Sri. P. Satheesh Chandran Nair (President):

The complainant filed this complaint u/s.12 of the C.P. Act 1986.

2. The case of the complainant is as follows. The husband of the complainant late Sri. Wilson.P.Chacko pledged gold ornaments (52.23gm) and received a loan for an amount of Rs. 96,500/- on 11/11/2014 from the opposite parties.  The complainant remitted an amount of Rs.3,579/- as interest of the loan up to 19/01/2015.  During the time of the loan remittance the husband of the complainant died as a result of certain diseases.  According to the complainant the opposite parties used to publish the advertisement of the opposite parties through TV and newspapers.  When the complainant understood that the interest imposed by the opposite parties were so excess than the interest shown in the advertisement the complainant’s husband sent complaints to Advertising Standards Council of India and RBI with regard to the irregularities.  It is contended that the opposite parties auctioned the gold ornaments of the complainant and they did not inform the details of the auction to the complainant or her deceased husband.  The opposite parties issued a cheque for an amount of Rs. 8,122/- dated: 08/08/2015 to the deceased husband of the complainant after the auction of the said ornament as return of the excess amount received through the said auction.  The husband of the complainant subsequently died on 09/11/2015.  It is contented that the pledged gold ornaments are rare in fashion and the making charge of the gold ornament would come up to 40% of the value of the gold.  It is contended that the complainant herein approached the 3^rd opposite party several time to return the gold ornaments but opposite parties reluctant to return the gold ornaments by receiving the loan amount plus reasonable interest.  It is contended that the complainant is ready and willing to pay the reasonable interest of the loan to the opposite parties.  Hence the complaint for return of four bangles of gold ornaments from the opposite parties or refund of the cost of the gold ornament Rs. 2,01,084/-, compensation, cost etc. etc
3. This Forum entertained the complaint and issued notices to the opposite parties for their appearance.  All the opposite parties entered appearance and filed a joint version as follows.  According to the opposite parties the case is not maintainable either in law or facts.  It is contended that the opposite party ‘Manappuram Finance Ltd’ is a company incorporated under the Companies act 1956.  It is admitted that the husband of the complainant Wilson P. Chacko has pledged 52.23grams of gold ornaments in 3^rd opposite party’s Branch Office at Pathanamthitta on 11/11/2014 for an amount of Rs. 96,500/-.  The loan is for a reset period of 91 days and above in PL scheme and the reset period is clearly stated in the pledge receipt.  The interest of the loan is also mentioned in the said receipt.  It is also contented that pledge receipt would show the change of rate of interest after reset period.  It is contented that the rate of interest and the approach for gradation of risk and rationally charging different rate of interest to different categories of borrowers shall be disclosed to the borrowers.  Through the application form and sanctioned letter the relationship of the complainant with the real loanee are also doubtful as far as these opposite parties are concerned.  The remittance of the interest of the Rs. 3,579/- is admitted by the opposite parties.  It is contented that the complainant’s husband who filed a loan from the opposite party after accepting the rules and conditions of the above loan scheme.  It is further contented that the opposite parties sent an auction notice to Wilson P Chacko on 12/03/2015 and the said notice was published in ‘Mangalam Daily’ dated: 04/05/2015.  According to this opposite parties the provisions of the money lenders act are not applicable to the opposite parties and they are governed by the provisions of chapter III B of the RBI Act 1934, and governed by the Rules, Regulations and Circulars of the RBI.  The complainant had not paid the interest and purposefully violated the loan agreement and harassing the opposite parties in order to grab excess money.  According to this opposite parties they are ignorant that the four bangles of aforesaid pledge gold ornaments are special and rare fashion and the making charge would come 40%.  Since the opposite parties complied legal formalities for the auction there is no deficiency in service on the part of this opposite parties.  It is contended that the auction was conducted during the life time of the pledger Wilson P Chacko so that he was the party to raise any objection at the time of the auction.  Therefore the complainant has no locus-standi to raise any objection with regard to the auction conducted by the opposite parties.  It is further contented that the 1^st opposite party having more than 3250 branches throughout the country, the present complaint of the complainant is only to defame the opposite parties before the general public.  It is further contented that if the loanee paid the interest with in the stipulated time (reset period) no hike in interest would have charged against the loanee.  According to this opposite parties the complainant never offered to take back the gold ornament by paying principal amount with applicable interest on time.  It is stated that all the pledged gold ornaments of the complainant were auctioned and sold.  It is further contented that no hardship or loss had caused to the complainant as alleged and on the other hand irreparable loss and injury were caused to this opposite parties.  Therefore, the opposite parties prayed to dismiss the complaint with cost them. 
4. On the basis of the complaint, version and the record before us, we framed the following issues for consideration.  

