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

DATED 09^TH DAY OF AUGUST 2023

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-
   1. Direct the OP to immediately release the gold and collect the actual gold loan disbursed and interest agreed at the time of sanctioning the loan.
   2. Direct the OP to not to sale the pledged gold in auction.
   3. Direct the OP not to demand any additional charges, penal interest or fine, or any other charges from the complainant.
   4. To pay Rs.10,000/- litigation charges of the present complaint.
   5. Pass any other order as this Hon’ble Commission may deem fit, in the interest of justice and equity.
   6. Pass necessary orders directing the OP to pay an amount of Rs.5,00,000/- as compensation for the mental and physical strain put on the complainants for unreasonable delays in accepting the interest and releasing the gold.

2. The case set up by the complainant in brief is as under:-

The OP  is a finance company which provides gold loans on pledging of gold articles to its customers. The complainant is a house wife and she is not at all well worsed with day to day transaction of finance company and she is not technologically savvy.  She is a regular customer of the OP and she had taken gold loans and repaid the loans promptly in previous occasions and she also signed blank documents while availing the loan. While taking the new gold loan also she was made to give her documents and she was asked to sign on documents where no information was filled. The complainant used to sign the documents and handed the same to the OP under good faith.

3. The complainant has taken a gold loan on 07.05.2022 for Rs.3,49,959/- and agreed to pay interest of Rs.3,780/- @ Rs.1.08% p.a., and she has been paying interest every month.  When she was trying to pay interest through online banking she was shocked to see the interest due around Rs.5,800/- .  After enquiry with the OP she came to know that the gold loan has been automatically renewed without her knowledge and the rate of interest has been increased from 1.08 to 1.59% p.m., without the knowledge and consent of the complainant.

4. It is further case of the complainant that she had informed the branch manager of the OP to close the loan as she is ready to pay the loan amount with interest but the manager was not ready to close the loan and gave the letter from Rajarajeshwari Nagar branch on 01.09.2022 asking for more amount of interest from the complainant and he has not obliged nor responded to her request by giving untenable reply.  When she asked the manager again he told the loan has been renewed automatically online by getting the OTP from the complainant side. When the complainant informed him that she has not received any OTP to her mobile number nor she has updated any OTP but he did not respond.
5. It is the main grievance of the complainant that she had never agreed for the rate of interest which was charged by the OP and also never received any OTP pin to her mobile for the renewal of the gold loan. Despite the above explained deficiency in service the OP has been charging higher interest and also penal interest and charges regularly towards the complainant account even though the complainant has never agree for the interest charged by the OP.  Inspite of request made by the complainant the Ops never obliged to receive the loan amount with agreed rate of interest and to release the gold ornaments pledged by the complainant.  After that she has sent a legal notice on 23.09.2021 and same was served on the OP and he has not furnished detailed statement regarding the transaction but issued a reply notice dated 06.10.2022.  The OP has also not provided any documents or electronic records to prove that the OTP sent to the complainant and she was agreed and done the renewal of gold loan at higher rate of interest.  The complainant has paid the interest and also paid the gold loan amount to the OP but OP has not released the loan.  Hence the complaint.

6. In response to the notice, OP appears and files version. The OP has stated about their company and also their business and further stated that it is a leading NBFC.  It is also the case of the OP that, they are successful in their business and became a listed company in the year 2015 and they have 4200 branches all over the country. They are carrying their business strictly in accordance with law. They will give loan to any Indian citizen who is requirement of any financial assistance and the customer has to provide their details as required by KYC norms to this OP company after satisfying with the customer they will allow the customer to pledge the gold articles and they will extend financial assistance corresponding to the gold so pledged. This OP is required to report the stock level of the gold and its holding quarterly to RBI.

7. It is the specific contention taken by the OP that the complainant had availed the loan on 07.05.2022 for an amount of Rs.40,000/- by pledging the gold ornaments worth 108.90 grams.  The complainant had availed the loan under DS Scheme and she has accepted the terms and conditions of the scheme.
8. It is further case of the OP that the complainant has renewed this loan online for two times and had switched the schedule through online gold loan application by herself and availed a loan of Rs.3,50,028/- on 07.05.2022 against the fully repledged the gold ornaments.  The complainant again renewed the loan on 03.08.2022 for an amount of Rs.3,49,959/- by pledging the same loan. The online transaction is a step and set defined process and same is approved by the RBI with all applicable rules. The complainant has filed this complaint without disclosing any facts. The complainant is liable to repay the loan amount with agreed rate of interest if the loans are not recovered from the complainant then there shall be series of objections that are unwarranted and hence the auctioning of the gold be allowed in the event of nonpayment of loan amount by the complainant. Hence the OP prayed for dismissal of the complaint.

