BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 11^TH DAY OF AUGUST 2023

ORDER

SMT.M.SHOBHA, PRESIDENT

1.         This complaint has been filed through Power of attorney holder of the complainant under section 35 of C.P.Act 2019 (herein after referred as “Act”) against the OPs for the following reliefs.

1. Direct the OPs to hand over/return the gold jewellary weighing 84 grams to the complainant which was pledged for gold loan or compensate the value of the gold jewellary as on date; and
2. Direct the OP to wave off all future EMIs due for Home loan and Top up loan as compensation for mental trauma; and
3. Direct the OP to award a compensation of Rs.5,00,000/- to the complainant by directing the OPs to compensate the complainant for the deficiency in service committed y OPs which has caused loss, damage, mental agony, inconvenience towards legal expenses.
4. Any other orders which this Hon’ble court deems fit in the facts and circumstances of the case in the interest of justice and equity.

2. The brief case of the complaint is as follows:

It is the case of the complainant that he has availed the home loan, top up loan, security loan and gold loan in the OP bank and he has been diligent in paying EMIs as agreed till now. The home loan and the top up loans towards the home situated at south city garden Calcutta. The complainant has given his address to Ops for correspondence purpose.

3. The complainant due to some medical issues shifted to Bangalore during September 2019 and he has intimated the same to OP and requested them to send all communication pertaining to bank loan to his registered email or to his registered mobile number given by him which is on Ops record.  The OP has assured that they will communicate him through registered email or on registered mobile number but the complainant has not received any communication from their side and even after making several request there was no response from the Ops.
4. It is further case of the complainant that he had never defaulted in paying the EMIs even during the moratorium period announced by the RBI.  The OP is well aware about the gold loan account number 000605032722 on 10.04.2019 for a sum of Rs.1,67,401/- against the gold articles weighing 84 grams and the same was renewed by him on receiving a call from OP to renew the gold account loan.  The complainant has renewed the gold account loan on 29.08.2021 through mobile app by paying Rs.36,214/-, before expiry and the OP bank renewed the complainant’s loan account till 29.08.2021 and also he got the credit amount of Rs.89,766/- on 02.09.2021 against the gold loan renewal.
5. It is further case of the complainant that he had taken the gold loan account for Rs.1,69,400/- and the OP has deducted the processing fees of 1% i.e., Rs.1,694/- and GST @ 18% Rs.305/- and totally Rs.1,999/- and they have transferred Rs.1,67,401/- to the complainant account.  The scheme is yearly renewal and there is no EMIs to be paid.  As on the date of gold loan the value of the gold was Rs.2,25,867/- and the Ops have kept the security charges @ 25% of the price, the present value of the gold weighing 84 grams is Rs.3,94,800/- and these are antic jewellary.
6. It is further case of the complainant that he was under the impression that every months EMIs cleared towards home loan and top up loan.  The OP has break the trust of valuable customer the complainant who have changed his loan account from another bank to OP bank only hoping that the OP would give a better service.  This complainant has also intimated to the OP that he has shifted his base to Bangalore.  After he was shifted to Bangalore it is the Ops responsibility to send email or call on registered mobile number and also update the correspondence address of the complainant in their office records and system as well.  Without the complainant’s knowledge and intimation the OP auctioned the jewellary without approval or acknowledgement from the complainant which is a great default on the part of the OP. when the complainant tried to contact the Ops representatives the concerned people have not responded.  The complainant has also raised a complaint before the RBI on 25.02.2021.  Afterthat the OP have given an evasive reply.
7. It is further case of the complainant that the gold jewellary belongs to his wife and she got those in their marriage as such she has special bond with the jewellary. Because of the Ops mindless auction the complainant is facing problem and now without these jewellary his wife is not letting the complainant inside the house.  The OP has caused not only mental agony to the complainant and caused family dispute as well.  The complainant is not getting the same jewellary now and it is OP responsibility to accommodate the same on their cost. When the OP have failed and neglected to set right the issues the complainant has requested the OP orally and also in writing since February 2021 finally he has sent a legal notice dated 04.05.2021 calling upon the OP to hand over the gold jewellary which was deposited in their bank and also exempt all future EMI due for him and top up loan as compensation.  The OP even though received the legal notice have neither come forward to comply with the notice or to give any reply.  The complainant is put to mental agony and great hardship and also monitory loss on account of deficiency in service. This complainant is a consumer who has availed the services of the OP.  The Ops failed to render the services as promised by them and this act of the OP amounts to deficiency of service and unfair trade practice. Hence the complainant has filed this complaint.
8. After service of notice OP appeared and filed their version.
9. It is the case of the OP that the complaint is not maintainable. The complainant himself has averred that he holds SB account and he has availed home loan, top up loan, security loan and gold loan with this OP. The nonpayment of the EMIs has resulted in the present situation.  As per the clause 4.2.7 RBI masters circular No.RBI/2015-16/101 DBR on prudential norms on income recognition asset classification and provisioning pertaining to advances, the asset classification has to be borrower wise and not facility wise.  In this case since the home loan availed by the complainant was classified as NPA. Consequently all other facilities availed by the complainant i.e., gold loan, home loan, credit card and cash credit OD facility were categorized as NPA.  This OP have issued a detail response when the complainant filed a complaint before banking ombudsmen dated 25.02.2021. The complaint filed by the complainant on 25.02.2021 clearly states the delinquency on part of the complainant in clearing his loans and auction taken by the OP on various dates towards recovery of the same.
10. It is the specific contention taken by the OP that the complainant has never intimated to the OP and not sent a single email relating to his shifting to Bangalore.  It is a regular banking practice to approach the bank for change in address by submitting requisite form along with new address along with some KYC documents to effect change of address. The complainant has not filed any shred of evidence to show that he had duly submitted either in physical form or electronically as prescribed by this bank.  This OP bank is obligated to exercise due care while changing address of its customer to ensure confidentiality and safety of their funds and to prevent any attempts to commit fraud by third parties which may result in financial loss to its customer. As per the records of this OP bank no request for change in address was received from the complainant and hence the said Calcutta address remained on the records of the OP.  Consequently all the notices were directed to Calcutta address. The complainant at no point of time avers that the notice may no more issue to Calcutta address which means that the said Calcutta address is also active.
11. It is further case of the OP that to the default of the gold loan including loan recall notice and paper publication have been clearly stated in the documents filed along with this version. This OP have taken various notices along with paper publication of the gold auction on 29.09.2020, 26.10.2020 and 13.11.2020.  The OP has specifically denied that they have auctioned the gold jewellary without any intimation to the complainant. They have auctioned the gold after issue of necessary notices to the complainant at his Calcutta address.  The complainant has committed default. Hence this OP is allowed to take necessary steps available under the law including sale of assets by complying with due procedures established by the law. This OP has followed the clear procedure in conducting auction.  This OP has not committed any deficiency of service. He has complied with all due procedures under the law with regard to auction of gold jewellary. The complainant is not entitled for any relief. Hence the OP prayed for dismissal of the complaint.
12. The complainant files affidavit evidence and relied on 25 documents.  Op’s have filed affidavit evidence of their authorized signatoryand relied on 10 documents. Heard the arguments and perused the records and written arguments.
13.  The points that would arise for our consideration are as under:-

