DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE
PRESENT: Sri. P.C. PAULACHEN, M.Com, LLB : PRESIDENT
Smt. PRIYA.S, BAL, LLB, MBA (HRM) : MEMBER
Thursday the 30th day of May 2024
CC.351/2016
Complainant
C.V. Rani,
W/o. Shaji,
Ponnarasseri Pootheri Purayil Paramba,
Kalalundi Road, Feroke .P.O,
Kozhikode – 673631
(By Adv. Sri. Brijul. K)
Opposite Party
Kozhikode District Co-operative Bank,
KDC Bank, Feroke Branch,
Rep. by its Manager.
(By Adv. Sri. B.V. Deepu)
ORDER
By Sri. P.C. PAULACHEN – PRESIDENT
This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.
- The case of the complainant, in brief, is as follows:
The complainant had availed a gold loan of Rs. 58,000/- from the opposite party bank pledging her thali chain, wedding ring and a bangle. The bank had agreed to sanction the loan @ 4% interest per annum under the agricultural loan scheme. But contrary to the banking norms, exorbitant interest was levied by the opposite party.
- By the end of June 2016, the complainant approached the bank for redeeming the gold ornaments. Then the bank authorities informed her that the gold ornaments were sold in auction. Then she approached the bank along with her husband and enquired about the notice and paper publication and the procedure followed before the auction. But the bank authorities gave only an evasive reply. Thereafter the complainant issued a lawyer notice to the opposite party demanding the return of the gold ornaments and also compensation of Rs. 50,000/-. But they have not complied with the demand in the notice. There was gross deficiency of service on the part of the bank whereby the complainant was put to gross mental agony and hardship. Hence the complaint for return of the gold ornaments after receiving the amount due from her towards principal and interest and also compensation of Rs. 50,000/-.
- The opposite party has resisted the complaint by filing written version. The opposite party has admitted that the complainant had obtained a gold loan of Rs. 58,000/- on 25/02/2014 for a period of 6 months by pledging 27.500 grams of gold ornaments comprising of a chain, a ring and a bangle. The loan was required to be closed on or before 25/08/2014 with interest @ 13% per annum. The complainant had also executed a promissory note. In the event of failure to settle the loan, the bank is entitled to realise the amount by selling the gold in public auction.
- The complainant failed to remit the amount due within the time stipulated in the loan agreement. Consequently, the opposite party had issued notices on various dates calling up on her to close the loan. Eventually, as per notice dated 15/01/2015 the opposite party demanded the complainant to pay off the dues and to retrieve the ornaments pledged and had specifically indicated that if she had failed to close the loan on or before 21/01/2015, the pledged gold ornaments would be sold in auction. The notice was issued in the address provided by the complainant at the time of obtaining the loan and specified in the loan documents. However, the notice was returned as ‘not known’. In the absence of any communication on the part of the complainant for approximately more than 8 months after the date of termination of the loan, the pledged goal ornaments were sold in public auction held on 05/05/2015. Even after the sale of the gold ornaments in auction, an amount of Rs. 3,238/- is still pending from the complainant towards the dues.
- The opposite party had never assured the complainant that interest would be levied @ 4% under any scheme of the central government. The lawyer notice was issued approximately 2 years after the date of maturity of the loan. All the legal and statutory requirements were complied with before the auction. There is no deficiency of service on the part of the opposite party. None of the reliefs is allowable. With the above contentions, the opposite party prays for dismissal of the complaint with compensatory costs.
- The points that arise for determination in this complaint are; 1) Whether there was any deficiency of service on the part of the opposite party, as alleged? 2) Reliefs and costs.
- Evidence consists of the oral evidence of PW1 and Exts A1 to A7 on the side of the complainant. RW1 was examined and Exts B1 to B4 were marked on the side of the opposite parties.
- Heard. The opposite party filed brief argument note.