9. The complainant has filed his affidavit evidence and relies on 04 documents.  Affidavit evidence of official of OP has been filed and OP relies on 08 documents.

10. Heard the arguments of advocate for the parties.  Perused the written arguments filed by the complainant.

11. The following points arise for our consideration as are:-

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

12. Our answers to the above points are as under:

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

13. 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, written arguments filed by the complainant and documents.

14.  It is undisputed fact that the complainant has availed a loan of Rs.3,49,959/- on 07.05.2022 by pledging the gold ornaments worth 108.90 grams.  She was agreed to pay the interest @ 1.08% per month on the loan amount.  after that when she was tried to pay the interest through online banking she came to know that the interest due around Rs.5,800/- which was not as per the agreed rate of interest.  After enquiry she came to know that the gold loan has been automatically renewed without her knowledge and the rate of interest has been increased from 1.08% to 1.59% p.m.   after that she has enquired with the OP. she has also requested to clear the loan amount with agreed rate of interest but the OP was not ready to close the loan amount on the ground that the complainant has to pay the amount on the increased rate of interest and not with agreed rate of interest.  
15. In support of her contention the complainant has relied on four documents. Document No.1 is the gold loan receipt dated 07.05.2022 and document No.2 is the copy of the letter issued by the OP Manager, document No.3 and 4 are the copy of the legal notice and also the reply issued by the OP.  The complainant has reiterated all the allegations made in the complaint. 

16. On the other hand the contention taken by the OP is that the complainant has availed the loan on 07.05.2022 for an amount of Rs.40,000/- by pledging her ornaments having gross weight of 108.90 grams. The complainant has availed the loan under DS scheme after agreeing to the terms and conditions of the scheme.  The complainant has renewed the loan online for two times and had switched the schedule through online gold application by herself and availed a loan of Rs.3,50,028/- on 07.05.2022 and she has renewed the gold loan again on 03.08.2022 by repledging the gold ornaments for an amount of Rs.3,49,959/-. The online transaction is a step by set define process and the same is duly approved by the RBI. Even though the complainant has availed the loan and agreed to pay interest and renewed the loan for two times she is liable to pay the agreed rate of interest as per the terms and conditions of the scheme.  The complainant without returning the amount with agreed rate of interest has filed this complaint. 

17. In support of their contention the OP has produced the copy of the certificate for authorizing Sri.M.Ramesh, who is an employee of the OP company, which is marked Ex.D1. Ex.D2 is the extract from the minutes of the meeting, Ex.D3 is the copy of the gold loan receipt, Ex.D4 and 5 are the copy of details of the loan and also the terms and conditions, Ex.D6 is the statement of account and Ex.D7 is the copy of the Aadhar card of the complainant.

18. The dispute between the parties is that the complainant has renewed the loan for two times online after pledging the gold ornaments and after taking loan of Rs.40,000/- on 07.05.2022.  The complainant has admitted that she has taken the loan on 07.05.2022 for Rs.3,49,959/- and she agreed to pay interest @ 1.08%.  It is the specific case of the complainant that she has never renewed the loan online and she is a house wife and she has no knowledge of day to day commercial transaction and also she is not a technical savvy. The complainant has not received any OTP for renewal of the loan.

19. The main contention of the OP is that the complainant has renewed the loan for two times online and taken the loan of Rs.3,50,028/- on 07.05.2022 and again she renewed the on 03.08.2022 for an amount of Rs.3,49,959/- under DS scheme.  Even though the complainant has received the OTP for renewal of the loan through online transaction she has suppressed the fact and she approached this commission by making false allegations.

20. If the complainant has renewed the loan for two times, she would have got the OTP and after entering the said OTP pin the loan would have renewed.  In this complaint the OP has not at all produced any E-documents to show that they have renewed the loan for two times on the basis of the OTP pin sent by the complainant. According to the complainant the OP have renewed the loan without sending any OTP and without her knowledge and they are claiming the exorbitant interest of 1.59% p.m., on the loan amount.

