Kerala

StateCommission

A/13/308

THEMANAGER, MUTHOOT FINANCE LTD - Complainant(s)

Versus

RAVEENDRAN - Opp.Party(s)

C.S RAJMOHAN

21 Nov 2014

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL

COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM

 

APPEAL NO.308/13

JUDGMENT DATED 21/11/2014

 (Appeal filed against the order in CC No.222/2012 on the file of CDRF,Idukki dated, 29/01/2013)

 

 

PRESENT:

 

SMT. A. RADHA                             :         MEMBER

SHRI. K. CHANDRADAS NADAR :        JUDICIAL MEMBER

SMT. SANTHAMMA THOMAS    :        MEMBER

 

APPELLANTS:

 

1. The Branch Manager,

Muthoot Finance Ltd., Thookupalam, Idukki.

 

1. The Muthoot Finance Ltd., Muthoot Chambers,

Banerji Road, Ernakulam (represented by The 1^st OP)

 

1. Adv: Beena John, Muthoot Finance Ltd., 2^nd Floor,

Infant Jesus Building, Banerji Road, Kochi

(represented by the 1^st op)

 

(By Adv:  C.S. Rajmohan)                   

 

                   Vs

 

RESPONDENT:

 

          Raveendran.S., Preeja Bhavan,

Mundiyeruma, Parathode,

Kallar P.O., Idukki.

         

 

                                      

JUDGMENT

 

SMT. A. RADHA  :  MEMBER

 

This appeal arises out of the order passed in C.C.No.222/12 on the file of CDRF, Idukki wherein the Forum Below allowed the complaint.

2.  The brief facts of the case are that the complainant availed a loan of Rs.1,50,000/- from the 1^st opposite party on 18/8/2011 by pledging 69.10 gm of gold ornaments. The closing date for the loan was 16/9/2011.   It is alleged in the complaint that the opposite party assured the interest rate of loan @ 1% for Rs.100/-.  It is the allegation of the complainant that when he approached the opposite party to repay the loan amount, the opposite party demanded Rs.1,99,736/- towards the closing of the loan amount.  The opposite party assured a deduction of Rs.6,630/-.  As the complainant was not provided with the statements of accounts, the complainant approached the opposite party again on 25/9/2011 and by that time the opposite party insisted the complainant to pay Rs.2,02,360/-.  The auction notice was issued to the complainant as on 11/9/2012 without giving the details of the interest calculation.  It is stated in the complaint that the complainant approached the opposite parties attracted by the advertisement in the newspaper that they are giving loan with 1% interest for Rs.100/-.  The complaint is filed for getting the statement of accounts and to restrain the opposite parties from auction sale of the gold ornaments and also for compensation of Rs.50,000/-.

3.  The opposite party filed written version contending that the opposite party is a non-banking finance company in-corporated under the Company’s Act 1956 and registered Under Section 45(1)(A) of the Reserve Bank of India Act 1956.  The relationship between the complainant and the opposite party is that of a debtor-creditor relationship which does not come under the term ‘service’.   Hence  the  complainant  is  not  a  ‘consumer’  under  the  Consumer  Protection  Act  and there does not arise the question of deficiency of service or unfair trade practice in this case.  It is admitted that the complainant availed a loan for Rs.1,50,000/- by pledging 69.10 gms of gold ornaments on 18/08/2011.  The interest rate and penal interest were specifically stated in the pledge form which was fully understood by the complainant who signed the form while pledging the gold ornaments and received the loan amount.  The interest rates for different periods were also mentioned in the pledged form.  The rate of interest for 1 month is 24% p.a, for 2 months 25% p.a, for 3 months 26% p.a, for 6 months  28% p.a and for one year 29% p.a.  The opposite party denied the allegation made by the complainant that interest rate is only 1% for Rs.100/-.  The complainant can close the loan at any time but he is bound to remit the interest and penal interest as per the pledge form applicable to the relevant period.  After pledging the gold the complainant had not turned up to close the loan account.  The complainant availed the loan under Super Personal Loan Scheme (SPL).  The complainant borrowed the maximum amount per gram of gold for which the interest rate was also high.  As per the SPL scheme if a customer does not redeem his pledge within the loan period the company is at liberty to recover the outstanding dues in such accounts by auctioning the ornaments pledged by customers.  The complainant was having the loan account No.SPL-13502. If the customer does not redeem the ornaments within a period of 12 months penal interest also will be calculated against the loan amount.  The complainant is estopped from challenging the interest rate after signing the terms and conditions. The opposite party is functioning under the guidance and in compliance with the directions of RBI.  The complainant is not entitled to get any relief from the opposite party and the complaint is only to be dismissed with cost.