- Points No 1: The complainant has approached this Commission with a prayer to direct the opposite party bank to return the gold ornaments pledged by her after receiving the principal amount and interest due from her and to pay compensation of Rs. 50,000/- for the mental agony and hardship caused to her due to the deficiency of service on the part of the bank.
- In order to substantiate her case, the husband of the complainant was examined as PW1, who has filed proof affidavit and deposed in terms of the averments in the complaint and in support of the claim. Ext A1 is the copy of the pledge token, Ext A2 is the copy of the lawyer notice dated 18/7/2016, Ext A3 is the copy of the postal acknowledgment card, Ext A4 is the copy of the notice dated 29/04/2015, Ext A5 is the notice dated 27/10/2017 issued by the arbitrator, Ext A6 is the pass book and Ext A7 is the notice dated 29/04/2015.
- The manager of the opposite party bank was examined as RW1. RW1 has filed proof affidavit and deposed supporting and reiterating the contentions in the written version. Ext B1 is the gold loan application, Ext B2 is the unserved notice, Ext B2(a) is the postal acknowledgment card, Ext B3 is the statement of account for the period 01/04/2015 to 31/03/2018 and Ext B4 is the copy of the reply notice dated 10/08/2016.
- The learned counsel for the complainant has argued that the legal formalities and procedures before the auction were not complied with by the bank, as a result of which, injustice was caused to the complainant as she lost the gold ornaments over which she has sentiments and emotions. It was pointed out that notice was not issued to the complainant in her address. On the other hand, the learned counsel for the opposite party stated that the bank has every right to sell the gold ornaments to recover the principal amount as well as the interest and all the legal formalities were complied with before the auction and there is no deficiency or latches on the part of the bank.
- That the complainant had availed a gold loan of Rs. 58,000/- from the opposite party is admitted. The loan was availed on 25/02/2014 by pledging 27.500 grams of gold ornaments comprising of a chain, a ring and a bangle. The loan was to be closed on or before 25/08/2014. The gold loan was not closed in time. The pledged gold ornaments were sold in public auction by the bank on 05/05/2015. There is no serious dispute on the above aspects.
- One of the allegations of the complainant is that the bank had assured that interest for the loan would be levied only at 4% per annum under agricultural loan scheme of the central government, but contrary to the assurance, exorbitant rate of interest was charged. This allegation is stoutly denied by the bank. Ext B1 would show that the interest agreed up on was 13% per annum. Ext B1 is not disputed by the complainant. Nothing is produced by the complainant to show that the bank had agreed to levy only 4% interest under any scheme of the central government. That being so, the allegation of the complainant that the opposite party had levied interest at excessive rate in contravention of the banking norms is found to be without any basis.
- The main allegation of the complainant is that her gold ornaments were sold in public auction by the bank without following the legal formalities and without due notice to her. On a careful consideration and scrutiny of the evidence in hand, we find that the grievance of the complainant is genuine. It is true that the bank has every right to sell the gold ornaments to recover the principal amount and interest due. But before conducting the auction, proper notice should have been issued to the complainant. But no notice is seen given to the complainant before the auction. It is averred in the written version that the opposite party had issued notice to the complainant on various dates calling up on her to pay all the amount due towards loan. But no such notices are produced before this Commission except Ext B2. If such notices were in fact issued, nothing prevented the bank from producing documents evidencing the issuance of the notice. Ext B2 is returned with endorsement ‘not known’. The address shown in Ext B2 is “ Rani.K.V, Ponnassery House, Kadalundi road, Kadalundi - 673001”. But the address of the complainant is “Rani. C.V, Ponnarassery, Pootheri purayi paramb, Kadalundi road, Feroke -673 631”. This is the address shown in Ext A5 passbook issued to the complainant. Same is the address shown in Ext A4 notice dated 29/04/2015 issued by the bank to the complainant and her husband requesting them to shift the articles kept in the bank locker to the locker in the new building of the bank. That being the position, it is not known why Ext B2 notice was issued in a different address. RW1 has deposed that Ext B2 was issued after verifying the address of the complainant in the records kept in the bank. It is true that the address shown in Ext B1 and Ext B2 is the same except for the house name. The house name in Ext B1 is ‘Ponnarassery’ whereas the house name shown in Ext B2 is ‘Ponnassery’. Ext B1 is prepared by the bank authorities, though it is signed by the complainant. It is to be noted that in Ext B3 statement of account pertaining to Account No. 100061200800906, the address is Ponnassery house, Kadalundi road, Kadalundi. But Ext B6 is the corresponding passbook issued by the bank in Account No. 100061200800906. As already stated, the address in Ext B5 is Ponnarassery, Pootheri Purayi Paramb, Kadalundi road, Feroke – 573631. The opposite party has no explanation as to the difference in the address in Ext A5 and B3 which pertain to one and same account. So the opposite party cannot escape from the liability by saying that the notice issued in the address in the loan account was returned as ‘not known’. The opposite party should have sent a registered notice in the correct address of the opposite party. The act of the opposite party in selling the gold ornaments pledged by the complainant without due notice to her amounts to gross deficiency in service.
