, in brief, are as follows:  the complainant had availed gold loans from the opposite party as

At the time of pledging the ornaments and taking the loans the opposite party had informed the complainant that they would charge interest @12% per annum for the amount taken as loan.  The complainant approached the opposite party with the principal amount plus interest @ 12% for closing the loan and taking back the gold pledged.  But the opposite party refused to close the loan account and return the gold and demanded interest @ 29% for closing the loans availed by the complainant.  In these circumstances, the complainant approached the General Manager of the opposite party on 05.09.2009 and apprised him about the illegal demand and requested him to return the gold ornaments after closing the loan accepting the interest as per the agreement @ 12% per annum.  But the General Manager of the opposite party also refused to return the gold ornaments or to give the complainant any assurance in the context.  The opposite party also threatened that they will auction the gold ornaments pledged and take the principal amount and interest @ 29% per annum.  The complainant sent a notice to the opposite party on 14.09.2009 to accept the loan amount and interest as per the Money Lenders Act and return the gold ornaments pledged.  But the opposite party has not replied yet to the notice and they have not agreed to close the loan account and return the gold ornaments.  The complainant visited the branch manager of the opposite party several times and expressed his intention to close the loan account.  The opposite party is refusing to close the loan account accepting the agreed interest, but insisting on payment of 29% interest for closing the loan account.  The opposite party had threatened to auction the gold ornaments pledged if that interest illegally charged on the complainant is not paid within the stipulated time.  There was malafides and fraud in charging the excess interest rate.  Hence this complaint. 

3.  Opposite party filed version raising the following contentions.  The petition is not maintainable either in law or on facts.  The opposite party is a non-banking finance company incorporated under the Companies Act 1956 and the complainant is not a consumer coming under the provisions of the Consumer Protection Act.  The relationship between complainant and the opposite party is that of debtor-creditor relationship.  There was no service being given by the opposite party to the complainant.  Hence there is no deficiency in service or unfair trade practice in this case.  There was no agreement between the complainant and opposite party for collecting interest @ 12% per annum.  The complainant has never approached the opposite party or its General Manager on 05.09.2009 or any other dates for closing the loans availed by him.  The complainant has availed the loans agreeing to repay the amounts with interest @ 17% per annum and risk interest @ 12% per annum.  As per the loan agreement if the loan account is closed within 3 months a reduction of 6% on the risk interest is allowed and if the loan account is closed within 6 months a reduction of 3% on the risk interest is allowed.  The complainant has not issued any notice to the opposite party on 14.09.2009 or any other dates. But the opposite party has issued separate notices to each loan in every three months and finally issued separate registered notices on 11.10.2009 to the complainant.  The complainant has neither paid the amount due from him nor cared to contact the opposite party.  The Kerala Money Lenders Act is not applicable to the opposite party.  The charging of basic interest 17%, risk interest and penal interest are all made as per the Fair Practice Code, which is a public document filed before the RBI by the opposite party.  As per the provisions of RBI Act, no fixed rate of interest is made to an NBFC, but RBI left decision making to the companies depending upon the market and as such every company has to reveal the rate of interest it is charging to the loans and such rate shall be intimated to the RBI from time to time through the Fair Practice Code.  Hence the rate of interest charged by the opposite party in the loans in dispute is in accordance with the provisions of the RBI Act.  There was no deficiency in service from the side of the opposite party.  Hence this complaint may be dismissed with costs.   

4.  Complainant filed proof affidavit and Exts. A1 to A5 were marked on his side.  The Branch Manager of the opposite party filed affidavit and Exts. B1 to B9 were marked on the side of the opposite party. 

5.  Considering the evidence adduced by the parties and hearing both sides the district forum has passed the impugned order.  Aggrieved by the Order passed by the district forum, the opposite party has filed the present appeal. 

6.  Heard both sides and perused the records.

7.  There is no dispute to the fact that the complainant availed four loans from the opposite party by way of four occasions, i.e; on 13.03.2018, 14.03.2018 and 15.03.2018 by pledging gold ornaments and received the loan amounts.  Exts. A1 to A4 are the loan receipts issued by the opposite party to the complainant regarding the loan transactions.  It is the case of the complainant that at the time of availing the loans the opposite party informed him that they would charge 12% interest only but on 05.09.2009 when he approached the opposite party to close the loan transaction they demanded 29% interest.  On 14.09.2009 he issued a notice to the opposite party but they have not sent any reply.  So the complainant has filed the complaint against the opposite party alleging deficiency of service and unfair trade practice on their part.  It is contended by the opposite party that they did not intimate the complainant at the time of availing of the loan that they would charge only 12% interest.  It is stated by the opposite party that the complainant agreed to pay interest @ 17% and risk rate of 12% per annum.  Exts. B1 to B4 are the copies of the consent letters executed by the complainant when he availed the loans from the opposite party.  It is stated by the opposite party that they have not received any notice alleged to have sent by the complainant on 05.09.2009.  Further it is stated by the opposite party that they had issued separate notices to each loan in every three months and finally they issued notices on 11.10.2009 to the complainant.  Exts. B5 to B8 are the copies of the acknowledgement cards signed by the complainant.  It is stated by the opposite party that they are non-banking financial company registered under Sec. 45(1) A of the Reserve Bank of India Act and they are charging interest, risk interest etc. as agreed by the parties, as per the Fair Practice Code filed by the opposite party before the RBI.  As per the provisions of the Reserve Bank of India Act no fixed rate of interest is prescribed.  Ext. B9 is the copy of the Fair Practice Code.  Since the complainant is a defaulter he is bound to pay interest @ 29%.  It is contended by the opposite party that there was no deficiency of service or unfair trade practice on their part.  The district forum observed that from the available documents and evidence they cannot make a conclusion that the opposite party is entitled to the alleged rate of interest as claimed by them.  The complainant is ready and willing to remit the amount with interest @ 12% which is just and proper and over and above the normal bank rate of interest but the opposite party demanded 29% interest.  The demand made by the opposite party is not sustainable because it is a high rate.  So it cannot be said that the demand made by the opposite party was just and proper.  So the case of the complainant is to be allowed and the complaint was allowed.  Aggrieved by that order the opposite party has filed the present appeal.

