IN THE CONSUMER DISPUTES REDRESSAL FORUM, KOLLAM
DATED THIS THE 29TH DAY OF September 2015
Present: - Smt. G.Vasanthakumari, President
Adv. Ravisusha, Member
Adv.M.Praveen Kumar, Member
CC.No.196/2014
P.Krishnapillai : Complainant
Vijaya Krishna (Rajastan House)
Kannimel Cherry, Maruthadi P.O
Kollam – 691003
[By Adv.Pramod Prasannan, Kollam]
V/S
1. M/s Muthoot Finance Ltd. : Opposite parties
Muthoot Chambers
Ernakulam
2. Branch Manager
Muthoot Finance Ltd.
Ramankulangara
Kollam
[By Adv.Sooranad Varghese, Kollam]
ORDER
ADV. M. PRAVEEN KUMAR, MEMBER
Complainant’s case is that the complainant approached the 2nd opposite party and availed three gold loans (i) Loan No.MXL12894 dated 10.06.2011 for Rs.70,800/-(ii) Loan No.MRL 7372 dated 31/08/2011 for Rs.70,000/- and (iii) Loan No.XLP 10673 dated 10/10/2011 for Rs.14,000/-. At the time of availing the said loans, the 2nd opposite party’s Ramankulangara branch informed the complainant that the rate of interest applicable will be @ 21 % per annum for a period of 9 months and above that period, the rate of interest will be @ 24% per annum. The complainant closed the three loan aforementioned and released the gold loan XLP 10673 was closed on 28/12/2012 (period of loan was 14 months & 19 days) by remitting an amount Rs.19,390/- thereby charging an amount of Rs.5390/- as interest, which is about 32% per annum. Then on 08/07/2013, the other two loans were closed. Loan No.ML12894 was closed (Period of loan was 25 months ) by remitting an amount of Rs.1,20,644/- thereby charging an amount of
(2)
Rs.49844/- as interest, which is about 34% per annum . Loan No.MRL.7372 was closed (period loan 22 months and 8 days) by remitting an amount of Rs.1,08,313/- thereby charging an amount of Rs.38,313/- as interest, which is about 29.5% per annum. The act of the opposite party was unfair trade practice and deceisting. The matter was informed to the opposite party in writing but in vein. Then the complainant approached the banking Ombudsman, which referred the matter to the Reserve Bank of India as the subject matter was out of its jurisdiction. RBI clearly opined that the opposite party had not clearly indicated the rates of interest in the pledge forms. It also observed that the opposite party has not fully adhered to the RBI guidelines on Fair practice code to be adopted by all NBFCs. Opposite party has illegally collected an excessive interest of Rs.31,726/- (Thirty one thousand seven hundred and twenty six only) from all the three loans, which is against the fair practice code envisaged in the RBI, guidelines, which the opposite party has to get adhered to and it is an unfair trade practice.
Opposite parties filed version contending that the Reserve Bank of India and banking Ombudsman also rejected his claim and complaint and submitted that this Hon’ble Forum is also not having any jurisdiction to trial this petition. Complainant remitted the entire amount and redeemed the gold pledged based on agreement executed infavour of this opposite party. The pledge form is in Malayalam and it is very visible and clear, the complainant read over it and agreed to the terms and conditions of the opposite party and executed an agreement infavour of this opposite party. It is also submitted that an Ex-serviceman will never put his signature on compulsion or any persuasion and it is not necessary to this opposite party to force and get a signature from a customer, who is the master of this institution. The complainant has redeemed his pledged gold ornaments on agreed rate of interest. The calculation and rate of interest mentioned in the statement is absolutely wrong and without any bonafides. This opposite party, by honouring an ex-serviceman than any other citizen of Indian offered a further reduction of Rs.2785/-. It is further submitted that it was not an admission of gulf on the contrary it is an honour rendered to a man who served this great nation. This opposite party never committed any unfair trade practice or any negligency or deficiency of service. It is further submitted that the complainant never pledged any deficiency of service or alleged any negligency of service on the contrary he pleaded an excessive rate of interest and that can be adjudicated by a competent civil
(3)
court. Absolutely no illegal act is intentionally or unintentionally is committed or any deficiency of service committed by this institution and it is not necessary also.
The points that would arise for consideration are:-
(1). Whether there is any deficiency in service or unfair trade practice on the part of the opposite parties?
(2).Reliefs and costs?
The evidence in this case consists of only the oral testimony of PW1 and DW1 and documentary evidence Exts P1 to P5 and D1 to D6. After closure of evidence, both sides were heard.
The Points:- Admitted case of the parties that complainant availed three gold loans (i) Loan No.MXL12894 dated 10.06.2011 for Rs.70,800/-(ii) Loan No.MRL 7372 dated 31/08/2011 for Rs.70,000/- and (iii) Loan No.XLP 10673 dated 10/10/2011 for Rs.14,000/-, later complainant closed the loan No. 1 and 2 on 08/07/2013 by remitting and amounts of Rs.1,20,644 & Rs.49,844/- respectively. Third loan was closed on 28/12/2012 by remitting an amount of Rs.19,390/- and taken back the pledged items ie both parties have no dispute with loan amount and loan closing amount. And the disputes regarding the interest calculated and received by the opposite parties.
Here the question arise for consideration is whether opposite parties had collected/charged exorbitant and interest from the complainant in the case of the second item of 3 gold loans.
