Willson P Varikkattu filed a consumer case on 02 Feb 2022 against Manager UBI in the Idukki Consumer Court. The case no is CC/42/2018 and the judgment uploaded on 16 Mar 2022.
DATE OF FILING :2.3.2018
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION IDUKKI
Dated this the 2nd day of February, 2022
Present :
SRI. C. SURESHKUMAR PRESIDENT
SMT. ASAMOL P. MEMBER
SRI. AMPADY K.S. MEMBER
CC NO.42/2018
Between
Complainant : Wilson P. Varikkattu,
Varikkattu House,
Thodupuzha P.O.
(By Adv: K.M. Sanu)
And
Opposite Party : The Manager,
Union Bank of India,
Kalayanthani Branch,
Kalayanthani P.O., Thodupuzha.
(By Adv: Sijimon K. Augustine)
O R D E R
SRI. C. SURESHKUMAR, PRESIDENT
1. Complaint filed under Section 12(1) of the Consumer Protection Act, 1986 (the Act, for short). Complainant’s case briefly discussed here under :
2. Complainant had availed a gold loan of Rs.1,33,200/- after pledging 74 gms of gold ornaments on 22/12/2016 from the opposite party, namely, Union Bank of India, Kalayanthani Branch, represented here by its Manager. At the time of pledging, gold ornaments were weighed and examined by the appraiser of the bank. Later, complainant had sought for renewal of the said loan after payment of interest due. Opposite party had agreed for this and had renewed the loan for the same amount on 21.2.2018. Gold ornaments were not returned upon closure of old loan. Those were accepted as security (cont….2)
- 2 -
for the new loan also. At the time of renewal, gold ornaments were not again examined by the appraiser. In 2016, complainant had paid appraiser fee for examination of gold ornaments and thereafter these have remained in bank locker. These were not taken out or appraised at the time of renewal of earlier loan. Yet the complainant was again made to pay Rs.400/- towards appraiser’s fee at the time of renewal. This, according to complainant, amounts to unfair trade practice and he had questioned this, which was not liked by officials of opposite party. They had deliberately made him to wait in the branch office for hours unnecessarily under the pretext of completing formalities of renewal. Complainant therefore prays for return of Rs.400/- which he was compelled to pay unnecessarily to the bank towards appraiser’s fee along with 18% interest and compensation of Rs.25000/- for deficiency in service along with litigation costs of Rs.4000/-.
3. Opposite party has filed written version disputing the claim of complainant. It’s case is briefly discussed here under:
4. Opposite party admits that complainant had availed a gold loan of Rs.1,33,200/- on 22.12.2016 after pledging 74 gms of gold ornaments. Subsequently, loan account became irregular due to non-payment. Hence recovery proceedings were initiated against complainant. While so, complainant approached opposite party and made a request for renewal of loan upon payment of interest. Manager of opposite party had favourably considered the request of complainant and made / adjusted book entries, closed the loan on 21.2.2018 and had opened a new loan account after taking fresh application from complainant. Earlier gold loan of complainant was under general scheme and its rate of interest was 9.75 + 2 % penal upon default. To give maximum benefit to complainant, opposite party had permitted the complainant to change his loan account from general scheme to interest subvention scheme. As per guidelines of Government of India, gold loan upto Rs.3 lakhs are eligible to be subsidized for cultivation of seasonal crops at an interest rate of 7% for a period of one year. Thus after giving maximum benefit to complainant, a copy of Tax receipt pertaining to land having extent of 54.23 Ares in Sy. No.79/9 of Karimannoor Village owned and possessed by complainant was also collected as additional security/ evidence of agricultural operations for which loan was advanced. Opposite party therefore submits that copy of Pan card is necessary in connection with (cont….3)
- 3 -
fresh loan, since circulars provide for collection of such documents from borrowers in case of loan above Rs.50000/-. However, complainant had refused to give copy of his Pan card stating that he has no such document. Thereafter he was requested to give a Form 60 Declaration for which complainant was not amnable. Hence manager of opposite party had cordially approached complainant and informed him about the necessity of documents and persuaded him to give requisite declaration. It is incorrect to say that the complainant was subjected to unnecessary harassment by making him to wait in the bank’s branch office. Since new loan was sanctioned to complainant, as per rules opposite party is required to examine gold ornaments pledged as security and as per circular applicable, 0.04% of loan amount is to be collected from the borrower towards appraiser’s fee. In the case of complainant, appraiser’s fee was further reduced to Rs.400/-. There is no deficiency in service on the part of opposite party. Complainant is not entitled for any of the reliefs claimed in the complaint. Same is to be dismissed with costs.
5. After filing of written version, case was posted for evidence after affording reasonable opportunity to both sides for adducing evidence.
