BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SIRSA.            

                                                          Consumer Complaint no. 94 of 2017                                                                          

                                                      Date of Institution         :    26.4.2017

                                                          Date of Decision   :    24.1.2018.

Amandeep son of Shri Satnam Singh, resident of Inderpuri Mohalla, Sirsa, Tehsil and District Sirsa. 

                      ……Complainant.

                             Versus.

1. India Infoline Finance Limited, (IIFL) (Gold Loan company) having its Branch office at above Axis Bank Building, 1^st Floor, Dabwali Road, Sangwan Chowk, Sirsa, District Sirsa.
2. Satish Kumar, Branch Manager India Infoline Finance Limited, (IIFL) (Gold Loan Company) having its Branch office at above Axis Bank Building, 1^st Floor, Dabwali Road, Sangwan Chowk, Sirsa, District Sirsa.
3. India Infoline Finance Limited, (IIFL) (Gold Loan company) through its Managing Director/ Manager/ Authorized/ Responsible office Registered & corporate Office at 12A, 10, 13^th Floor, Parinee Crescenzo, C-38 & 39, G-Block, Bandra Kurla, Complex, Bandra (East) Mumbai- 400051.

                                                                     ...…Opposite parties.

            Complaint under Section 12 of the Consumer Protection Act,1986.

Before:        SH. R.L.AHUJA…………………………PRESIDENT

SH. MOHINDER PAUL RATHEE …… MEMBER.   

Present:       Sh. Sanjeev Garg,  Advocate for the complainant.

                   Sh. B.S. Beniwal, Advocate for opposite parties.

ORDER

                   The case of the complainant in brief is that complainant is the consumer of the opposite parties as the complainant has availed the loan services rendered by the ops. That the op no.1 is the branch office at Sirsa of the gold loan company which branch office at Sirsa is being managed and controlled by the op no.2 in his managing capacity and op no.3 is the Head office of the company. That in the month of January, 2016, the complainant being in hard need of the amount for his personal affairs approached the ops for getting the gold loan facility and asked about the gold loan facility. The Manager of the op no.1 fully assured the complainant about the fair trade business of the company and stated that the gold ornaments/ jewellery of the complainant would be pledged with their company and that would be mere deposit of the complainant with them against the cash loan facility being provided by the ops to the complainant and the ops would be only concerned to charge the principal amount alongwith due interest thereon (levied as per Banking norms) and also assured/ allured the complainant that except this entitlement of company, they will do nothing with the pledged jewellery/ ornaments of the complainant. The ops also assured that in case of excess delay (more than six months from due date) in payment of due installments, in that case the company would charge the extra panel interest which would be up to 6% per annum and also stated that the penalty interest would be charged with detailed justification and due express notice at the postal address of the complainant. That the complainant having no other option to fulfill his hard need of money and as per assurance given by the ops, pledged the gold ornaments against the loan amount, detail of which is as under:-

                   It is further averred that even after availing the loan facilities, the complainant was assured by the ops that the gold ornament/ jewellery pledged by the complainant with the ops are safe and this is only deposit with the ops. It is further averred that the pledged jewellery are not only the gold ornaments but are the emotional attached ornaments prepared by the complainant’s family on the specific occasions, hence the emotions/ feelings are also attached with them, as such the complainant opted to pledge the same instead of sale of same in the market. It is further averred that after availing the loan facility, the complainant has deposited the installments of loan amount including interest amount thereon in the month of May, 2016 and October, 2016. That however the fact remains that because of demonetization in the month of November, 2016 there were lower down of business everywhere and on account of critical economic condition and poor situation in his family, the complainant could not deposit the installments and he being the responsible person/ consumer of ops approached them and put forth his compulsion upon which the op no.2 on behalf of ops no.1 and 3 assured the complainant that “its okay we understand your problem” and that upto the financial year the gold jewellery of the complainant is safe deposit with the ops and all the account of the complainant would be rendition on the ending financial year i.e. on 31.3.2017 and only after that day the due auction for the recovery of the principal and interest thereon would be taken that too after serving the express notice of total due amount of the company in respect of the loan account. The complainant however approached the op no.2 alongwith respectable of the area and put forth his compulsion, but the ops always gave above assurance. It is further averred that now when in the month of March, 2017, the complainant alongwith his colleague approached the op no.2 for the deposit of due amount of gold loan account, then the op no.2 in a fraudulent manner stated that they have sold out the gold pledged by the complainant and asked the complainant to get out from their office and threatened that if the complainant again entered in their office he would be killed by their musclemen. However, when the complainant and other collected respectable of area asked the op no.2 to justify the complainant, he refused to do nothing. The complainant moved an application to this effect but op no.2 failed to justify his act of unfair trade business. That the ops have committed this unfair trade business and deficiency in service knowingly, having their dishonest intention of earning the wrongful gains in such like manner. The clear cut unfair trade business of ops is specifically established that due date of payment of Gold Loan Account Number GL6388545 is 27.4.2017 and as such much before the due date of maturity, pledged gold jewellery has been sold out. Hence, this complaint.

