Chandigarh

DF-II

CC/716/2018

Vikas Bali - Complainant(s)

Versus

Muthoot Finance LTD., - Opp.Party(s)

Sakshi Aggarwal Adv. & Manreet Kaur Adv.

03 Sep 2019

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	716 of 2018
Date  of  Institution	:	14.12.2018
Date   of   Decision	:	03.09.2019

 

 

 

 

Vikas Bali aged about 35 years son of Sh.D.L.Bali, resident of House No.3315, Sector 35-D, Chandigarh.  

             ……..Complainant

 

Versus

 

Muthoot Finance Ltd., SCO 455-456, Sector 35-C, Chandigarh.

 ………. Opposite Party

 

BEFORE:  SH.RAJAN DEWAN        PRESIDENT

SMT.PRITI MALHOTRA    MEMBER

         SH.RAVINDER SINGH     MEMBER

 

 

Argued By:       Ms.Manpteet Kaur, Adv. for complainant

Sh.Harpreet Singh, Branch Head of Opposite Party

 

 

PER PRITI MALHOTRA, MEMBER

 

                                The case of the complainant in brief is that he availed loan of Rs.2,58,000/- from Opposite Party by pledging the gold ornaments on 19.7.2016.  It is averred that the complainant and Opposite Party also entered into a Loan Agreement for the said amount for which gold ornaments weighing 140.10 grams and net weight 125 grams (Ten items) were pledged with Opposite Party as collateral security (Ann.C-1). It is stated that against the said loan amount, the complainant paid the installments to the Opposite Party firstly on 19.7.2016 of Rs.67,837/-, Rs.11,211/- on 25.5.2017 and Rs.25,000/- on 19.12.2017. It is submitted that when the complainant visited the Opposite Party for payment of balance amount and to take back the gold ornaments, he was informed by the Officials that due to non-payment of the balance loan amount, the gold ornaments had been sent for auction, whereas no notice of auction was ever sent to the complainant.  The matter was also reported to the Opposite Party in writing by sending emails (Ann.C-2), but they did not pay any heed.  Hence, this complaint has been filed alleging deficiency in service on the part of Opposite Party.

 

2]       The Opposite Party has filed reply and while admitting the factual matrix of the case, stated that the loan agreement was executed between the parties on 19.7.2016 for a loan amount of Rs.2,58,000/- with 19% of interest p.a. having Loan Account No.00515/MOS/000061 and the tenure period for repayment of the said loan was of One year i.e. to be payable on or before 18.7.2017.  It is stated that as per Loan Agreement executed between the complainant and Opposite Party, the Company has the absolute right to sell, transfer, assign and securitise all the rights, titles and interest that accrue to the company on this loan transaction to another individual or company or entity or to borrow/take loan by creating charge on it.  It is also stated that the receipt dated 19.7.2016 and 25.5.2017 for deposit of Rs.65,837/- & Rs.11,211/- respectively by the complainant, pertains to Loan Accounts No.0151-MSL-14660 & 0515-MGL-109 respectively, whereas the Loan Agreement in question bears the Loan Account NO.00515/MOS/000061.  It is submitted that a regd. post for auction notice dated 27.1.2018 was sent to the complainant at his given address reminding him about the default of payment and intimation of auction by providing a period of 14 days for paying back the amount.  After expiry of the auction notice, a public notice was also circulated by the company dated 21.2.2018 in local newspaper ‘Financial Express’ & ‘Punjabi Jagran’  mentioning about the loan account number of the complainant i.e. 00515/MOS/000061. Denying all other allegations and pleading no deficiency in service, the Opposite Party has prayed for dismissal of the complaint.

 

3]      The complainant filed rejoinder thereby reiterating the assertions as made in the complaint and controverting that of the Opposite party made in the reply.

 

4]       Parties led evidence in support of their contentions.

 

5]       We have heard the ld.Counsel for the parties and have also perused the entire record.

 

6]       After giving due consideration to the rival contentions of the parties, it is made out that the complainant Sh.Vikas Bali availed loan of Rs.2,58,000/- from the Opposite Party by pledging his Gold Ornaments weighing 140.10 grams and net weight 125 grams against said loan. 

 

7]       It is the submission of the complainant that he time to time paid the loan installments to Opposite Party as he paid Rs.67,837/- on 19.7.2016, Rs.11,211/- on 25.5.2017 and Rs.25,000/- on 19.12.2017. 

 

8]       The grievance of the complainant is that when he approached the Opposite Party to clear the outstanding loan and to redeem the pledged ornaments, he was informed that Opposite Party has already sold the ornaments pledged by him, whereas he was never intimated beforehand about the process to be initiated for the sale to be held by the Opposite Party, as was agreed under the loan agreement to that effect.

9]       On the contrary, the Opposite Party submitted that the complainant never adhered to the repayment schedule as he failed to repay the loan amount.  It is also contended that the amounts so alleged to have been paid by the complainant pertains to other loans availed by him from the Opposite Party.  It is submitted by the Opposite Party that due to failure on the part of the complainant qua payment of the loan amount, the Opposite Party as per agreement initiated the process of auctioning the collateral security deposited by him to recover the due loan amount. It is also contended that on the date of auction, the loan amount due was Rs.3,58,734/- and the company fetched Rs.3,52,413/- from the auction done, out of which Rs.1500/- was auction charges, and balance amount of Rs.7821/- was still due towards the complainant.  It is further contended that the complainant thereafter deposited Rs.25,000/-, which the company kept in sundry account and after deducting the remaining due amount of Rs.7821/-, the balance amount comes to Rs.17179/- which the company is ready to refund.

