The brief facts of the complaint case are that the complainant had availed loan to the tune of Rs.21,400/- from the OP bank vide Loan Account No.A0154250/32150480 against security of gold ornaments belonged to his mother. The said loan was taken at the time of his mother’s death in order to pay the nursing home bills and cremation charges. After sometimes upon receiving source information the complainant visited the OP bank and heard that the gold ornaments which were kept as security had been sold by the OP bank. Thereafter, the OP bank had handed over a manager’s cheque of Rs.4,280.59 sating the said amount as balance left after selling the gold ornaments and after calculating all adjustments towards the loan account. The complainant knocked each and every door of the OPs but they narrated that they had given enough opportunity to the complainant to repay the loan but none turned up from the end of the complainant and accordingly the OPs sold the ornaments in auction. It has been asserted by the complainant that the OP bank never intimated the complainant regarding the sale procedure and illegally sold the said ornaments of the complainant without giving any intimation and thus the OPs have harassed and denied to disburse the claim of the complainant which is deficiency in service under the purview of the Consumer Protection Act. Hence, this case.
OP Nos.1 & 2 have entered appearance and contested the case by filing written versions wherein the material averments made in the complaint have been denied and it has been contended inter-alia that the instant case is not maintainable.
It has been contended by the OPs that it was the duty of the complainant to repay the loan by paying instalments in due time but the complainant deliberately avoided and neglected to repay the loan and as such the OP bank did not have any other option than to sell the pledged ornaments for recovery of loan. It has been further stated by the OPs that OP bank had sent consecutive notice to the complainant before selling the pledged gold but even after reminders the complainant failed to pay the dues and accordingly gold ornaments were put on auction and sold and the fact was intimated to the complainant vide letter dated 02.01.2016 and the excess amount accrued in the auction was returned to the complainant vide Cheque No.012151. It has been further stated by the OPs that the complainant has approached before this Forum with oblique motive without having any basis at all and as such the instant case is liable to be dismissed.
To prove the case, the complainant has filed the following documents:-
1. Original copy of the letter of the OP is marked as Annexure - A.
2. Original copy of the Cheque is enclosed as Annexure - B.
3. Xerox copy of the track record is enclosed as Annexure – C.
4. Original Bank letter dated 23.03.2015 showing weight of Gold.
OP Nos.1 & 2 have filed some documents which are marked as Annexure A, B, C, D & E.
Complainant has filed examination-in-chief supported by affidavit.
Complainant has filed written notes of argument.
OP Nos.1 & 2 have filed examination-in-chief by way of affidavit.
OP No1 & 2 have filed written notes of argument.
Points for determination
1. Is there is any deficiency in service on the part of the OPs ?
2. Is the complainant entitled to get any relief as prayed for ?
Decision with reason
Both the issues are taken up together for the brevity and convenience of discussion.
It is admitted fact that the complainant took loan of Rs.21,400/- from the OP bank by depositing gold ornaments as security.
This is the case of the complainant that he took the said loan at the time of his mother’s death in order to pay the nursing home bills and cremation charges. The further case of the complainant is that after sometimes upon receiving source information the complainant visited the OP bank and heard that the gold ornaments which were kept as security had been sold by the OP bank. Thereafter, the OP bank had handed over a manager’s cheque of Rs.4,280.59/- stating the said amount as balance left after selling the gold ornaments and after calculating all adjustments towards the loan account. The further case of the complainant is that the OP bank never intimated the complainant regarding the sale procedure and without having any knowledge of the complainant the gold ornaments were put on auction and sold by the OP bank for their illegal gain.
The OPs on the other hand claimed that it was the duty of the complainant to repay the loan amount by instalments in due time but the complainant deliberately avoided and neglected to repay the loan. The OP bank had sent two consecutive notices to the complainant before selling the pledged gold but even after repeated reminders the complainant failed to pay the dues and accordingly the gold ornaments were put on auction and sold and the fact was intimated to the complainant vide letter dated 02.01.2016 and the excess amount accrued in auction was returned to the complainant vide cheque no.012151.
