Dt. of filing - 8/11/2017

Dt. of Judgement – 5/11/2018

Mrs. Sashi Kala Basu, President

        This is a complaint filed by the Complainant Shri Santanu Saraswati under Section 12 of the C. P. Act against OP namely Muthoot Finance Ltd alleging deficiency in service on its part.

          The case of the Complainant in brief is that he took loan of Rs.2,85,000/- after pledging five gold ornaments. The loan was sanctioned on deposits of said five gold ornaments vide loan sanction letter dated 16/7/2016. At the time of providing the loan sanction letter, no EMI chart regarding the payment details was annexed. He was told by the OP that the same would be sent to the Complainant. During the month of February, 2017 as the Complainant suffered a massive stroke on right eye he had to go to Hyderabad for his treatment. He intimated his physical condition to the OP and the cost incurred by him towards his treatment. For the said reason he could not repay the loan but on 31/10/2017 Complainant received a notice dated 13/10/2017 from the Ld. Advocate of the OP intimating the dates of auction of the said gold ornaments deposited by him. A reply was immediately sent by the Complainant explaining his situation. OP arbitrarily decided to put the gold ornaments in auction. Thus the present case has been filed for an order directing to stay the proceeding of auction, for compensation of Rs.1,00,000/- and the litigation cost of Rs.10,000/-.

          The case is contested by the OP by filing the written version denying the allegation made by the Complainant. It is the specific case of the OP that the Complainant availed loan facility by pledging the gold ornaments as co-lateral security knowing fully well that the said pledged gold ornaments can be utilized for realization of the loan amount along with accrued interest and other charges in case of default in making payment by the Complainant. The actual loan account was started on 16/7/2016 whereby an amount of Rs.2,85,000/- was sanctioned. The said loans were for a period of twelve months from the date of sanctioned which expired on 16^th July, 2017. As the Complainant failed to pay the said loan amount, the OP as per the agreement was within its right to put the gold ornaments in auction for realization of the loan amount and the interest therein. URL or Link for taking EMI statement/ledger statement was available in the loan application itself and thus EMI Chart was there for the Complainant to comply. OP thus has prayed for dismissal of the complaint case.

          With the petition of complaint, Complainant has annexed  documents such as loans sanction letter dated 16/7/2016, copy of the notice sent by the OP dated 13/10/2017 and the copy of reply sent by the Complainant to the said notice dated 1/11/2017.

In course of the evidence both the parties filed their respective affidavit-in-chief followed by cross examination in the form of questionnaire and reply thereto.

          Both the parties have also filed their respective written notes of argument. The OP along with their written notes of argument have also annexed copy of the case laws relied upon by it. They are case law reported in 1997 to CPC (NC) 411 (Standard Chartered Bank Vs P. N. Tantia  & ANR), (2) 2001 1 CPC (NC) 336 (P. Subbian Vs The Branch Manager, Canara Bank  and (3) 2004 1 CPC 327  N.A.Sudharsan Vs Mathew Dominic & ANR.

          So in the back drop of the case of both the parties following points require determination.

1. Whether the Complainant is a consumer under the provision of C. P. Act ?
2.  Whether there has been any deficiency in service on the part of the OP?
3. Whether the Complainant is entitled to the relief as prayed for?

Decision with reasons

Point No.1 & 2

          Both these points being co-related are taken up together for discussions for the sake of convenience.

          Admittedly Complainant took loan of Rs.2,85,000/- from the Opposite Party after pledging five gold ornaments. It is admitted case of the Complainant that the said loan was sanctioned in his favour vide loan sanction letter dated 16/07/2016. Sanction letter filed by the Complainant reveals that the net weight of the gold deposited was 136.500 (gram) (b-c). The terms and conditions towards sanction of the said loan has been categorically stated in the loan sanction letter. Term 6 in the said loan sanction letter specifies that the loan amount along with interest and other charges is repayable on demand made by the Company. Even if not demanded, the loan has to be repaid with interest within the loan tenure of 12 months. In case the value of the gold ornaments given as collateral security comes down below the total dues payable, the borrower has to immediately make good the amount either in such or by pledging additional gold ornaments of proportionate weight/value. In the event of failure on the part of the borrower to do so, the company shall have the right to recall the loan and demand the borrower to repay the entire loan amount together with interest and other charges any time during the currency of the loan.

          Term 7 in the said loan sanction letter reads “In case of any default on the part of the borrower to repay the loan amount together with interest/charges within the due date or earlier as demanded by the company, the company has the legitimate right to initiate legal proceedings against the borrower and /or sell the ornaments pledged through an auction by giving 14 days prior notice given to the borrower at the address given in the application for loan and appropriate the amount so received towards the loan amount, interest and other charges.”

          It is evident from the loan sanction letter that the said loan of Rs.2,85,000/- were for a period of 12 months from the date of sanction. If that be so then it expired on 15^th July, 2017 as the loan started on 16^th July, 2016. Apparently Complainant did not make any payment of the loan amount during the said entire period of twelve months. So as per the terms and conditions of the loan sanction letter referred to above, Opposite Party was well within its rights to put the gold pledged on auction to realize the loan amount.

          Complainant has mainly claimed that Opposite Party did not provide him EMI Chart regarding payment details but in this context, it may be mentioned here that in the application form for loan and sanction letter annexed with the written version indicates that there is a link as well as phone number to know the balance outstanding by a borrower and about the EMI Chart. Complainant’s plea that he is not a computer savvy and so did not know about it, in our view is nothing but an afterthought. It cannot be believed that Complainant inspite of knowing that the loan amount was to be paid within 12 months instead of making the payment, kept on waiting for EMI Chart. Nonpayment of any amount during those 12 months belies that Complainant did not pay because he was not provided with the EMI chart.

          So in view of the terms and conditions referred to above, auction of the gold ornaments pledged by Complainant is within the right of the Opposite Party and thus the case of the Complainant is liable to be dismissed.

          It appears from the reply to the questionnaire by the OP, Complainant has stated that be made payment of Rs.97,638/- to the OP through NIFT after the service of auction notice dated 13/10/2017 but for the reason best known to the Complainant, no document is filed in order to show that any such amount has been paid by him. The document was necessary as the Opposite Party has categorically stated in the written version that principal amount along with interest and other charges due to be paid till the date of the said legal notice was Rs.3,72,169/- .

          Now coming to the point as to whether Complainant is a consumer under Consumer Protection Act, this came up for consideration before the Hon’ble National Commission in case of Standard Chartered Bank Vs P. N. Tantia & ANR (Supra) wherein it has been held that “It was a relationship of a creditor and debtor so far as pledged shares were concerned. No question of hiring of services of bank arose. Remedy for Complainant/Pawner for an improper sale of pledged shares was for recovery of damages by way of a civil suit. Complainant could not resort to remedies provided under Consumer Protection Act.”

          In other two case laws referred to above, cited by the Opposite Party, namely  case of P. Subbian Vs Branch Manager, Canara Bank, and case of N.A. Sudarsan Vs Mathew Dominic & ANR, it has been held by the Hon’ble National Commission and Hon’ble State Commission, Chennai respectively that Bank was entitled to bring the pledged jewel for sale for the recovery of amount due under the loan.

          So in view of the discussions as highlighted above, not only Complainant is not a consumer but otherwise also, he has failed to prove that there has been any deficiency in services on the part of the Opposite Party.

          These points are thus answered accordingly.

Point No.3

          Complainant is not entitled to any relief as prayed for in view of the discussions made above and thus this complaint case is liable to be dismissed.

Hence,

ORDERED

CC/631/2017 is dismissed on contest.