THE CONSUMER DISPUTES REDRESSAL FORUM, KOTTAYAM
Present:
Sri. Santhosh Kesavanath P., President
Sri. K.N. Radhakrishnan, Member
CC No. 289/2009
Thursday, the 14th day of February, 2011
Petitioner : Muhammed Ameen
Humayoon Manzil,
Velloor P.O, Kottayam
(By Adv. Zakhier Huzzain)
Vs.
Opposite party : The Proprietor,
Kunnathukalathil Financiers,
Pulimoodu Jn.
Kottayam.
O R D E R
Sri. Santhosh Kesavanath P., President
Case of the petitioner, filed on 29..2..2009, is as follows:
Opposite party is a Money lender come under the purview of Money lenders Act. Petitioner pledged some gold ornaments and availed finance from the opposite party, agreeing to repay the loan amount with interest at the rate of 2% above commercial bank rate. On 10..9..209 petitioner approached the opposite party to pay the loan amount and to release the ornaments. At the time of closing of the loan opposite party demanded interest at the rate of 36% per annum and no receipt were issued to the petitioner for the same. According to the petitioner, as a money lender, opposite party cannot charge interest above 2% of maximum interest charged by the commercial bank. Since petitioner apprehends damages to the articles pledged he remitted the entire amount demanded by the opposite party after filing this complaint. According to the petitioner act of the opposite party amounts to unfair trade practice. So, he prays for a direction to the opposite party to refund the illegal amount collected from the petitioner. Petitioner prays for a compensation of Rs. 10,000/- for the deficiency in service and cost of the proceedings.
Opposite party entered appearance and filed version contenting that petition is not maintainable. According to opposite party they never demanded interest at the rate of 36%. Opposite party issued receipt for the amounts paid. The gold ornaments pledged by the petitioner were taken back. Opposite party contented
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that they had not collected any interest illegally and they are not liable to refund any amount. Opposite party prays for dismissal of the petitioner with their costs.
Points for determinations are:
i) Whether there is deficiency in service or unfair trade practice on the part of the opposite party?
ii) Relief and costs?
Evidence in this case consists of affidavit filed by both sides and Ext. A1 to A5 documents on the side of the petitioner and C1 Commission report.
Point No. 1
The crux of the case of the petitioner is that. Petitioner is forced to remit interest rate for the pledged gold ornaments more than the interest rate which is stated in the money lenders act. According to the petitioner he had paid 36 % interest for the loan amount. Opposite party has a definite case that they never levied interest at the rate of 36 % per annum to the loan amount of the petitioner. Opposite party further contented in the version that receipt were issued for the amount paid. Petitioner had taken an advocate commission. Report filed by the commissioner is marked as Ext. C1. In Ext. C1 commission report, Commissioner reported that on enquiry to the employees of the opposite party they stated that no receipt were given for the amounts paid and no register regarding payment were kept in their institution. So, we are constrained to rely on the affidavit filed by the petitioner that he paid interest at the rate of 36 % per annum for the loan. Hon’ble High Court of Kerala in Sundaram Finance Ltd. Vs. State of Kerala and others (reported in 2009 (4) KHC page 871) stated that non banking finance companies are “Money lenders” coming within the purview of money lenders Act, 1956. Further more the Hon’ble Division bench of the High Court further stated that provisions of chapter III B of Reserve Bank of India Act are intended to protect the depositors, where as provisions of money lenders act are essentially to protect the borrowers. Provisions of both acts are not in conflicts and simultaneously apply to non banking financial companies. In the said dictum Hon’ble High Court opined that interest chargeable should not exceed 2 % above the maximum rate of interest charged by the commercial banks. Here petitioner in his sworn proof affidavit averred that opposite party collected an amount of Rs. 17,115/- from the petitioner in excess. Opposite party has not adduced any evidence to prove in contra to the evidence adduced by the petitioner. So, the
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petitioner’s averments about the collection of excess amount is believable. In our view act of the opposite party in charging excess amount than what stated in money lenders Act 1958 is an unfair trade practice. So, point No. 1 is found accordingly.
Point No. 2
In view of the finding in point No. 1, petition is allowed. In the result opposite party is ordered to refund an amount of Rs. 17,115/- to the petitioner with 12% interest from the date of filing of the petition till realization. Without saying what had happened caused much inconvenience loss and sufferings to the petitioner. Since interest is allowed no compensation is ordered. Opposite party is ordered to pay an amount of Rs. 1,000/- as cost of the proceedings. Opposite party is further ordered under section 14 (f) of the Consumer Protection Act 1986 to discontinue the unfair trade practice and not to repeat the same . Order shall be complied with within one month of the receipt of the copy of this order.
Dictated by me, transcribed by the Confidential Assistant, corrected by me and pronounced in the Open Forum on this 14th day of February, 2011.
Sri. Santhosh Kesavanath P., President Sd/-
Sri. K.N. Radhakrishnan, Member Sd/-
APPENDIX
Documents for the Petitioner:
Ext. A1: Copy of the receipt Dtd: 15..7..2008
Ext. A2: Copy of the receipt Dtd: 16..7..2008
Ext. A3: Copy of the receipt Dtd: 27..8..2008
Ext. A4: Copy of the receipt Dtd: 7..10..2008
Ext. A5: Hand written receipt dtd: Nil.
Documents for the Opposite party:
Nil
By Order,
Senior Superintendent
Received on / Despatched on