1. Whether the complainant proves deficiency of service on the part of the OPs?
2. Whether the complainant is entitled to reliefs mentioned in the complaint?
3. What  order?

14. Our answer to the above points are as under:

Point No.1 :-Affirmative

Point No.2 :- Affirmative in part

Point No.3:- As per the final order.

                                REASONS

15. Point No.1 and 2:

These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, affidavit evidence and documents relied on by both the parties.

16.  The complainant has availed home loan, top up loan security loan and gold loan in Ops bank, Calcutta. He has been diligent in paying EMIs as agreed till now. The home loan and top up loans were towards the home situated at South City Garden, tower 1, unit 1D, 61, BL Saha Road, Calcutta.  Due to some medical issues the complainant was shifted to Bangalore during September 2019 and he has intimated the same to the OP bank and he requested them to send all communication pertaining to bank loans to his registered email ID and registered mobile number, which is on Ops record.  Even though the Ops have agreed that they will communicate to the complainant but the complainant never received any communication from the OP side. Even though he has informed that his phone calls were not being answered no one bother to answer his quires.
17. The complainant never defaulted in paying the EMIs even during the moratorium period announced by RBI the OP is well aware of the gold loan taken by the complainant on 10.04.2019 for a sum of Rs.1,67,409/- against the gold articles weighing 84 grams and the same was renewed by receiving a call from the OP on 29.08.2020 thorugh mobile app by paying Rs.36,214/- before expiry and the OP bank renewed the complainant’s loan account till 29.08.2021 and he has also got the credit amount of Rs.89,766/- as on 02.09.2020 against gold loan renewal.  The complainant has also paid the installment due towards home loan on 19.01.2021 for the month of December 2020 and January 2021 and the Ops authorized person have collected both the installments.  The Ops without giving any intimation to the complainant or the correspondence to the address given by the complainant have auctioned the valuable gold articles on 19.01.2021 which was kept with the OP in a different SB account No.627601149299 dated 10.04.2019.  The default was with the home loan account but OP auctioned in gold loan account which was not at all acceptable and thereby the OP has committed deficiency in service.
18.  This complainant has also tried to contact the Ops but they have not given any response.  After that he has raised a complaint to RBI on 25.02.2021. The gold jewellary belongs to the wife of the complainant and it was given to her in her marriage and she has special bond with the jewellary.  In view of the mindless auction of the Ops the complainant is facing problems in his family.  If the Ops have intimated the complainant about the auction of the gold ornaments he would have made separate arrangements for clearance of the entire gold loan.  Even though the gold loan was not matured the OP has conducted the auction without intimation to the complainant.
19.  In support of his contention the complainant has filed his affidavit evidence and relied on 25 documents. Ex.P1 to P5 are the loan account and gold loan account, Ex.P6 is the bank statement for gold auction, P7 is the legal notice and P8 is the postal receipt and P9 is the post tracking acknowledgement. P11 to 13 are the copies of the emails and Ex.P14 to 16 are the account statement for clearing the loan still February 2022. Ex.P17 is the copy of the email, Ex.P18 to 21 are the copies of the bank statement, Ex.P22 is the copy of the email Ex.P23 is the complaint given by the complainant to the OP and Ex.P24 is the complaint to the RBI sent by the complainant and ExP25 is the copy of the grievance of the complainant.
20.  On the other hand, the case of the OP is that the complainant has not at all intimated about his change of address and he has not produced even a single document to show that he has informed the OP about change of address.  The complainant is not even provided with a permanent or temporary residential address. It is not even certain as to how the complainant is associated with the said M/s Expo marketing. The legal notice issued by the complainant dated 04.05.2021 also discloses the address of the complainant as that of Calcutta which is the address where the Ops have corresponded with the complainant of all times.  The complainant never informed the OP that he is not residing in the Calcutta address, hence the said address is valid, according to sec 27 of the general clauses act. All the bank records shows even as on 03.09.2021 the address of the complainant in the bank records was the Calcutta address.