In order to prove the case of the complainant, the complainant filed a proof affidavit in lieu of his chief examination along with 5 documents. On the basis of proof affidavit, he was examined as PW1 and documents produced were marked as Exts P1 to P5. Opposite parties filed version and filed proof affidavit in lieu of his chief examination. On the basis of the proof affidavit, he was examined as DW1. Documents produced were marked as Exts. D1 to D6. Learned counsel for the opposite parties argued that the pledge form is in Malayalam and it is very visible and clear, the complainant read over it and agreed to the terms and conditions of the opposite parties and executed in favour opposite party.1.
Complainant approached the 2nd opposite party and availed three gold loans (i) ,ii) and (iii) and complainant closed the said 1 and 2 gold loans on 08/07/2013 and third on 28/12/2012.
(4)
Which is admitted by opposite parties. Hence there is no dispute regarding pledged amount and closing amount. Complainant argued that at the time of availing the said loans, 2nd opposite party informed that the rate of interest applicable will be @ 21% per annum for a period of 9 months and above that period the rate of interest will be at 24% per annum. But later while closing the loans opposite partiers charged rate of interest @ 34%, 29.5%, 32% respectively. Branch manager represented by opposite parties examined as DW1 and DW1 deposed that 3 gold loan Ifn 24-28% hsc penal interest DÄs¸sS CuSm-¡n-bn«pv. hmZn-bp-sS- I-¿n \n¶pw 31½ % hsc ]eni hm§n-bn-«pv .Opposite parties produced a letter dated 28/01/2014 from RBI marked as Ext.D6 which stating the rate of interest on loans on 2nd para “please note that the rates of interest in loans granted by NBFC’s are not regulated/fixed by RBI (except for NBFC’s-MFI), but they are changed as per the terms and conditions mutually agreed between the company and the borrower at the time of sanction of loan”.
As far as the 1st item of gold loan is concerned, opposite party received Rs.1,20,644/-(including loan amount and interest) where principal amount is Rs.70,780/- and 49,844 is interest calculated by opposite party, which is about 34% per annum. Opposite party produced any documents regarding the terms and conditions signed by the complainant , agreeing to remit interest @ 26% per annum for 12 months or above.
As far as the 2nd item of gold loans is concerned, opposite party received Rs.1,08,313/- (including principal amount and interest) when principal amount is Rs.70,000/- and interest is Rs.38,313 and interest calculated @ 29.5% per annum. Opposite party produced Ext.D4 and Ext.D4 states that the interest rate is, interest at monthly rest 3 month(s) 18% , 6 months 19% 12 months 22% above 12 months 29%. On examination of the documents produced, we are found that opposite parties charged interest @ 29.5% on the place of 24% as per D4 document for the 2nd item of gold loan. Complainant closed the loan after 22 months and 8 days and remitted Rs.38,313/- instead of 32,200/- ie Rs.6113/- charged excessively from the complainant and complainant is liable to get such excess amount illegally collected by opposite party .
Excess amount charged by opposite parties from complainant on 1st item of gold loan is Rs.11,494/- ie as per 26% interest is only 38,350/- and opposite party received Rs.49,844/- on behalf of 38,350/- excess amount charged by opposite parties from the complainant on 2nd item
(5)
of gold loan is Rs.6113/- to as per 29.5% interest is only Rs.32,200/-. But opposite party collected Rs.38313/- on behalf of 32,200/-.
Excess amount charged by opposite parties from the complainant on 3rd items of gold loan is Rs.492/- ie as per D3 document rate of interest is 28% ie 4898/- but opposite party collected Rs.5390/- on behalf of Rs.4898/-.
The opposite party has right to extract interest charged only at the rate as per the terms and conditions mutually agreed between the company and borrower at the time of sanction of the loan. In this case opposite parties admitted that they collected penal interest from the complainant. It is against the RBI rules as per RBI rules opposite parties cannot charged penal interest.
Considering all the facts and evidence produced before us, we are of the opinion that opposite parties charged excess and exorbitant amount as interest against terms and conditions which mutually agreed by both parties at the time of sanction the loan. It’s a clear case of gross negligence, deficiency in service and unfair trade practice on the part of opposite parties.
In the result, the complaint is allowed in part. Opposite parties are directed to give Rs. 18,099/- (excess amount received from complainant as interest) with 18% to the complainant interest from 08/07/2013 till realization. Opposite parties are again directed to pay a compensation of Rs.10,000/- and Rs.2500/- as cost to the proceedings to the complainant.
Dated this the 29th day of September 2015.
G.VASANTHAKUMARI:Sd/-
ADV.RAVISUSHA: Sd/-
ADV.M.PRAVEENKUMA:Sd/-
Forwarded/by Order
Senior Superintendent
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I N D E X
PW.1:-P.Krishnapillai
DW.1:-P.Thankamony
Ext.P.1:-Receipts (series )
Ext.P.2:-Copy of letter dated 20/10/2013
Ext.P.3:-Letter received from RBI dated 28/01/2014
Ext.P.4:-Letter dated 23/05/2014
Ext.P.5:-Letter dated 26/05/2014
Ext.D.1:-Pledged form No.2253119 dated 10/06/2011
Ext.D.2:- Pledged form No3390713 dated 31/08/2011
Ext.D.3.- Pledged form No.2178843 dated 10/10/2011
Ext.D.4- Pledged form No.1999640 dated 11/06/2013
Ext.D.5:- Pledged form No.1999641 dated 11/06/2013
Ext.D.6:- Letter from RBI dated 28/01/2014