1. Whether the complaint is maintainable before this Forum?
2. Whether the opposite parties committed any deficiency in service against the complainant?
3. Regarding the relief and costs?

5.    In order to prove the case of the complainant, the complainant she who filed a proof affidavit in lieu of her chief examination and examined her as PW1.  Through the PW1 Ext. A1 to A9 and B1 to B2 are also marked. Ext. A1 is the gold loan receipt dated: 11/11/2014 issued by 3^rd opposite party.  Ext. A2 is the receipt for renewal of loan interest Rs. 3579/- on 19/01/2015. Ext. A3 is the advertisement in Manorama newspaper Dated:10/07/2015.  Ext. A4 is the illegal paper advertisement dated: 24/09/2015 issued by complainant.  Ext. A5 is the death certificate of Wilson P. Chacko dated:09/02/2016.  Ext. A6 is the certificate loan of transaction existing between the parties. Ext. A7 is the cheque for an amount of Rs. 8,122/- dated 08/08/2015 which was sent to Wilson P Chacko connected to this loan transaction. Ext. A8 is the copy of Identity card. Ext. A9 is the another receipt issued by opposite parties in favour of Wilson P Chacko for an another deal.   Ext. B1 is an advertisement published by the opposite party in a newspaper named ‘Deccan Chronicle’. Ext. B2 is the another advertisement published in ‘Mangalam’ Malayalam Daily.  On the other side DW1 to DW3 were also examined. DW1 he who filed a proof affidavit and examined him as DW1.  Through DW1 Ext. B3 to B13 were also marked. Ext. B3 is the authorization letter dated:21/06/2016.  Ext. B4 is the receipt of pledged gold ornaments dated: 11/11/2014.  Ext. B5 is the Scheme wise eligible loan indicator sheet dated:11/11/2014.  Ext. B6 is the document which shows that the husband of the complainant Wilson S/o Chacko residing at Biju Villa, Konni P.O, Pathanamthitta who availed a loan of Rs. 96,500/- by pledging 4 bangles of 52.23 grams on 11/11/2014. Ext. B7 is the notice signed by Wilson dated: 11/11/2014.  Ext. B8 copy of ID Card.  Ext. B9 is the copy of Acknowledgment Card dated: 12/03/2015.  Ext. B10 is another document which was issued by postal and telegraph, Parktown Chennai in favour of the opposite party.  Ext. B11 is the auction participation register page No.36 item No.2.  Ext. B12 and B13 are the copy of guideline issued by the Reserve Bank of India.  Ext. B14 is the copy of notice dated:11/11/2014.  Ext. B15 is the certified copy of certificate of registration issued by the 1^st opposite party.  DW2 is also examined and B14 and B15 are also marked through this witness.  DW3 was also examined and marked Ext. B16 through this witness.  Ext. B16 is the copy of the registered list for Thiruvalla RMS.  After the closure of the evidence we heard both the parties.
6. Point No.1: The opposite parties seriously contented that the complainant has no locus-standi to file this case and also contented that there is no cause of action against the complainant as alleged. It is further contented that the complainant herein is not a consumer of the opposite parties and the opposite parties are not the service providers of the complainant.  We peruse the entire evidence in this case and records before us and it is understood that the complainant’s husband Wilson P Chacko was the loanee of the opposite parties and he pledged gold ornaments of his wife for an amount of Rs. 96,500/- on 11/11/2014.  It is also come out in evidence to see that during the life time of the complainant’s husband he paid an amount of Rs.3,579/- as interest to 3^rd opposite party.  Therefore we can easily come to a conclusion to the effect that the complainant’s husband Wilson P Chacko is the consumer and the opposite parties are service providers.  The next question to be considered is whether the complainant herein has any locus-standi to file a case against the opposite parties.  Though the opposite party raised this objection no positive evidence in their favour had not been adduced to substantiate their contention.  The complainant herein is the wife of the loanee and it is come out in evidence to see that the complainant herein is the owner of the gold ornaments.  Therefore the contention with regard to the complainant’s locus-standi has not been sustainable.  Hence Point No.1 found in favour of the complainant.   
