Punjab

Ludhiana

CC/17/408

Ashok Kumar - Complainant(s)

Versus

Muthoot Finance Ltd - Opp.Party(s)

N.K.Chhibbar Adv.

13 May 2021

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No: 408 dated 23.05.2017.                                                                 Date of decision: 13.05.2021. 

 

Ashok Kumar S/o. Mella Ram, R/o. 411, E, Shaheed Bhagat Singh Nagar, Ludhiana.                                                                                                                                                                                                              ..…Complainant

                                                                                 

                                                Versus

1. The Muthoot Finance (P) Limited, Corporate Office- North A-6, First Floor, Above Post Office, Cannaught Place, New Delhi-100001, through its Authorized Representative.
2. The Muthoot Finance Limited, Branch Office address-B-15-136, 2^nd Floor, Jandu Tower, Miller Ganj, Ludhiana, through its authorized representative Mr. Varun Gupt.                                                                                                                                                                                   …..Opposite parties 

Complaint under Section 12 of Consumer Protection Act.

 

QUORUM:

SH. K.K. KAREER, PRESIDENT

MS. JYOTSNA THATAI, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. N.K. Chhibber, Advocate.

For OPs                          :         Sh. Anand Sabherwal, Advocate.

ORDER

PER K.K. KAREER, PRESIDENT

 

1.                     Shorn of unnecessary details, the case of the complainant, as set up in the complaint, is that the complainant obtained a gold loan of Rs. 82,000 for a period of three months i.e. up to 08/04/2008 from the OPs. The complainant pledged her gold ornaments with the opposite party and the same were returnable in an intact condition at the time of the repayment of the loan. No specific rate of interest was disclosed by the opposite party to the complainant and he was told that the loan would be extended on a very low rate of interest. The opposite party obtained the signatures of the complainant on some blank papers. Ever since the availment of the loan, the complainant has been paying interest on the principal sum of Rs. 82,000. After a period of 3 months, the complainant visited the office of OP 2 and requested that the loan amount along with interest be accepted and the pledged gold ornaments be returned to him. However, the manager of OP 2 disclosed that the gold ornaments belonging to the complainant had been stolen on 17/05/2008 and in this regard,  FIR No. 39 of 2008 had been got registered with PS division No. 2, Ludhiana. The manager of  the OP 2 refused to accept any repayment from the complainant on the pretext that the criminal case regarding theft of gold ornaments was sub judice. The complainant kept visiting the office of OP 2 with a request that the gold ornaments, got released on supurdari, be released to him  after accepting payment of principal and interest but the manager showed his inability to do so that saying that the criminal trial was pending and the ornaments cannot be released till the decision of the case. Eventually, the complainant came to know in the month of March 2017 that no case was pending in any court of law regarding the pledged gold and the complainant has always been willing to return the loan amount with interest. The complainant again approached OP 2 in the month of March for the return of the pledged gold ornaments but the latter started claiming exaggerated the rate of interest for the entire period from 2008 onwards which comes to more than the price of the pledged gold. This amounts to deficiency of service on the part of the OPs as they failed to protect the ornaments pledged by the complainant with them. In the given circumstances, the opposite party is not to entitled to claim  exaggerated rate of interest from the complainant. In the end, it has been requested that the opposite party be directed to return the gold ornaments to the complainant and to charges only a reasonable rate of interest only for the period from the date of loan till the date of registration of FIR regarding theft of gold ornaments. It has further been requested that the OPs be further directed to pay a compensation of Rs. 50,000 and litigation expenses of Rs. 11,000/-.

