SRI.R. VIJAYAKUMAR, MEMBER.
This is a complaint filed under section 12 of the Consumer Protection Act. The complaint is filed seeking an order directing the opp.parties not to sell the ornaments pledged by the complainant, to return the same to the complainant after receiving the loan amount along with interest at the rate of 12% per annum, to allow the complainant to realize a sum of Rs.5000/- with 12% interest per annum as compensation for deficiency in service from the part of opp.party and to pay compensation and cost.
The complainant’s case is that he had availed financial assistance from the opp.party pledging gold ornaments on 11..12..2008, 10..12..2008, 16..12..2008 and 21..12..2008. The agreed rate of interest was only 12 % per annum. When the complainant approached the opp.party on 1..8..2009 to remit the interest accrued for his loan amount he had also requested for a statement of account. The opp.party refused the complainant’s request. They had demanded a huge amount as interest The opp.party intimated the complainant through telephone that if he did not remit the loan amount along with the interest demanded by them, the ornament will be sold by auction procedure. The complainant was ready for settling the loan account paying principle amount along with interest at the rate of 17% . But the opp.party was not amenable. There is deficiency in service from the part of opp.party. Hence the complainant filed the complaint for getting relief.
The opp.party filed version contenting the allegations in the complaint. The complaint is not maintainable either in law or on facts. The complainant is not a consumer and the complaint is bad for non-joinder of parties also. The relationship between the party is debtor-creditor relationship
The complainant had pledged 36.8 gms of old and used ornaments on 4., 10, 16 and 27th of December 2008 for Rs.34,400/-. The basic rate of interest as per agreement is 17% and also the complainant agreed that the ornaments will be taken back within 3 months. The statement that the interest rate is 12% per annum is absolutely false. The complainant cannot violate the terms and conditions of the contract.
The opp.party never rendered any service on payment or even done any illegal or negligent act or any deficiency in service. There is no cause of action. The complainant is not having any legal right to get any relief as sought by him.
The complainant filed affidavit. PW.1 was examined. Ext. P1 series and P2 series marked. Exts. D1 to D4 also marked.
From the side of opp.parties DW.1 examined.
Heard both sides.
The points that would arise for consideration are:
1. Whether the complaint is maintainable in the Forum
2. Whether there is any deficiency in service from the part of opp.party?
3. Compensation and cost.
Point :1
The opp.party contented that the complaint is not maintainable in the Forum as there is only debtor-creditor relationship between the parties. According to the complainant there is consumer relationship between the parties and hence the petition is maintainable in the Forum.
In the decision reported in 1[2009], CPJ 109, Tamilnadu State Consumer Disputes Redressal Commission held relaying the decision of Apex court reported in II [2000] CPJ II that bank lending money taking jewels on pledge is a service provider and hence the complainant would content that he is a Consumer and that there is deficiency in service in the part of opp.party who had charged exorbitant interest which is an unfair trade practice which will squarely come within the purview of Consumer Protection Act. There is consumer relationship and the Forum has ample jurisdiction to entertain the matter.
Points 2 and 3
Admittedly the complainant had pledged 36.8 gms of gold ornaments in the opp.party institution for an amount of Rs.34,400/-. There was an agreement between the parties regarding the interest and repayment of the loan amount.
According to the complainant the agreed interest rate is 12% per annum. But according to the opp.party the complainant had to pay 17% interest and 12% risk interest. Interest is depending upon different scheme chosen by the borrower. The company will grant some rebate for early payment for its customers.
The term of loan also is a matter of dispute. According to the opp.party the pledged old gold ornaments will be taken back within 3 months. The complainant contented that it is imaginary that the complainant would take the ornaments within 3 months. The opp.party has legal right to sue for balance amount only after 12 months. Here in this case, the complainant approached the Forum within 8 months and he was willing to pay off all the liabilities to them. Without giving any statement of account the opp.party telephonically intimated the complainant that if the complainant did not remit the interest in time, they will sell gold ornaments by auction. The opp.party demanding 35.40% of rate of interest that was against loan agreement. The opp.party imposed huge rate of penal interest also. This also is a violation of RBI Rules.
We have perused the documents in detail. On a careful verification of Ext. P1 series it is seen that the basic interest rate of pledged amount is 17% Risk interest rate is not mentioned in Et.P1 series.
In Ext. D1to D4 documents also it is stated that basic interest is 17% . It is further mentioned that risk interest will be calculated at the rate of 12% . After the period of one year penal interest also will be calculated for interest and risk interest.
It is clear from these documents that the opp.party imposed an exorbitant rate of interest upon the complainant.
The opp.party argued that no court has any jurisdiction against the opp.party as per section 21 [A] of Banking Regulation Act 1949. But as argued by the learned counsel for the complainant, the opp.party admitted that their firm was registered under non-banking finance company registered under companies Act regulated by Companies Act and Finance Act.
For all that has been discussed above we find that the act of imposing exorbitant interest rate and non issuance of statement of accounts amounts to deficiency in service from the part of opp.parties. The points found accordingly. We are of the opinion that it is reasonable to charge interest at the rate of 18% per annum for the pledge amount.
In the result the complaint is allowed in part. The opp.party is directed to return the pledged gold ornaments to the complainant on receipt of the pledge amounts and interest at the rate of 18% from the respective dates of pledge till the date of this complaint. The opp.party is further directed to pay compensation Rs.2000/- along with cost Rs.1000/-.
The order is to be complied with within one month of the date of this order.
Dated this the 31st day of March, 2012.
I N D E X
List of witnesses for the complainant
PW.1. – M. Naisam
List of documents for the complainant
P1. – Receipts[ 4 numbers]
P2. – Notices
List of witnesses for the opp.party
DW.1. – P.C. Sasidharan Pillai
List of documents for the opp.parties
D1. – Receipt dated 4..2..2008
D2 –Receipt dated 10..12..2008
D3. – Receipt dated 16..12..2008
D4. – Receipt dat Nil