6. No oral evidence was tendered by complainant. Of the 2 documents produced by complainant, copy of account extract from his pass book was admitted without formal proof as Ext.P1. 2nd document was not admitted. On the side of opposite party, DWs1 and 2 were examined. DW1 is the previous manager and DW2 is the present manager of opposite party. Exts.R1 to R9 were admitted on the side of opposite party. DW1 was not cross examined on the date when he has tendered for cross examination after filing of chief affidavit. Subsequently an application was filed by complainant for recalling this witness on 17.10.2019. It is seen from proceedings of the case dated 20.10.2019, that the said application was allowed, albeit no orders were recorded upon the application. Nevertheless, an application is seen filed again for recalling DW1 for cross examination. Since DW1 was not at that time working in Kalayanthani branch office, his successor in office was examined as DW2. He was cross examined on behalf of the complainant also. Hence we do not think that it is necessary to recall DW1, since the witness was examined as he was the then manager and being an official had tendered evidence as per records. More so, when complainant does not have a specific allegation that DW1 was the (cont….4)
- 4 -
manager who had sanctioned the old and new loan as well. Hence second application for recall is hereby dismissed. Exts.R1 to R6 were proved by DW1 and remaining documents were proved by DW2. After examination of DW2, evidence was closed and both sides were heard. Now the points which arise for consideration are :
1) Whether complainant was made to pay unnecessary / excess charges for appraiser fee, in connection with renewal of loan, amounting to Rs.400/- ?
2) Whether there is any deficiency in service on the part of opposite party ?
3) Whether complainant was unnecessarily harassed by opposite party’s employees ?
4) Whether complainant is entitled for return of appraiser’s fee and compensation for deficiency in service ?
5) Reliefs and costs ?
7. Point Nos.1 to 4 are considered together :
Learned counsel for complainant, after briefly adverted to pleadings addressed by both sides, submitted that his case has been proven by the evidence tendered by DW2 during cross examination. It is admitted in the pleadings itself that earlier loan was renewed. There is nothing to show that gold ornaments were again weighed and examined by the appraiser. Hence collection of appraiser fee again at the time of renewal of earlier loan was improper. Such acts of opposite party, amount to deficiency in service also. Since complainant had raised objection with regard to collection of appraiser fee, he was unnecessarily harassed by employees of opposite party. This is also deficiency in service. Amount collected in excess is to be returned to complainant and he should be compensated for deficiency in service as prayed for in the complaint. Opposite party is also to be made liable for the litigation cost of complainant.
8. Learned counsel for opposite party would submit that complaint is not maintainable upon facts. There is no deficiency in service. Earlier loan was closed by complainant and new loan was sanctioned to him. First loan was under the general scheme applicable to gold loan. 2nd loan was an agricultural loan. Security of immovable property was also taken in connection with the 2nd loan. Gold ornaments pledged by (cont….5)
- 5 -
complainant for the earlier loan were again offered as security by complainant. Those were returned to him upon closure of earlier loan, that apart, 2nd loan was availed when new manager of the bank was in charge of the branch. Hence it was necessary that the gold ornaments were to be again weighed and examined by the appraiser, since any short comings or deficiency in weight will be directly answerable by the manager. He has personal liability for advances upon gold ornaments. The fact that gold ornaments were returned to complainant upon closure of earlier loan and subsequently those were again received from him and examined by appraiser are proved by Ext.R1 itself. Subsequently, Ext.R2 to R9 would also corroborate this fact. There was no harassment of complainant as he has not made any objection with regard to payment of appraiser’s fee at the time of availing the 2nd loan. He had created a scene in the branch office by refusing to give a copy of Pan card and in its absence Form 60 Declaration as requested by manager of opposite party. No delay was occasioned from the side of opposite party. There is no deficiency in service. Nothing was collected in excess from complainant either. Hence complaint is to be dismissed.
9. We have gone through the pleadings and evidence on record. Oral testimony available is only of witnesses of opposite parties, namely, DWs1 and 2. It is pertinent to note that complainant has not ventured to mount the box and to give evidence regarding facts within his knowledge which are expected to be proved by him. Ext.P1 copy of extract purportedly of entries in his pass book is the only document admitted on his side.