 

10]      A thorough perusal of the record reveals that the repayments, as claimed by the complainant of Rs.65,837/- & Rs.11,211/- made on dated 19.7.2016 and 25.5.2017 respectively pertains to other Loan Accounts bearing No.0151-MSL-14660 & 0515-MGL-109 (Ann.C-2) respectively.  Evidently only the payment of Rs.25000/- has been made against the Loan account in question bearing NO. MOS-61 (Ann.C-1 P-16) and that too on 19.12.2017, when already the tenure for the repayment of the loan amount had expired.   

 

11]      Thus it is established that the whole loan amount was outstanding against the complainant at the end of the loan tenure and it definitely had fetched penal interest besides agreed interest and the loan amount would have been increased/swollen upto the claimed amount of Rs.3,58,734/-, which the complainant had also not objected.

 

12]      After giving thoughtful consideration to the terms & conditions of the loan agreement (Ann.C-1), it is observed that Clause 7 & 8 of the Loan agreement stipulates as under:-

“7. 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 the legal proceedings against the borrower and/or sell the ornaments pledged through an auction process by giving 14 day’s prior notice to the borrower at the address given in the Application for loan and appropriate the amount so received towards the loan amount from the borrower or from his personal assets like immovable assets Land, Building or any movable assets. Where the amount realized through auction is higher than the total amount due from the borrower, then the excess amount realized will be refunded to the borrower either in cash or by cheque within 30 days from the date of such realization.  However, if there are any other amounts due from the borrower, the same will be recovered by appropriation from the excess amount and the balance, if any, thereafter only will be refunded to the borrower.

8.  I agree that as a pre-condition of the loan given to me by the Company, in case of any default in repayment of the loan or interest thereon, or any of the agreement installments of the loan on respective due date(s), the Company will have an unqualified right to disclose or publish my name, details and photograph as a defaulter in such manner and through such medium as the Company in their absolute discretion may think fit.  For recovery, the Company could go in for the Road Show(s) or conduct open “Munadi” (Announcement through Loud Speaker).”

 

13]      Thorough perusal of the above condition stipulates that mandatorily the complainant should have been intimated with 14 days prior notice at his supplied address intimating about the auction to be condoned or the sale to be made.    

 

14]      The Opposite Party certainly has not given 14 day’s prior notice to the complainant, as stipulated in the Loan Agreement, referred to above, as no such document has been produced by it on record.  The Opposite Party claimed in their reply that they have issued a public notice and circulated it in local newspaper(s), but no such document/copy of newspaper has been placed on record by the Opposite Party to substantiate this plea.  The only document, which the Opposite Party has placed on record is the copy of the letter dated 1.5.2018, whereby the Opposite Party indirectly raised the demand of balance due amount of Rs.7821/- after conducting the auction of pledged ornaments of the complainant.  It is observed that had the Opposite Party given 14 days prior notice to the complainant about auctioning of the pledged ornaments, he might have arranged the money and get the outstanding loan cleared in order to redeem his gold ornaments to which presumably the emotions & sentiments of his wife have been attached. But no such opportunity has been provided to him by the Opposite Party despite having been agreed in loan agreement, which is not only grave deficiency in service on the part of Opposite Party, but also amounts to an unfair trade practice.

 

15]      During the pendency of the case, it is also noticed that the Opposite Party submitted that they have recovered the balance amount of Rs.7821/- from the amount of Rs.25,000/- deposited by the complainant on 19.12.2017 and now it is ready to refund the balance amount of Rs.17,179/- to the complainant. It is observed that here also the Opposite Party rendered deficient service towards complainant and he was not refunded the excess amount beforehand as has been agreed to be refunded within 30 days from the full recovery made, as has been agreed in the terms incorporated earlier.    

 

16]      From the whole scenario, it divulges that the Opposite Party though was right to recover the loan amount by selling the pledged gold ornaments of the complainant, but it certainly not only acted in a deficient manner but also indulged into unfair trade practice, by not adopting the right course as agreed in the loan agreement; by not giving 14 days prior notice to the complainant before conducting auction of his pledged gold ornaments and further by not refunding the balance amount of Rs.17,179/- to the complainant within the stipulated period agreed between the parties to which the Opposite Party now states to be ready to refund.  Due to such deficient act and unfair trade practice by Opposite Party, the complainant certainly had suffered mental agony, harassment and great financial loss and thus, he deserves to be adequately compensated.

 

17]      Taking into account the discussion & findings, as discussed in the preceding paragraphs, the present complainant is partly allowed against Opposite party with following directions:- 

a]  To refund the balance amount of Rs.17179/- to the complainant;

b)  To pay an amount of Rs.25,000/- as compensation on account of deficient services coupled with unfair trade practice;

 

c)  To pay litigation cost of Rs.10000/- to the complainant.

 

         This order shall be complied with by the Opposite Party within a period of 30 days from the date of receipt of its copy, failing which it shall be liable to pay additional compensatory cost of Rs.20,000/- part from the above relief.

 

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

3^rd September, 2019                                                               Sd/-

                                                                                                (RANJAN DEWAN)

PRESIDENT

         

 

Sd/-

                                                                    (PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER