KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
VAZHUTHACAUD, THIRUVANANTHAPURAM
APPEAL No. 820/2016
JUDGMENT DATED: 14.06.2022
(Against the Order in C.C. 166/2014 of CDRF, Malappuram)
PRESENT:
SRI.T.S.P. MOOSATH : JUDICIAL MEMBER
SMT. BEENA KUMARY. A : MEMBER
SRI. RADHAKRISHNAN K.R. : MEMBER
APPELLANTS:
- The Manager/Director, Muthoot Finance Ltd., Down Hill P.O., Malappuram.
- The Regional Manager, Muthoot Finance Ltd., 2nd Floor, Muthoot Towers, Banerji Road, Kochi-682 018.
(By Adv. C.S. Rajmohan)
Vs.
RESPONDENT:
Jaffar P., Pattupara House, Ottatharal, Kodur P.O., Malappuram-676 519.
JUDGMENT
SMT. BEENAKUMARY A. : MEMBER
The appellants are the opposite parties in C.C. No. 166/2014 on the file of the Consumer Disputes Redressal Forum, Malappuram (District Forum for short). The respondent is the complainant.
2. Facts of the case are as follows:
The complainant is a business man. The opposite party made public advertisement stating that they grant gold loan on a meager interest compared to other financial institutions. The rate of interest mentioned in the advertisement was 9% per annum with no hidden charges. Believing the representation of opposite party complainant pledged gold ornaments having weight of 6 gms and 23.5 gms for his emergent need. As per direction of the opposite party, complainant put his signature in the blank voucher forms, agreements and other records. The complainant was not able to pay the entire loan amount due to ailments and financial constraints. Complainant informed the 1st opposite party not to sell his gold ornaments. The 1st opposite party contacted the complainant over phone and intimated that the loan dues exceeded the value of gold ornaments pledged. The complainant contacted the 1st opposite party and checked the calculation. It was found that the 1st opposite party took insurance charges for the gold ornaments which was not paid by them to any insurance company. The interest rate charged was not as agreed upon. The opposite party has collected interest on interest. A complaint was sent to the 2nd opposite party. On 19.04.2014 the complainant received letters stating that the gold ornaments were auctioned. The complainant contacted the 1st opposite party and he stated that whenever the gold value is found to be equal to the outstanding amount the ornaments would be sold. On enquiry it was revealed that the gold ornaments were taken by the opposite parties in the name of other persons as benami for illegal gain. The opposite parties were committing unfair trade practice for extracting illegal gain from the loanees. The complainant lost his gold ornaments and his family was put to irreparable hardship. The loan availed was Rs. 30,000/- and the value of the gold pledged was Rs. 85,000/-. The opposite party made huge profits by doing unfair trade practice. The gold ornaments were sold without notice. Thus the opposite parties may be directed to pay compensation of Rs. 1,00,000/- to the complainant along with costs of the proceedings.
3. The opposite party denied all averments in the complaint and raised the following contentions. The opposite parties are not issuing any advertisement as stated by the complainant. It is false to say that in the advertisement of the opposite party it was stated that they would grant loan on interest @ 9% per annum. It is true that complainant have pledged gold ornaments having 6 gms and 23.5 gms. At the time of gold loan the complainant executed an agreement and the complainant is bound to comply with the conditions stated in the agreement. It is false to say that the opposite parties required signature of complainant in blank papers, vouchers and agreements and forms. In spite of the repeated demands complainant did not pay the amount. The complainant was informed by the opposite parties that the loan due exceeded the value of the gold pledged. It is false to say that the opposite party has collected insurance amount from the complainant. Before the auction of the gold ornaments two registered letters dated 29.01.2014 were sent to the complainant and he has received the same on 06.02.2014. In those notice the amounts due on the date of auction were shown. It is incorrect to say that the opposite parties have taken the gold ornaments in the name of benami and collected interest on interest. No unfair trade practice was done by these opposite parties. Ornaments were sold after complying with all legal formalities. Even after the auction a huge amount is still due to the opposite party from the complainant. To escape from the legal action a false complaint is filed to harass the opposite parties.
4. Complainant and opposite parties filed proof affidavits and marked Exts. A1 and A2 on the side of the complainant and Exts. B1 to B6 on the side of the opposite parties.
5. From the evidence adduced by both the parties the finding of the District Forum was that the complainant availed a loan of Rs. 64,000/- and not for Rs. 30,000/- as stated by the complainant. Exts. B5 and B6 loan agreement proved that contention. Complainant alleged that rate of interest per annum is 9%. But he had not produced any evidence for that. As per Ext. B5 and B6 interest declared by the opposite party was 29% and 25% per annum respectively. Minimum interest was 23% and 18% respectively. These two documents were signed by the complainant. The District Forum also found that at the time of cross examination the opposite party stated that in the advertisement the rate of interest shown was 14% onwards. He also failed to give the circumstances under which the interest below the rate shown in Ext. B5 and B6 are imposed on gold loan. So it is seen from the evidence of DW1 that a lesser rate of interest is shown in the advertisement and exorbitant rate was imposed on the loan which amounts to unfair trade practice.
6. The District Forum further found that the opposite parties had not produced the statement of account of the complainant. The amount paid by the complainant, actual amount due from him and total amount for which the ornaments were sold in auction etc. are also suppressed by the opposite party. The District Forum also found that the opposite party conducted the auction at Ernakulam, but the transaction has taken place at Malappuram. No explanation was given for the same. For the above mentioned reasons the District Commission found that there is unfair trade practice from the side of the opposite party and therefore complaint was allowed directing the opposite parties to pay Rs. 1,00,000/- as compensation to the complainant with costs of Rs. 5,000/-. Against the impugned order the opposite parties filed this appeal.