8.  As submitted by the counsel for the appellant, it can be seen that the district forum passed the order without considering the documents produced by the parties.  It is the case of the complainant that at the time of availing of the loans the opposite party informed him that they would charge interest only @ 12%, which was denied by the opposite party.  Except the statement made by the complainant in the complaint there is no evidence for the claim of the complainant that at the time of availing of the loans the opposite party informed him that they would charge interest @ 12% only.  Exts. A1 to A4 does not contain the entry that the rate of interest will be 12%.  It is the case of the opposite party that the complainant agreed to pay interest @ 17% with risk interest @ 12%, in case of default on payment.  In support of their contention, opposite party produced Exts. B1 to B4, copies of the Consent letters given by the complainant to them when he availed the loans in which he agreed to pay interest @ 17% with risk interest @ 12%.  On the back side of Exts. B1 to B4 it is stated that complainant shall pay risk interest @ 12% and it is also stated that if the loan account is closed within 3 months a reduction of 6% on the risk interest is allowed and if the loan account is closed within 6 months a reduction of 3% of the risk interest is allowed.  Admittedly the complainant availed the loans in March 2008.  In Exts. A1 to A4 the last dates for payment of interest without fine or penal interest are stated, as the dates in June 2008, after 3 months corresponding to the dates of availing of the loans.  The complainant has no case that he has paid the interest or any amount towards the loan within that period.  So the opposite party is entitled to charge risk interest @ 12% per annum from the complainant as per Exts. B1 to B4.  The complainant has not disputed the execution of Exts. B1 to B4 documents.  The complainant has no case that opposite party obtained his signatures in those documents which contained some blank portions.  He has no case that the opposite party obtained his signatures in Exts. B1 to B4 by misrepresentation or fraud.  So the complainant is bound to pay interest at the rate agreed by him.  According to the complainant on 05.09.2009 he approached the opposite party to close the loan transaction and at that time the opposite party demanded 29% interest.  The said allegation is denied by the opposite party.  Except the statement made by the complainant in the complaint, there is no evidence to consider that on 05.09.2009 he approached the opposite party for closing the loan transaction and they demanded 29% interest.  According to the complainant on 14.09.2009 he had issued a notice to the opposite party and Ext. A5 is said to be the copy of the said notice.  The opposite party contended that they have not received any notice alleged to have sent by the complainant on 14.09.2009 or any other date.  Complainant has not produced the postal receipt or the acknowledgement card to show that on 14.09.2009 he had issued notice to the opposite party and it was received by them.  It is stated by the opposite party that they had sent separate notices to each loan in every three months and finally issued separate registered notice on 11.10.2009 to the complainant.  Exts. B6 to B8 are the copies of the acknowledgement cards signed by the complainant regarding the receipt of the notices sent by the opposite party to him.  There is no evidence to consider that on 05.09.2009 complainant approached the opposite party to close the loan transaction with interest @ 12% and since they demanded 29% interest he has not settled the loan transaction and on 14.09.2009 he had issued notice to the opposite party expressing his readiness to close the loan transaction with interest @ 12%.  There is no evidence to consider that on any day/date prior to the filing of the complaint, the complainant approached the opposite party to settle the loan transactions.  In these circumstances we consider that the order passed by the district forum is to be modified directing the opposite party to receive the loan amount with interest @ 29% from the complainant till 11.01.2010, the date of filing of the complaint and thereafter @ 12% per annum till 29.02.2016 the date of the final order, passed by the district forum and return the gold ornaments pledged by him.  We consider that the cost of Rs. 2,000/- ordered by the district forum is to be reduced to Rs. 1,000/-.  The order passed by the district forum is to be modified, as stated above.

In the result, the appeal is partly allowed.  The order passed by the district forum is modified as:  The opposite party is directed to receive the loan amount with interest @ 29% from the complainant till 11.01.2010, the date of filing of the complaint and thereafter @ 12% per annum till 29.02.2016, the date of the final order passed by the district forum and return the gold ornaments pledged by him and to pay Rs. 1,000/- as cost of the proceedings to the complainant. 

Parties are directed to suffer their respective costs.

At the time of filing of the appeal the appellant has deposited Rs. 1,000/-.  The respondent/complainant is permitted to obtain release of the amount, by filing proper application, to be adjusted/credited towards the cost ordered above.

T.S.P MOOSATH     :  JUDICIAL MEMBER

RANJIT. R    : MEMBER

jb                                                                                                                                                    BEENA KUMARY. A          : MEMBER