BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 14^TH DAY OF JULY 2023

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-

1. Total amount claimed of Rs.2,93,404/- with future interest @ 18% p.a., till realization.
2. Rs.1,00,000/- for damages/compensation and mental harassment
3. Cost of proceedings of complaint.
4. Such other relief which is Hon’ble Commission deems fit.

2. The case set up by the complainant in brief is as under:-

Complainant has obtained gold loan by pledging his gold ornaments of 130.100 grams on 24.07.2020 with the OP1, against which he received loan of Rs.3,07,000/-. OP1 fixed up the loan maturity date would be 24.06.2022. OP1 has issued receipt vide index No.SA226516, loan account No.72550097.

3. As per the terms and conditions of the OP1 bank, complainant has very promptly repaid the monthly installments. He has also cleared the loan amount of Rs.90,000/- for loan account No.7302490.

4. During March 2022 complainant approached the OP1 to return back pledged gold jewellary.  OP1 informed that the jewellery already been auctioned by the OP1 as the complainant could not pay the interest as per terms of loan against the borrowed amount. Complainant requested the OP1 that he will ready to deposit the entire interest as per the rules and requested them to return his gold, but OP 1 not replied. Complainant issued legal notice dated 19.05.2022. Hence the complainant was compelled to file this complaint.

5. In response to the notice, OPs appears and files version and submits that the averments and contentions made in the complaint are all false, unfounded and incorrect and OP bank has denied. The entire case made by the complainant is nothing but a fictitious one and they are not entitled to any relief.

6. The Ops further submits that on the basis of the application form duly signed by the complainant OP bank has sanctioned loan in the year 2021 for an amount of Rs.3,07,000/- payable along with interest within 24 months and the EMI commencing from 01.07.2020 to 24.06.2022 and the same was renewed from time to time.  Since the complainant was unable to repay the loan amount within the time at the request of the complainant the loan was renewed from time to time.  The OP has also furnished the details of renewal of the loan amount from 24.06.2020 till 23.06.2021.  The complainant had willfully defaulted in the repayment of the outstanding dues despite of reminders from the bank.

7. It is further case of the OP that this OP bank had issued notice intimating the default made by the complainant through letter dated 13.01.2022 and on the default and failure of the repayment of the gold loan amount this OP bank had issued loan recall notice dated 24.01.2022 recalling the entire loan facility of Rs.3,32,700/- along with contractual interest and charges to be paid within seven days from the date of receipt of the notice. Despite receipt of the recall notice the complainant failed to comply with the same as such the OP bank has constrained to issue notice for sale of pledged gold dated 09.02.2022 but the notice issued was undelivered with reason addressee left.  This OP bank have sent all the notices to the last known address of the complainant and the OP bank also issued final notice on 03.03.2022 stating that it has also issued public notice for the auction of the complainant’s pledged gold securities in the newspaper Vijayavani English Edition on 18.02.2022 and fixing of the auction for sale of pledged gold on 08.03.2022.

8. This OP bank after giving sufficient opportunity to the complainant to close the loan account the complainant neglected and failed to repay the loan amount. Hence the OP bank having left with no other option published auction sale notice of the gold security on 18.02.2022 intimating the general public that auction sale shall be conducted on 25.02.2022 but due to inadvertent circumstances the said auction could not be conducted on the date mentioned in the public notice and later it was rescheduled on 08.03.2022 between 9.30 am to 5.30 pm.

9. It is further case of the OP that on 08.03.2022 the gold security of the complainant’s account was successfully auctioned for a total amount of Rs.4,64,400/- against the loan due of Rs.3,43,570/- in account No.73092490 and from the excess amount of Rs.1,07,303.79 ps., of the sale proceed Rs.9,381/- was adjusted towards the due of consumer durable loan account No.8389205 and a DD bearing No.007595 dated 21.04.2022 for an amount of Rs.97,922.79 ps., was issued to the complainant along with post sale notice, as per clause 27 of the loan agreement.   The complainant sent a legal notice on 19.05.2022 to this OP, even after receival of the notice, this OP has not provided proper response are all false.  There is no deficiency of service or negligence on the part of the OP and hence there is no question of any mental agony to the complainant for seeking compensation. The act of the OP is as per the terms and conditions of the loan agreement and does not amount to deficiency in service or unfair trade practice.  As per the decision of the Hon’ble Supreme Court in SGS India Ltd., -vs- Dolphin International Ltd., held that onus of truth of deficiency in service is on the complainant under the C.P.Act. Therefore, mere allegations of deficiency in service on the part of the OP bank will not be sufficient for passing order against the bank unless the complainant discharges initial burden of proving it by placing sufficient materials before the Court. The complaint is devoid of merits and contrary to settled principles of law. Hence OP prayed for dismissal of the complaint with compensatory cost.

10.  The complainant has filed his affidavit evidence and relies on 08 documents.  Affidavit evidence of official of OP has been filed and OP relies on 08 documents.

11. Heard the arguments of both the parties.  Perused the written arguments filed by both the parties.

12. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OPs?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

13. Our answers to the above points are as under:

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

14. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, evidence, written arguments and documents produced by both the parties.

15. The complainant has borrowed Rs.3,07,000/- loan amount by pledging 130.100 grams of gold from the OP bank. The complainant was regular in paying the monthly installments without due and he has also cleared the loan amount of Rs.90,000/- for account No.7302490.  During the lock down period the complainant was unable to repay the loan amount.  After that the complainant with an intention to clear the outstanding the loan visited the OP bank and requested them to return the gold mortgaged with the OP by receiving the balance amount.  When the OP have not at all given any reply he was forced to approach this Commission.  The complainant has also got issued legal notice on 19.05.2022, but the OP have not given any reply. 

