By Smt. Beena. M, Member:
This is a complaint filed under Section 12 of Consumer Protection Act 1986.
2. Complainant’s case in brief is as follows:- The complainant had pledged gold ornaments on various dates and availed a gold loan of Rs.2,35,000/- from the opposite party. The repayment period is 3 months and the rate of interest is 18% per annum. The complainant had taken the loan on the basis of the assurance given by the opposite party at the time of pledging that the loan will be automatically renewed after 3 months and the rate of interest is simple and only 18% per annum. There after the complainant periodically renewed the same and at last when he approached the opposite party to close the loan transaction and get the ornaments the opposite party willfully neglected the complainant and did not ready to receive the amount and asked higher interest rate. On 08-02-2019 when the complainant approached the opposite party for release the pledged gold ornaments by paying the loan amount with interest at the rate of 18% annum the opposite party demanded 25% quarterly compounded interest for releasing the ornaments. As per the provisions of the Kerala Money Lenders Act the opposite party can charge only 18% simple interest towards the gold loan. But the opposite party demanding higher rate of interest and it is a gross violation of law. The opposite party had not right to
retain the gold ornaments of the complainant by asking higher rate of interest instead of lawful rate of interest. After that the complainant issued a lawyer notice to the opposite party demanding the release of the gold ornaments. But even after received the said notice the opposite party not returned the gold ornaments and sent a replay notice to that notice saying flimsy reasons.
3. The Opposite party entered appearance and filed version denying the averments of the complaint and contested the matter. The opposite party admitted the relationship but he denied the other aspect regarding the rate of interest and period of repayment. The opposite party says that the rate of interest is 25 % p.a. and the period of repayment is 3 months. The opposite party never approached the opposite party to release the gold ornaments by paying the loan amount with
interest and the opposite party has entitled to get 25% interest as per the provisions of the Kerala Money Lenders Act. The description and weight of the gold ornaments shown in the complaint are wrong. As per No.1021/14-15A the complainant pledged one bangle, 2 rings, one cross, 2 chains, altogether 50.800 gm gold ornaments were pledged and it having total weight 50.800 gm. Other statements are false. The opposite party further averred that the complainant released the gold which was pledged on 1.9.2015 and on 19.7.2016 by paying the principal amount and interest hence that loans are not in existence. The other two items loans were closed on 12.1.2015 and re pledged the same on that day itself. Now only the items
No.5,6,7,8 are shown in the complaint are in existence and the opposite party is always ready to give back the gold to the complainant if the complainant is ready to pay the entire amount due. The opposite party never asked higher interest. As per the rate specified the Kerala Money Lenders Act, the opposite party is only demanded 20% interest. The intension of the complainant is only to tarnish the opposite party in the society and among the public and obliterate the reputation. The complainant had not entitled to get any relives as prayed.
4. On perusal of complaint and documents the Forum raised the following points for consideration:-
1. Whether any negligence or deficiency of service on the part of opposite
party?
2. Whether the opposite party is entitled to get 20% or 25% interest from
the complainant?
3. Relief and cost.
5. The Complainant was examined as PW-1 and marked Exhibits A-1 series, A-2 and A3. The opposite party examined as OPW-1 and Ext B-1 Series marked. Ext.A1 series is the receipt (8 numbers), Ext.A2 is the lawyer notice, A3 is the reply notice. Ext. B1 series is the application for gold loan .
6. Point No. 1 & 2 :- These points are considered together for the sake of brevity and convenience. The complainant had filed this complaint under section 12 of the Consumer Protection Act, 1986 against the opposite party with the submission that the opposite party asking higher rate of interest and not willing to give back the pledged gold ornaments. The complainant filed proof affidavit in lieu of the chief examination reiterating the matters put forth in the complaint. We have gone through the materials and evidence in hand very carefully and gone through the submissions of the counsels. Undisputedly, the complainant had taken loans from the opposite party by pledging his gold ornaments on various dates. Regarding the rate of interest and the weight of gold pledged are the reaming disputes to be redress. As per Ext A-1 series it is very clear that the complainant was pledged his gold ornaments in the opposite party’s bank on 02-06-2014,
09-09-2014, 12-01-2015. The opposite party did not raised any objection regarding the execution of the Ext.A1 Series. Ext.A1 series documents are the PAWN TICKETS which was issued by the opposite party at the time of pledging the said gold ornaments and it contains the terms and conditions should have to be followed by the parties. The condition is that when the complainant approached the opposite party with the receipt to pay and release the gold ornament, the opposite party is bounden duty to receive the money and take back the PAWN TICKETS and release the gold ornaments. Here all the PAWN TICKETS were in the possession of the complainant himself. On the other hand, the opposite party produced the loan
applications to prove the entire transactions referred in the complaint as well as proof affidavit and the same is marked as Ext B1 series. The learned counsel of the opposite party is vehemently submitted that that the loan taken by the complainant on 2-6-14 and on 12-1-2015 has been repaid with interest and dues on1.9.15 and 19.7.16 respectively and loan taken on 9.9.2014 has been repaid on 12.1.2015 and the same was renewed on that day itself. The opposite party further averred that the Loan No.1018/14-15/A, 1019/14-15/A, 1020/14-15/A, 1021/14-15/A are the only existing loan and the opposite party is always willing to release the same after the payment of principal and interest at the rate of 20%. On perusal of the Ext.A-1 and B1 series documents it do not disclose the rate of interest and nowhere mentioned about the actual rate of interest. On a cross examination of Ext.B-1 the signature appeared in the reverse side appeared differ from the front page of it. The opposite party herein failed to produce cogent evidence to prove his case. There are no believable materials available to substantiate the case of the opposite party. The opposite party is liable to return back the gold ornaments by accepting principal amount with 18% from the date of the loan. This point is answered infavour of the complainant.