7. Point Nos. 2 and 3:   For the sake of convenience, we would like to consider Point No.2 and 3 together.  When we evaluate the evidence before us, it is to see that the complainant availed a loan of Rs. 96,500/- from opposite parties by pledging 52.23grams (4 bangles) of gold ornaments on 11/11/2014.  It is also admitted that the loanee Wilson P Chacko who paid an amount of                   Rs. 3,579/- to opposite party as the interest of the loan up to 19/01/2015.                 In order to prove the loan transaction between the parties PW1 produced and marked Ext. A1 loan report.  When we look into Ext. A1 we can see that up to 60 days interest is 18%, up to 90 days interest is 24% and from 91 days interest is 27%.   Ext. A2 shows that the complainant is remitted an amount of Rs. 3,579/- as interest of the loan on 09/01/2015.  Ext. A3 is an advertisement of the opposite parties with an introduction “ഉയർന്നമൂല്യത്തോടൊപ്പം gold loan പലിശ ഇപ്പോൾ 5% കുറച്ചിരിക്കുന്നു”.  An Ext. A3 paper cutting is marked as subject proof.  So we are not in a position to take this Ext. A3 in evidence.  Ext. A4 is an e-mail message dated:24/09/2015 to the complainant related to an advertisement of the opposite parties.  The finding of the ASEI is that the advertisement was misleading by omission and it contravene chapter 1.4 of the code.  Ext. A5 is the death certificate of the husband of the complainant to show that he died on 09/11/2015.  As per Ext. A1 to A5 it is come out in evidence to see that the complainant pledged the ornament and the complainant’s husband paid an interest Rs. 3579/- on 19/01/2015 to the opposite parties. Though Ext. A3 is marked as subject proof Ext. A4 shows that the above said advertisement was contravened chapter 1.4 of the code, as per the finding of ASEI.  Ext. A6 shows that there is a loan transaction which was existed between the parties and Ext. A7 shows that a cheque for an amount of Rs. 8,122/- dated 08/08/2015 was sent to one Wilson P Chacko connected to this loan transaction. There is no evidence to see that whether the complainant cashed the cheque amount seen in Ext. A7. Ext. A8 copy of the ID card is produced to prove the identity of the complainant and Ext. A9 is another receipt issued by opposite parties in favour of Wilson P Chacko for an another deal.    
8. As stated earlier when PW1 was cross-examined by opposite party’s counsel B1 and B2 are also marked.  Ext. B1 is an advertisement published by the opposite party in a newspaper named ‘Decan Chronacle’.  Ext. B2 is another copy of a newspaper named ‘Mangalam’ dated 4^th May 2015.  When we peruse Ext.B1 we can see that the opposite party is intended to conduct auction on 19/05/2015 in several branches for certain pledged gold ornaments of loanees.  The name of the branch and the number of the accounts are so difficult to read.  It is true that for the purpose of this case opposite party marked the name of the branch and account number with the help of marker pen (yellow).  Ext. B2 is also another advertisement published in ‘Mangalam’ Malayalam Daily.  The said advertisement is also not readable.  It is so clear that normally no defaulter of a loan can trace their loan number through this type of advertisements.  Ext. B3 is an authorization letter in favour of one Priyalal M.G for conducting this case before this Forum. He is examined as DW1.  Ext. B4 is a pledged receipt of the above said loan which shows that the complainant’s husband Wilson P Chacko who availed a gold loan of Rs.96,500/- from the opposite party by pledging gold ornament of 52.23 grams.  Ext. B4 and Ext. A1 are one and same.  Therefore it indicated that the opposite party admitted the loan transaction of the complainant’s deceased husband for the above said amount by pledging gold ornaments of 52.23 grams.  Ext. B5 is a scheme wise eligible loan indicates sheet dated: 11/11/2014.  It shows the different rate of interest of gold loan for different parties ie., 14% to 27%.  Ext. B6 is a document which shows that the husband of the complainant Wilson S/o Chacko residing at Biju Villa, Konni P.O, Pathanamthitta had availed a loan of Rs. 96,500/- by pledging 4 bangles of 52.23 grams on 11/11/2014.  Ext. B7 is a document which shows that the loanee Wilson P Chacko who signed a receipt on 11/11/2014 as an acknowledgement of the duration of the loan.  It is seen that if the loanee did not close the loan transaction within the time limit of 3 months the opposite party has a right to auction the gold ornaments for realizing principal amount and interest.  