16. On the other hand, the case of the OP is that the complainant has raised the loan amount by pledging the gold ornaments.  They have denied that the complainant was regular in payment of loan amount.

17. It is the specific contention taken by the OP that after availing the facility the complainant failed to repay the amount of Rs.3,32,700/- and on maturity the loan was not renewed. Contrary to the terms of the agreement the complainant has defaulted in making payment of the said gold loan inspite of sufficient demands and reminders.  The OP have issued a demand notice on 13.01.2022, 24.01.2022 and 09.02.2022 and when there was no response the OP bank invoking the terms of the facility has recalled the facility vide loan recall notice dated 09.03.2022.  All the notices were sent to the last known address of the complainant and the OP1 and 2 had also published the auction notice in two leading newspapers for fixing of auction for sale of pledged gold on 08.03.2022. In view of the default in the repayment of the loan installments and breach of the terms of the agreement, the OP bank has recalled the outstanding of the said loan and declared that the entire loan amount outstanding together with interest with all cost charges and expenses and other sums due and payable under the agreement.  The same was notified to the complainant through notices demanding him to pay the outstanding amount. Inspite of the same the complainant failed to clear the amount hence the OP bank had to sell the gold pledged in auction on 08.03.2022 for an amount of Rs.4,64,400/- and same was adjusted towards the dues.  The OP have also sent DD of Rs.97,922/- the difference amount along with post sale notice.  Under these circumstances the prayer sought by the complainant cannot be granted as the complainant admittedly had defaulted in payment of the installments of the OP.

18. On these back ground the evidence and documents produced by both the parties. The complainant has produced Ex.P1 to P7. Ex.P1 is the loan sanction order, dated 24.06.2020, Ex.P2 is the receipt against gold pledged, Ex.P3 is the loan statement, Ex.P4 is the legal notice, Ex.P5 is the postal receipt and Ex.P6 is the postal track consignment for having delivered the notice to OP1, Ex.P7 is the copy of the Pan card and Ex.P8 is the copy of the Aadhar card.

19. On the other hand the Ops have also produced Ex.R1 to R8 documents.  Ex.R2 is the loan sanction order, Ex.R3 and R4 are the copies of the demand notices, Ex.R5 is the copy of the final sale notice, Ex.R6 is the bank statement and Ex.R7 is post sale notice and Ex.R8 is the copy of undelivered speed post.

20. On perusal of the entire evidence and documents it is clear that there is no dispute relating to the transaction took place between the complainant and OP bank. Admittedly the complainant has taken the loan of Rs.3,07,000/- by pledging the gold ornaments worth 130.100 grams. The specific contention taken by the OP is that, the complainant has not paid the installments regularly and he has committed default. Hence they have recalled the entire loan and they have put the gold for auction after following the procedure and finally they have conducted the auction on 08.03.2022 and the complainant’s pledged gold ornaments are auctioned for Rs.4,64,400/-. Out of that the OP have deducted Rs.3,43,570/- and from the difference amount of Rs.1,07,303.79 ps., of the sale proceeds Rs.9,381/- was adjusted towards CD loan account and they have issued the DD of Rs.97,922.79 ps., along with post sale notice.  

21. It is clear from the Ex.P1 and Ex.R2 both are the same documents produced by both the parties that the loan maturity date is 24.06.2022.  The OP have conducted auction even though the notice issued was not served to the complainant on 08.03.2022 before the loan maturity date. As per the say of the complainant he was irregular in payment of installments and during covid period and after that he has approached the OP during March 2022 i.e., before the loan maturity period and requested for release of the ornaments by receiving the balance loan amount with interest. The OP bank has recalled the outstanding loan amount on the ground that the complainant was in default in repayment of the loan installments and it amounts to breach of the terms and conditions of the loan agreement and hence they have taken steps to auction the gold for the satisfaction of the loan amount. The OP bank have taken steps to auction the gold even prior to the loan maturity date. If the OP bank would have served the notice personally before conducting the auction the complainant would have made arrangements for release of his gold ornaments by paying the amount due to the OP bank.  The OP bank have not given sufficient opportunity to the complainant to clear the loan amount. Even though the value of the gold was approximately Rs.5,000/- per gram which amounts to Rs.6,50,500/- for the gold ornaments pledged by the complainant of 130.100 grams.  The OP bank have auctioned the gold for Rs.4,64,400/- and they have adjusted to the loan amount of Rs.3,43,570/- and also they have adjusted Rs.9,381/- towards CD loan account and they have issued DD for Rs.97,922.79 ps., along with post sale notice to the complainant.  The complainant has waited to clear the loan till the loan maturity date. He has approached the OP bank even earlier to the maturity date in March 2022. The OP bank have conducted the auction even prior to March 2022 and hence they have not responded to the complainant either to return the gold ornaments or demanded the complainant for repayment of the loan amount.

22. When the OP have conducted the auction without proper service of the notice to the complainant prior to the loan maturity date is illegal. In view of this the complainant has lost his valuable gold ornaments and he has suffered mental agony and also financial loss. The OP bank have sold the gold ornaments for a lessor price even though the one gram of the gold was worth Rs.5000/- at the time of conducting the auction. Under these circumstances the complainant has also sustained financial loss mental agony. Hence the complainant is entitled for the relief claimed in this complaint.  Hence we answer point No.1 in affirmative and point No.2 partly in affirmative.

23. Point No.3:- In view the discussion referred above we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OP is directed to pay Rs.2,93,404/- the difference amount with interest at 9% p.a., from the date of auction i.e., 08.03.2022 till realization.
3. OP is further directed to pay compensation of Rs.50,000/- along with litigation cost of Rs20,000/- to the complainant
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.2,93,404/- till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 14^TH day of July, 2023)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1;