2.                The complaint has been resisted by the OPs. In the joint written statement filed by the OPs, it has been pleaded that there has been no deficiency of service on the part of the OP . According to the OPs, the complainant had obtained a loan on submission of a collateral security with his own free will and the relationship between the complainant and the OPs has been that of a pawner and a pawnee which is covered under section 172 of the Indian contract Act as well as section 56 of the said Act. The OPs were not liable to perform the  promise if the non-performance was due to any reason of force majure which were beyond the control of the OPs. In the instant case, the reason for not returning the gold ornaments of the complainant was that the ornaments were not within the custody of the opposite parties  as the same had been stolen. The complainant was fully aware regarding the robbery of the ornaments. The complaint further knew that the gold articles were not in possession of the opposite party. Therefore, it cannot be said to be a case of deficiency of service on the part of the OPs. The OPs have further submitted that a theft was committed in the Miller Ganj Ludhiana Office and the ornaments pledged by the complainant had been stolen. In this regard, FIR No. 39 of 2008 was got registered under section 457/380 IPC with PS division No. 2 Ludhiana on 19/05/2008. During the pendency of the said case, the opposite party filed an application for getting the stolen ornaments released on supurdari which was allowed by the court of Judicial Magistrate 1^st Class, Ludhiana vide its order dated 21^st of May 2008. The OPs  further moved an application seeking permission to release the recovered articles obtained on supurdari to the respective borrowers but the said application was dismissed by the court of  Judicial Magistrate 1^st Class vide order dated 26/03/2012. The trial of the criminal case finally concluded  with the judgment dated 31/01/2015 passed by the court of JMIC Ludhiana. Subsequent to that, an application under section 452 Cr.P.C. was preferred seeking permission to return the pledged ornaments to the borrowers which was allowed vide order dated 31/07/2015 passed by the court of Ranjeev Kumar, the then Chief judicial Magistrate, Ludhiana. After getting the permission from the court, the OPs requested the complainant to deposit the outstanding loan amount and to take back the gold ornaments but the complainant refused to do so. On merits, it has been denied if no specific rate of interest was disclosed by the OPs to the complainant at the time of availment of the  loan. It has also been denied if the OPs obtained the signatures of the complainant on blank papers. As a matter of fact, the rate of interest for the 1^st month was 15% per annum and thereafter for the subsequent months, the applicable rate of interest was between 24% to 30% .The rest of the allegations made in the complainant have been denied as wrong and in the end, a prayer for dismissal of the complainant has also been made.

3.                In evidence, the complainant submitted his affidavit as Ex. CA as well as affidavit of Sh. Sandeep Singh as Ex. CB along with documents Ex. P1 to Ex. P4 and closed the evidence.

4.                On the other hand, OPs submitted affidavit as Ex. RW1 of Sh. Varun Gupta, Branch Manager of OPs along with documents Ex. R1 to Ex. R4 and closed the evidence.

5.                We have heard the counsel for the parties and gone through the record. No written submissions were made by the parties in this case.

6.                During the course of arguments, it has been contended by the counsel for the complainant that admittedly the gold pledged by the complainant with the opposite party was got stolen in the month of May 2008 and in this regard, a case was also got registered vide  FIR No. 39 of 2008 by the opposite party. The counsel  for the complainant has further contended that  the OPs were not in a position to return the gold ornaments of the complainant to her due to pendency of the criminal trial in respect of the theft case. The theft had also taken place due to negligence on the part of the OPs. Therefore the OPs is not entitled to claim interest in respect of the period the trial of the theft case remained pending and the permission was not granted by the court to the OPs for releasing the ornaments to the borrowers. The counsel for the government has further contended that the OPs cannot  be allowed to charge exorbitant rate of interest against the loan of Rs. 82,000/- availed by the complainant as the complainant was not  informed about the rate of interest and he was told by the opposite party that a very low rate of interest would be charged. The counsel for the complainant has further contended that the complainant was made to sign blank papers when the loan was released to her and she was not explained about the rate of interest.

7.                 On the other hand, the counsel for the opposite party has contended that the complainant is false and frivolous one and the same deserves to be dismissed. According to the counsel for the opposite party, the complainant never approached the opposite party for repayment of the loan nor any written request was made by the complainant to the opposite party in this regard. Therefore, the complainant cannot be heard harping that he is not entitled to pay interest in respect of the period during which criminal trial regarding the theft case remained pending. The counsel for the opposite party has further contended that as per the documents executed between the parties, the complainant was liable to pay interest at the rate of 15% per annum for the 1^st month and the interest was to increase in the subsequent months in the range of 24% to 30%. The counsel for opposite parties has further contended that once having voluntarily agreed to pay a definite rate of interest, the complainant cannot now claim that the rate of interest being charged is exorbitant or unjustified.

8.                We have weighed the above referred contentions raised by the counsel for the parties.

9.                Undisputedly, the complainant took a loan of Rs. 82,000/- from the opposite parties on 09/01/2008. It was a gold loan which was secured by pledge of gold ornaments by the complainant. It is also not disputed that the ornaments which were pledged by the complainant with the opposite parties were stolen on 19.05.2008 and in this regard, a case was got registered  by the OPs under section 457/380 IPC. It is also not disputed that after the case of theft was registered, the gold ornaments pledged by the complainant and some other borrowers of the opposite parties were recovered by the police from the miscreants who had stolen the same and the opposite parties got the ornaments released on supurdari. It is further on record that the opposite parties filed an application before the trial court seeking permission to release the ornaments to the borrowers but the said application was declined by the trial court wide order dated 26^th of March 2012 pitches Ex R2. Eventually, the trial of the criminal case of theft concluded on 31/01/2015. Thereafter, the opposite parties again applied to the trial court for permission to release of the case property i.e. the ornaments to the borrowers to settle their loan accounts and vide order Ex R3 dated 31/07/2015, the court permitted the opposite party to disburse/return the stolen ornaments to the concerned borrowers including the complainant

