BEFORE:

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

HON’BLE DR. SADHNA SHANKER, MEMBER

For the Appellant                Mr Kuriakose Varghese, Advocate

                                       Mr Akshat Gogna, Advocate  

For the Respondent             Ms Ruhini Dey, Advocate

                                       Mr Giri Nagu Kumar, Advocate

ORDER

PER SUBHASH CHANDRA

1.      This appeal under Section 19 the Consumer Protection Act, 1986 (in short, the “Act”) challenges order dated 26.08.2019 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata in Complaint no. 1 of 2015 allowing the complaint.

2.     We have heard the learned counsel for the parties and perused the records. The delay of 47 days in the filing of the appeal was considered in light of the application seeking condonation of the delay. For the reasons stated therein, the delay was condoned in the interest of justice.

3.     Succinctly put, the relevant facts of the case, are that the respondent obtained a loan (Gold Loan) of Rs 10,98,800/- against the mortgage of gold ornaments weighing 549 grams from the appellant on 25.08.2011. The loan was against a receipt which mentioned the terms and conditions of the loan on the reverse as stated on the receipt. The respondent repaid a sum of Rs 79,000/- against this loan in instalments. However, in view of the default in repayment, appellant issued notices to the respondent asking for the repayment failing which the mortgaged ornaments would be auctioned. As the loan was not repaid by the date stipulated, a notice was issued by the appellant on 16.09.2014 asking for repayment of Rs 14,20,600/- within 15 days and thereafter another notice on 18.12.2014 asking the respondent to pay Rs 21,56,050/- by 22.12.2014. The respondent made representations including asking for updated Statements of Accounts that were not considered by the appellant and the mortgaged ornaments were auctioned on 22.12.2014. Respondent approached the State Commission in CC No. 1 of 2015 praying for restraining the appellant from auctioning the ornaments and damages of Rs 25,00,000/- for wrongfully withholding the Agreement and refusing to disclose the rate of interest, mental agony and harassment. The complaint was decided, on contest, in its favour vide order dated 26.08.2019 holding the appellant liable for deficiency in service and directed that it pay Rs 5,00,000/- as compensation within 40 days from the date of order, failing which to pay the amount with interest @ 9% for the period of default. It was also directed not to stake any further claims. Appellant seeks the setting aside of this order.

4.      The appellant’s case is that the loan was against mortgage of gold and was governed by the terms and conditions of the loan printed on the reverse of the undertaking cum sanction letter as per which the appellant reserved the right to sell the pledged/mortgaged gold without prior notice for default. Reliance has been placed on the judgment of this Commission in Standard Chartered Bank Vs. P.N.Tantia & Ors., Revision Petition No. 423 of 1996 which held that when there exists a relationship of creditor and debtor between parties, the rights and duties of the pledger are governed by Section 176 of the Contract Act, 1872 and cannot be enforced under the Consumer Protection Act.

5.      Per contra, respondent contends that the appellant did not provide the copy of the Agreement and the rate of interest to be charged on the subject Gold Loan. Appellant did not respond to its representations and went ahead with the auction of the gold ornaments mortgaged with it. The written statement filed by him before the State Commission was deliberately not shared by the appellant. The rate of interest charged was alleged to be in violation of the RBI Guidelines and contended to have been arbitrarily enhanced without intimation. The appellant’s action of not responding to the respondent’s representations and auctioning of the mortgaged gold was alleged to be mala fide.  

6.      From the record it is not in dispute that the loan against mortgage of gold ornaments was taken by the respondent. It is contended that the terms of the loan were not brought to its notice and that the Statement of Account indicating repayment and outstanding amount was not brought to the respondent’s notice. Therefore, the action of auctioning of the ornaments is challenged in view of deficiency in service by the appellant. Respondent contests the bringing on record, by way of additional affidavit in this appeal, fresh evidence by the appellant. Appellant has placed reliance on its part on the judgment of the Hon’ble Supreme Court in A. Andisamy Chettiar Vs. A. Subburaj Chettiar, Civil Appeal No. 14055 of 2015 decided on 08.12.2015 to contend to the contrary.

7.      From the foregoing it is manifest that the appellant had extended a loan against mortgage of gold ornaments. Terms and conditions of the loan were specified on the reverse of the receipt of the loan. The respondent’s contention that the terms and conditions were not supplied to him cannot be accepted in view of this submission. The respondent has submitted that he is an advocate by profession. The claim of lack of knowledge of the terms and conditions needs to be considered in light of the admitted fact that only Rs 79,000/- of the loan amount stood repaid by the respondent. The respondent has not contended which condition of the terms of the loan was breached by the appellant. The finding of the State Commission with regard to the deficiency also does not mention any specific condition or terms of the loan sanction letter which has been challenged specifically to allege deficiency.

8.      In view of the foregoing, we are not persuaded by the arguments of the respondent. The impugned order is therefore held to be perverse and not sustainable. Consequently, the appeal is allowed and the order of the State Commission is set aside.

9.      Pending IAs, if any, stand disposed of with this order.