Haryana

Panchkula

CC/461/2019

SMT .SUNITA - Complainant(s)

Versus

MUTHOOT FINANCE LTD. - Opp.Party(s)

COMPLAINANT IN PERSON.

14 Jun 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PANCHKULA.

 

 

                                                       

Consumer Complaint No	:	461 of 2019
Date of Institution	:	09.08.2019
Date of Decision	:	14.06.2023

 

 

Smt. Sunita wife of Late Shri Surjeet Singh, resident of House No.120-C, K-Block, Police Line, Moginand, Sector-25, Panchkula.

                                                                         ..….Complainant

Versus                                                                  

Muthoot Finance Ltd. SCO No.333, Ist Floor, Sector-9, Panchkula through its Branch Manager.

                                                                       ……Opposite Party

COMPLAINT UNDER SECTION 35 OF THE CONSUMER PROTECTION ACT, 2019

 

 

Before:              Sh. Satpal, President.

                        Dr. Sushma Garg, Member.

                        Dr. Barhm Parkash Yadav, Member. 

 

 

For the Parties:   Complainant in person with Sh. S.K.Rohilla, Advocate for the complainant.

                        Sh. Jasjot Sharma, Senior Relationship Executive, the                       authorized representative of the OP.

 

ORDER

(Satpal, President)

1.             Briefly stated, the facts, as alleged in the present complaint, are that the husband of the complainant, namely, Surjeet Singh being in need of money visited the OP along with the complainant for obtaining financial assistance. The complainant and her husband were assured by the representative of OP qua providing of the financial assistance on a very meager rate of interest with the facility of the repayment of the loan either on the monthly basis or at the time of clearing the loan. On the basis of assurance, the complainant and her husband agreed to take the loan facility and accordingly pledged  the gold ornaments weighing Gross weight 12.000g, consisting of 5 number of jewellery items i.e. 3 Ring & 2 studs vide Customer ID No. 012830000001979, on 04.08.2017, and availed  the financial assistance of Rs.21,500/-. Again,  the husband of the complainant  was in need  of money and visited the OP & pledged the gold ornaments weighing Gross weight 15.600g, consisting of 1 number  of jewellary item  i.e. Chain with locket  vide Customer ID No.012830000001979, on 31.03.2018, and availed the financial assistance  of Rs.19,460/-. After availing the loan against the said gold ornaments, the husband of the complainant kept on making the payment of interest to the OP. Unfortunately, the husband of the complainant had expired in a road side accident on 09.06.2018. After the death of her husband, the complainant visited the OP for the release of the said pledged gold ornaments, but the OP refused to release the said gold ornaments directly to her and directed the complainant to get an affidavit qua the fact that she is the wife of the mortgagor- Surjeet Singh and then the loan would be transferred in her name, and after the transfer of the said loan, the gold ornaments will be released to her on deposit of the total loan amount along with due interest. Accordingly, the complainant visited the OP on 23.08.2018 for getting the said loan transferred in her name but the OP declined her request and disclosed that an amount of Rs.48,000/- was due against the said gold  pledged ornaments, which included the loan amount as well as interest and disclosed  that the said gold ornaments would be released in her favour on deposit of the amount and further, the OP also handed over a proforma from the complainant. On the instructions of the OP, the complainant visited again the OP again on 24.08.2018 along with the payment, deposit slips and death certificate of her husband but the OP raised another objection and directed the complainant to obtain the certificate from the employer of her deceased husband. Accordingly, on the same day, the complainant obtained the certificate from the employer of her husband i.e. Deputy Superintendent of Police, Telecom HR, Panchkula and visited the OP again with the payment and certificate from the employer of her deceased husband and requested to allow her to deposit the amount and release the gold ornaments but again, the OP put another condition that affidavits of two neighbours/known were also required to be submitted. The duly sworn affidavit of two colleagues, namely Narinder son  of Sh. Ramesh Kumar, resident  of house no.107-A, Police line, Sector-25, Panchkula and Gurpreet son of Sh. Ram Chander, resident of House No.78-B, Police Line, Sector-25, Panchkula, of her deceased husband, were also submitted before OP on 24.08.2018 along with death certificate of her husband, her identity proof, certificate from the employer, deposit slips and the amount of Rs.48,000/- and requested the OP  to release  the gold ornaments but the Op’s official asked the complainant to submit four other affidavits of her neighbours, who were having  the details of her movable and immovable properties/liabilities etc. Finding no relief, a legal notice was served upon the OP on 25.04.2019 but to no avail.  Due to the act and conduct on the part of the OP, the complainant has suffered a great mental agony, physical harassment and financial loss; hence, the present complaint.

