Present         :           Sh. Arvinder Singh Khosa, Counsel of Complainant.

            Sh.Vivek Arora, Counsel of Opposite Parties.

ORDER BY AMRINDER SINGH SIDHU, M.A (Eng.),LLM,PRESIDENT

1. The complainant filed present complaint under Section 12 of the Consumer Protection Act, 1986 against the opposite parties for return the gold to the Complainant along with compensation for mental harassment and agony, legal expenses and interest for deficiency in service on the part of the Opposite Parties, Pleading that on 03.05.2016 he took a loan for a time period of 12 months of Rs.2,82,000/- from Opposite party No. 1 and vide loan account No. 01241/MOS/000036 against his pledged gold ornaments weighting more than 160 grams as a collateral security from Sector 46, Branch, Chandigarh.  On dated 2^nd September 2017 some allegedly representative/employees of Opposite Parties visited personally to complainant house and stated that Muthoot Finance (Opposite Party) going auction the entire gold on or before 4^th September 2017 and showed a newspaper cutting. Newspaper cutting has no Name/date or page number or any other validation and he not handover any Document/Notice/or intimation letter regarding auction of gold. As per terms and conditions of loan agreement if borrower failed to pay the loan amount of interest on time then company have right to auction the gold but the company required to  sent a notice to the borrower before 14 days of auction but opposite parties never sent any notice to the complainant regarding auction. As per auction advertisement issued by  opposite parties in the newspaper, they are going to auction of less purity gold NPA account till 31.03.2017 whereas, complainant loan was sanction on 30.05.2016 and complainant gold not came under the category of less purity gold and as per terms and conditions time period of loan was 12 months. The Opposite Parties threatened to auction the Complainant gold against the mentioned terms less purity gold NPA account till 31.03.2017 as per their newspaper cutting. It is pertinent to mention that neither the Complainant falls under the category of less purity gold nor his account was NPA till 31.03.2017. Copy of advertisement of auction is Annexure C-2. The Complainant also served a legal notice dated 08.09.2017, to the Opposite parties that complainant ready to settle the account and they stop the process of auction with the respect of Complainant’s gold. It is pertinent to mention that no reply was received from any of the opposite party. Copy of legal notice is Annexure C-3. When there was no response from the opposite parties, the Complainant telephonically confirmed from  the Branch as well personally from them Branch Manager namely Mr. Bajaj and he clearly stated that the Complainant entire gold was auctioned on 9^th September 2017 as per their record and nothing can be done now. On dated 30 October, 2018 after one year employee of Opposite Parties visited personally at Complainant house again and stated that the Complainant entire gold is still safe with them and they need written request from him, so they can get an approval to get the entire gold back in their Branch and renew the loan. It is pertinent to mention here that now Complainant is still ready to pay the loan amount with interest till September 2017 to get his entire gold back. Regarding this, Complainant sent a notice to the Opposite Parties on 31.08.2018 through registered post as well as E-mail. Copy of notice dated 31.08.2018 is Annexure C-4. The Opposite Parties did not respond positively to the Complainant notice and E-mail sent on 31.08.2018. The Complainant again sends the E-mails on 05.12.2018 and 10.01.2019 for the sake of justice and to get his entire gold back from the Opposite parties but attitude of the Opposite parties was very arrogant. The acts committed by the opposite parties amounted to deficiency, in rendering service, as also indulgence into unfair trade practice as they have not followed terms and conditions of the agreement. As would be seen that there is no violation of the terms of the policy of the loan. Hence, there is deficiency in service on the part of the Opposite Parties. The cause of auction qua the present complaint has arisen on 24.04.2019 (Annexure C-5) when the request of the Complainant was not answered. Copy of E-mail attached an Annexure C-5. The entire gold of the Complainant along with compensation and litigation costs.
2. After the service of notice upon the O.P, the O.P.S appeared before this Commission and filed the written version to complaint which was taken on record taking preliminary objections that the complainant has not approached this Commission with clean hands; it is submitted that the Complainant had availed said loan upon representation and assurance that he shall honour his obligations and undertakings under the terms of the said loan contract; The relationship between the Complainant and the Opposite Party is that of a “ Pawnor” the Complainant has pledged gold ornaments as collateral security for the purpose of securing the repayment of a loan availed by from the Opposite Party Company, which is a non banking Finance Company, registered with the Reserved Bank of India. Section 176 of the Indian Contract Act 1872 provides as Under:

“Pawnee’s right where Pawnor makes default in payment of the debt, or performance; at the stipulated time or the promise, in respect of which the goods were pledged the Pawnee may bring a suit against the Pawnor upon the debt or promise, and retain the goods pledged as collateral security; or he may sell the things pledged, on giving the Pawnor reasonable notice of the sale.

