Date of Filing : 18/12/2015
Order No. 16 dt. 19/01/2018
The case of the complainant in brief is that on 03.05.2014 the complainant had been at the branch office of the o.p. no.3 with 193.600 grams gold ornaments and contacted with o.p. no.1. After compliance of all the formalities the complainant took loan of Rs.3,75,500/-and at the time of obtaining loan the complainant filled up the printed form and put his signature thereon.
Complainant after the lapse of several months made arrangements to repay the loan amount with statutory interest to o.p. no.1 and prayed for realizing the ornaments but the o.p. no.1 on various pretext delayed the plea of the complainant and in such manner whenever the complainant found that such dilatory tactics was adopted by the o.ps. and the complainant tried to repay the loan amount but all on a sudden a on 26.11.2015 the complainant received a notice from the o.p.1 in respect of other two loans whereby the complainant was informed that ornaments pledged against the loan would be sold in the public auction on 22.12.2015 in the office of o.p. no.1 if the complainant failed to pay up the total sum of Rs.5,47,845/- by 21.12.2015 to o.p.1.
The complainant further stated that though the complainant took loan from o.p. no.1 in respect of Rs.5,47,845/- but no statement of account was sent to the complainant. It is the bounden duty of the o.p. nos.1 and 3 to intimate the complainant about his dues and the complainant denied that his dues was Rs.5,47,845/-. The complainant is not willing to sell out the ornaments pledged since those ornaments having the sentimental value and accordingly, the complainant prayed for an interim order and in the prayer of the complainant it was specifically stated that o.p. nos.1 and 3 to return the complainant’s gold ornaments and compensation of Rs.1 lakh and litigation cost of Rs.30,000/-.
On the basis of the facts and circumstances of the case the o.ps. filed a w/v whereby they denied all the material allegations of the complaint. It was specifically stated that the o.ps. are the pawnee of the pledged gold article and the mater between the parties is governed by the principle laid down u/s 173 to 176 of Indian Contract Act and the relation of the complainant and o.ps. are that of pawner and pawnee. O.ps. having special right over the complainant’s property described in the complaint under the provision of Sec 173 to 176 Contract Act and has every right to sell the pledged article for the realization of the claim amount. The pledged gold article is in the exclusive possession and the o.ps. shall have the exclusive right title interest over the property as mentioned in the complaint since the complainant has failed to make payment of the outstanding despite reasonable opportunity being given and sale notices served upon the complainant. The o.p. no.1 is a company engaged in the business of granting loan by the pledging of gold ornaments under the name and style M/s Muthoot Finance Ltd.
It was specifically stated that it is the policy of o.ps. to explain the terms and conditions in the vernacular understandable by the customer in order to protect their interest and the same policy was applied in the case of the complainant also. The loan amount of Rs.3,75,500/- for a period of 12 months in respect of the earlier loan application and the complainant also put his signature on the said loan agreement. The said application was rechristened because of the internal audit process of o.ps. and the complainant availed of the OTS facility for discounting the interest component to which the o.ps. have granted and adjusted as the value of the gold further devalued to the tune of Rs.75,223/-. Further it was rechristened on 03.05.2014 till 06.10.2015 and limit was increased to an amount of Rs. 5,47,845/-.
The complainant by suppressing the material fact and also the terms and conditions of the loan agreement has falsely filed this case. Accordingly the o.ps. prayed for dismissal of the case.
On the basis of the submissions of the respective parties the following points are to be decided:
- Has the complainant taken loan from the o.ps.?
- Was the complainant never informed of the accumulation interest by the o.ps.?
- Whether terms and conditions in the loan agreement were suppressed to the complainant?
- Whether notice was served upon the complainant regarding the sale of those ornaments?
- Whether the complainant will be entitled to get the relief as prayed for?
Decision with reasons:
All the points are taken up together for the sake of brevity and avoidance of repetition of facts.
It is an admitted fact that the complainant took loan from the o.p. no.1. Ld. lawyer for the complainant submits that the complainant filled up the printed form after handing over the gold ornaments, a sum of Rs. 3,75,500/- was taken by the complainant and the complainant put his signature on the printed form. Whenever the complainant requested the o.p. no.1 to clarify the o.p. no.1 assured that the complainant need not be worried and after payment of principal amount with interest of the gold ornaments will be returned to the complainant.
Ld. lawyer for the complainant emphasized that whenever the complainant made arrangement to repay the loan amount with statutory interest the o.p. no.1 on different pretext failed to accept the proposal of the complainant and ultimately on receiving a notice dt. 26.11.2015 in respect of loan taken by the complainant with regard to different transactions the complainant finding no other alternative but to file this case. It was further emphasized by ld. lawyer for the complainant that the demand of the o.ps. for putting the complainant’s gold ornaments in public auction on 22.12.2015 and the complainant has prayed for relief with the prayer that he is ready to pay the amount with interest and as such, ld. lawyer prayed for relief as mentioned in the prayer portion of the complaint.
