Andhra Pradesh

Chittoor-II at triputi

CC/19/2014

Anasam Reddy Venkataraam S/o. Late A.Pratap Sundar Rami Reddy - Complainant(s)

Versus

The Branch Manager ,Manappuram Finance Limited, - Opp.Party(s)

M.Vani

24 Jul 2015

ORDER

Filing Date:17.04.2014

Order Date: 24.07.2015

 

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

CHITTOOR AT TIRUPATI

 

 

      PRESENT: Sri.M.Ramakrishnaiah, President ,

        Smt. T.Anitha, Member

 

 

FRIDAY THE TWENTY FOURTH DAY OF JULY, TWO THOUSAND AND FIFTEEN

 

 

C.C.No.19/2014

 

Between

 

A.Venkatram,

S/o. late. A.Pratap Sundar Rami Reddy,

Hindu, aged about 48 years,

Plot Nos.39 and 42, S.S.Nagar,

Chennai Road,

Srikalahasti Town,

Chittoor District.                                                                              … Complainant

 

 

And

 

The Branch Manager,

Manappuram Finance Limited,

Nagari Street,

Srikalahasti,

Chittoor District.                                                                              …  Opposite party.

 

 

            This complaint coming on before us for final hearing on 07.07.15 and upon perusing the complaint, written version and other relevant material papers on record and on hearing M.Vani, counsel for the complainant, and M.Giri Babu, counsel for the opposite party, and  having stood over till this day for consideration, this Forum makes the following:-

 

ORDER

DELIVERYED BY SRI. M.RAMAKRISHNAIAH, PRESIDENT

ON BEHALF OF THE BENCH

           

            This complaint is filed under Section-12 of C.P.Act 1986 by the complainant for the following reliefs 1) to direct the opposite party to state the outstanding due amount that is payable by the complainant towards discharge of the schedule mentioned loan with interest as per the approved guidelines and to receive the same from the complainant and release the gold ornaments, 2) to direct the opposite party to pay a sum of Rs.25,000/- towards compensation for causing mental agony, 3) to direct the opposite party to pay the costs of the complaint and 4) to pass such other orders as the Forum may deem fit and proper in the circumstances of the case.

            2.  The averments of the complaint in brief are:- that the complainant availed the following gold loans by pledging gold 1) loan No.0121020700001828 dt:28.08.2012 for a sum of Rs.52,000/-, 2) loan No.0121020700002678 dt:31.12.2012 for a sum of Rs.2,41,000/-, 3) loan No.0121020700002624 dt:27.12.2012 for a sum of Rs.3,10,000/- and 4) loan No.0121020700002630 dt:29.12.2012 for a sum of Rs.1,77,000/-. At the time of availing loan, the rate of payable interest is at 25% p.a., which is much against the advertisement given by the opposite party. In addition to that opposite party is also charging penal interest and penal charges if the loan is sought to be discharged before the loan period. Opposite party is charging exorbitant rate of interest from the customers without following the guidelines of R.B.I. in respect of levying interest. That on 02.08.2013 the complainant paid a sum of Rs.14,000/- to the opposite party expressing his intention to pay the outstanding balance in respect of his loan No.0121020700001828 and the opposite party passed a receipt for the said amount of Rs.14,000/-.

            3.  The complainant approached the opposite party with an intention to discharge the entire debt in the month of December 2013 and requested the opposite party to furnish the exact amount to be paid by the complainant, so as to redeem the pledge. The opposite party levied interest higher than the agreed rate of interest and asked the complainant to make payments and further stated that all the gold ornaments that were pledged will be put in auction even without notice to complainant for which he requested the opposite party not to do so and requested some time to discharge the entire debt, that the complainant visiting the office of opposite party and requesting to receive the amount and release the gold ornaments but the opposite party did not respond and bluntly stated that all the gold ornaments were auctioned and refused to furnish the details of auction. Due to the behaviour of opposite party, complainant is put to lot of mental agony and monitory loss. So far as gold loan is concerned 60% of the value of the gold pledged will be advanced as loan, auctioning the pledged gold ornaments amounts to ‘unfair trade practice’ and there is deficiency in service on the part of opposite party. Hence the complaint.