We don’t think that Ext. B7 has any validity on the eyes of law.  The above said auctions of the opposite parties are treated as an ultra vires action and it is a violation of the natural justice of a person.  No doubt it is the duty of the opposite party to inform the details of the auction to the concerned by a registered notice with an acknowledgement.  The mere paper publication and subsequent auction of the opposite parties cannot be considered as a genuine intimation to a defaulter.  Ext. B8 is a copy of I.D Card of Wilson P Chacko. Though it is produced by the opposite party it is an evidence to see that the loanee was Wilson P Chacko and he was a resident of Konni Panchayath at the time of the pledging of the gold ornaments.  Ext.B9 is a document to show that the opposite party acknowledged the date of auction to Wilson P Chacko on 12/03/2015.  Though this document is produced by the opposite party through DW1 the complainant opposed the marking of the said document since the said document was not signed by the complainant’s husband Wilson P Chacko. The genuineness of the said document is doubtful because the opposite party’s failed to produce the original Acknowledgement before us.  If the said registered notice is duly served to complainant’s husband what prevented them to produce the original before the Forum.  Anyway the cooked up story of the opposite party cannot be sustained as an evidence against the complainant.  Ext. B10 is an another document which was issued by postal and telegraph department, Parktown Chennai in favour of the opposite party.  Though the complainant’s counsel opposed the marking of this document this Forum allowed to mark the document subject to objection.  If we go through the contents of Ext. B10 nothing to show that the registered letter No. RT 389721849IN has been duly served to the complainant or his wife as alleged by the opposite party.   In order to substantiate the case of opposite parties they further examined DW2 the Branch Manager of opposite party 2.   According to him it is the duty of the 1^st opposite party to issue a registered notice to defaulters prior to other steps.  The copy of the notice is also marked as Ext. B14 subject to objection and the Ext. B15 is another document to show that the said notice is mentioned in the certificate of the registration of 1’st opposite party’s office.  In cross of complainant he answered  “Ext. B14 ചെന്നൈയിൽ നിന്ന് അയച്ചതല്ലേ (A) അതെ. (Q)ഇത് എന്ന് അയച്ചു എന്ന് ഈ രേഖ കൊണ്ട് കാണുന്നുണ്ടോ. (A) ഇല്ല”. On the basis of this answer there is no need to rely Ext. B14 to know the sanctity of the issuance of the registered letter.  The DW3 is the person who is in charge of business post centre, Port Town, Chennai.  According to him Ext.B10 and Ext. B16 are one and the same.  Therefore no need to any further discussion with regard to Ext. B16. In-cross he answered “I have no idea with regard to the receipt of Ext. B10”.  As per Ext. B9 we can see that the article was received by one Sheela. On the basis of the testimony of DW3 a genuine doubt about the sanctity of the delivery of the registered notice to the complainant is arised.   In order to know the truth in this matter we examine the track report of Indian Post and Telegraph and found that they have no details with regard to the serving of the letter.  The track consignment says ‘Consignment details not found’.  The track report is marked as Ext. X1 suo moto by the Forum.   
9. On the basis of this report we can safely come to a conclusion that the allegation of the issuance or delivery of a registered letter prior to the auction to the complainant is a false story.  Ext. B11 dated: 27/07/2015 shows that on the said day the opposite party auctioned the gold amount lot No.33,815/- (gross weight 487.900 gms.) for an amount of Rs. 10,55,000/-.  Ext. B12 and Ext. B13 are the guideline of RBI circular No. RBI/2008-09/337 dated:02/01/2009 the cover page of this document shows that it is a regulation of excessive interest charged by NBFCs.  In page 3 of Ext.B12 it reads “The Reserve Bank has been receiving several complaints regarding levying of excessive interest and charges on certain loans and advances by NBFCs.  Though interest rates are not regulated by the Bank, rates of interest beyond a certain level may be seen to be excessive and can neither be sustainable nor be conforming to normal financial practice.

