BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc.,LLB., President, 2. M.N.MANOHARA, B.A.,LLB., Member. 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, COMMON ORDER Complaint No.MDF/C.C.No.75 & 83/2009 Order dated this the 16th day of September 2009 COMPLAINANT/S IN CC.75/2009 Sri.Shankar S/o Marigowda, R/o 2nd Cross, Near by Kalegowda High School, Marigowda Layout, Mandya City. (By Sri.C.Boregowda., Advocate) COMPLAINANT/S IN CC.83/2009 Sri.Ramesh S/o Late Boraiah, R/o Devegowdana Doddi, Near Sugar Town, Mandya City. (By Sri.H.P.Sadashivappa., Advocate) -Vs- OPPOSITE PARTY/S The Manager, Karnataka State Industrial Co-operative Bank Ltd., Ashok Nagara, Mandya City. (By Sri.M.P.Usha., Advocate Date of complaint in CC 75/09 Date of complaint in CC 83/09 24.06.2009 14.07.2009 Date of service of notice to Opposite party 10.07.2009 in CC 75/2009 29.07.2009 in CC 83/2009 Date of order 16.09.2009 Total Period in CC 75/09 Total Period in CC 83/09 2 Months & 6 Days 1 Month & 17 Days Result The complaints in C.C.75 & 83/2009 are partly allowed with a direction to the Opposite party to pay the price of the gold at the rate of Rs.850/- per gram on net weight of the jewels to the Complainants with interest at 9% p.a. from the date of pledge till realization after deducting the loan due up to the date of theft. The parties are directed to bear their own costs. The copy of the order shall be kept in CC.83/2009. Sri.Siddegowda, President 1. As the facts and nature of the claim are similar, the above 2 complaints have been disposed off by this common order. 2. These complaints are filed under section 12 of Consumer Protection Act, 1986 for a direction to the Opposite party to pay the value of the gold ornaments pledged with damages and interest. 3. The facts of the complaints are that the Complainant in C.C.75/09 had availed jewelry loan of Rs.25,000/- by pledging gold ornaments weighing 74.700 grams to the Opposite party under LF No.151/35 under account No.7839. Similarly, the Complainant in C.C.83/09 had availed jewelry loan of Rs.8,500/- on 03.03.2007 by pledging gold ornaments weighing 39.50 grams with Opposite party. When these Complainants approached the Opposite party with a request to clear the loan and take back the gold articles. The Opposite party reported that the jewels pledged have been stolen from the bank along with other jewels and not in a position to return the pledged gold jewels and in this regard, the Opposite party has filed a complaint to the Police Station and they are inspecting. But, jewellaries are not traced out till now and they discussed with the Insurance Company and as per the advise of the insurance company to pay the additional amount by deducting total value as fixed by the appraiser of the bank and calculating the amount with interest till date of theft. But, the Opposite party has failed to protect the pledged gold articles, they have committed deficiency in service in showing negligence for safety method of protecting the jewels pledged. The Opposite party bound to return the pledged gold articles or to pay the present market value of the golden articles at Rs.1,500/- per gram. The Opposite party has no right to demand, refund along with interest. 4. In C.C.83/09 it is pleaded that the Opposite party in spite of legal notice dated 12.05.2009 has not complied with the notice nor send reply and further this Complainant has sought for return the gold ornaments of 39.50 grams by receiving the principle amount with agreed interest and in C.C.75/09, the Complainant has sought for value of the gold of 74.700 grams at the rate of 1,325/- per gram with interest from the date of pledge. 5. The Opposite party has filed version in both the complaints admitting the loan borrowed by the Complainants by pledging the jewels and contending that the Complainants are bound by the terms and conditions of the loan. Unfortunately a huge quantity of gold ornaments pledged by various customers were stolen on 13.11.2007 and the complaint has been lodged in Crime No.166/2007 and investigation is still pending and the same has been published in all daily Newspapers and broadcasted in television also. In the larger interest of the gold loan borrowers, it was decided in the Board Meeting held on 22.12.2007 to settle the claims of the borrowers immediately on the basis of the value assessed by the appraiser of the bank at the time of pledging the jewels, which is also basis for settlement of insurance claim by the insurance company and also as agreed by the borrower after appropriating the loan dues till the date of theft. The complaint is premature. The question of return of gold pledged ornaments would arise only after discharge the loan amount with interest. Since, the Complainant has not discharged the loan with interest till today. When the Opposite party is ready to settle the claim the question of deficiency of service does not arise at all. Denying the allegations of not taking safety measures. The Opposite party pleaded that it had taken all safety measures in the bank ever since 1952 and strong iron safe locker installed in the Bank. Therefore, the complaint is liable to be dismissed with costs. 