In this case, the complainant has submitted his examination-in-chief supported by affidavit. Complainant has also submitted certain original documents. The original bank receipt dated 23.09.2015 submitted on the side of the complainant disclosed that the complainant took loan on 23.03.2015 by depositing four nos. of gold rings and eight nos. of ear rings and the gross weight of said ornaments was 16.00 gms. The loan was taken for a period of six months and due date of payment of loan was 23rd September, 2015. The OP Bank claims that even after expiry of the date of payment of the loan amount the OP bank sent notice on 23.10.2015 and again on 10.11.2015 to the complainant at his address by Speed Post giving him opportunity to renew or repay the loan but despite of service of notice and several reminders by SMS the complainant did not take any initiative to repay the loan. But in this case the OP bank has failed to satisfy this Forum that the aforesaid two notices were at all served upon the complainant. The Xerox copy of the papers submitted by the OP allegedly issued by Postal Department shows that the said notices were unserved due to insufficient address. OP did not furnish the original envelopes bearing the original endorsement of the Postal peon in respect of the said two unserved notices before this Forum.
It is a settled legal proposition that at the time of availing gold loan there was a contract between the parties which are binding upon them. But in this case, the OP failed to submit the said contract agreement.
For argument’s sake if we hold that the complainant had no intention to repay the loan or the complainant was defaulter in payment of loan instalment to the OPs, even in that case the OP bank cannot ignore the terms and condition as embodied in the Declaration cum Terms and Conditions of the gold loan. As per terms and conditions in the event of default in payment of loan the bank shall be entitled to sell the gold security in open market after giving borrower a notice of seven business days which the borrower/borrowers agree is a reasonable period for the purpose of Section 176 of The Contract Act, 1972. The proceeds so realized from the sale of gold security shall be utilized towards the repayment of dues under the loan.
In this case, the OPs have claimed that the bank sent several reminder notices to the complainant and even contacted him through SMS but we do not find any materials to hold that any of the letters or notices, issued by the bank through Speed Post, were at all reached to the address of the borrower/complainant. If those letters were sent to the address of the complainant then there must be acknowledgement receipt of service and if the letters were not served, those should be returned unserved to the address of the sender. The OPs have deliberately suppressed the original postal covers which were returned to the OPs due to insufficient address of the addressee. As per terms and conditions between the parties, it was the obligation on the part of the OPs to intimate the complainant before auction or sale of the pledged gold ornaments. But the OPs did not perform their part of the contract. Here it is clear that the notice was not reached to the complainant to his address and it was not in the knowledge of the complainant that the OPs put the gold ornaments in auction and sold the same for realization of the loan amount. So, there is no hesitation to hold that the OP bank without serving any notice upon the complainant or without informing the complainant had sold the pledged gold ornaments in violation of the terms and conditions of the loan agreement which is unfair trade practice on the part of the OPs. The OPs for their illegal gain have arbitrarily auctioned the gold ornaments of the complainant in illegal manner which is absolutely against fair trade practice. The gold ornaments of the complainant was auctioned and sold by the OPs keeping the complainant in dark and without giving him any opportunity to liquidate the loan amount.
So, considering the facts and circumstances of the case with regard to the materials and evidence of the parties on record, this Forum is of the view that the OPs are liable for deficiency in service and there was unfair trade practice on the part of the OPs for which the complainant suffered loss.
Under such circumstances, complainant is entitled to get return of the gold ornaments/gold weighting 16.00 gms. and a sum of Rs.20,000/- towards compensation for mental pain, agony and harassment and Rs.5000/- towards litigation cost from the OPs.
In the result, the case succeeds in part.
Hence, it is
O R D E R E D
that the Consumer Case No.40/S/2016 is allowed on contest in part against the OP Nos.1 & 2 with cost.
The complainant is entitled to get return of the Gold Ornaments/Gold weighing 16.00 grams from the OP Nos.1 & 2 after adjustment of the loan amount together with interest thereon as per banking rules.
The complainant is further entitled to get a sum of Rs.20,000/- towards compensation for mental pain, agony and harassment from the OP Nos.1 & 2.
The complainant is further entitled to get a sum of Rs.5,000/- towards litigation cost from the OP Nos.1 & 2.
The OP Nos.1 & 2, who are jointly and severally liable, are directed to return the Gold Ornaments/Gold weighing 16.00 grams after adjustment of the loan amount together with interest thereon as per banking rules within 45 days from the date of this order.
The OP Nos.1 & 2, who are jointly and severally liable, are further directed to pay a sum of Rs.20,000/- by issuing an account payee cheque in the name of the complainant towards compensation for mental pain, agony and harassment, within 45 days of this order
The OP Nos.1 & 2, who are jointly and severally liable, are further directed to pay a sum of Rs.5,000/- by issuing an account payee cheque in the name of the complainant towards litigation cost, within 45 days of this order,
In case of default, the awarded amount will carry interest @ 9% per annum from the date of this order till realization.
Failing which, the complainant will be at liberty to put the decree into execution.
Copies of the judgment be supplied to the parties free of cost.