2.             Upon notice, the OP has appeared through counsel and filed written statement contesting the complaint by raising preliminary objections mentioning that the OP company is primarily engaged in the business of granting loans/facilities against the collateral security/ pledge of gold ornaments and has branches across India and is widely acclaimed for its reputation and services.  The OP has carved a niche for itself in the Gold Loan products, as well as other financial services, across the country. It is admitted that the deceased borrower had availed loan of Rs.21,500/- after pledging  3 rings and 2 studs  vide loan no.MGL/001005 dated 04.08.2017 from OP’s branch. Also, the deceased had availed another loan of Rs.19,460/- by pledging Chain and locket vide customer ID No.012830000001979. As per the terms of the said loan, the complainant had pledged gold ornaments by way of collateral security thereby securing the repayment of the said loan. Further as per the terms of the loan contract, the loan tenure was for 12 months and the complainant, was accordingly, liable to repay the said loan, along with the accrued interest  thereupon, within  the stipulated  period of 12 months. It is submitted that the complainant in utter defiance of the terms of the repayment of the said loan, had failed/avoided/neglected to repay the said loan and had committed defaults, as such, the OP Company was constrained to follow the due process for selling the gold in Auction. It is submitted that the relationship between the complainant and the OP is that of a ‘Pawnor’ and a ‘Pawnee’. The complainant has pledged the gold ornaments as collateral security for the purposes of securing the repayment of a loan availed by her deceased husband from the OP company, which is a non banking finance company, registered with the Reserve Bank of India. It is submitted that the OP is entitled as per Section 176 of Indian Contract Act, 1872 to sell/auction the pledged articles after serving a reasonable notice of sale of the pawnor/the borrower/the complainant in the present case.

                On merits, it is stated that gold items as pledged vide account no.MGL/1005 dated 04.08.2017 for Rs.21,500/- has already been auctioned by the company on 21.11.2018, after following due procedure. As per clause no.7 of terms and conditions of Pledge Form, the Company can auction the pledged ornaments, in case, the loan is not repaid within due date. It is admitted that deceased borrower had availed another loan of Rs.19,500/- vide loan no.MOL/000228 dated 31.03.2018. As per statement of account, he has not paid any interest thereto. Further, the pleas and assertions made in the preliminary objections have been reiterated and it has been prayed that there is no deficiency in service on the part of the OP and as such, the complaint is liable to be dismissed.

3.             To prove the case, the complainant has tendered affidavits as Annexure C-A along with document Annexure C-1 to C-13 in evidence and closed the evidence by making a separate statement. On the other hand, the authorized representative of the OP has tendered affidavit Annexure R-A along with documents as Annexure R-1 to R-6 and closed the evidence.

4.             We have heard the learned counsel for the complainant as well as the authorized representative of OP and gone through the entire record including the written arguments filed by the complainant as well as OP, minutely and carefully.

5. Admittedly, deceased Sh.Surjeet Singh, husband of the complainant, had availed the loan of Rs.21,500/- on 04.08.2017 and Rs.19,500/- on 31.03.2018 by pledging the gold items with OP. The details of the said two loans are given in tabular form as under:-

Sr. No.	Loan Amount	Loan Date	Loan A/c no.	Scheme	Tenure of loan	Nos. of articles	GRS.WT	Net WGT
1	21500	04.08.2017	1005	MGL	6 months	5	12 gms	11gms
2	19500	31.03.2018	228	MOL	12 months	1	15.6 gms	15 gms

 

Further, it is also an admitted factual position that the OP had sold the pledged gold items on 20.11.2018 in auction for a sum of Rs.31,483/-, prior to the filing of the present complaint by the complainant. The pledged gold items qua second loan account no.01283/MOL/000228 has been sold by OP on 19.11.2022 through auction during the pendency of the present complaint.

6.The complainant has alleged lapses and deficiencies on the part of the OP on the two counts, which are as under:-

1. That the Op was not legally empowered/authorized to sell the pledged gold items, after the death of her husband, without serving any prior notice to her.
2. That the procedure adopted by the OP while selling the pledged gold items was not fair, valid and legal.

7.During arguments, the learned counsel on behalf of the complainant reiterating the averments as made in the complaint has contended that no notice, whatsoever, was ever sent by OP to the complainant qua the holding of sale of pledged gold items and thus, the complainant was preventedfrom participating in the auction process. Concluding the arguments the learned counsel contended that the OP had been deficient while rendering services to the complainant and thus, the complainant is liable to be accepted.