            4.  The opposite party filed its written version admitting the loans referred to above availed by the complainant and further contended that the agreed interest is 25%. 3% penal interest will be charged only after tenure of loan, that the complainant at the time of availing loan on pledging gold ornaments executed documents agreeing the rate of interest, penal interest, reset date, disclosing the items of gold pledged and terms of loan etc. As per the circular DNBS.CC.PD.No.266/03.10.01/ 2011-12 dt:26.03.2012 titled “Guidelines on Fair Practices Code for NBFC’s of the Reserve Bank of India, penal interest can be charged against the late payment of loan. The opposite party denied parawise allegations in the complaint and further contended that since the loan period of pledge in the above said 4 loans was lapsed, the opposite party intimated date of expiry of loan and the loan terms and requested the complainant to release the pledged gold articles by paying loan amounts, else the ornaments will be auctioned, auction notices were also served on the complainant. The complainant even on lapse of 6 months after expiry of loan period of one year, did not pay any amounts to the pledged articles. The complainant postponed the time by giving letters dt:02.08.2013 and 03.10.2013 requesting time and suggested some dates by himself for discharging / redeeming the pledge, but failed to stick on to his promise and redeem the pledge gold ornaments. Inspite of prior notice and auction notice, the complainant negligently and intentionally avoiding to redeem the pledge even after serving auction notice on him. The principal loan amounts and interest exceeded the cost of the gold pledged and company sustained loss, as the auction amount was not sufficient to appropriate the loan amounts. The dates of auction, bid amount, pledged settlement amounts were furnished at page.8 of written version. The complainant is a defaulter, there is no deficiency in service on the part of opposite party and prays the Forum to dismiss the complaint with costs.

            5.  Complainant as well as opposite party have filed their respective chief affidavits, written arguments and got marked Exs.A1 to A7 for the complainant and Exs.B1 to B14 for the opposite party.

            6.  Now the points for consideration are:-

            (i).  Whether the opposite party is claiming exorbitant rate of interest?

            (ii).  Whether there is deficiency in service on the part of opposite party?

            (iii).  Whether the complainant is entitled to the compensation of Rs.25,000/-?

            (iv).  Whether the complainant is entitled to the reliefs sought for?

            (v).  To what relief?  

            7.  Point No.(i):-  in order to answer this point, we have to refer Exs.B5, B6, B7 and B8, which are equivalent to Exs.A1 to A4. In those documents under the table just above the terms and conditions, it was specifically mentioned the rate of interest at columns 2,3,4,5,6 and 7. So far as the loans of the complainant is concerned         6^th column is relevant, which is GL-C1 scheme. In columns 2,3,4,5 as well as column.6, the maximum rate of interest is only 24% with monthly compound interest, whereas Ex.B1 shows the rate of interest at 24%, Exs.B2, B3 and B4 shows that the opposite party has claimed interest at 25%, which is quite against the terms and conditions referred to in Exs.A1 to A4 / Exs.B5 to B8. It is not specific in column.6 of Exs.A1 to A4 / Exs.B5 to B8 when the compound interest will be charged i.e. to say whether it will be charged if installment is not paid or whether it will be charged inspite of payment of installments or whether it will be charged after expiry of reset period of one year, if the customer failed to pay the installments. It seems that the opposite party taking advantage of such column and such mentioning as monthly compound interest and collecting more amounts under the guise of monthly compound interest from the customers and making them penalized even though they have pledged gold ornaments with the opposite party for availing loans to meet their necessities. The complainant in his complaint, chief affidavit, as well as written arguments stated that the opposite party is releasing loan only equivalent to 60% worth of the gold ornaments pledged, which was not disputed or denied by the opposite party in specific terms, when such is the case, why they are charging monthly compound interest. In view of the documents under Exs.B1 to B4, it is evident that the opposite party is charging interest more than the agreed rate of interest, by this way also the opposite party causing financial burden to the customers. The opposite party did not file any scrap of paper that he is claiming rate of interest basing on the guidelines given by the R.B.I. The interest portion on the principle amounts and also the penal interest there on were not mentioned either in the written version and no such calculations were submitted to the Forum. Thus, the opposite party, it seems collecting exorbitant rate of interest from the customers, which is unfair on the part of the opposite party. Accordingly this point is answered.

            8.  Point No.(ii):-  So far as this point is concerned, making publications, disclosing that they will charge 24% interest on the gold ornaments pledged and loans will be released accordingly and infact claiming more interest than the agreed rate of interest towards the loan amount apart from charging penal interest at 3% over and above the agreed rate of interest is nothing but penalizing the customers.

            As per Section-2(1)(o) of C.P.Act service means:-                                             

“service” means service of any description which is made available to potential (users and includes, but not limited to, the provision of) facilities in connection with banking financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both (housing construction) entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

 

            Here in this case, the opposite party is expected to extend its services for its customers / consumers while financing the customers on pledging gold ornaments. Now it is necessary to define what is deficiency?

Section-2(1)(g) of C.P.Act defines the word deficiency:

“deficiency” means any fault, imperfection, short coming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

 

             So, in the case on hand, the opposite party having advanced the loan amounts accepting pledging of gold ornaments with specific terms and conditions, the opposite party ought to have collect the penal interest if the customer fails to pay the installments within the reset period as mentioned in the terms and conditions prescribed under Exs.A1 to A4 / Exs.B5 to B8 and it appears that the opposite party has claimed exorbitant rate of interest at 25% along with penal interest at 3% with monthly compounding, which is quite against the guidelines / norms set out by the RBI. No document is filed in its support that claiming interest at 24% or 25% with monthly compounding and also penal interest of 3% over and above the admitted rate of interest. In view of the above faults and defects, we are of the opinion that there is deficiency in service on the part of opposite party. Accordingly this point is answered.

            9.  Point No.(iii):-  to answer this point, it is pertinent to state that the complainant has not approached the Forum with clean hands. The complainant has nowhere mentioned in his complaint, chief affidavit or written arguments, the purpose of availing the said loans, whether that loan is availed for commercial purpose or for meeting his family necessities etc., that the complainant having availed 4 loans         1) loan No.0121020700001828 dt:28.08.2012 for a sum of Rs.52,000/-, 2) loan No.0121020700002678 dt:31.12.2012 for a sum of Rs.2,41,000/-, 3) loan No.0121020700002624 dt:27.12.2012 for a sum of Rs.3,10,000/- and 4) loan No.0121020700002630 dt:29.12.2012 for a sum of Rs.1,77,000/-, failed to pay even a single installment in any month except a sum of Rs.14,000/- on 02.08.2013 in his loan No. 0121020700001828, nothing was paid though the reset period of one year is going to be expired and though the opposite party has given him notices as admitted by the complainant in his letter dt:02.08.2013 in which he requested the opposite party to give time so that he will discharge entire dues on or before 31.08.2013 and in another letter dt:03.10.2013 also he stated that his gold pledged in the above said account numbers was transferred to Auction Centre Tirupati and informed the opposite party that he will repay the above said gold loan on or before 15.10.2013 and requested the opposite party to oblige his request. In his letter dt:02.08.2013 under Ex.B10 he admitted that the opposite party has issued urgent notices and auction notices. He further stated that he has other due loans for a sum of Rs.12,31,290/- and that he is now in financial crises and he will get money within 15 days and he will clear the loans on or before 31.08.2013. So, it is apparent on record that the complainant has availed number of loans and committed default in payment of installments. The principle amounts availed under the present 4 loans is Rs.7,80,000/- apart from other admitted pending loans in a sum of Rs.12,31,290/-. Having availed the loans in huge amounts in lakhs of rupees, he did not disclose for what purpose he availed the said loans, whether it is for any commercial purpose or to advance the same to some other persons by the complainant etc. So it seems that he is also suppressing the facts and approached the Forum with unclean hands. The complainant having committed default is not supposed to seek any compensation. We relied on a decision reported in 1(2014) CPJ 509 (NC) Alliance Inorganics Ltd Vs. Pradeshiya Industrial and Investment Corporation of UP Ltd & Anr.  in which their Lordships held - Consumer Protection Act 1986 – Section-2(1)(g), 21(a)(1), 26 – Banking and Financial Institutions Services – Loan – Default in payment – Rehabilitation Package not approved – Suppression of fact – Property auctioned to recover loan - ... Complainant failed to abide as per agreement – Complainant was defaulter and even the banks did not want to come to its rescue – Complainant did not deserve rehabilitation package in view of its previous record. Complaint is frivolous and vexatious. Under the above circumstances, we are of the opinion that the complainant is not entitled to the relief of compensation of Rs.25,000/-. Accordingly this point is answered.

            10.  Point No.(iv):-  in order to answer this point, it is pertinent to mention the first relief sought for in the complaint, which is as follows “to direct the opposite party to state the outstanding due amount that is payable by the complainant towards discharge of the schedule mentioned loan with interest as per the approved guidelines and to receive the same from the complainant and release the gold ornaments”. The complaint is filed on 17.04.2014. The gold ornaments were auctioned by the opposite party in connection with the 4 loan accounts of the complainant referred to above on 23.01.2014 and 17.02.2014 i.e. about 2^1/2 months before filing the complaint. It clearly denotes that the complaint is filed for the above said relief as if he does not no about the auction of the gold ornaments and appropriating the bid amounts to his loan amounts due. It is nothing but not only mis-representing the facts before the Forum but also suppressing the facts. Since the complainant himself admitted in Ex.B10 notice dt:02.08.2013 and 03.10.2013 that his gold ornaments were sent to Auction Center, Tirupati, for conducting auction, so the complainant is having sufficient knowledge even by the month of October 2013 itself about the proposed auction of the gold ornaments pledged by him with the opposite party. In the complaint it is stated that in the month of December 2013 he went to the opposite party and requested to furnish the exact amount to be paid by him, so as to enable him to redeem the pledge. The opposite party levied interest higher than the agreed rate of interest and asked the complainant to make payment and further stated that all the gold ornaments that were pledged will be put to auction even without notice to complainant, for which the complainant requested the opposite party not to do so and requested some time to discharge the entire debt. This statement is a self-contradictory statement, at one stage he is stating that he went to the opposite party and requested them to furnish the amounts due, so that he will pay entire amount and redeem the pledge, on the other hand, he is stating that he requested the opposite party to grant him some more time to discharge entire debt. It shows that he is not prepared to pay the amounts due even by December 2013, which makes the opposite party to proceed with the auction to recover the amounts due. Therefore, under the above circumstances, we are of the opinion that the complainant is not entitled to the relief sought for, as the said relief was already exhausted, as the opposite party has conducted auction on 23.01.2014 and on 17.02.2014 and furnished the details of the bid in the written version also at page.8. Accordingly this point is answered.