    On Merits, O.P denied the entire allegation made against them. It is denied that except that employee went to him and gave him valid cutting newspaper “……………” in which auction notice was given. It is further submitted that  the above complainant be  directed to approach  the office along with  principal and amount till date/its clearance and dispose off the matter; It is denied that the said officer had left the office on completion of his contract; it is denied that in-fact upon his request the official contracted the complainant to settle the loan and dispose off the matter but all in vain the OPs had now been unnecessarily been dragged to the Court and lastly prayed that the complaint may kindly be dismissed with costs.      

3. Parties led evidence in support of their contentions.
4. We have heard the Counsel for the parties and have gone through the entire record.

        The main issue involved in the present complaint is that whether opposite party is justified in with-holding the gold articles of the complainant for auction without serving notice upon him or not?

5. The main allegation of the complainant is that the Opposite Parties are duty bound to serve a notice of 14 days upon the complainant before initiating the auction proceedings as per clause 7 of the terms and conditions of the agreement between the complainant and the opposite parties, which is placed on record as Annexure C-1. The opposite party denied this allegation and placed on record copy of notice dated 22^nd of July 2017.

1. • Counsel for the appellant argued that copy of insurance policy was not supplied to the appellant and hence, the exclusion clause in the contract of the insurance policy is not binding upon him. He further argued that no proof of sending of insurance policy was ever produced by respondent despite specific contention raised by the complainant that insurance policy was never received by him. He argued that though there is an averment of the OP that the policy in question was delivered through Blue Dart Courier to the Complainant yet in order to prove their contention, no affidavit of any employee of Blue Dart was produced who would have made a statement to have the effect that the policy was delivered to the Complainant nor any acknowledgment slip for having received the article by the Complainant through courier company was produced by the insurance company. He argued that since no policy document was received by the insured and argued that the terms and conditions as alleged to be part of the insurance policy were not binding upon the insured. He argued that policy was issued in the name of deceased Sh. Vijinder Pal Mahajan with his wife Mrs. Veena Mahajan as beneficiary and the same was never refused by the OP and the proper premium of insurance was paid by late Complainant. He argued that as per the specific allegations made in the complaint in para No. 4. No rebuttal to that contention was specifically there in their written reply in para No. 2 and para No. 4 in the rely filed by OP in the District Forum. He argued that Hon’ble National Consumer Disputes Redressal Commission, New Delhi in case of “Ashok Sharma VS National Insurance Co. Limited,” in Revision Petition No. 2708 of 2023 held  in para No. 8 to the point of non- delivery of terms and conditions of the policy. He also cited Hon’ble Supreme Court’s decision given in the matter of “United India Insurance Co. Limited Vs. M.K.J. Corporation” in Appeal (Civil) 6075-6076 of 1995 (1996) 6 SCC 428 wherein the  Apex Court held that a fundamental principle of insurance Law makes it that utmost good faith must  be observed by contracting parties. Good faith forbids either party from concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, “Similarly, it is the duty of the insurers and their knowledge, since obligation of good faith applies to them equally with the assured and further argued that since the terms and conditions were not supplied even on repeated requests the same cannot be relied upon by the opposite party in order to report to repudiate the genuine claim of the wife of the deceased policy holder.”

Recently, Hon’ble Supreme Court of India, in case Bharat Watch Company through its partner VS. National Insurance Company Limited through its Regional Manager, 2019 Lawherald. Org. 915 (Civil Appeal No. 3912 of 2019) decided on 12.04.2019 has held that when insurance company failed to furnish the terms and conditions of the exclusion and special conditions of the policy holder, then the same were not binding on the policy holder.

