DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi- 110016

Case No263/2016

Satish Kumar,

S/o Sh. Pradeep Pal,

R/o C-261, Pul Prahladpur,

New Delhi- 110044

At Present

S-291/17, Steet SGC,

Near Mittal Chowk,

Pul Prahladpur,

New Delhi-110044                                                                                                                                                                                                                                                                             ….Complainant

Versus

The Branch Manager,

M/s Muthoot Finance Ltd.

Saket, Opp. Saket Select City Mall,

New Delhi                                                               ….Opposite Party

       Date of Institution    :         12.08.2016 

       Date of Order            :         24.01.2022

Coram:

Ms. Monika A Srivastava, President

Ms. Kiran Kaushal, Member

Sh. U.K. Tyagi, Member

ORDER

President: Ms. Monika A Srivastava

            The present complaint has been filed by the Complainant against the OP. The complainant has prayed for a sum of Rs. 5,00,000/- as compensation, Rs. 10,000/- as litigation charges and return of his pledged gold articles.

            It is stated by the complainant that in the year 2011 he needed some money and hence went to the OP for gold loan. For the purpose of this gold loan he pledged his gold articles being 18.4 grams in weight consisting of three rings 6 studs and a pendant. It is the case of the Complainant that all the studs, one ring and the one pendant belonged to his mother which she got at the time of her marriage and that two rings belonged to the complainant which he got at the time of his marriage. For all of these gold articles the OP gave a loan of Rs.24,000/-. It has further been stated by the complainant that interest on the gold loan was payable annually and the original debt acceptance letter and cash receipts are annexed as Annexure C-1.

It is further the case of the complainant that he had been regularly paying yearly interest and that he has paid Rs. 4,079/- on 28.05.2012 for the year 2011-2012, sum of Rs. 7,034/- on 28.06.2014 for the year 2013 -2014 and Rs.6,030/- on 27.06.2015 for the financial year 2014 -2015. However, when the complainant visited the office of the OP on 24.05.2016, during the course of discussion he was informed that the above mentioned pledged gold ornaments were auctioned by the OP on 26.12.2015. It is this act of the OP that has been challenged by the complainant being arbitrary, unreasonable and  unjustifiable. The complainant has further stated that this act on the part of the OP has caused harassment, mental agony and is gross deficiency in service on the part of the OP.  The complainant further states that up till now he has paid an interest of Rs. 26,000/- in total against a loan of Rs. 24,000/-.

            The OP has objected to the maintenance of the present complaint against the branch manager of the company. They have stated that that the branch manager has neither extended the loan in his personal capacity nor has he any personal liability in respect of this loan. Muthoot Finance Ltd. has not been made a party in this case and therefore the complaint is liable to be dismissed outrightly. It has also been stated that the present complaint has been filed to mislead the forum and that the complainant has suppressed material fact and that there is no cause of action which has arisen in favour of the complainant.  It is further been stated that the complaint involves intricate, complex, complicated questions of law and fact which would require detailed elaborate trial and voluminous evidence and therefore the consumer forum is not competent to adjudicate the present complaint.

On facts, it is stated by the OP that each time the complainant paid the interest a new loan account number was accorded to the said loan and the loan amount remained the same that is Rs. 24000/- and the same gold ornaments were carried forward as pledged ornaments which were three rings one pendant 6 studs and the gross weight of the ornaments was 18.4 grams while the net weight was 14.000 grams. It has further been stated by the OP that the interest payable was monthly and not annually and that the last payment made by the complainant was a part payment towards interest. The said loan was however neither got closed nor renewed by the complainant. It has been stated that as per the specific terms of the said loan, the loan was repayable on demand and that the OP issued notice/pre auction notice dated 04.12.2015 calling upon the complainant to deposit the total dues outstanding in respect of the said loan being Rs. 26,619/- on or before 23.12.2015. The complainant was duly notified that in case he did not make the payment of the said dues, the pledged ornaments shall be auctioned. This notice was received by the complainant. It has further been denied that the complainant came to know about the auctioning of his gold ornaments only when he visited the office of the company on 24.05.2016.