7. The appellant stated that the District Forum ought to have found that as per the fair practice code issued by RBI the rate of interest and principal amount to be properly informed to the customer at the time of pledge and it was done accordingly. The District Forum ought to have found that as complainant became a defaulter proper notices were issued as per Ext. B1 and B2 and as per the RBI guidelines auction was made. The appellants argued that there is no bar for them to conduct auction either at Malappuram or Ernakulam. The finding of the District Forum is that auction ought to have been conducted at Malappuram instead of Ernakulam is illegal and arbitrary. The appellants submitted that on mere assumptions, presumptions, probabilities and not based on any evidence and record the District Forum illegally and arbitrarily passed the impugned order and hence liable to be set aside.
8. The respondent did not appear before this Commission even after paper publication. We heard the appellant and perused the entire records on file.
9. As per Ext. B5 and B6 the respondent pledged two sets of gold ornaments before the appellant bank on 01.02.2012. As per Ext. B5 the complainant had taken loan for Rs. 52,000/- and as per Ext. B6 for Rs. 12,000/-, i.e; total amount was Rs. 64,000/-. These documents show that interest rate for 3 months 23%, for 6 months 26% and for 12 months 29% per annum. Total gold pledged was 29.5 gm. Ext. B5 and B6 are the terms and conditions of the agreement. The complainant signed these documents and accepted the terms. As per this document the complainant had to pay 29% interest per annum.
10. Complainant stated that he had seen the advertisement that the rate of interest for gold loan is 9%, but he has not produced any evidence to prove that contention and that at the time of pledging the gold he admitted the rate of interest mentioned in the agreement and signed on it. At the time of cross examination he deposed that “9% പലിശയ്ക്കാണ് ഞാൻ സ്വർണ്ണം പണയം വച്ചത്. ആയതിന് രേഖകൾ ഒന്നും ഹാജരാക്കിയിട്ടില്ല. ലോൺ എടുത്തപ്പോൾ ഞാൻ രേഖകളിൽ ഒപ്പിട്ട് കൊടുത്തിരുന്നു. അത് സ്വമേധയാ ഒപ്പിട്ട് നൽകിയതാണ്. ലോൺ സമയത്തിന് എനിക്ക് തിരിച്ച് എടുക്കാൻ കഴിഞ്ഞില്ല. ഇൻഷുറൻസിന് വേണ്ടി എന്റെ കൈയിൽ നിന്നും പണം വാങ്ങിയിട്ടില്ല.”. From this statement it is clear that the complainant was fully aware of the rate of interest mentioned in the loan agreement. The District Forum found that the opposite party admitted that in their advertisement they declared that the rate of interest for gold loan is 14%. For that reason there is unfair trade practice from the side of the opposite party. But it is not correct. The deposition of DW1 is that “പരാതിക്കാരി എടുത്ത loan-ന് കൊല്ലത്തിൽ 28% ആണ് പലിശ. പരസ്യത്തിൽ 14% മുതൽ പലിശ എന്നാണ് കാണിച്ചിട്ടുള്ളത്“. From this statement it is clear that there are various types of loans, long term and short term loan. The interest rate is different for different types of loan ie; from14% onwards.
11. The District Forum wrongly found that the opposite parties did not issue notice before the auction. But Exts. B1 (1) and B1(2) are the acknowledgment cards signed by the complainant on 06.02.2014 regarding the auction conducted on 22.02.2014. Exts. B3 and B4 are the statement of account of auction sale. The same documents produced by the complainant are marked as Exts. A1 and A2. The complainant stated that he has no information about the auction sale and the opposite parties have not informed the amount received by them from the auction. The statement of the complainant is utter false. The District Forum did not consider Exts. B3 and B4.
12. The finding of the District Forum is that the opposite parties did not comply with the legal formalities before auction. It is not correct. Before the auction the opposite parties sent auction notice by registered post to the complainant and the complainant received the notice. Exts. B2 (1) and B2(2) are the acknowledgement cards signed by the complainant.
13. There is no doubt that the complainant had availed a loan of Rs. 64,000/- on 01.02.2012 by pledging his gold. Thereafter he has not paid any amount to the loan till the date of auction i.e; on 22.02.2014. As per the agreement the rate of interest per annum is 29%. From the auction sale of the gold the appellants have received an amount of Rs. 75,000/-. But as per the agreement the amount to be realized from the complainant comes around Rs. 1,07,651/-. According to the appellants the complainant has to pay Rs. 31,651/- as balance to them as per the loan agreement. The complainant has taken the loan on 01.02.2012 and the auction was conducted on 22.02.2014. The amount availed by the complainant was Rs. 64,000/-. The appellants received only Rs. 75,000/- from the auction sale. From the above calculation it can be seen that the opposite party has received interest below 10% for the loan amount. The complainant has not adduced any evidence to prove that the interest rate advertised by the opposite party was 9% per annum. He agreed as per Ext. B5 and B6 document to pay 29% interest.
14. From the above mentioned discussions and calculations we find that there is no unfair trade practice from the side of the appellants/opposite parties. We carefully perused the entire documents on record. Hence we find that the order passed by the District Forum in C.C. No. 166/2014 is not sustainable and therefore we set aside the order passed by the District Forum, Malappuram.
In the result, the appeal is allowed. No order of costs.
T.S.P. MOOSATH : JUDICIAL MEMBER
BEENA KUMARY. A : MEMBER
RADHAKRISHNAN K.R. : MEMBER
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