Boards of NBFCs are, therefore, advised to lay out appropriate internal principles and procedures in determining interest rates and processing and other charges.  In this regard the guidelines indicated in the Fair Practices Code about transparency in respect of terms and conditions of the loans are to be kept in view”.

Either the complainant or the opposite parties did not point out any interest rate as per Ext. B12.  However on the basis of the explanation with regard to excessive interest charged the circular indicated a Fair Practices Code about the transparency in respect of the terms and conditions of the loans.  The circular also said that all the interest rate should have published in the website of the companies and the interest should be calculated annually. The Ext. B3 to Ext. B13 are marked through DW1.  Anyway we are not in a position to agree with the argument of the opposite party with regard to the charging of interest in respect of loans as per the above R.B.I circulars.  When we go through Ext.  B13 another circular of RBI No.470/2011-2012 dated: 26/03/2012 it shows with regard to the application of loans, terms and conditions etc.  It is stated that the NBFCs shall mention the penal interest of later repayment in gold in the loan agreement.  When we peruse the document produced by the both parties in this case we can see that the loan agreement between the complainant and opposite party have not been filed before this Forum.  The suppression of the original loan agreement before the Forum is against the guideline of the RBI. Therefore we can see that the opposite parties are not complying the above R.B.I circular.  Ext. B14 is a document to show that the opposite party is decided to auction the pledged gold ornaments of the complainant’s husband vide account No.0125980700002599 on 11/11/2014.  We do admit that the complainant has a definite case that the complainant’s husband had not been received the quotation notice as alleged by the opposite party.  Anyway the outstanding loan amount is Rs. 96,500/- on 11/11/2014 and the column of interest is seen blank as per Ext. B4.  On the basis of Ext. B4 we can inferred that the complainant has to pay an amount of Rs. 96,500/- as principal amount to the opposite party.  On the basis of the evidence it is revealed that the complainant who availed a gold loan from the opposite party by pledging gold ornaments of 52.23grams and availed a loan of Rs.96500/-.  As per Ext. B14 the outstanding amount is seen as Rs. 96,500/-.  It is also found that the opposite party auctioned the gold ornaments of the complainant on 27/07/2015 for an amount of Rs.1,55,000/- without issuing a registered notice to the complainant as discussed above.  No doubt the act of the opposite party by auctioning the gold ornament on 27/07/2015 is a violation of contract act and the act infringed the right of the customer and caused hardship and difficulty.  This act of the opposite party amount to deficiency in service on their part and opposite parties are liable to the complainant.  According to the complainant as PW1 this 4 bangles are in rare fashion and the making charge of the said gold ornaments are so high compare to other gold ornament.  We are also agreed with the complainant with regard to the claim of rare fashion of his gold ornaments since the other side failed to reburt the contention of the complainant.  Though the complainant, requested to return the gold ornament after paying the arrears, it is found that the ornaments are sold by auction.  Therefore the prayer is now become infructuous.   As discussed earlier the complainant is also eligible to get a reasonable compensation from the opposite party because the opposite party sold the gold ornament in auction without the knowledge of the complainant. We find that the complainant remitted the interest of gold loan on 19/01/2015 and renewed the loan as per Ext. A2.  The complainant is liable to pay the interest from 19/01/2015 onwards to opposite party.   We find that 1^st to 3^rd opposite parties are jointly and severely liable to the complainant.  The complainant is succeeded to prove their case hence, Point No.2 and 3 are also found in favour of the complainant.