21.  It is a regular banking practice to approach the bank for change of address by submitting requisite form along with new address along with some KYC documents to effect change of address. There is no documents produced by the complainant that he had duly submitted either in physical form or electronically his change of address as prescribed by the OP bank.  The OP bank is obliged to exercise due care while changing address of his customers to ensure confidentiality and safety of their funds and to prevent any attempts to commit fraud by third parties which may result in financial loss to its customer.
22.  The OP has further denied that there is a lack of correspondence of this OP to the complainant about the gold loan. He has further denied they have not given auction intimation to the complainant.  They have further denied that the complainant is making payment in all the loan facilities availed by him.  The OP further denied that the complainant is entitled for the relief.
23.  One of the officials of the bank legal manager of the OP bank has filed his affidavit evidence and relied on Ex.R1 to R10. Ex.R1 to R4 are the copy of the notices, Ex.R5 and 6 are the two paper publications in English and Bengali and copy of the statements as Ex.R7 to 9.
24.  The main contention taken by the OP is that as per

clause 4.2.7 RBI Master circular No.RBI/2015-16/101 DBR. No.BP.BC.2/21/21/04/048/2015-16 on prudential norms on income recognition, asset classification and provisioning pertaining to advances, the Asset Classification has to be Borrower wise and not facility wise. In this present case, since the home loan availed by the complainant was classified as Non PerformingAsset (NPA) consequently all other facilities availed by the complainant viz Gold Loan, Home Loan, credit Card and Cash Credit/OD facility were categorized as NPA.

25. It is further contention taken by the OP that as per Ex.R1 to R4 they have made correspondence with the complainant at all points of time.  The OP has clearly given intimation of the gold auction taken place to the complainant. They have issued notice dated 13.11.2020 the Ex.R4 and the dispatch report clearly shows that the complainant was aware of the auctions taken by the OP bank. Ex.R2 and R3 were repeated reminders to the complainant to ensure that the complainant has to regularize or paid up the entire loan amount which is also evidenced with dispatched report.  The Ex.R5 and R6 i.e., the publication of the gold articles shows that the bank has followed due process under the law. The amount realized from the auction of the gold is also reflected in the account statement produced by the complainant himself.  The complainant was not regular in making payments in all the loans availed by him. The statement Ex.R7 to R9 clearly discloses that the complainant has committed default in payment of loans.
26. On the other hand, it is the specific contention taken by the complainant that, all the complainant’s loans were categorized as NPA and it is also undisputed fact that all the notices and the correspondences were directed to the Calcutta address.  If at all the Ops opted for auction then sending notice to the Calcutta address of the complainant does not arise at all. Whereas one of the clause is that, if notice were not sent to the complainant the Ops can deduct the amount and go for paper publication and then conduct the auction.  Even though the Ops have taken the contention that they have sent notice to the complainant but they failed to produce the acknowledgements and no other documents were produced to understand the OP followed the procedure while auctioning.  The Ops have the phone number and email ID of thecomplainant and they would have informed the complainant through his registered mobile number or through email ID before going for auctioning. The gold renewal was done by the complainant as per Ex.P5 on 29.08.2020. It is clearly mentioned in Ex.P11 the maturity date of the gold loan was 29.08.2021. There were no dues for three consecutive months ever.  The complainant learnt about two months and has authorize the bank to deduct the same.  According to RBI rules 2.1.2(1)