4.  No oral evidence adduced by both parties.  Exbts:P1 to P3 and Exbts:R1 to R3 were produced on the part of complainant and opposite parties respectively.

5.  The submission made by the counsel for the appellant is that the complainant is not a consumer and there is only debtor creditor relationship.  The appellant is functioning as a non-banking finance company as per the directions of the Reserve Bank of India.  The     non-banking financing companies charge the rate of interest in lieu of the terms and conditions of the loan agreement entered into between the borrower and the company.  In order to ensure transparency in such matters the NBFCS have been advised by Reserve Bank of India to adopt Fair Practice Code with the approval of their board.  Admittedly the respondent availed a loan amount of Rs.1,50,000/- pledging      69.10 gm on 18/8/2011 in Account No.SPL-13502.  The complainant had not redeemed the ornaments within the time of 12 months and the company is at liberty to recover penal charges for the loan amount and the outstanding dues by auctioning the ornaments pledged.  The respondent had already signed the terms and conditions in the pledge form and was well aware of it.  No advertisement was given by the appellant giving low rate of interest.  The advertisement produced by the complainant was dated 19/11/2012 whereas the complainant had availed the loan on 18/8/2011.  The complainant availed the loan under SPL whereas the advertisement produced by the complainant pertains to scheme BVL and that too for a subsequent date.  The appellants have no liability to compensate the complainant as there is no unfair trade practice or deficiency in service on the part of the appellant.  No amount was re-paid by the respondent to redeem the pledged ornament even after the lapse of one year.  The Forum Below ignored the terms and conditions in the pledge form and allowed the complaint which is illegal.

6.  The grievance of the complainant is that he was charged with higher rate than in the advertisement given by the appellant.  As per the advertisement the appellants are charging only 1% interest for Rs.100/-.  The complainant admitted that he availed a loan for Rs.1,50,000/- wherein he had not repaid any amount.  In order to settle the account, the respondent approached the appellant’s office and the appellants demanded Rs.1,99,736/- thereafter though a deduction of Rs.6,630/- was offered, the complainant requested for the statement of accounts of interest.  On 25/9/2012 the complainant was insisted to pay Rs.2,02,360/-.  An auction notice was also issued to the complainant as on 11/9/2012.  The complainant’s request for the statement of accounts was denied and the opposite parties were very hasty for auction sale of gold ornaments.  This act of the opposite parties amount to unfair trade practice and prayed for compensation.

7.  We find that the complainant availed the loan of Rs.1,50,000/- as on 18/8/2011.  It is evident from   Exbt.R3 which was signed by the complainant wherein it is stated that it is a Super Personal Loan (SPL).  The terms and conditions on the reverse side of the pledge form were also signed by the complainant.  Hence it is evident that the complainant is well aware of the terms and conditions of the agreement.  The   opposite party is registered with RBI as Non Banking Finance Company. The loan granted by them and the rate of interest to be charged by the company is governed by the terms and conditions of the loan agreement entered into between the borrower and the NBFC.  It has to adopt Fair Practices Code with the approval of the board of the company.  Hence the rate of interest is fixed by the opposite parties as per the loans offered to the customers.  The complainant availed the loan on 18/08/2011 and the paper publication produced by the complainant as Exbt:P1 is dated 19/11/2012 which pertains to BVL scheme by the opposite parties.  We would like to point out that no retrospective effect can be made applicable to an advertisement published by the opposite parties on a subsequent date and it is specifically mentioned that the scheme as BVL and not SPL.  No evidence adduced by the complainant that he had remitted any amount within the stipulated period of 12 months after availing loan from the opposite party.  The complainant availed the maximum loan amount under the SPL Scheme for which the rate of interest is high and the appellant is entitled to charge penal interest as the complainant had not remitted the amount in due time.  The complainant was given sufficient notice regarding the auction.   A contract is binding on the parties with its terms and conditions.  In the instant case, the complainant is bound by the terms and conditions of the SPL Scheme and we are of the considered view that the complaint does not find any merit and is only to be dismissed. 

In the result, appeal is allowed setting-aside the order passed by the Forum Below.

The office is directed to send a copy of this order to the Forum below along with LCR.

 

 

 A. RADHA          :        MEMBER

 

K. CHANDRADAS NADAR  :        JUDICIAL MEMBER

 

 

SANTHAMMA THOMAS     :        MEMBER

 

 

 

Sa.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KERALA STATE CONSUMER

                                                                  DISPUTES REDRESSAL

                                                           COMMISSION

THIRUVANANTHAPURAM

 

 

 

 

 

 

APPEAL NO.308/13

JUDGMENT DATED 21/11/2014

 

 

 

 

 

 

 

 

 

 

Sa.