            11. Point No.(v):- In view of our discussion on points 1 to 4, we are of the opinion that the complainant and the opposite party as well, did not approach the Forum with clean hands and did not place the actual facts before this Forum and that they are sailing with self-contradictory statements. The complainant failed to furnish the purpose of loan and also committed default in payment of loan installments and mis-representing the facts, as if the loan amounts were still pending for redemption with the opposite party. It is also found that claiming exorbitant rate of interest from the customers under the guise of monthly compound interest apart from claiming of interest at 24% p.a. and also claiming / charging penal interest at 3% over and above the agreed rate of interest, they are also claiming 25% interest per annum as against agreed rate of interest of 24% per annum. Thus both the complainant as well as opposite party are found guilty of mis-representing the facts and suppression of facts and approached the Forum with unclean hands, consequently, the complaint is liable to be dismissed.

            In the result, the complaint is dismissed. No costs.                          

Typed to dictation by the stenographer, corrected by me and pronounced in the Open Forum this the 24^th day of July, 2015.   

 

       Sd/-                                                                                                                      Sd/-                                                                              

Lady Member                                                                                                      President

 

 

APPENDIX OF EVIDENCE

 

Witnesses Examined on behalf of Complainant.

 

PW-1:  A.Venkataram (Chief Affidavit filed).

 

Witnesses Examined on behalf of Opposite Party.

 

RW-1:  P.Preme Kumar (Chief Affidavit filed).

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT

 

Exhibits (Ex.A)	Description of Documents
	Original receipt of pertaining to loan No.0121020700001828, for a sum of Rs.52,000/-. Dt: 28.08.2012.
	Original receipt of pertaining to loan No.0121020700002678, for a sum of Rs.2,41,000/-. Dt: 31.12.2012.
	Original receipt of pertaining to loan No.0121020700002624, for a sum of Rs.3,10,000/-. Dt: 27.12.2012.
	Original receipt of pertaining to loan No.0121020700002630, for a sum of Rs.1,77,000/-. Dt: 29.12.2012.
	Original copy of part payment receipt. Rs.14,000/- Dt: 02.08.2013.
	Sakshi News Paper Advertisement. Dt: 03.03.2014.
	Original receipts (6 in no.). Dt: 15.02.2014 & 17.02.2014.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTYs

 

Exhibits   (Ex.B)	Description of Documents
1.	DPN cum-Application along with Terms & Conditions of Pledge No. 0121020700001828. Dt: 28.08.2012.  (Original).
2.	DPN cum-Application along with Terms & Conditions of Pledge No. 0121020700002678. Dt: 31.12.2012. (Original).
3.	DPN cum-Application along with Terms & Conditions of Pledge No. 0121020700002624. Dt: 27.12.2012. (Original).
4.	DPN cum-Application along with Terms & Conditions of Pledge No. 0121020700002630. Dt: 29.12.2012. (Original).
5.	Office copy cum Original receipt of PAWN Ticket Pledge No. 0121020700001828. Dt: 28.08.2012.
6.	Office copy cum Original receipt of PAWN Ticket Pledge No. 0121020700002678. Dt: 31.12.2012.
7.	Office copy cum Original receipt of PAWN Ticket Pledge No. 0121020700002624. Dt: 27.12.2012.
8.	Office copy cum Original receipt of PAWN Ticket Pledge No. 0121020700002630. Dt: 29.12.2012.
9.	True copy of Postal Acknowledgement card served to complainant Four (7).
10.	Original letter submitted by complainant. Dt: 02.08.2013 & 03.10.2013.
11.	True copy of auction details. Dt: 23.01.2014 & 17.02.2014.
12.	True copy of Auction details & successful Bidders. Dt: 23.01.2014.
13.	True copy of Notice sent to complainant & statement of accounts.          Dt: 19.06.2013.
14.	True copy of R.B.I. Rules & Guidelines. Dt:24.04.2012.

 

                                                                                                                                                                                                                                                                                    Sd/-

                                                                                                                President

 

// TRUE COPY //

// BY ORDER //

 

 

Head Clerk/Sheristadar,

                Dist. Consumer Forum-II, Tirupati.

 

 

 

  Copies to:-   1. The Complainant.

                        2. The opposite party.