A non performing asset is a loan or an advance:

i.    Interest and installment of principal remain overdue for a period of more than 90 days in respect of a term loan.

27.  The complainant never defaulted for three consecutive months to consider as defaulter under the NPA. The Ex.P22 dated 19.01.2021 clearly discloses that dues are for two months and for which the complainant authorize the Ops to clear and it was cleared by the complainant.  The Ex.P17 clearly discloses that the irresponsible attitude of the Ops towards the customers as they have sent the emails with irrelevant account numbers relating to the gold loan and the transaction details between the complainant and this OP.
28.  It is clear from the evidence and the documents placed before this Commission by both the parties that the gold loan was not due and the maturity date was on 29.08.2021 as per Ex.P11. Inspite of that the OP bank has conducted the auction on 19.01.2021 itself without personally intimating the complainant even though they have got the registered mobile number of the complainant and also his registered email ID. If the OP bank had intimated the complainant about the auction of the gold ornaments through his mobile or through is email ID the complainant would have made arrangements to clear the loan amount.  The Ops have also not at all followed the procedure in conducting gold auction of the complainant.  
29.  The Ops have deducted the auction charges on 16.12.2020. The gold renewal was done by the complainant as per Ex.P5 on 29.08.2020 and the maturity date was fixed on 29.08.2021. There were no dues for three consecutive months. When the complainant came to know about two months due he was authorized the bank to deduct the same and as per his instructions the Ops have deducted the amount. Even after conducting auction the OP bank have kept quite and they have not intimated the complainant about the auction of the gold ornaments. When the complainant has enquired the OP bank in February 2021 the complainant came to know about the auction taken by the OP bank. Inspite of issue of the legal notice on 04.05.2021 calling upon the OP to hand over the gold jewellary which were deposited in their bank and also exempt all future EMI due for home and top loans as compensation within 15 days of receipt of the notice the OP even after received the legal notice have neither come forward to comply with the notice nor issued any reply. In view of this the complainant has suffered mental agony, great hardship and monitory loss. The auction conducted by the OP without intimating the complainant amounts to deficiency of service unfair trade practice and negligence on their part.
30.  The complainant has sought for the relief to direct the Ops to hand over or return the gold jewellary weighing 84 grams to this complainant which was pledged for gold loan or compensate the value of gold jewellary as on date and further direct the Ops to waive off all future EMI dues for home loan and top up loan as compensation for mental trauma and further direct the Ops to award a compensation of Rs.5,00,000/- to the complainant for the deficiency of service committed by the Ops.
31.  It is pertinent to note here that even though the complainant has sought for relief to direct the Ops to return the gold jewellary which was pledged for gold loan has not made the auction purchasers as parties in this complaint. Under these circumstances we cannot direct the Ops to return the gold jewellary which was already auctioned by the OP bank. Under these circumstances complainant is only entitle for the value of the gold jewellary as on the date of the auction. The complainant is not entitled for the relief to waive off all the future EMIs due relating to other three loans, i.e., home loan, top up loan.  It is the duty of the complainant to pay the loan amount raised by him towards home and top up loans. The complainant is entitled for compensation of Rs.1,00,000/- due to the mental agony and financial loss and inconvenience caused to him in view of the auction of the gold ornaments without intimating this complainant by the OP. in addition to this the complainant is also entitled for litigation expenses of Rs.10,000/-. Accordingly we answer point NO.1 in the affirmative and point No.2 partly in affirmative.
32.  POINT NO.4: In view of the discussion referred above, In the result, we proceed to pass the following;

                             O R D E R 

1. Complaint is allowed in part.
2. OP is directed to pay the value of the gold jewellary pledged by the complainant as on the date of the auction.
3. OP is directed to pay the compensation of Rs.1,00,000/- to the complainant along with litigation expenses of Rs.10,000/-.
4. If the OP fails to pay the value of the gold jewellary pledged by the complainant, the OP is directed to pay interest at the rate of 12% p.a., from the date of auction till realization.
5. Furnish the copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 11^TH day of AUGUST 2023)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1 :