6. During trail, both the Complainants are examined and they have produced Ex.C.1 to C.4 and C.1 & C.2 respectively and on behalf of the Opposite party Manager is examined and Ex.R.1 to R.5 are produced in both the complaints. 7. We have heard both the sides. 8. The Opposite party has also filed written arguments. We have perused the records. 9. Now the points that arise for our considerations are:- 1) Whether the Opposite party has committed deficiency of service in not releasing the jewels pledged? 2) Whether the complaint is premature? 3) Whether the Complainants are entitled to relief sought for? 10. Our findings and reasons are as here under:- 11. POINTS NO.1 to 3:- The undisputed facts are that the Complainant in CC.75/09 has availed jewelry loan of Rs.25,000/- on 04.04.2007 as per Ex.C.1 by pledging gold jewels in account No.7839 under LF No.151/35 by executing the document Ex.R.1 and the loan is not discharged. Similarly, the Complainant in CC.83/09 had availed jewellery loan of Rs.8,500/- by pledging ornaments weighing 39.50 grams in account No.7825 on 03.03.2007 as per Ex.C.1 and the agreement Ex.R.1 and loan is not discharged. It is also undisputed that the pledged jewels kept in the iron safe locker in the bank were stolen on the night of 13.11.2007 and the complaint has been lodged to the police station and Crime No.166/07 was registered and the police have drawn the mahazar and the Opposite party has produced the copies of the same and investigation is going on and the jewels are not traced so far. In CC.75/09, the Complainant had given the petition on 27.01.2009 as per Ex.C.2 to the Opposite party stating that he is ready to pay the loan with interest and requested to return the jewels and Opposite party has furnished the reply Ex.C.3 on 23.01.2009 informing the theft of the jewels and decision taken by the Committee of the bank after consulting with the insurance company and as per the agreement, upto the date of theft, they would calculate the interest on the loan and from the value assessed by the appraiser of the bank, the loan would be deducted and balance would be paid and the jewels cannot be returned. Thereafter, the Complainant got issued a legal notice Ex.C.4. The Opposite party has produced Ex.R.3, the list of customers whose claim was settled and Ex.R.4 the instructions of the Head Office of the Opposite party Bank to settle the claim. The Opposite party has produced Ex.R.5 a copy of the Bankers Indemnity Insurance Policy issued by the Oriental Insurance Company. 12. The contention that the complaints are not maintainable and they are premature, since the Complainants have not discharged the loan cannot be accepted, in view of the reply of Opposite party that the jewels are stolen and they would deduct the loan and interest upto the date of theft from the value fixed by the bank appraiser of the pledged jewels. 13. In CC.83/09, the Complainant has sought for return of the gold jewels weighing 39.50 grams by receiving the principle loan amount with agreed interest. Now, it is established by the Opposite party that all the gold jewels pledged by the customers and kept in the bank safe locker were stolen and they are not in a position to return the ornaments. It is established by the Opposite party that the gold articles were insured with the Oriental Insurance Company. The Complainant in C.C.75/09 has sought for value at the rate of Rs.1,325/- per gram for the gold articles weighing 74.700 gram. But, the Complainant has not produced any document to show, the actual market value of the gold per gram at the time of theft or at the time of his intention when he wanted to discharge the loan. Now according to the Opposite party, some of the customers claim has been settled as per the direction of the Head Office of the Opposite party Bank. According to the Opposite party Bank in Ex.R.4, if the borrowers requests for payment of the balance amount after adjusting the loan amount with interest, then interest has to be calculated up to the date of theft and from the value determined by the jewels appraiser of the bank, the loan amount be deducted and the balance amount is to be paid to the borrower by obtaining the bond. In fact, the Complainants were informed by giving reply that they are not in a position to return the jewels and they would settle the matter by deducting the loan amount from the value determined by the jewels appraiser in the agreement. 