BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD.
FA No.301 OF 2016 AGAINST CC No.13 OF 2016
ON THE FILE OF DISTRICT FORUM, MEDAK, SANGAREDDY
Between :
- India Infoline Finance Limited,
H.No.6-146, Market Road,
SBH Lane, Near Hanuman Temple,
Vidyanagar, Gajwel – 502278,
Rep. by its Branch Manager
Sri Sabbani Bhaskar,
S/o. S.Narayana, aged about 29 years,
- Zonal office – My Home,
India Infoline Finance Limited,
Sarover Plaza, 5th Floor, No.5-9-22,
Opp: Secretariat, Hyderabad -63.
- India Infoline Finance Limited,
Cin No.U67120 MH 2004 PLC 147356
Reg. Office & Corporate Office 12A-10,
13th Floor, Parinee Crescenzo,
c-38 & 39 , G-Block, Bandra Kurla Compelx,
Bandra (East), Mumbai – 400051.
- India Infoline Finance Limited Gold Loan,
D.No.5-9-22/B/501, 6th Floor,
My Home Sarover Plaza, Secretariat Road,
Saifabad, Hyderabad -63. …Appellants / Opposite Parries 1 to 4
AND
Kanuganti Narayana Reddy
S/o. Chandra Reddy, aged Major,
R/o. H.No.5-50, beside Water Plant,
Narasannapet, Post Cheberthy,
Mandl: jagadevpur, Siddipet (Medak) District.
..Respondent/Complainant
Counsel for the Appellants / Opposite Parties 1to 4 : Sri Sai Gangadhar Chamarty
Counsel for the Respondent / Complainant : Sri K.V.Rao
Hon’ble Sri Justice B.N.Rao Nalla … President
&
Hon’ble Sri Patil Vithal Rao … Member
Wednesday the Twenty Eighth day of March
Two thousand Eighteen
Oral Order : (Per Hon’ble Sri. Patil Vithal Rao, Member).
***
This Appeal is directed against the Order dated 04.11.2016 passed in C.C.No.13/2016 by the District Consumer Forum, Medak at Sangareddy (for brevity, ‘the District Forum’). The Appellants before us are the Opposite Parties and the Respondent is the Complainant in the said case. For the sake of convenience, the parties will be referred to hereinafter, as arrayed in the complaint.
2 The factual matrix of the Complainant’s case is that on 12.08.2015 he had pledged his gold ornaments weighing 45 grams with the Opposite Party No.1, Finance Company against the loan of Rs.64,000/- which was to be repaid with interest in monthly installments within a period of 11 months. Thereafter on 28.12.2015 the Complainant received a notice from the Opposite Party No.1 calling upon him to clear the entire outstanding loan amount immediately on which he rushed to the office of the Opposite Party No.1 and expressed his inability to clear the same before expiry of the agreed period of 11 months on which the Opposite Party No.1 was satisfied and advised him to pay it as per the Agreement. The further case of the Complainant is that on 14.02.2016 he went to clear off the entire loan amount but the Opposite Party No.1 refused to accept the same and to return back the pledged gold ornaments by stating that, they were already sold away in an auction by it’s Head Office with a direction to them to pay the balance amount of Rs.18,763/- to the Complainant after deducting the loan amount from the total sale value of the ornaments. Surprised by the said attitude of the Opposite Party No.1, the Complainant made an application on 03.03.2016 with a request to the Opposite Party No.1 to furnish details of the auction but there was no response. By terming the conduct of the Opposite Parties in disposing of the pledged gold ornaments, before expiry of the agreed period, as illegal amounting to deficiency in service, he filed the case under section-12 of the Consumer Protection Act, 1986 (for short, “the Act”)seeking refund of the pledged gold ornaments or alternatively it’s value.
3 The Opposite Parties have resisted the claim by way of filing a Written Version before the District Forum on the grounds, interalia, that the claim was barred by jurisdiction inview of it’s commercial nature and covenants of the Loan Agreement. Further, as the Complainant failed to pay installments for a continuous period of 4 months in terms of the said agreement, a demand notice was issued to him on 28.12.2015 giving 7 days time to pay and regularize the loan account. The further defence is that as the Complainant did not respond positively, an auction notice dated 02.02.2016 was served on him and thereafter auction was conducted on 15.02.2016 for a sum of Rs.91,001/- and that after adjusting the principal amount of Rs.64,000/- and interest amount of Rs.8,238/- (total Rs.71,238/-) the balance of Rs.8,783/- has been lying with the Opposite Parties and that they are prepared to refund the same to him. The Opposite Parties have also furnished details of the auction to him on receiving his application dated 03.03.2016 for the said purpose. Thus, as per the Opposite Parties, they have followed due procedure in accordance with the terms and conditions of the loan agreement in realising the loan amount. For these reasons, they sought dismissal of the complaint with costs.
4 After due enquiry into the matter, the District Forum passed the Order on 04.11.2016 by allowing the complaint directing the Opposite Parties jointly and severally either to return the pledged gold ornaments or to pay their market value along with punitive damages of Rs.10,000/- and compensation of Rs.10,000/- with costs of Rs.5,000/- to the Complainant by granting 30 days time for due compliance.
5 The Opposite Parties have assailed the above said order under section-15 of the Act, 1986 by way of the present Appeal on the grounds, in brief, that the District Forum erred in interpreting terms and conditions of the loan agreement dated 12.08.2015 and also ignored the fact of committing default by the Complainant in making repayment of the loan amount. Further, the District Forum did not consider the aspect of service of demand notice and auction notice in a right perspective so also failed to consider commercial nature of the transaction and passed the impugned order erroneously and illegally and that as such the same is liable to be set aside.
