K.V.Krishna Murthy:
The complainant herein pledged certain gold ornaments and availed loan of Rs.54,200/- on 20-03-2012 from the respondent company. Repayable within a maximum period of 12 months. The company has the right to recall the loan at any time before the expiry of period of loan. The interest rate is not visible because of the affixture of stamp at the relevant spot in Ex.P1. The additional interest will be charged at 1% p.a. for every completed month default excluding the month in which loan is closed. Extra rate of interest at 3% p.a. is payable for every additional three months if interest is not remitted monthly/quarterly.
2. A notice as per Ex.B4 dated: 20-03-2013 was sent through Registered Post to the complainant requesting to close or to renew the loan on or before 04-4-2013, failing which the management will be constrained to take necessary steps as deemed fit as per loan agreement. After the receipt of this notice, the complainant made payment of Rs.16,200/- towards outstanding loan on 13-03-2013.
3. The respondent company sold the pledged gold ornaments on 19-8-2013. The company claims that the notice was sent to the complainant through Registered Post on 12-8-2013 as per Ex.B11 in the envelop, Ex.B7, which was returned as unclaimed. The company claims that the pledged articles were sold in public auction under the provisions of 176 of Indian Contract Act – 1872, through which a sum of Rs.75,000/- was realized.
4. In the written version, the company claims, after adjustment of the outstanding amount, Rs.10,821/- was due tobe paid to the complainant by the company and therefore a notice (vide Ex.B9) dated: 09-9-2013 was issued asking the complainant to collect the amount from the date of receipt of notice from the Koppal branch of the company.
5. The complainant claims that there is a deficiency in service on the part of the OP company in selling the pledged articles without intimating her before the selling the gold ornaments, whereas the OP company refutes the allegations.
6. In the complaint, the complainant sought for following reliefs;
- Direct the respondent to accept the due amount in Gold loan bearing its No.F1957 loyalty No.MFKPL 260810111.
- To direct the respondents to return the Gold articles kept under the above the loan account.
- To direct the respondents to pay Rs.50,000/- towards inconvenience and mental agony and loss in business caused to the complaint.
- Further direct the respondents to pay Rs.5,000/- to the complainant towards the cost of this complaint and grant such other relief’s.
7. Section – 176 of the Indian Contract Act – 1872 states as follows;
“Pawnee’s right where pawnor makes default – If the pawnor makes default in payment of the debt, or performance; at the stipulated time of 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 a collateral security; or he may sell the thing pledged, on giving the Pawnor reasonable notice of the sale.
If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.”
8. The point in dispute is whether pawner has been reasonable notice of the sale of the pledged articles prior to the sale as required under Sec. 176 of the Indian Contract Act – 1872.
9. In the instant case, public auction notice as per Ex.B11 was sent to the complainant through Postal Envelop, Ex.B7 through Registered Post. This notice was returned ‘un-claimed’. The address mentioned over envelop is same as that of address furnished by the pawner at the time of obtaining the loan.
10. This notice was retunred to the sender as ‘unclaimed’. The notice deemed to have been served on the pawner in view of Sec. 27 of the General Clauses Act – 1897, which reads as follows;
“27. Meaning of service by post – where any [Central Act] or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression “serve” or either of the expressions “give” or “send” or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.”
11. In the notice, Ex.B11, condition No.3 in the notice states that –
“3. The customer/s – borrower/s or holder of the receipt is permitted to redeem his articles before the date of the auction by paying the Principle, Interest and Auction Expenses.”
12. On the facts of the case, the notice is valid and reasonable also because the notice is dated: 30-07-2013, dispatched on 07-8-2013, reached the addressee on 12-8-2013 and the auction date was on 19-8-2013. Therefore we hold that there was compliance of the issuance of the prior notice of the sale as provided under Sec. 176 of the India Contract
Act – 1872. Therefore, the auction of the pledged articles remains valid.
13. It is also pertinent to notice that subsequent to payment of Rs.16,200/- on 04-4-2013, the pawner did not turn up to clear the debt. Even if her version that she approached the opposite party on 21-8-2013 for payment of outstanding amount, no proof that the complainant possessed requisite amount to repay the full amount on 21-8-2013. Hence we reject her version in this regard.
14. Section – 176 of the India Contract Act – 1872 mandates the pawnee shall pay over surplus to the pawner. In this case, the details of the outstanding amount, etc., not mentioned. In the written version, the OP claims, after the deduction of outstanding amount of Rs.10,821/- was due vide Ex.B9. The written version is also silent on this aspect as to how the figure of Rs.10,821/- was arrived. Anyway, there is no dispute on this aspect. Therefore this amount should have been paid by pawnee. That has not been done. The pawnee should have paid this amount by way of DD or cheque at-least after 11-2-2014, the date on which notice in this proceedings has been served on this respondent. Therefore, we direct that there is a deficiency in service on the part of the OP company in not paying the amount of Rs.10,821/- so far, which resulted in the financial loss to the complaint.
15. For the above reasons, compensation of Rs.3,000/- is awarded towards deficiency in service besides awarding Rs.3,000/- towards litigation expenses. The respondent is directed to make deposit of Rs.16,821/- (Rupees sixteen thousand eight hundred and twenty-one only) in this Forum on or before 30-8-2014. In default, the complainant is at liberty to file criminal complaint u/sec. 27 of the Consumer Protection Act – 1986.
Complaint Partly Allowed.