7. Admittedly the Opposite party is a non-banking private limited finance firm engaged in the business of advancing money by pledging gold etc., Now the question is considered is as to whether the provisions of the Kerala Money Lenders Act and provisions of the Kerala Prohibition of charging Exorbitant Interest Act,2012. It is well settled that the provision of the Kerala Money Lenders Act are applicable to companies registered under the companies act or societies registered under co-operative Societies Act or even partnership registered under the Partnership Act or the like. And the provisions of Kerala Money Lenders Act are applicable to the non banking financial companies, because they are engaged in money lending business. Admittedly, the opposite party is a money-lender. Under Section 7(1) of the Kerala Money Lenders Act, no money lender shall charge the interest on any loan at a rate exceeding 2% above the maximum rate of interest charged by commercial banks on loans granted by them. Sub-section (3) of Section 7 specifically makes it clear that the money lender shall not demand or take from the debtor any interest in excess of that payable under section (1). The second provision of Section 7(1) of the Kerala
Money Lenders Act empower the state Government by notification specify the rate of interest under sub-section (1) from time to time. By virtue of the said power, the Government of Kerala issued notification, which was published in K.G(P)No. 541 dated 11.03.2005, which is extracted hereunder:-
“S.R.O No. 255/2005:- In exercise of the powers conferred by Section 7 of the Kerala Money Lenders Act, 1958 (Act 35 of 1958) the Government of Kerala, having considered it is necessary in public interest so to do, hereby fix the rate of interest under sub-section (1) of section 7 of the said Act at twelve per cent annum.”
8. More over that The Kerala Prohibition of Charging Exorbitant Interest Act, 2012 also came into force with effect from 07.01.2013. Section 2(1) of the Kerala Prohibition of Charging Exorbitant Interest Act,2012 provides that “ exorbitant interest” means an interest at the rate more that the rate specified in sub-section (1) of Section 7 of the Kerala Money Lenders Act, 1958. Section 3 of the Kerala Prohibition of Charging Exorbitant Interest Act provides that no person shall charge exorbitant interest on any loan advanced by him.
9. Even though the rate of interest is specified in the above act and notification is 12% the complainant herein is conceded that he is ready to pay 18% per annum and hence the rate of interest for the above transaction is hereby fixed as 18% per annum.
10. Point No. 3 :- For the above observations and in view of our findings on points No.1 and 2 the complaint is only to be allowed. The complainant is entitle to release the gold ornaments which was pledged before the opposite party as per the Ext. A-1 series by payment of the principal amount and simple interest accrued it at the rate of 18 % per annum from the date of pledge within 30 days from the receipt of the order of this Forum. In default, the opposite party has the right to proceed to recover the amount due by adopting appropriate legal steps against the opposite party. Considering the fact and circumstances the Forum is hereby decline to order any cost and compensation.
In the result, the complaint is partly allowed. The opposite party is directed to release the entire gold ornaments covered in the Ext.A-1 series to the complainant at the instance of the payment of the principal amount due along with 18% simple interest accrued thereon from the date of default till date of payment.
Dictated to the Confidential Assistant, transcribed by him and corrected by me and Pronounced in the Open Forum on this the 7th day of January 2020.
Date of filing:04.04.2018.
PRESIDENT: Sd/-
MEMBER : Sd/-
APPENDIX.
Witness for the Complainant.:-
PW1. Jose. Complainant.
Witness for the Opposite Party:-
OPW1. Sathyan. P Banker
Exhibits for the Complainant:
A1(a). Pawn Ticket. dt:02.06.14
A1(b) Pawn Ticket. dt:09.09.14
A1(c) Pawn Ticket. dt:09.09.14.
A1(d) Pawn Ticket. dt:12.01.15.
A1(e) Pawn Ticket. dt:12.01.15.
A1(f) Pawn Ticket. dt:12.01.15.
A1(g) Pawn Ticket. dt:12.01.15.
A1(h) Pawn Ticket. dt:12.01.15.
A2. Copy of Letter. dt:17.02.2018.
A3. Letter. dt:08.03.2018.
Exhibits for the Opposite Party:-
B1(a). Gold Loan Application. dt:02.06.14.
B1(b). Gold Loan Application. dt:12.01.15.
B1© Gold Loan Application. dt:09.09.14.
B1(d) Gold Loan Application. dt:12.01.2015.
B1(e) Gold Loan Application. dt:19.06.14.
B1(f) Gold Loan Application. dt:12.01.2015.
B1(g) Gold Loan Application. dt:12.01.2015.
B1(h) Gold Loan Application. dt:09.09.2014.