2.                On notice, opposite parties no.1 to 3 appeared and filed reply asserting therein that answering ops’ company is a body corporate incorporated under the provisions of Indian Company Act. It has the status of legal persona and as such being a legal entity it has the right to sue and be sued in its own name and it can be sued for its own liability only. The answering ops company is a real estate non banking company which is engaged in the business of finance. The complainant had applied for gold loans as per details in para no.5 of complaint and complainant has duly executed agreements with the company for the same. It is further submitted that as per records of answering ops, the complainant has not come to branch after taking loan, to deposit interest installments in the company against above said gold loans as per the terms and conditions. The complainant has however intended to discontinue the agreement and has shown his willingness to not deposit interest amount as agreed. After taking the above said loans, complainant ignored the terms and conditions of the agreement. After sometime ignoring the matter by the complainant, ops contacted many time through telephonically and personally at the house of complainant and requested to deposit the interest amount and also requested to abide the terms and conditions of the company but complainant ignored the same at last ops served loan recall and pre-sale notices Ref. No.5930769/AUC/HAR/MAR’17/23158, in which company has finally recalled the entire loan amount of Rs.21,072/- and Ref. No.GL5930854/AUC/HAR/MAR’17/23159 in which company has finally recalled the entire loan amount of Rs.1,03,417/- and Ref. No.GL5930883/AUC/HAR/MAR’17/23160 in which company has finally recalled the entire loan amount of Rs.91,024/- and Ref. No.GL6388545/AUC/HAR/MAR’17/22815 in which company has finally recalled the entire loan amount of Rs.58,374/- and in said notices dated 10.2.2017 described all the terms and condition and gave the information regarding auction of gold ornaments pledged by the ops as per terms and conditions of the agreement. It is further submitted that after that ops have published, public notice of auction of gold ornaments in Jagat Kranti Newspaper and in Business Standard Newspaper but the complainant intentionally, deliberately and knowingly has not given any response or reply of the above said notice or publication to the ops, because rates of the gold became very low at that time. After that lastly the ops adopting the due process as per the terms and conditions of the agreement had conducted the auction after complying with the required formalities and had auction the gold ornaments of the complainant due to violation of the agreement and non depositing of the interest amount within time as mentioned in the agreement.  After that also till today the complainant has not approached to the company and now has filed the present false complaint against the ops only with the intention to grab the money and humiliate and harass the ops. It is further submitted that earlier to present complaint, the complainant filed a complaint to the Police and also to C.M. Window but all the complaints have been disposed off and complainant could not prove the allegations which were imposed by him against Branch Manager and company. It is further submitted that in fact the complainant is not a consumer under the definition of the Consumer Protection Act because as per the National Commission, the pledging of the gold ornaments is a debtor creditors relationship and it does not comes under the jurisdiction of the Consumer Protection Act. The ops had not received any money for rendering service to the complainant. Complainant had pledged gold ornaments under an agreement and agreed rate of interest. It is further submitted that there is an arbitration clause in the agreement which has been executed between the parties according to which the parties should invoke arbitration proceedings for redressal of their grievances, if any in accordance with the Arbitration and Conciliation Act, 1996. Remaining contents of the complaint are also denied and prayer for dismissal of complaint has been made.

3.                The parties then led their respective evidence by way of affidavits and documents.

4.                We have heard learned counsel for the parties and have perused the case file carefully. The learned counsel for complainant has also submitted written arguments which have been duly perused and considered.