8.             On the other hand, the authorized representative on behalf of the OP, while reiterating the averments as made in the written statement as also in affidavit(Annexure R/A) read with reply placed on record today in response to application moved by the complainant on 28.02.2023 has contended that due procedure was adopted by the OP while selling the pledged gold items. It is contended that auction notice(Annexure R-3) was sent to Surjeet Singh deceased from Kohli & Sobti Advocate qua the sale of pledged gold ornaments through  auction on 19.11.2018. It is contended that publication was also made qua sale of gold items in newspapers and in this regard, reliance was placed on photocopy of newspapers(Annexure R-4).

                The authorized representative inviting our attention towards the details of auction as also and the participants during the sale of  gold items in auction, contended that there was no illegality on the part of the OP while conducting the auction qua sale of pledged items. Similar arguments were advanced by authorized representative qua sale of gold items as pledged vide loan account no.MOL/228 for a sum of Rs.19,500/-. Concluding the arguments, the authorized representative has prayed for dismissal of the complaint being frivolous, baseless and meritless.

9.             The first question that arises for consideration before the Commission, is whether the OP was authorized to sell the pledged gold items. Secondly, whether the procedure adopted by OP, while selling the pledged gold items was fair, valid and justified.

10.            With regard to the first issue, pertinently the loan facility was availed by the deceased, Surjeet Singh by pledging the gold items with OP. The Pawnor, deceased, Sujeet Singh had died on 12.06.2018 in accident.

11.            We have perused the terms and condition of the gold loan agreement(Annexure C-5 & C-7) and find no such condition, which is applicable  in the eventuality of death of a pawnor.

12.            On the other hand, the complainant has been found to have made sincere & serious efforts to get the gold loan transferred in her name. Though as per Section 176 contract Act, 1872, the Pawnee i.e. OP is authorized to sell the pledged items, in case of any default made by the pawnor, but in the present case, the pawnor had died before the sale of gold items and the Op has sold the pledged items after his death. As per terms and conditions contained in the loan agreement Annexure C-5 & C-7, the OP was not authorized to sell the pledged items without associating the Lrs of deceased Surjeet Singh.

13.            Further, it is also of utmost relevance to mention here that the OP, instead of giving any heed to the genuine request of the complainant qua the transfer of loan accounts in her name, has preferred to proceed with the auction of the pledged gold items after the death of Surjeet Singh. In reply dated 06.06.2023, placed on record by OP, it is categorically admitted that the complainant had approached the branch office of OP on 28.08.2019. The affidavit of the complainant (Annexure C-12) and another affidavit dated 24.08.2018 (Annexure C-11) along with affidavits of Sh.Gurpreet and Sh.Narender who were allegedly  the colleague of deceased  Surjeet Singh are available on record. Certificate  issued by Deputy Superintendent of Police telecom HR Panchkula, certifying that complainant is wife of Late Surjeet Singh resident of Government Quarter No.120-C, K-Block, Police Line, Moginand, Sector-25, Panchkula, is available on record as Annexure C-13. The complainant in her affidavit dated 24.08.2018 (Annexure C-11) has specifically stated that the affidavit was to be submitted to Muthoot Financial Limited, Sector-9, Panchkula for releasing the gold. As such, we find that the complainant had made sincere and serious efforts in getting the pledged gold items released by making payment of due amount.

14.            On the other hand, we find no communication from the side of OP, wherein the complainant was asked to fulfill any specific requirement like submissions of certificate of Lrs etc. Therefore, no fault of any kind in any manner, can be found with the complainant while seeking the release of gold items, which were pledged with OP.

15.            Now, we advert to the procedure, which was followed by OP in selling the gold items on 20.11.2018 and 19.11.2022 through auction.

16.            Evidently, the auction notice, prior to sale of the pledged gold items, was sent to deceased Surjeet Singh. Copy of the auction notice is placed on record as Annexure(Annexure R-3). In this regard, it is relevant to highlight here that the notice sent to a dead person has no legality attached with it and thus, the same was illegal and void ab-initio; as such, the auction conducted in pursuance to said auction notice (Annexure R-3) was of no consequences. Further, the publication allegedly made in the newspaper is also of no avail to the case of OP as the same was done after the death of Pawnee, namely, Surjeet Singh. Furthermore, the list of bidders, who had allegedly participated in the auction, do not contain the signatures of the concerned bidders. In addition to it, the details of security amount, which was required to be deposited by the participating bidders, has not been disclosed. Similar procedure has been adopted by OP qua the sale of gold items as was pledged vide second loan account no.MOL/228 amounting to Rs.19,500/-. In this regard, the notice was issued to the deceased Pawnor vide Annexure R-5 & R-6, which were illegal and void ab-initio and not binding upon the complainant. Therefore, the sale of gold items through auction is hereby declared as illegal and invalid. As such the OP is found deficient while rendering services to the complainant.