21. The OP is a financial company and if the complainant has renewed the loan according to their procedure they would have got the documents to show that the complainant has renewed the loan after she obtained the OTP pin and it is very much within the knowledge of the complainant. It is clear from the evidence and documents placed before this commission by both the parties that the OP being a financial company would have got online system for automatic renewal of the loans for the purpose of collecting higher rate of interest without following any procedure and without the consent and knowledge of the customers. Even though the Ops have taken the contention that they have got the online transaction is a step and set defined process and the same is approved by the RBI and is in compliance with all applicable laws in force have failed to produce any documents in order to establish their contention that the loan was renewed two times online only after they have received the consent of the complainant after she received the OTP pin and updated the same.

22. Under these circumstances the complainant has clearly established that the loan was renewed by the OP according to their wish and will without the knowledge and consent of the complainant on 03.08.2022.  As per Ex.P1 the complainant loan amount was shown as Rs.40,000/- dated 07.05.2022 at 1.34 pm., and the maturity dated 04.08.2022.  it is admitted fact that the complainant has availed the loan of Rs.3,49,959/- on 07.05.2022 and she was agreed to pay the interest at 1.08% p.m., and it is around Rs.3,780/-. The same was not displayed in Ex.P1 document and also the Ex.D3 which are one and the same.  The complainant has taken the loan of Rs.3,49,959/- on 07.05.2022 itself the Ops have shown the loan amount as Rs.40,000/- and they have renewed the loan on the same day for Rs.3,49,959/-. There is no document produced before this Commission to show that the OP have sanctioned the loan amount of Rs.3,49,959/- to the complainant on 07.05.2022. as Ex.D6 the OP has shown the pledged value as Rs.40,000/- and interest rate as 26% p.a., if the loan was cleared within 90 days and if the loan was not cleared after 90 days they will collect 29% p.a., on the same day they have renewed the loan for Rs.3,50,028/- with same rate of interest on the same gold pledged by the complainant.  Again they have renewed the loan on 03.08.2022 for Rs.3,49,959/- as Ex.D6.  The online transaction shown in Ex.D6 and the loan transaction taken between the complainant and the OP is entirely different.

23. Even though the complainant has approached the OP for refund of loan amount of Rs.3,49,959/- i.e, Rs.3,50,000/- on 07.05.2022 they have split the loan amount by showing Rs.40,000/- and again they have shown the pledged value as Rs.3,50,028/- on the same day.  The Ex.D6 cannot be believed since it will not depict the actual transactions taken between the complainant and OP.  in addition to this the OP have tried to collect the exorbitant interest of 1.59% without the knowledge and consent of the complainant. Even though the complainant is ready to clear the loan amount with agreed rate of interest they are dragging the matter without receiving the amount only in order to extract exorbitant interest amount from the complainant. Under these circumstances the complainant has clearly established the unfair trade practice and the deficiency of service and negligence on the part of the OP.

24. When the complainant has offered the amount of Rs.3,49,959/- with agreed rate of interest of 1.08% p.a., they refused to receive the amount. In view of this the complainant has suffered mental agony and also financial loss and harassment. Therefore the complainant is also entitled for compensation from the OP. Hence we answer point No.1 in affirmative and point No.2 partly in affirmative.

25. Point No.3:- In view the discussion referred above it is necessary to direct the OP to release the gold and collect the actual gold loan disbursed with agreed rate of interest of Rs.1.08% at the time of sanctioning the loan.  The OP is further directed not to sell the pledged gold in auction and further not to make any demand for any additional charges, penal interest or fine or any other charges.  OP is further liable to pay compensation of Rs.25,000/- with litigation expenses of Rs.10,000/=- to the complainant. Hence we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OP is directed to release the gold and collect the actual gold loan disbursed with agreed rate of interest of Rs.1.08% at the time of sanctioning the loan. 
3. OP is further directed not to sell the pledged gold in auction and further not to make any demand for any additional charges, penal interest or fine or any other charges. 
4. OP is further directed to pay compensation of Rs.25,000/- with litigation expenses of Rs.10,000/- to the complainant.
5. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 10% p.a. after expiry of 60 days on the loan amount of Rs.3,49,959/- to the complainant.
6. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 09^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;