IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOLLAM
DATED THIS THE 8th DAY OF NOVEMBER 2022
Present: - Sri. E.M.Muhammed Ibrahim, B.A, LLM. President
Smt.S.Sandhya Rani. Bsc, LLB ,Member
Sri.Stanly Harold, B.A.LLB, Member
CC.No.225/2021
Shyla S., 39 years,
Ezhiyil, Pada: South
Karunagappally,
Kollam 690 518. : Complainant
(By Adv.Maruthadi R.Sreeraj)
V/s
- Managing Director,
ICL Fincorp Ltd.,
Main Road, Irinjalakkuda,
Trissur 680 121.
(By Adv.Alamcode M.N.Sajeer)
- Manager,
ICL Fincorp Ltd.,
Near Dhanalakshmi Bank,
Pada, South, Karunagappally
690 518. : Opposite parties
(By Adv.Alamcode M.N.Sajeer)
ORDER
Smt.Sandhya Rani, B.Sc, LLB, Member
This is a case based on a complaint filed U/s 35 of the Consumer Protection Act 2019.
The averments in the complaint are as follows:-
The 1st opposite party ICL Fincorp Ltd. is a Non Banking Financial Company registered by RBI and 2nd opposite party is the branch office of 1st opposite party. On 25.06.2018 the complainant has availed a gold loan from 2nd opposite party by accepting Rs.35,000/- after pledging 16.470 gm of gold chain as per loan a/c No.0111070700000784. Again on 23.07.2018 she has availed Rs.65,025/- by pledging another 31.980 gms of gold ornaments including one chain, thali and ganda as per the gold a/c No. 0111070700000845. While so on 17.04.2019 the complainant has received a notice from 2nd opposite party regarding the loan amount Rs.65,025/-. Upon the request of the complainant as a cancer patient, the 2nd opposite party extended the time for taking back the pledged gold ornaments till 30.10.2019. But on 03.10.2019 the complainant has received a notice dated 30.09.2019 informing that the gold ornaments pledged before the 2nd opposite party was auctioned on 27.08.2019 and also directing to supply the details of account Number to send the excess amount of Rs.4,052/- received in auction. Even though the 2nd opposite party had given assurance to the complainant that they would retain the pledged gold ornaments till 30.10.2019, they have failed to keep up their words. That the opposite party has auctioned the pledged gold ornaments without giving prior notice to the complainant. According to the complainant the above mentioned acts on the part of opposite parties amounts to deficiency in service and unfair trade practice. In addition to the above facts, the opposite parties have not send any such notice regarding the other gold loan. That the auction process of the pledged gold ornaments belongs to the complainant without giving notice to her was purely intend to deceive the complainant and also for monitory gain. Thereafter on 09.10.2019 when the complainant enquired regarding the gold auction process without giving notice to her, then the 2nd opposite party replied that while auctioning the entire time barred debts together, 2nd opposite party has failed to notice time extension already allowed to the complainant. According to the complainant the above conduct of 2nd opposite party amounts to deficiency in service and unfair trade practice.
As on the date of auction sale the market value of 1 gm gold ornament according the complainant was Rs.3,544/-. Hence for 48.450 gm of pledged gold ornaments the opposite parties might have obtained Rs.1,71,706/-. But when the complainant approached the 2nd opposite party he has made the complainant to believe that 2nd opposite party would deposit the balance amount in the account of complainant after taking the entire dues, but the complainant has received only Rs.4,052/- through her account. The main allegation raised by the complainant is that by conducting auction sale of 48.450 gm of gold ornaments belonged to the complainant the opposite parties would have obtained Rs.1,71,706/-. In the circumstances according to the complainant he is entitled to get Rs.55,681/- after deducting the loan amount along with 16% interest out of the above market value of pledged gold ornaments.
It is further alleged in the complaint that the opposite parties have charged 36% interest instead of charging 16%, which is definitely unfair trade practice on the part of opposite parties. According to the complainant the above mentioned acts on the part of opposite parties caused much mental agony apart from financial loss to the complainant. Hence according to the complainant he is entitled to 1) get Rs.51,629/-@18% interest by way of balance amount after deducting arrears from the market value of 48.450 gm gold ornaments as on the date of auction (27.08.2019) 2) Rs.1,00,000/- by way of compensation for mental agony and financial loss. 3) Costs. Hence the complaint.
Though notice issued from this commission was received by the opposite parties 1 and 2, they have not appeared before the commission. Hence opposite parties 1 and 2 are set exparte. Complainant filed proof affidavit by reiterating the averments in the complaint and got marked Exts.A1 to A3 documents.
Heard the counsel for the complainant. Ext.A1 is the gold loan receipt No.0111070700000784 dated 25.06.2018 issued by 2nd opposite party ICL
FINCORP LIMITED in favour of the complainant Shyla which would indicate that the complainant has availed a sum of Rs.35,000/- from 2nd opposite party by pledging a gold chain having 16.470 gms. Ext.A2 is the second gold loan receipt No.0111070700000845 dated 23.07.2018 issued by 2nd opposite party which would indicate that the complainant Smt.Shyla has availed gold loan of Rs.65,025/- from 2nd opposite party by pledging 31.09 gm of gold ornaments. Ext.A3 is the intimation letter issued by 2nd opposite party stating that due to the non payment of gold loan amount and interest by the complainant the 2nd opposite party sold the pledged gold ornaments on 27.08.2019 by conducting auction sale and appropriated Rs.1,41,335/- towards the loan and its interest till them and also offering to return amount Rs.4,052/- as excess amount received and in order to return the said balance amount the complainant has to send her bank account details to 2nd opposite party.