In such a situation, the repudiation made by Opposite party regarding genuine claim of the Complainant appears to have been made without application of mind. It is usual with the insurance company to show all types of green pasters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel  Vs. Oriental Insurance Co. Ltd., III(2008) CPJ 63 (SC) is fully attracted, wherein it was held that, insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on the pretext or the other, when they are called upon to pay compensation. This ‘take it or leave it’ attitude is clearly unwarranted not only as being bad in law, but ethically indefensible. It is generally seen that the insurance Companies are only interested in earning the premiums and find ways and means to decline claims.

6. However, in the present Complaint opposite parties fail to prove on record that this notice was ever served to the Complainant.Neither the postal receipt is placed on record nor affidavit of the employee of the concerned postal authorities is placed on record. Hence opposite Party failed to prove on record that they served a 14 days notice upon the complainant as per the mandatory requirement of clause 7 of the terms and conditions of the agreement between the parties. In view of the violation of the terms and conditions of the agreement between the parties, the opposite parties are not justified to withhold the gold articles of the Complainant for auction of the same for such a long time period. Moreover, Complainant is ready and willing to pay principal amount of loan along with interest, Hence there is no reason to with-hold the gold to auction it. The auction of gold like articles should be the last option/resort of the financers.
7. Moreover, the loan amount was received by Complainant on third of May, 2016 by pledging his gold articles with the opposite party and time period for the return of principal and interest is for 12 months. Thus Complainant is entitled to return the principal amount along with interest till second of May, 2017 to redeem his gold but Annexure C-2 which is a copy of public notice of the cutting of newspaper vide which Complainant proves that opposite parties initiated auction  proceedings before 31^st of December 2016 without any personal notice served upon the Complainant but by public notice warning, the loanee to pay the principal amount along with interest by 31^st of December 2016, failing which their pledged gold will be auctioned. When the last date of return of principal amount along with interest is fixed for 2^nd May, 2017 as per terms and conditions of repayment of within 12 months, then demand of returning the amount by 31^st of December 2016, failing which Complainant’s gold articles will be auctioned is wrong and illegal. Therefore, it is held to be an unfair trade practice on the part of the Opposite Parties.

“The opposite party relied upon order of the District Consumer Forum at Shrikakulam titled as “Kancharana Versus The Branch Manager, India Infoline Finance Limited, in CC No. 49 of 2016 vide which District Consumer Forum dismissed the Complaint of the Complainant mentioning the order of the Hon’ble National Commission reported in (1) III (1997) CPJ 3 (2) 1996 (2) CPR 44 (3) 1997 NCJ 289 (4) 1996 NCJ 289 wherein the Hon’ble National Commission held that District Forum do not have justification to adjudicate upon the matter in dispute. However, it is observed that the Hon’ble National Consumer Commission in Lathika C. Vs. Branch Manager, Muthoot Finance Ltd, on 04th July, 2016 (Revision Petition No. 166 of 2016, 2016 (3) CPR 155 (NC) held that District Forum has jurisdiction to held the opposite parties liable for the deficiencies and unfair trade practice in this type of disputed subject matter. So, it can safely be held that this Forum has jurisdiction to adjudicate upon the disputed subject matter. In the present complaint, the opposite parties failed to prove on record that they have served a legal notice of 14 days upon the Complainant before initiating auction proceedings of gold articles of the Complaint which amounts to deficiency in service as well as Unfair Trade Practice adopted by O.P.s. Hence, Complaint is partly allowed.

8.  The Opposite Parties are directed to return the gold articles of 160 grams to the Complainant subject to payment of 2,82,000/- as principal amount and Rs.79,717/- as interest and plenty as calculated by opposite parties on 22^nd of July 2017. However, Opposite Parties are not entitled to any further interest or plenty etc because opposite parties themselves remain deficient in service, by not following the terms and conditions of the agreement between the parties and by adoption of Unfair Trade Practice by which complainant was over burdened to pay more interest for the more time period by  withholding the gold for such a long time in their wrongful custody because Complainant was ready and Willing to pay the principal amount alongwith interest.  
9. This order be complied with by the OP(s), within 60 days from the date of receipt of its certified copy.
10. The pending application(s) if any, stands disposed of accordingly.
11. Certified copies of this order be sent to the parties as per rules. After compliance file be consigned to record room.

Announced in open Commission.

Date:25.04.2023

Place: Chandigarh.

(Amrinder Singh Sidhu)

                                                                                          PRESIDENT

                                                                                          (B.M. SHARMA)

                                                                                          MEMBER.

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