Sri Shyamal Gupta, Member
The case of the Complainant, in a nutshell, is that, on or about 25-08-2011, he availed of loan for a sum of Rs. 10,98,800/- from the OP against pledging of gold ornaments weighing approx. 549 g. The relevant agreement, however, has never been provided to him by the OP. As a result, he was totally unaware of the applicable rate of interest in respect of the said loan. The Complainant, on diverse dates, paid a total sum of Rs. 79,000/- to the OP. As the OP did not intimate him anything about the total outstanding amount being payable by him, he could not take suitable steps to repay the said loan. In any case, on 16-09-2014, he asked the OP to provide him the up to date Statement of Account in respect of his loan account. Surprisingly, instead of obliging him with the desired document, the OP issued one purported demand Notice asking him to pay Rs. 14,20,600/- within 14 days, else face the consequence of auction sale of pledged ornaments. Being aggrieved with such notice, the Complainant made further representations to the OP to provide him the up to date Statement of Account and relevant agreement copy, but in vain. Thereafter, he was served another notice by the OP on 18-12-2014, whereby he was directed to pay Rs. 21,56,050/- by 22-12-2014. Immediately on receipt of the said notice, the Complainant made another representation by writing a letter on 20-12-2014. But, as the OP refused to receive the said letter, he sent it by Speed Post. Against such backdrop, apprehending mal-intention on the part of the OP, the Complainant filed the complaint case.
OP contested the case by filing WV contending inter alia that the Complainant took the loan for a sum of Rs. 10,98,800/- in the year 2011 by pledging 549 g. gold ornaments as collateral security. The said loan was repayable within a period of 12 months along with due interest. It is claimed by the OP that at the time of execution of agreement, the company issued a receipt cum agreement and a copy thereof was handed over to the borrower instantly. As the Complainant was very irregular in the matter of repayment of loan amount, the outstanding amount kept escalating with the passage of time. The company sent a final notice on 18-12-2014, whereby the Complainant was called upon to clear all outstanding dues on or before 22-12-2014. However, as the Complainant did not take any positive step to settle the account, the pledged ornaments were sold in a public auction.
Both the parties were heard at great length in the matter and documents on record carefully gone through.
The Complainant denied receiving any copy of the agreement containing detail terms and conditions of the subject loan and also updated Statement of Account from the OP. In order to refute such allegation, the OP furnished copies of some documents, such as, gold loan application form dated 15-03-2013, ‘Undertaking-cum-Sanction letter’, one undertaking of even date etc., it claimed that the Complainant was furnished copies of all the relevant documents as and when the same were issued.
Significantly, the OP could not furnish any acknowledgement in order to show that the same was received by the Complainant. Therefore, we are unable to shrug off such allegation of the Complainant completely.
It is also astonishing to note that the OP did not issue updated Statement of Account to the Complainant despite his repeated demand for the same. In fact, the OP has not furnished the same before us also. Such evasive attitude of the OP does raise eyebrows.
It appears from the documents on record that by issuing a notice on 18-12-2014, the OP intimated the Complainant that as on date, he owed an amount of Rs. 21,56,050/- to the company and Complainant was asked to repay it within 4 days therefrom, else he was cautioned of the possibility of liquidation of pledged gold through auction sale. It is astonishing to note that, never before that the Complainant was duly apprised of the outstanding amount stood in his name from time to time by issuing necessary Statement of Accounts to him. In the process, repeated fervent plea of the Complainant was simply ignored by the OP. It is not understood, what harm it would cause to the OP had the Complainant been provided with the desired documents. In any case, as a consumer/client, the Complainant had every right to know his exact liability to the OP.
We also take grim view of the fact that, no prior communication was made to the Complainant apprising him of the date and venue of auction sale to enable him to make a last ditch effort to save his precious valuables. In fact, in absence of relevant auction papers, public notice in newspaper etc., it could not be ascertained whether alleged auction took place following due procedure, or not.
It is though contained in the reverse of the undertaking cum sanction letter that the Company reserved the right to sell the pledged gold without any prior notice to the borrower, it seems, it had no legal right to do so. In this regard, it may not be out of the place to mention here that if the consideration or object of an agreement is found to be unlawful, it turns the very agreement void in terms of the provisions laid down u/s 23 and 24 of the Indian Contract Act, 1872.
It is noteworthy that vide its Circulars bearing No. DNBS.CC.PD.No.266 /03.10.01/2011-12 dated 26-03-2012 and No. DNBS.CC.PD.No.356 /03.10.01/2013-14 dated 16-09-2013, the RBI formulated detail guideline regarding various dos and don’ts in respect of gold loan which is applicable for all NBFCs . On going through the said guidelines vis-à-vis the conduct of OP, it appears that stipulated Regulatory norms were thrown out of windows by the OP.
It was incumbent on the part of the OP to provide a copy of the loan agreement to the Complainant which was not given to him. The Complainant was not issued any Statement of Account from time to time. While measuring the weight of gold, standard guideline of the RBI was breached. Due procedure was not followed.while selling the pledged gold through auction. The pledged gold was sold out abruptly behind the back of the Complainant. All these lapses are a clear pointer of the fact that the OP is not a firm believer in fair business practices. Otherwise, it would certainly not shy away from discharging its Regulatory obligations. It has not even approached this Commission with clean hands as all the relevant papers have not been put forth before us to enable us to independently verify whether all its dealings were above board or not.
On due consideration of such severe lapses on the part of the OP, we have no qualms holding it guilty of gross deficiency in service. Accordingly, we are inclined to allow this case. The OP shall pay Rs. 5,00,000/- as compensation to the Complainant within 40 days from today, i.d., Complainant shall be at liberty to execute this order in accordance with law and in that case, OP shall be liable to pay simple interest @ 9% over the aforesaid sum for the entire period of default. Further, OP is debarred from staking any claim from the Complainant in respect of the subject claim. The gold ornaments being already sold out, we refrain from passing any such direction to the OP to return the pledged ornaments to the Complainant.