6 Perused the material evidence on record and written arguments of both the parties. Heard both the learned counsel.
7 Now the point for consideration is that:
whether the impugned order is unjust and erroneous, both in law and on facts, and as that as such liable to be set aside ?
8. Point: At the outset let us deal with the aspect of maintainability of the claim of the complainant. No doubt on the face of it, it appears to be a transaction of commercial nature but the same, in our opinion, it is not so. Because it is to be noted that the Complainant did not avail the loan in question for any commercial purpose but, as per his complaint, to meet the needs of his agricultural activities. The Opposite Parties did not dispute this purpose. Therefore, by any stretch of imagination, it cannot be said that he is not a ‘consumer’ within the meaning of the Act, 1986.
9. Further, as seen from the record on hand, no application was moved by any of the parties to the dispute either before the District Forum or before this Commission to refer the dispute to an arbitrator in terms of clause No.15 of the Loan Agreement, Ex.A1. Having submitted to the jurisdiction of the District Forum under the Act, 1986, in our opinion, it is not open to the Opposite Parties to agitate, for the first time, before this Commission that the claim is barred by jurisdiction under the provisions of the Arbitration and Conciliation Act, 1996.
10. In this backdrop of the fact we are of the considered opinion that the claim, as set up by the Complainant, is certainly maintainable.
11. Now coming to the factual aspect of the matter it not in dispute that, the Complainant had availed a gold loan of Rs.64,000/- on 12.08.2015 from the Opposite Party No.1 Finance Company with interest under the Agreement, Ex.A1 by pledging his gold ornaments of 45.40 grams of 20 carat purity with an undertaking to repay the same with interest @ 24.60 p.a. The loan was to be cleared within a period of 11 months by remitting monthly installments. Undisputedly, the Complainant has committed default in making the payment in installments continuously for 4 months from the date of availing of the loan. Therefore, the Opposite Party No.1 issued Default – Cum - Demand Notice, Ex.A2 on 28.12.2015 calling upon the Complainant to pay the accrued interest of Rs.5,952/- as on the said date and regularize the loan account within 7 days. Thereafter, as the Complainant did not respond positively during the said period, as per the Opposite Parties, they sold away the pledged gold ornaments in public auction on 15.02.2016. The Complainant has specifically challenged the manner of disposal of the pledged articles by the Opposite Parties as illegal by way of addressing a letter dated 03.03.2016 vide Ex.A5. Thus, initially, he sought details of the alleged auction. Responding to the same, the Opposite Parties have furnished the details stating, interalia, that the auction was held on 15.02.2016 for a sum of Rs.91,001/- by giving wide publicity in the Newspapers, Business standard and SURYA, dated 06.02.2016. But interestingly they did not furnish name and details of the auction purchaser so also even the place of the auction, for no reason. They have simply stated that this information could not be shared with the customer. The Complainant has filed the documents under Exs. A3 and A6 in this regard. We are unable to comprehend the wisdom of the Opposite Parties behind it. It is also to be noted that the Opposite Parties did not file copies of the said Newspapers to establish that they were having publicity in the area of Complainant’s occupation and avocation. The terms and conditions printed on the reverse side of the Loan Sanction Letter, Ex.A7 are too minute in font to read conveniently by a normal person with bare eyes. There is also no evidence to establish that the said terms and conditions were read over and explained to the Complainant before the loan transaction was finalized. The cumulative effect of all these facts and circumstances, in our opinion, certainly create a doubt and suspicion about the fairness and bonafides on the part of the Opposite Parties in dealing with the transaction in question. After the alleged auction of the pledged articles, the Opposite Parties have calculated the balance amount at Rs.18,783/-. As per their calculation, after deducting a sum of Rs.72,238/- (from loan amount of Rs.64,000/- plus interest accrued Rs.8,238/-) towards the outstanding loan amount from the sum realized of Rs.91,001/- by way of the auction, the balance comes to Rs.18,783/-. They have shown their readiness and willingness to handover the same to the complainant.
12. It is evident from the discussion made supra, that initially the Complainant has committed default in adhering to the terms and conditions of the Loan Agreement in making repayments and thereafter the Opposite Parties have committed grave mistake in conducting the auction in an unfair manner. Thus, it is a clear case of contributory negligence. Under this circumstance we feel it is just, necessary and expedient to modify the impugned Order by directing the Opposite Parties to pay the complainant market value, as on this day, of the pledged gold ornaments with interest @ 9% p.a., from the date of the auction i.e., 15.02.2016 till realization, ofcourse, after adjusting the accrued amount of interest of Rs.5,952/- there from and that rest of the reliefs awarded by the Forum below are unsustainable. In this view of the matter, with the above modification, the Appeal is liable to be dismissed.
13. The point is answered accordingly.
14. In the result, the Appeal is dismissed by modifying the impugned Order directing the Opposite Parties jointly and severally to pay the Complainant market value, as on this day, of the pledged gold ornaments with interest @ 9% p.a., from the date of the auction i.e., 15.02.2016 till realization, after adjusting the accrued amount of interest of Rs.5,952/-there from. In the circumstances, the parties shall bear their own costs.
Time for compliance, 4 weeks.
PRESIDENT MEMBER
Dt. 28.03.2018