17.            Admittedly, the complainant had approached the OP on 24.08.2018 seeking the release of pledged gold items, by making payment of due amount. In our considered opinion, the ends of justice would be served, if 24.08.2018 is treated as the cut off date qua computation of interest payable to the OP against the loan amount; accordingly, the date i.e. 24.08.2018 is taken as cut-off date up to which, computation of interest payable to the OP against the loan amount is to be made.  As per agreement (Annexure C-7), the OP were entitled to levy interest on the amount of Rs.21,500/- w.e.f. 04.08.2017 till 24.08.2018 @24% P.A., which comes to Rs.5,450/-. As per OP, the gold items were sold for a sum of Rs.31,483/-.

18.            The gold items pledged vide second loan account no.MOL/228 were sold for a sum of Rs.64,831/-. The amount of interest on second loan amount of Rs.19,500/- w.e.f. 31.03.2018 till 24.08.2018 @24% p.a. comes to Rs.2,004/-.  The details of amount payable by OP is given as under:-

Sr.No.	Loan  A/c No.	Principal amount	Interest payable to OP(Rs.)	Total i.e. Principal +interest amount	Amount received  in sale of gold items	Balance payable to complainant
1.	MGL/1005	21500	5450	26950	31483	4533
2.	MOL/228	19500	2004	21504	64831	43327

 

19.            As per above, the total amount payable to the complainant comes to Rs.47,860/-(Rs.4533+43327). It is pertinent to mention here that the complainant had a special emotional and sentimental attachment with the pledged gold ornaments as the same were allegedly gifted to her by her deceased husband; as such, the complainant is entitled to adequate compensation on account of mental agony and harassment.  

20.            As a sequel to the above discussion, we partly allow the present complaint with the following directions to OP:-

1. To pay a sum of Rs.47,860/-(Rs.4,533+43,327) to the complainant, along with interest @ 9% per annum (S.I.) w.e.f. the date of filing of the complaint till its realization. 
2. To pay an amount of Rs.20,000/- to the complainant on account of mental agony and harassment.
3. To pay an amount of Rs.5,500/- as cost of litigation charges.

 

 21.          The OP shall comply with the order within a period of 45 days from the date of communication of copy of this order failing which the complainant shall be at liberty to approach this Commission for initiation of proceedings under Section 71/72 of CP Act, 2019 against the OP. A copy of this order shall be forwarded, free of cost, to the parties to the complaint and file be consigned to record room after due compliance.

Announced on:14.06.2023

 

 

 

     Dr.Barhm Parkash Yadav           Dr.Sushma Garg          Satpal

                  Member                        Member                         President

 

Note: Each and every page of this order has been duly signed by me.

 

                                             Satpal

                                            President

 

CC.461 of 2019

Present:             Complainant in person with Sh. S.K.Rohilla, Advocate for the complainant.

                        Sh. Jasjot Sharma, Senior Relationship Executive, the                       authorized representative of the OP.

 

                       Arguments heard. Now, to come upon 14.06.2023 for orders.

Dt.05.06.2023

 

 

        Dr.Barhm Parkash Yadav      Dr.Sushma Garg             Satpal

                       Member                            Member                         President

 

Present:             Complainant in person with Sh. S.K.Rohilla, Advocate for the complainant.

                        Sh. Jasjot Sharma, Senior Relationship Executive, the                       authorized representative of the OP.

 

                                Vide a separate order of even date, the present complaint is hereby partly allowed against OP with costs.

                        Reply filed on behalf of OP to the application dated 28.02.2023 moved by the complainant challenging the validity/legality of auction dated 21.11.2018 and 19.11.2022 conducted by OP qua sale of pledged gold items. The said application dated 28.02.2023 moved by the complainant stands dispose of in the terms of main orders of even date.

         A copy of the order be sent to the parties free of costs and the file be consigned to the record room after due compliance.

Dt.14.06.2023

 

 

       Dr.Barhm Parkash Yadav       Dr.Sushma Garg             Satpal

                       Member                            Member                         President