- According to the complainant, the pledged ornaments include in her thali chain and wedding ring over which she has sentimental and emotional attachment. The opposite parties should have taken utmost care in informing the complainant before the sale of her gold ornaments. There were latches and deficiency on the part of the opposite party in this regard and thereby the complainant was deprived of her gold ornaments over which she has sentiments and emotions.
- The prayer is for return of the gold ornaments after collecting the principal amount and interest due from the complainant. It may be noted that the gold ornaments had already been sold in the auction and therefore the prayer is not allowable. However, the complainant deserves to be compensated adequately for the deficiency on the part of the opposite party for not observing the proper procedure before the auction and also for the mental agony and inconvenience suffered by the complainant due to the latches and deficiency on the part of the bank. Considering the entire facts and circumstances, we are of the view that a sum of Rs. 50,000/- will be reasonable compensation in this case. The complainant is also entitled to get Rs. 5,000/- as cost of the proceedings.
- Point No. 2:- In the light of the finding on the above point, the complaint is disposed of as follows;
a) CC.351/2016 is allowed in part.
b) The opposite party is hereby directed to pay a sum of Rs. 50,000/- (Rupees fifty thousand only) as compensation to the complainant.
c) The opposite party is directed to pay a sum of Rs. 5,000/- (Rupees five thousand only) as cost of the proceedings to the complainant.
d) The payment as afore stated shall be made within 30 days of the receipt of copy of this order, failing which, the amount of Rs. 50,000/- shall carry an interest of 9% per annum from the date of this order till actual payment.
Pronounced in open Commission on this, the 30th day of April, 2024.
Date of Filing: 12.08.2016.
Sd/- Sd/-
PRESIDENT MEMBER
APPENDIX
Exhibits for the Complainant :
Ext.A1 – Copy of the pledge token.
Ext.A2 – Copy of the lawyer notice dated 18/7/2016.
Ext.A3 – Copy of the postal acknowledgment card.
Ext.A4 – Copy of the notice dated 29/04/2015.
Ext.A5 – Notice dated 27/10/2017 issued by the arbitrator.
Ext.A6 – Pass book.
Ext.A7 – Notice dated 29/04/2015.
Exhibits for the Opposite Party
Ext.B1 – Gold loan application.
Ext.B2 – Unserved notice.
Ext B2 (a) - Postal acknowledgment card.
Ext.B3 – Statement of account for the period 01/04/2015 to 31/03/2018.
Ext. B4 - is the copy of the reply notice dated 10/08/2016.
Witnesses for the Complainant
PW1 - P.S. Shaji (Complainant)
Witnesses for the opposite parties
RW1 – Anitha. C.
Sd/- Sd/-
PRESIDENT MEMBER
True Copy,
Sd/-
Assistant Registrar.