Ld. lawyer for the o.ps. argued that the o.ps. have every right to sell the gold ornaments of the complainant and as per notice dt.26.11.2015 the o.ps. did not commit any deficiency in service or unfair trade practice and the o.ps. are entitled to sell the pledged gold ornaments under the provisions of Sec. 176 of the Contract Act and as such, relationship of the complainant and the o.ps. that of a pawner and pawnee. As the pawnee has every right to sell the pledged gold ornaments, if the pawner fails to repay the loan amount secured along with interest and other charges. The complainant at the time of obtaining loan was properly informed by the o.ps. regarding the terms and conditions of the payment of the loan that since the complainant failed to pay the amount, the o.ps. adopted the due process of law and the complainant was properly informed regarding the terms and conditions of the said loan and the notice dt.26.11.2015 was issued in accordance with law as envisaged u/s 176 of Indian Contract.
Ld. lawyer for the o.ps. explained the pawnee’s right where pawner makes default. If the pawner makes default in payment of the debt or performance; at the stipulated time or the promise, in respect of which the goods were pledged, the pawnee may bring an application against the pawner upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawner reasonable notice of the sale. Here in this case the notice was issued to the pawner / complainant and after issuance of the said notice the o.p. was trying to sell the said pledged gold ornaments but the complainant by suppressing the material fact the complainant wanted to have an order so that the auction cannot be held since the case is pending the auction has not been held and the gold has not been sold though the o.p. is entitled to sell the ornaments since the complainant failed to repay the loan amount and the complainant was only to repay the interest despite the communications although he was well aware that the whole amount along with interest and charges has to be repaid within 12 months from the date of sanction even if the notice is issued loan has to be repaid with interest within 12 months. In case the value of gold ornaments given as collateral security comes down the borrower has to repay immediately the amount demanded by the company.
Considering all these aspects ld. lawyer for the o.ps. emphasized that the case has made out by the complainant has got no legs to stand, as such, the same has to be dismissed.
Considering the submissions of the respective parties, from the materials on record, it is an admitted fact that the complainant took loan from the o.p. no.1 and he obtained loan by pledging the gold ornaments and the money has been taken from o.p. no.1 to the tune of Rs.5,47,845/-. It is also an admitted fact that the complainant failed to pay the amount within the stipulated period of 12 months. Though the complainant claimed that he did not receive a notice regarding the selling of the pledged gold ornaments but from the materials on record it is crystal clear that the notice dt.26.11.2015 was issued upon the complainant and as per Sec 176 of the Contract Act the complainant was informed that a special right is conferred upon the o.ps. u/s 176 of the Indian Contract Act which they are entitled to exercise under the terms and conditions of the loan agreement. The complainant failed to produce the terms and conditions of the agreement entered by him with o.p. no.1 at the time of obtaining loan. In the terms and conditions of the loan it was specifically stated that loan amount along with interest is repayable on demand made by the company, even if not demanded the loan has to be repaid with interest within 12 months. In case the value of gold ornaments given as collateral security comes down the borrower has to repay immediately the amount demanded by the company. In the said terms and conditions it was specifically mentioned in case the loan amount together with interest is not repaid within the due date or earlier as demanded by the company, the company has the right to initiate the legal proceedings and/or sell the gold ornaments with prior notice and set off the amount so received towards the loan amount, interest and other charges. If the amount thus recovered is insufficient to cover the amount, the shortfall will be recovered from the borrower personally or from his other personal assets and the complainant put his signature on the terms and conditions as pledged before him and the complainant in order to create a case falsely stated that no notice was served or he was not informed regarding the terms and conditions of the said loan. The complainant did not come with clean hands and in order to evade his responsibility of returning the loan amount as well as interest has falsely taken this plea that he was not informed regarding the selling of the gold ornaments or no notice was served upon him.
Ld. lawyer for the complainant in support of his clients contention annexed a judgment passed by Hon’ble State Commission in respect of 1st appeal no. FA 1195/2013. On perusal of the said judgment we find that Hon’ble Commission was pleased to bank upon the plea of the complainant in that case that before the selling of the pledged gold ornaments no notice was served upon him and accordingly, Hon’ble Commission was pleased to allow the prayer of the complainant by modifying the judgment passed by Ld. District Forum. But here in this case it is crystal clear that notice was served and the terms and conditions clearly stated that even if notice is not sent the complainant is duty bound to pay the loan amount along with interest. The o.ps. have every right to sell the pledged ornaments. Though in this case ld. lawyer for o.p. argued that the pledged property has not been sold due to the initiation of this proceedings, but we hold that the complainant failed to comply the conditions at the time of obtaining loan from the o.ps. and thereby the complainant will not be entitled to get any relief as prayed for. Accordingly, we hold that the judgment as cited by the ld. lawyer for the complainant had different aspects than that of the case being discussed in this case.
It is pertinent to mention here that since the complainant has failed to substantiate his claim and the omission committed by the o.ps. and accordingly, we hold that there was no deficiency in service or unfair trade practice on the part of the o.ps. and therefore, we hold that the complainant will not be entitled to get any relief as prayed for. Thus all the points are disposed of accordingly.
Hence, ordered,
That the CC No.572/2015 is dismissed on contest without cost against the o.ps. If any interim order us passed the same may be released.
Supply certified copy of this order to the parties free of cost.