The OP has denied the allegation of cheating against him. It has also been stated that as per Section 176 of the Indian Contract Act the pawnee i.e the lender is entitled under law to sell/auction the pledged articles after serving a reasonable notice of sale to the borrower/complainant in the present case and therefore no illegality has been committed by the OP as alleged.

We have carefully gone through all the complaint, reply rejoinder, evidence affidavits and written submissions of both the parties placed on record. We are of the view that the evidence provided by the parties is sufficient to decide the case on merits and does not any elaborate trial and therefore the contention of the OP that the present case is not triable by the Consumer fora is rejected.

The contention of the OP that the present complaint is not maintainable as it has been filed against the Branch Manager is to some extent valid however in the present case it is not a case that the Branch Manager is being sued in his personal capacity, the memo of parties state Branch Manager, Muthoot Finance Co. Ltd. with the OP’s official address, therefore this contention of the OP is not upheld.

The next contention of the OP that the interest that was charged was monthly and not annually is incorrect, as is evident from the Ex. RW1/4 Colly wherein different rates of interest are mentioned for different periods, that is monthly, quarterly, annually. Therefore, the contention of the OP that this loan provided to the complainant was payable monthly cannot be upheld.

There is no denial by the OP as to the security pledged with them, by the complainant. It is seen from the gold loan ledger “as on 01-December-2017” filed by the OP that an interest of Rs. 5985/- was payable by the complainant and was in fact, paid by him on 27-06-2015. It is also noticed that on 26-12-2015 the amount of Rs. 26,600/- was received by the OP by auctioning the ornaments pledged with them by the complainant. The hurry in which the pledged ornaments are sold by the OP is not clear as they have willingly accepted the amount of interest which stood payable by the complainant on the date when it was paid.

The contention of the OP that they are within their rights as a pawnee to sell the pledged property as per Section 176 of the Indian Contract Act and that in this regard, a notice was sent to the complainant before the auction, is under a cloud. Taking a closer look at the notice Ex. RW1/15 filed and allegedly sent to the complainant by the OP though bears a proper address of the complainant at the top of the notice but the receipt of delivery bears a different pin code different from that of the complainant although with the same name. It is also not missed that the public notice Ex RW 1/16 published by the OP cannot be understood by any person with a naked eye, it is almost illegible. The documents placed on record by the OP also do not explain the actual rate at which the gold was sold, the procedure that was followed during the auction and the market rate of the gold at which it was auctioned.

Therefore, we arrive at the conclusion that the act of the OP in auctioning the pledged property of the complainant was unjustified and definitely is a deficiency in service on their part and also amounts to following of unfair trade practice by the OP.

In this regard, we rely on the judgment of Hon’ble NCDRC passed in HDFC Bank v. Sharmila Dasgupta on 28.06.2018 wherein the Hon’ble NCDRC has categorically held that:

‘It is significant to mention that in the entire record there is absolutely no documentary evidence filed by the Bank to establish the actual rate, on which the gold was sold; what was the market rate as on the date of the auction; and, further, the procedure that was followed during the auction process.  A perusal of the record does not anywhere show that a notice was issued to the Complainant prior to the auction to have given an opportunity to her to exercise the option whether to participate in the auction or not.  This is against the principles of natural justice and audi alteram partem.  Hence, we are of the view that the conduct of the Bank in auctioning the gold without prior notice to the Complainant amounts to unfair trade practice.  In this view of the matter, the Revision Petition does not require any interference. ’

Having reached this conclusion, the OP is directed to pay to the complainant an amount equivalent to the weight of the pledged gold articles at gold rate today i.e the date of order after deducting their principal amount of Rs. 24,000/-. The OP is not to levy any further interest on the principal amount as they have already realised the entire amount at the time of auction as per their own admission and documents on record.

File be consigned to the record room after a copy of the order to the parties. Order be uploaded on the website.