5.                The complainant in order to prove his case has furnished his affidavit Ex.CW1/A wherein he has reiterated all the averments made in his complaint. He has also furnished affidavit of Sh. Sahil Mehta as Ex.CW2/A wherein he has deposed that he is resident of same address where complainant resides and that as per his knowledge none of the official/ correspondent from the side of ops’ company never paid any visit at the house of complainant regarding any express demand notice of the due gold loan taken by the complainant from the ops. The complainant has also placed on file loan documents and copy of application and various other documents as Ex.C2 to Ex.C20. On the other hand, opposite parties have furnished affidavit of Sh. Satish Kumar, Branch Manager as Ex.R1 who has reiterated all the averments made in the written statement. The ops have also furnished authority letter and copies of loan documents as Ex.R2 to Ex.R30.

6.                The perusal of the record reveals that complainant raised gold loan from the opposite parties. The complainant availed gold loan of Rs.19,500/- vide loan account No.GL5930769 on 21.1.2016, gold loan of Rs.84,500/- vide loan account No. GL5930883 on 21.1.2016, gold loan of Rs.96000/- vide loan account No.GL5930854 on 21.1.2016 and gold loan of Rs.54,000/- vide loan account No.GL6388545 on 28.5.2016 and thus availed total gold loan of Rs.2,54,000/- from the opposite parties against the pledged gold jewellery vide loan applications Ex.C6 to Ex.C9  at the interest rate of 18% per annum. It has been further observed that loan was sanctioned for 11 months. The term of the loan amounts which were taken on 21.1.2016 was to expire on 20.12.2016 and the term of the loan amount which was taken on 28.5.2016 was to expire on 27.4.2017. The complainant has alleged in his complaint and reiterated in his affidavit that auction of his ornaments/ jewellery has been done by opposite parties unauthorisedly and illegally. He went to the ops to repay outstanding amount but he came to know about the said auction of his jewellery. He submitted an application to the Branch Manager on 21.3.2017 which was received by him on 27.3.2017 against his acknowledgement and copy of the same has been placed on file by the complainant as Ex.C11. On the other hand, the opposite parties have claimed that auction of the gold has been done as per system and procedure of the financer and notices to Amandeep borrower were given on 10.2.2017.  In support of their claim, they have submitted the postal registration No.949807503IN dated 17.2.2017, 949807517IN dated 17.2.2017, 949807432IN dated 17.2.2017. It has also been observed that a notice to the complainant was given about auction of his pledged gold on 10.2.2017 whereas three registered letters were sent on 17.2.2017. The fourth registered letter No.900993677IN is not matching with the record. The opposite parties have failed to produce any documentary evidence proving thereby that complainant received said auction notice. The complainant has claimed that he visited office of ops alongwith Panchayat Members also but Branch Manager failed to satisfy him. It has further been observed that a reference of postal registered number has been mentioned as 949807525IN whereas no such registered letter, copy/ receipt is placed on record by the ops. The opposite parties have placed on record copies of news published in Jagat Kranti on 15.3.2017 and in Business Standard on 15.3.2017 as Ex.R12 and Ex.R13 but however Ex.R12 is not readable and news inserted in the Business Standard mentions only loan account numbers without disclosing any details of the borrower/ assets, default amount outstanding against the complainant. However, a close scrutiny of the said news publication reveals that bidders were also invited by 18.3.2017 for inspection of the pledged gold. No record of inspection/ bids by bidders has been produced by opposite parties on file. No record with regard to the auction as to whom the said pledged jewellery has been sold and how many bidders took part in the said auction has been placed on file. Therefore, it appears that auction was manipulated and not based on merits. As per the claim of the ops, the auction was conducted on 20.3.2017 and the BBA rate applicable for 22 carat purity of gold was Rs.2675/- per gram. As per document Ex.R18, the publication date has been mentioned as 14.3.2017. As stated above the details in Ex.R18 regarding postal registration No.949807525 is not matching with that of record. According to the complainant and documents submitted during arguments which has not been contested/ denied by learned counsel for ops, the rate of the gold on 20.3.2017 was Rs.28540/- per ten grams i.e. Rs.2854/- per gram for 24 carat gold. By simple mathematical calculation the rate applicable to 22 carat pure gold comes to Rs.2616/-. But a close scrutiny of Ex.R18 reveals that out   of ATS total weight as 12.80, 58.5, 55.2 and 27.7, ATS gross weight has been arrived as 12.67, 57.72, 54.45 and 27.32 which has further been reduced to 11.52, 52.47, 48.47 and 24.84 (total 137.13 grams) against total weight of gold of 154 grams as pledged by complainant. The complainant has not denied that the jewellery pledged by him was of 22 carat purity. The ops have reduced the total weight by 16.17 grams against standard norms of 8.33% which comes to 12.82 grams. This amounts to unfair trade practice clearly. Further as per “Sarfa Bazar practice” the reduction in weight of a particular purity of gold is done with a view to arrive at 24 carat purity of gold. In the present case, by reduction in weight from 154 grams to 137.13 grams (as per standard norms 141.17 grams) the purity of gold has been arrived at 24 whereas rate of 22 carat purity has been made applicable. This clearly amounts to unfair trade practice. Thus, by simple mathematic calculations realizable value of the jewellery comes to Rs.4,02,900/- approximately whereas whole of the jewellery has been auctioned by the ops for a sum of Rs.3,63,410/- as per Ex.R18 and in this way the difference in this regard comes to approximately Rs.39,400/-.  It is further observed from the statement of accounts of loan wherein it is clear that interest has been levied in loan accounts upto 28^th March, 2017 whereas no interest is leviable after the auction date and it also amounts to unfair trade practice on the part of ops. The ops have averred that they informed the complainant telephonically about the auction but they have not produced any record in this regard to prove that the complainant was duly informed about auction of his assets. The publication of auction notice in the newspaper is also not as per procedure laid down in Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.   The record further reveals that loan account No.GL5930769 was regular up to 8.10.2016 as is evident from Ex.R26, loan account No.GL6388545 was regular upto 15.10.2016 as is evident from Ex.R27, loan account No.GL5930883 was regular upto 9.10.2016 as is evident from Ex.R28 and loan account No.GL5930854 was regular till 8.10.2016. The loan recalled as on 10.2.2017 for Rs.21072, Rs.91024, Rs.103417 and Rs.58374/- i.e. was for total outstanding amount of Rs.2,73,887/- against the total sanctioned loan amount of Rs.2,54,000/- and secured by assets of Rs.3,63,410/- as per documents placed on file by ops. Thus, irregularity was of the amount of Rs.19,887/- on the part of complainant on account of levy of interest and other charges etc. Moreover, the term of the loan bearing account No.GL6388545 was to expire on 27.4.2017 but the ops have auctioned the gold of that account also on 20.3.2017 i.e. prior to expiry of the term of loan. Hence, in our considered opinion the auction of the pledged gold ornaments of the complainant by the ops was not based on merits and was unethical and illegal.  