14. Now, as per Ex.R.1 in both cases, the jewels were pledged on 08.03.2007 and 04.04.2007, the theft of jewels had taken place on the night of 13.11.2007. Though, the term in the policy reveals that the value for the purpose of settlement of any claim in respect of jewellery/ornaments under the policy shall be as per the 100% value as recorded in the register of the Bank at the time of pledging jewellery or ornaments, it is mandatory to obtain the policy every year and as per document Ex.R.5, the policy is obtained for the period from 01.04.2007 to 31.03.2008. On this basis, it is contended that the Opposite party is liable to pay the value fixed in the agreement and not as on the date of presenting the complaint. The Opposite party has cited decision in Appeal (Civil) 4724/2006 in the case of Raythara Sahakari Bank Ltd., -Vs- Chandrakala R. Das wherein by judgement dated 08.11.2006, the Honble Supreme Court set aside the order of the Honble National Commission and also the Honble State Commission, Bangalore and remanded the matter to consider the decision taken in the meeting in the presence of borrowers with regard to the claim for stolen jewels which were pledged. 15. In the present case, though the Government Body of the Opposite party Bank has taken decision to settle the claim of the borrowers on the basis of the value fixed by the appraiser at the time of pledging, after deducting the loan due and obtaining indemnity bond, the Opposite party has not called for meeting of the borrowers to decide as to how the claim of the borrowers for pledged jewels which were stolen shall be settled. The Honble Supreme Court in the said case has held that the decision has taken in the meeting to the effect that the value of the gold on the date of theft was to be paid. It is undisputed that the claim of so many borrowers has been settled as per the list. It is commonly known that to sell the jewels, the purchasers will deduct some percentage of the weight on the ground of wastage and stones while melting the jewel for making another jewel and they will not pay the cost of jewel on gross weight. In view of the terms of the insurance wherein the insurance has been taken on the basis of the value of the gold on net weight recorded in the Opposite party Bank records and further when already claim of some borrowers has been settled as per the decision taken by the Head Office of the Opposite party Bank, the claim of the Complainants that they are entitled at present market value on gross weight cannot be accepted. If such claim is entertained all borrowers including the borrowers whose claim is settled would rush to Forum. Even the gold rate will be fluctuating from time to time and Complainants have not established the rate of gold at the time of theft or at the time of demand to return the jewels. Admittedly, they have not discharged the loan so far. In fact, this Forum dismissed C.C.24, 25 & 26/08 on the ground that the complaints are premature and when the Opposite party Bank is ready to settle the claim, the Complainants have not accepted. In the Appeal No.1516/08 & 1517/08 against the order of this Forum, the Honble State Commission has allowed the complaints with a direction to Opposite party to pay the price of the gold at the rate of Rs.850/- per gram to the Complainants with interest at 9% p.a. from the date of pledge till realization and further observed that if the loans borrowed by the Complainants have not been discharged, it is open for the bank to adjust the amount if any payable by the Complainants while paying the amount as ordered above. In those complaints also the jewels were pledged in October 2006, March 2007 and June 2007. So, in view of the judgement of the Honble State Commission in similar cases, it is just and proper to allow the complaints directing the Opposite party to pay the price of the gold at the rate of Rs.850/- per gram to the Complainants with interest at 9% p.a. after deducting the loan, since admittedly the Complainants have not discharged the loan. Even though, in CC.83/09 Complainant has sought for return of jewels, but due to theft beyond the control of Opposite party, Opposite party is not in a position to return the jewels. So, this Complainant is entitled to the value of gold ornament as observed above. 16. In the result, we proceed to pass the following order; ORDER The complaints in C.C.75 & 83/2009 are partly allowed with a direction to the Opposite party to pay the price of the gold at the rate of Rs.850/- per gram on net weight of the jewels to the Complainants with interest at 9% p.a. from the date of pledge till realization after deducting the loan due up to the date of theft. The parties are directed to bear their own costs. The copy of the order shall be kept in CC.83/2009. (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 16th day of September 2009). (PRESIDENT) (MEMBER) (MEMBER)