10. We shall advert to documentary evidence tendered by opposite party also. Ext.R1 proved by DW1 is copy of gold loan pledging form dated 22.12.2016. This relates to earlier gold loan availed by complainant. Ext.R2 is copy of similar gold loan pledging form dated 21.2.2018 relating to the subsequent loan. Ext.R3 is photocopy of basic tax receipt No.36/1456 pertaining to immovable property situated in Sy. No.79/9 in Karimannoor Village for an extent of 0.5423 Ares in the name of complainant relating to the year 1917-18. Ext.R4 is copy of declaration given by complainant with regard to subsequent loan. Ext.R5 is photocopy of assessment form for short term loan (crop loan) executed by complainant. Ext.R6 is copy of account extract for the period from 23.12.2016 to 23.9.2019 of loan account pertaining to earlier loan availed by complainant. Ext.R7 is copy of account extract for the period from 1.1.2018 to (cont….6)
- 6 -
18.11.2021 of loan account of complainant dated 19.11.2021. Ext.R8 is a similar copy of account extract for the period from 21.2.2018 to 18.11.2021 of loan account by complainant. Ext.R9 series are photocopy of a voucher dated 21.2.2018 for Rs.1,49,004/- and Ext.R9(a) is photocopy of loose cheque for Rs.1,33,200/- signed by complainant.
11. According to learned counsel for opposite party, there was no renewal of the earlier loan and that there was only subsequent sanctioning of a new loan and that too of a different category. Upon going through the evidence tendered by DW2, it could be seen that there is a practice by opposite party to grant a 2nd loan despite non-clearance of earlier loan and this appears to be the manner in which the earlier debt is again carried over in the form of a new loan. This procedure as such is termed as renewal of earlier loan. In this context it would be pertinent to advert to the pleadings addressed by opposite party. In the written version filed, there are specific pleadings to the effect that complainant had upon initiation of recovery proceedings, approached the manager of opposite party with interest and sought for renewal of old loan. That manager had favourably considered the request and the bank by making adjustment entries closed the loan on 21.2.2018 and upon a fresh loan application, new loan account was opened. Both DWs1 and 2 have subsequently sworn to this fact in their respective chief examination affidavits. DW2 has admitted during cross examination that new loan was for amounts due as per old loan. Thus what had transpired in effect was carrying forward of old loan in the form of a new loan. Despite non-examination of complainant, his case that he had approached for renewal of the earlier loan upon payment of interest and that his request was acceded by then manager is proved by the pleadings of opposite party and evidences tendered by DWs1 and 2. Much hype was raised at the time of arguments by learned counsel for opposite parties that there was no renewal of earlier loan but only grant of new loan as such. These contentions remain as empty war cries in the light of pleadings and evidence tendered on the side of opposite party discussed earlier. Thus closure of earlier loan and sanctioning of new loan was only by way of adjusting entries in account books and to complete the formality, a fresh loan application was taken from complainant.
12. It is contended by learned counsel for opposite party that after closure of old loan and upon sanctioning of new loan on the basis of gold ornaments pledged as security (cont…..7)
- 7 -
earlier, those ornaments are to be again examined by an appraiser. That this is necessary for several reasons. In case a new manager is in charge at the time of sanctioning of new loan, he will be personally held liable for the quality and quantity of gold and adequacy of security in terms of value of gold prevailing. Pleadings are also addressed on these lines. However, contentions and pleadings are only to the effect as to what is to be done in the case of accepting gold ornaments, which were previously taken as security in connection with an earlier loan, which are again offered as security for new loan to be availed by the borrower. In other words pleadings and contentions are only regarding the procedure to be followed for accepting gold as security for a new loan even if the very same gold was earlier accepted as security by bank for an earlier loan. The question is not only about what the prescribed procedure is, but also whether it was followed or not ? That the gold was again duly examined and appraised by an appraiser. Opposite party has no case in pleadings or evidence that the gold ornaments were taken out and examined by the appraiser again at the time of sanctioning of new loan. No such case is deposed by DWs1 and 2 in their respective chief examination affidavit. What has been deposed is only a prescribed procedure to be followed while accepting gold security, in connection with a new loan availed by the borrower, which was earlier accepted for an old loan. This does not mean that bank can collect appraiser fee without getting the security examined and valued by an appraiser. Bank will be entitled to collect appraiser fee only if the appraiser had actually weighed and appraised the gold ornaments and not for the mere reason that procedure provides for appraisal of security. Even the name of the appraiser is not mentioned in written version. Nore was there any attempt to examine the appraiser. Reliance is placed upon R1 and R2 to prove this aspect. When opposite party has admitted in written version that adjustment entries were made to renew the earlier loan, these documents by themselves are not sufficient proof to prove that there was a second appraisal of same gold.