10.              From a close scrutiny of the above referred facts, it emerges that after the ornaments pledged by the complainant with the opposite parties  were stolen on 19/05/2008, the latter were not in a position to settle the account of the complainant. This has been admitted by the opposite parties in the written statement itself that even after the ornaments were got released on supurdari by the opposite parties, they were not in a position to return the same to the complainant as the court trying the criminal case of theft declined permission to the opposite parties to release the ornaments to the borrowers including the complainant. The trial court finally on 31.07.2015 granted permission to the opposite party to disburse the ornaments to the complainant and the other borrowers. In this scenario, in the considered opinion of this Commission, the opposite parties cannot be allowed to claim and recover interest on the loan amount in respect of the period from 19/05/2008 till 31.07.2015. Here, one cannot be oblivious of the fact that the opposite party, being pawnee of the ornaments pledged by the complainant, were under an obligation to safeguard the same and keep them safe and intact to be eventually returned to the complainant in the same condition. However, the opposite parties miserably failed in its duty to take care of the ornaments pledged with them. Rather, the negligence on the part of the opposite parties in taking care of the pledged ornaments is writ large. The opposite party cannot be allowed to hide behind a plea of force majure by invoking the provisions of section 56 of the Indian Contract Act. The opposite party cannot be allowed to take advantage of their own wrongs. Having miserably failed to protect the ornaments, the opposite party cannot be allowed to claim interest in respect of the period when it was not in a position to return the ornaments to the complainant. It is totally unimaginable that the complainant would have returned the loan amount along with interest without getting back his pledged ornaments. In the facts and circumstances of this case, in our considered view, it would be appropriate if the complainant is liable to pay interest only from 09/01/2008, when the loan was borrowed, to 18.05.2008 when the ornaments were stolen. The complainant can further be held liable to pay interest on the loan amount of Rs 82,000 from 31.7.15 when the opposite party had obtained permission from the court to release the ornaments to the complainant till the date of actual payment.

11.              Another dispute which is required to be resolved in this case is with regard to the rate of interest on the principal sum of Rs. 82,000/-. The complainant has claimed in the complaint that no rate of interest was settled and the opposite party had assured him that a reasonable rate of interest would be charged on the loan amount. On the contrary, the OPs have claimed in the written statement that as per the agreement between the parties, the complainant was supposed to pay interest at the rate of 15% per annum for the 1^st month, at the rate of 24% per annum for the 2^nd month, 25% per annum for the 3^rd month and 28% per annum till the 6 months and beyond 6 months the applicable rate of interest was 30% per annum. Surprisingly enough, no loan agreement was executed between the parties nor any such agreement has been placed on the file. The OPs have placed on record a document Ex R4 and on the back side of this document, it is mentioned that the company levies a rate of interest of 15% per annum and there would be a rebate for early payment at the rate of 6% for the loans closed within 3 months and rebate of 3% for the loans closed within 6 months. However, this document ExR4 is totally contradictory to the stand taken by the opposite party in the written statement. On the contrary, in the document Ex. P4, produced on record by the complainant, no rate of interest has been mentioned. Even otherwise, rate of interest of 15% or more in respect of a loan which is secured by pledge of gold ornaments seems to be quite exorbitant and unfair. Here, it would not be out of place to mention that private non-banking finance companies generally exploit small  and needy borrowers and they often charge high rates of interest taking undue advantage of the acute need of such borrowers. Therefore, it would be just and appropriate if the complainant is held liable to pay simple interest at the rate of 12% per annum.

12.              As a result of above discussion, the complaint is partly allowed with an order that the complainant  shall repay the loan amount of Rs.82,000/- along with interest @12% per annum from 09.01.2008 to 18.05.2008 and from 31.07.2015 till date of actual payment, upon which the OPs shall return the gold ornaments to the complainant. Keeping in view the pecuniary circumstances of the case, there shall be, however, no order as to costs. Compliance of the order be made within 30 days from the date of receipt of copy of order.  Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.   

13.              Due to rush of work and spread of COVID-19, the case could not be decided within statutory period.

 

                             (Jyotsna Thatai)                              (K.K. Kareer)

                    Member                                           President

Announced in Open Commission.

Dated:13.05.2021.

Gobind Ram.