Delhi

North East

CC/487/2015

Deepak Kr. - Complainant(s)

Versus

I.I. F.L Gold Loans - Opp.Party(s)

12 Jul 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No. 487/15

 

In the matter of:

 

	Deepak S/o Shri Om Prakash R/o B-10, Meet Nagar, 20 ft Road, Shahdara. Delhi-110094.	Complainant
	Versus
1.	IIFL Gold Loans Add: Ground Floor, G-11, Dilshad Colony, Near Axis Bank,                    Delhi-110095.   Registered Office: 12A-10, 13th Floor, Parinee Crescenzo C-38 and C-39, G-Block, Behind MCA Bandra Kurla Complex, Bandra East, Mumbai-400051.	Opposite Party

 

DATE OF INSTITUTION:         JUDGMENT RESERVED ON:               DATE OF DECISION      :

10.12.2015 29.05.2018 12.07.2018

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

Ravindra Shankar Nagar, Member

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. The grievance of the complainant in the present complaint is that he had availed of gold loan from OP vide GL No. 2759154 on 09.04.2013 for a sum of Rs. 36,000/- by pledging his gold jewellery with OP for which complainant was paying regular installments on quarterly basis as per the loan agreement to OP and had paid the latest installment/interest on 06.07.2015. However when the complainant went to OP on 07.10.2015 to pay his quarterly  installment, the officials of OP informed him that they have already sold off his gold a month ago which act the complainant has alleged was done by OP without any notice to him despite OP taking regular installments from the complainant. When the complainant enquired above the company policy of getting agreement renewed every year as informed verbally by OP, no satisfactory explanation was given to the complainant by OP in this regard. The complainant, therefore was constrained to file present complaint, being aggrieved by the acts of OP of selling his gold jewellery without intimation to him and has prayed to this Forum for issuance of directions to OP to return the gold pledged with them and Rs. 1,80,000/- towards mental harassment.

Complainant has annexed sanction letter dated 09.04.2013 of gold loan no. 2759154 with OP pledging 13.99 Grams and 3.34 Grams (17.33 grams) net weight gold of the value 36,393/-against sanctioned loan of Rs. 36,000/- with quarterly interest @ 1.5% payable thereupon 08.07.2013 onwards and e-mail to OP.

2. Notice was issued to the OP which entered appearance and filed written statement on 21.04.2016. The OP admitted the factum of complainant procuring gold loan to the tune of Rs. 36,000/-  from it vide loan account no. GL-2759154 on 09.04.2013. However OP submitted that the OP had duly sent auction notice dated 04.07.2014 to the complainant bearing reference                                     no. GL2759154/AUC/DEL/JULY’15/50168 on the address of the complainant to which neither the complainant replied nor approached the OP to make the payment outstanding of                        Rs. 37,523/- claimed therein against the loan and further alleged that the said notice was sent since the complainant was not regular in making payment of the interest and OP denied having received any e-mail from the complainant in this regard. The OP further stated that another letter dated 19.10.2015 was issued by the OP to the complainant intimating the complainant about the refund of excess sale amount of Rs. 1861/- post auction and prayed for dismissal of the complaint on grounds that the OP gave sufficient time/opportunity to the complainant by way of repeated request and personal follow-up to repay the loan amount but the complainant failed to adhere to the same and therefore his gold was auctioned by the OP.
3. Rejoinder to the written statement was filed by the complainant in rebuttal to the defence taken by the OP in which the complainant submitted that he had pledged his gold jewellery containing one gold jhumki, one pair of ear rings, one ring and two pairs of baali with total gross weight 19.70 Grams and net weight  17.33 Grams of total market value of Rs. 36,393/- against which the OP had given him gold loan of Rs. 36,000/- at 1.5% Interest payable quarterly early interest payment rebate which installment / interest the complainant regularly paid on 08.07.2013, 11.10.2013, 09.01.2014, 17.04.2014, 10.07.2014, 11.10.2014, 10.01.2015, 13.04.2015 and lastly on 06.07.2015. The complainant submitted that on 06.10.2015 when complainant visited OP office for next payment, he was told that his gold has already been sold out on 28.09.2015. The complainant reaffirmed that he had sent an e-mail dated 16.10.2015 to OP resisting the auction of his gold items by OP without prior intimation to him and denied having received any auction notice dated 04.07.2015 or any letter dated 19.10.2015 from OP as stated by OP in its written statement.
4. Evidence by way of affidavit was filed by the complainant reiterating his grievance in the complaint and rejoinder and prayed for Rs. 5,100/- as cost of litigation in addition to relief already prayed for in the complaint.

Evidence by way of affidavit was filed by the OP reiterating its defence and exhibiting copy of auction notice and copy of letter of refund of excess sale amount post auction.

5. Written arguments were filed both the parties delineating their respective grievance / defence.
6. The complainant filed an application on 12.10.2017 for seeking relief for return of his gold jewellery and filed copies of receipts of interest paid by him against gold loan to OP on 11.10.2013, 17.04.2014, 10.07.2014, 11.10.2014, 10.01.2015 and 06.07.2015 (filed in original) to the tune of Rs. 1630/-, Rs. 2340/-, Rs. 1460/-, Rs. 1630/-, Rs. 1632/- and Rs. 1612/- respectively. The OP filed reply to the same and objected to the maintainability on grounds that the relationship between complainant and OP was not that of a consumer and the said application was moved at a belated stage of final arguments whereas the documents accompanying therewith should have been filed at the initial stage of the complaint and therefore not admissible at this stage. The OP further urged that the complainant defaulted in making payment to the OP against the gold loan and has not placed on record a single receipt of payment made to the OP to justify the auction of gold done by the OP. The OP relied upon the judgment of District Forum Srikakulam in case of Kancharana Krishnarao Vs The Branch Manager, India Infoline Finance Ltd and Anr. in CC No. 49 of 16 passed on 06.07.2017 in which the District Forum, relying upon judgment of Hon’ble Kerela SCDRC in Muthoot Bankers Vs N. Shadhadharan and as per the judgment of Hon’ble National Commission in 1997 (1) CPJ 559 held that pledging of gold ornaments is a debtor and creditor relationship and does not come under the jurisdiction of Consumer Protection Act, had dismissed the complaint with liberty to the complainant to approach civil court under CPC for remedy.
7. We have heard the rival contentions of both the parties and have thoroughly perused the documentary evidence placed on record.  

It is not in dispute that the gold loan of Rs. 36,000/- was availed of by the complainant from the OP vide gold loan No. GL-2759154 by the complainant pledging his gold jewellery weighing 17.33 Grams Net weight 19.70 Grams worth Rs. 36,393/- with the OP on 09.04.2013. However the dispute arose when the complainant acquired knowledge in October 2015 that the OP had sold of his pledged gold to which the complainant has alleged no notice or information given by OP in this regard despite the complainant paying regular interest / quarterly installment to the OP against the loan. The auction notice dated 04.07.2015 addressed to complainant by the OP does not bear any postal receipt or tracking report or proof of dispatch or delivery and same is the case with letter dated 19.10.2015 post auction refund letter to complainant by the OP. No details of auction allegedly held by the OP has been produced by OP regarding when it was conducted, the highest bidder therein with respect to pledged gold of the complainant and at what value the same was sold at. In absence of no cogent or convincing evidence of auction, inference of no legal / valid auction having taking place can safely be drawn against the OP. Further in the auction notice dated 04.07.2015, nowhere in the pleadings has the OP specified the period of default or interest payable by the complainant but has instead made a vague allegation of failure on the part of the complainant to repay the loan amount with ultimatum to pay the entire outstanding of Rs. 37,523/- failing which his pledged jewellery shall be auction after announcement of public auction in the newspapers but has not filed any such public notice given in any newspaper daily pertaining to the auction.Therefore, the OP has failed to establish beyond reasonable doubt that the auction notice was duly sent or received by the complainant or that any auction was ever held by the OP wherein the pledged jewellery of the complainant was sold. Pertinently in the post auction letter dated 19.10.2015 also, the OP has not specified or mentioned what amount they have received towards the auction of the pledged gold and have simply asked the complainant to collect the excess amount of Rs. 1861/-. The Hon’ble National Commission in the judgment of Manager, Karnataka Bank Ltd. Vs Puttamade Gowda 2002 (3) CPR 36 (NC) had held that before putting the pledged goods to sale, the pledgee or pawnee has to give reasonable notice to the debtor and failure to do so is clear breach of mandatory provision of section 178 on Indian Contract Act, 1872. We have also observed that there was no notice published by OP in any newspaper / press notice for auction which would have been a specific notice to effect sale / auction.

As regards the admissibility of the application filed by the complainant for placing on record the repayment receipts towards gold loan, the said application was undoubtedly moved at a late stage of proceedings, however notwithstanding the fact that the matter was listed for arguments, the complainant was a layman unaided by a counsel and was not conversant with the legal nuances of proceedings of the court and to not defeat the ends of justice, liberty was granted by this Forum to the complainant to place on record the repayment receipts of interest paid by the complainant to the OP against the gold loan and therefore the application was allowed.

On perusal of repayment receipts, it is observed that the payment receipts for the dates 08.07.2013, 09.01.2014 and 13.04.2015 are missing and on specific query put to the complainant by this Forum in this regard, he admitted to not having them in his possession to prove the maintenance of financial discipline of payment of quarterly interest to the OP, though the complainant admittedly had paid the latest installment in July 2015 which was the same month in which the auction notice issued by OP to him is also dated.

The Hon’ble National Commission in Federal Bank Ltd Vs Gajanan S. Alva 1 (1996) CPJ 252 (NC) had held the bank guilty of negligence and deficiency in service by putting gold auction to sale before the cutoff date and causing loss to the pledgee.

However, as regards the admissibility of the complaint, a pawn is a security whereby a deposit of goods is made by contract as security for debt. Section 2 (o) of CPA defines “service” to include provisions of facilities in connection with banking and financing. The service availed herein by the complainant is that of availing loan from OP on the security of goods. The Hon’ble National Commission in citation III (1997) CPJ 3 (NC) came to the conclusion that the transaction of pledging of shares and availing advance / over draft facilities the against did not come within the ambit of CPA and observed that ‘the bank could file a suit for recovery of the debt and retain the pledged good as a collateral security’. In view of this we are of the opinion that it was a relationship of a creditor and debtor so far as pledged shares were concerned. The remedy of the pawner for an improper sale of pledged goods is for recovery of damages. The complainant therefore could not resort to remedies provided under CPA 1986. The Hon’ble National Commission therefore had established that the relationship in such cases of creditor and debtor were matters to be entertained only by a Civil Court.

The Hon’ble National Commission in the judgment of Standard Chartered Bank Vs P.N. Tantia 1997 (2) CPR 237 (NC) had held in cases where the relationship between bank and complainant was held to be that of creditor and borrower, averment of deficiency of service is not maintainable and therefore the complainant / pawner could proceed against the bank by way of Civil Suit for recovery and not resort to Consumer Protection Act, thereby setting a site order passed by Hon’ble State Commission which had allowed the complaint and had awarded compensation to the complainant. Further in the case of D K Lalwani Vs President, Indian Bank Mutual Fund 2002 (I) CPR 161 (NC), the Hon’ble National Commission confirmed the order of the lower Fora holding that complainant could not raise consumer dispute for alleging deficiency in service against the bank in not splitting hypothecat shares as relationship between parties was simply that of creditor and debtor.

8. We therefore, in light of the rulings of the Hon’ble National Commission and in the facts and the circumstances of the case are of the considered opinion that the present dispute does not fall within the ambit of consumer complaint within the parameters of Consumer Protection Act in as much as the relationship between the complainant and the OP is that of pawner and pawnee that is debtor and creditor and the competent court of jurisdiction in the present dispute is Civil Court and the complainant is at liberty to seek appropriate relief against the alleged wrongful auction of this pledged gold by the OP. We accordingly, dismiss the present complaint, on grounds of non maintainability / inadmissibility with no order as to costs.
9.  Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
10.   File be consigned to record room.
11.   Announced on 12.07.2018

 

(N.K. Sharma)     President

(Sonica Mehrotra) Member

(Ravindra Shankar Nagar) Member