13. Admittedly, there was a circular authorizing conversion of gold loans of Rs.3 lakhs to loan for cultivation of seasonal crops at subsidized rate of interest. This will also show that old loan was renewed by conversion to a different category of loan. Therefore, the fact that a new loan of different category as per rules was sanctioned to complainant will not augment case of opposite party, that gold was appraised again. On the other hand, this only supports the case of complainant that only book entries regarding closure (cont…..8)
- 8 -
of old loan were made and that there was no return of pledged gold to him or fresh appraisal of those ornaments again in connection with conversion of old loan to crop loan.It was again contended that there is no oral evidence by complainant in this regard. We do not find any merits in these contentions for the reason that complainant is not expected to prove a negative aspect. It was for the opposite party to plead that appraising of gold was done again when loan was renewed and to lead evidence in this regard. No such evidence is forthcoming, except R1 and R2,which we have eschewed from consideration, in view specific pleadings that book entries were adjusted for conversion of old loan into new one. It was also contended that complainant had not paid the earlier loan and that he was a defaulter. Opposite party has a specific case that complainant had defaulted in repayment of old loan and had come for a new loan with an offer to clear interest due on the earlier loan when recovery proceedings were initiated. If that were to be so, manager of opposite party ought to have denied such facility to a defaulter instead of assisting him in dodging repayment by converting the old loan into a different loan that too upon concessional rate of interest. Such facilities should be extended to those customers who are prompt in repayment and not to chronic defaulters and fraudulent persons who avoid payment of dues.
14. Coming to disputed facts, it is proved from the evidence tendered that complainant was made to pay Rs.400/- towards appraiser’s fee in connection with the subsequent loan despite the fact that gold offered as security earlier was not appraised again. Collecting charges for which no service was given would certainly amount to unfair trade practice and can also by termed as deficiency in service.
15. Complainant has also pleaded that he was unduly harassed by the bank employees as they had made him to wait in the branch office unnecessarily for a long time, when he had questioned collection of appraiser’s charges again. These facts has been denied by opposite party. There is no evidence by complainant to prove that there was any harassment by the employees of opposite party as alleged by him. In the absence of evidence in this regard, this contention of complainant remains unproved.
16. We have already found that opposite party had collected Rs.400/- towards appraiser’s fee without examining the gold ornaments in connection with conversion of (cont….9)
- 9 -
old loan to a new loan. They are bound to return this amount with 12% interest from the date of collection till the date the amount is repaid to complainant. Complainant has sought a compensation of Rs.25,000/- towards deficiency in service considering the facts proved and nature of deficiency in service as such, we are of the view that complainant is entitled for a compensation of Rs.5000/- from opposite party in this regard. He is also entitled for litigation cost of Rs.1000/-. Point Nos.1 to 4 are answered accordingly.
16. Point No.5:
In the result, petition is allowed in part, upon the following terms :
Opposite party is directed to repay / return Rs.400/- collected from complainant again towards appraiser’s charges with 12% interest from 21.2.2018, till the date of repayment or realization of the same.
Opposite party is directed to pay Rs.5000/- as compensation to complainant for deficiency in service/ unfair trade practice with interest @ 12% per annum from 21.2.2018, till the date of payment or realization as the case may be.
Opposite party is directed to pay Rs.1000/- as litigation costs to complainant.
17. In case of non-payment of amounts mentioned in clauses 1, 2 and 3 above, within a period of 30 days from today, complainant shall be entitled to realize those amounts by proceeding against opposite in accordance with law.
Pronounced by this Commission on this the 2nd day of February, 2022
Sd/-
SRI. C. SURESHKUMAR, PRESIDENT
Sd/-
SMT. ASAMOL P., MEMBER
Sd/-
SRI. AMPADY K.S., MEMBER
(cont….10)
10 -
APPENDIX
Depositions :
On the side of the Complainant :
Nil.
On the side of the Opposite Party :
DW1 - Himanshu Arya
DW2 - Tijo Eldose
Exhibits :
On the side of the Complainant :
Ext.P1 - copy of account extract from complainant’s pass book.
On the side of the Opposite Party :
Ext.R1 - copy of gold loan pledging form dated 22.12.2016.
Ext.R2 - copy of gold loan pledging form dated 21.2.2018.
Ext.R3 - photocopy of tax receipt No.36/1456 .
Ext.R4 - copy of declaration given by complainant for subsequent loan.
Ext.R5 - photocopy of assessment form for short term loan (crop loan) executed by
complainant.
Ext.R6 - copy of account extract for the period from 23.12.2016 to 23.9.2019 of loan
account.
Ext.R7 - copy of account extract for the period from 1.1.2018 to 18.11.2021 of loan
account.
Ext.R8 - copy of account extract for the period from 21.2.2018 to 18.11.2021 of loan
account.
Ext.R9 series - photocopy of a voucher dated 21.2.2018 evidencing remittance of
Rs.1,49,004/-.
Ext.R9(a) - photocopy of loose cheque for Rs.1,33,200/- signed by complainant.
Forwarded by Order,
SENIOR SUPERINTENDENT
Consumer Court | Cheque Bounce | Civil Cases | Criminal Cases | Matrimonial Disputes
Dedicated team of best lawyers for all your legal queries. Our lawyers can help you for you Consumer Court related cases at very affordable fee.