It is true that as per Ext.A1 the rate of interest is shown as 18% per annum and in case of deposit 2% excess interest hike and the hike will be 36% if the loan is not repaid within 180 days. Ext.A2 receipt would show that initial interest will be 16% per annum and there will be a hike of 2% interest per month up to 36% if the loan is not repaid within 180 days above rate of interest for gold loan is highly excessive and unconscionable and a penal act which would attract action under Kubera Operations. The maximum rate of interest charged by the Scheduled Bank for gold loan is 16% per annum. The opposite party being private financial institution engaged in lending gold loan are entitled to charge 2% in excess of the rat of interest charged by the scheduled bank. Hence the maximum rate of interest that can be charged for Ext.A1 and A2 gold loan by the opposite parties is 18% per annum.
According to the complainant she received a notice dated 17.04.2019 in respect of Ext.A1 loan transaction immediately on getting notice she approached the 2nd opposite party and stated her pathetic condition that she has been suffering from cancer and prayed to extent the time to redeem the gold loan. Accordingly time extended till 30.10.2019. However she has not received any notice regarding Ext.A1 loan transaction. However on 03.10.2019 she received Ext.A3 notice dated 30.09.2019 stating that the entire pledged gold ornaments have been sold in auction on 27.08.2019 for Rs.50,125/- and Rs.91,210/- respectively and appropriated the two loan amount and interest and also offering Rs.4,052/- as balance amount to be paid to the complainant.
The unchallenged averment in the affidavit filed by the complainant would show that the opposite parties have not given any notice regarding auction of the 1st loan and in the case of the 2nd loan they have conducted auction well before the extended time. It is further alleged that the gold ornaments have been sold in auction for a lessor price without giving notice to the complainant. As the above case of the complainant remain unchallenged we are inclined to accept the above allegations. The materials available on record would indicate that the opposite party have committed deficiency in service as well as unfair trade practice in selling the pledged gold ornaments in auction for a lessor price than the market rate and also conducting auction sale without giving proper notice to the complainant.
According to the complainant the price of one gram gold ornament as on the date of auction was Rs.3,544/-. If that be so the total amount that would have been fetched for 48.45 gm (16.47 gm+31.95 gm) would be Rs.1,71,706.8/-. The period of 1st loan from 25.06.2018 till the date of auction ie 27.08.2019 is 428 days and the period of 2nd loan is from 23.07.2018 till 27.08.2019 is 400 days. The interest from 428 days for Rs.35,000/-@ 18% per annum calculated as
35000X18X428
100X365 = 7387
Interest due on the 2nd loan is calculated as 65025X18X400
100X365 = 12,826
Total interest due to the 2nd opposite party for the two gold loan transaction till the date of auctioning gold ornaments is 7387+12826=20,213
Total principal amount due is the 2nd opposite party from the complainant in the above 2 loan transactions 35000+65025=1,00,025.
The total amount including interest due to the 2nd opposite party as on the date of auction including interest is 100025+20213=120238.
The value of gold ornaments which would have been fetched as on the date of auction sale is 171706. Therefore the balance amount due to the complainant is 171706-120238=51468. According to the complainant the 2nd opposite party has deposited Rs.4502/- only in her Bank Account. In the circumstances the complainant is entitled to get Rs.51,468-4052=Rs.47416. The complainant is also entitled to get interest at the rate of 16% per annum for the said amount till realization.
It is also brought out in evidence that as the opposite parties have sold the pledged gold ornaments without giving proper notice to the complainant and sold away her gold ornaments for a far less price than the market rate, the complainant has sustained much mental agony apart from financial loss. Hence the complainant is entitled to get a reasonable compensation to the tune of Rs.5,000/- and also costs of the proceedings.
In the result complaint stands allowed in the following terms.
- Opposite parties 1 and 2 are directed to pay Rs.47,416/- with interest @ 16% per annum from 27.08.2018 till realization to the complainant within 30 days from the date of receipt of a copy of this order.
- Opposite parties 1 and 2 are directed to pay Rs.5,000/- as compensation and Rs.2500/- as cost of the proceedings to the complainant.
- If the opposite parties failed to comply with above directions the complainant is entitled to recover the amount covered by relief No.1 & 2 with interest @ 18% per annum except from costs the date of auction sale till realization from opposite parties 1 and 2 jointly and severally and from their assets.
Dictated to the Confidential Assistant Smt. Minimol S. transcribed and typed by her corrected by me and pronounced in the Open Commission this the 8th day of November 2022.
S.SANDHYA RANI:Sd/-
E.M .MUHAMMED IBRAHIM:Sd/-
STANLY HAROLD:Sd/-
Forwarded/by Order
Senior superintendent
INDEX
Witnesses Examined for the Complainant:-Nil
Documents marked for the complainant
Ext.A1 : The gold loan receipt No.0111070700000784 dated 25.06.2018 issued by 2nd opposite party ICL FINCORP LIMITED
Ext.A2 : The second gold loan receipt No.0111070700000845 dated 23.07.2018 issued by 2nd opposite party
Ext.A3 : The intimation letter issued by 2nd opposite party
Witnesses Examined for the opposite party:-Nil
Documents marked for opposite party:-Nil