10. In the result we pass the following orders:

1. The opposite parties 1 to 3 are directed to return the price of gold after deducting the principal amount and interest to the complainant as per the following statement within 30 days of receipt of this order.  If the opposite parties failed to comply the order within the stipulated time 1^st opposite party to 3^rd opposite party are also liable to pay an interest of 10% to the amount shown below (ie., Rs. 13,607.52/- rounded as 13,608/- (Rupees Thirteen Thousand Six Hundred and Eight only)  from the date of this petition onwards ie., 22/07/2016.

The table is shown below.

2. The opposite parties also directed to pay a compensation of Rs. 25,000/- (Rupees Twenty Five Thousand Only) and cost of Rs.3,000/- (Rupees Three Thousand only) to the complainant with 10 % interest from the date of receipt of this order. 

                    Dictated to the Confidential Assistant, transcribed and typed by her, corrected by me and pronounced in the Open Forum on this the 31^st day of July, 2017.       

                                                                                            (Sd/-)

                                                                   P. Satheesh Chandran Nair,                                                                                                                                                                                                                                              

                                                                                          (President)

Smt. Sheela Jacob (Member)               :  (Sd/-)

Appendix:

Witness examined on the side of the complainant:

PW1 :  Sheela Geroge

Exhibits marked on the side of the complainant:

A1 :  Gold loan receipt dated: 11/11/2014 issued by 3^rd opposite party.

A2 :  Receipt for renewal of loan interest Rs. 3579/- on 19/01/2015.

A3 :  Advertisement in Manorama newspaper Dated:10/07/2015.

A4 :  Illegal paper advertisement dated: 24/09/2015 issued by complainant.

A5 :  Death certificate of Wilson P. Chacko dated:09/02/2016.

A6 :  Certificate loan transaction was existing between the parties.

A7 :  Cheque for an amount of Rs. 8,122/- dated 08/08/2015 was sent to one

        Wilson P Chacko connected to this loan transaction.

A8 :  Copy of Identity card (with original).

A9 :  Another receipt issued by opposite parties in favour of Wilson P Chacko for

        an another deal.

Witness examined on the side of the opposite parties:

DW1: Priyalal N.U

DW2: Sandeep.V

DW3: A. John Britto Dharmaraj

Exhibits marked on the side of the opposite parties:

B1:  Advertisement published by the opposite party in a newspaper named 

       ‘Deccan Chronicle’.

B2:  Another advertisement published in Mangalam Malayalam Daily.

B3: Authorization letter dated:21/06/2016. 

B4: Receipt of pledged gold ornaments dated: 11/11/2014.

B5: Scheme wise eligible loan indicator sheet dated:11/11/2014.

B6: Documents shows that the husband of the complainant had availed a loan of    

      Rs.  96,500/- by pledging 4 bangles of 52.23 grams on 11/11/2014.

B7: Notice signed by Wilson dated: 11/11/2014.

B8: Copy of ID Card. 

B9: Copy of Acknowledgment Card dated: 12/03/2015.

B10: Subject to objection.

B11: Auction participation register page no.36 item No.2.

B12 and B13 : Copy of guideline issued by the Reserve Bank of India.

B14: Copy of notice dated:11/11/2014.

B15: Certified copy of the certificate of registration issued by the 1^st opposite   

         party. 

B16 : Copy of the registered list for Thiruvalla RMS. 

                                                                                                  (By Order)

Copy to:- (1) Sheela George,

                    Budhanikkunnil Veedu,

                    Jeesus Road, Nannuvakkadu P.O,

                    Pathanamthitta PO.

2.  The Managing Director & CEO,

     Valappadu, Thrissur – 680651.

3.  V.P Nandakumar,

      MD & CEO, Manappuram Finance, valappadu, Thrissur.

4.  Suby Mathew,

     Branch Manager,

     Manappuram Finance, St. Peter’s Junction, Pathanamthitta.

5. The Stock File.