7.                No authentic evidence has been placed on file by the ops to prove that excess amounts out of realized sale value after meeting the said loans has been paid to the complainant. It appears that part of the sale amount is still lying with the ops. This clearly amounts to unfair trade practice and deficiency in service on the part of ops.

8.                Since the auction has already been done and pledged ornaments/ jewellery already handed over to the purchasers, the sale cannot be undone at this stage and therefore, jewellery cannot be handed over to the complainant now as prayed for.

9.                 In view of the above, we partly allow the present complaint We direct the opposite parties not to levy any interest after 20.3.2017 i.e. the date of auction. Since the auction of pledged jewellery is not based on merits and was unethical and illegal, the ops are directed not to charge any auction charges from the complainant. The ops are further directed to pay the amount of Rs.1,24,048/- being the difference of Rs.4,02,900/- fair realizable value of gold jewellery and Rs.2,78,852/- outstanding loan amount as on 20.3.2017 minus payment already made, if any, to the complainant alongwith interest @18% per annum from the date of auction till actual payment to the complainant. We further direct the ops to pay a sum of Rs.20,000/- as composite compensation and litigation expenses to the complainant. The opposite parties are directed to comply with this order jointly and severally within a period of 30 days from the receipt of copy of this order. A copy of this order be supplied to the parties free of costs. File be consigned to the record room.   

Announced in open Forum.                                           President,

Dated:24.1.2018.                              Member                District Consumer Disputes

                                                                                      Redressal Forum, Sirsa.