BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE. (ADDL. BENCH)
DATED THIS THE 01st DAY OF MARCH, 2023
APPEAL No.789/2014
PRESENT
SRI RAVI SHANKAR, JUDICIAL MEMBER
SMT. SUNITA C.BAGEWADI, MEMBER
Subhankar Chakravarty,
S/o late B.K.Chakravarthy,
Aged 39 years,
R/at Sridevi Nilaya, 7th Main ... Appellant/s
M.J.Nagar, Hospet-583201,
Bellary (Dis), Karnataka
(By Sri.S.Srinivasa Murthy, Advocate)
-V/s-
1. The Branch Manager,
M/s Muthoot Finance Corp. Ltd,
No.312, 313, 1st Floor,
Banashankari Enclave,
Ward No.3, Near Ambedkar Circle,
Opp. SBI City Branch,
College Road,, Hospet,
Bellary (Dis), Karnataka -583 201
… Respondent/s
2. The Managing Director,
M/s Muthoot Finance Corp. Ltd,
Muthoot Centre, Punnen road,
Thiruvanatapuram GPO,
Thiruvanatapuram,
Kerala-695 001
(OP No.1-By Sri.B.M.Prasad, Advocate)
(OP No.2-Absent)
O R D E R
BY SMT. SUNITA C.BAGEWADI, MEMBER
This appeal is filed by the appellant/complainant being aggrieved by the order dated 21.4.2014 passed by the District Consumer Commission, Bellary in CC.No.271/2013 and prays to set-aside the order by modifying the impugned order dated 21.4.2014, in the interest of justice and equity.
2. The case of the complainant in brief is that the complainant is managing a canteen in the premises of M/s United Spirits Ltd, Chitwargi, Hospet. The respondent No.1 is doing money lending business by receiving gold ornaments at Hospet and the respondent No.2 is its Head Office. The complainant’s father was living in Delhi and was suffering with ill health and the complainant was taking care of is parents by visiting them regularly. The complainant’s father died on 30-8-2013. For the expansion of his business the complainant wanted to raise funds. On coming to know about the respondents company and the gold loan they are giving with lowest rate of interest the complainant. The complainant availed loan by pledging totally 196.6. grams of gold for Rs.2,80,967/-. The respondent No.1 verified the complainant’s gold ornaments quantitively and qualitively through their gold appraiser and the loan was availed at 1.185% interest per month. After verification of the gold articles, the respondent No.1 issued certificate cum receipts for 3 gold loans. With Rs.1,00,000/- the complainant approached the respondent No.1 in the month of September, 2011 to make part payment of the amount borrowed. The same was not accepted by the respondent No.1 stating that their computer system does not accept the part payment. When asked for accrued interest he was told that they are charging more than 2% p.m. with additional penal interest for delayed payment. The complainant was surprised to hear this as it was not conveyed to him in writing at the time of loan disbursement. In the month of December, 2011 the police from Town Police Station, Hospet informed the complainant that a criminal case has been registered against him in FIR No.197/2011 dated 30-10-2011 and he was summoned to the police station for interrogation. The frequent calling him to the police station has hampered the complainant’s business and it has adversely affected his health and medical checkup revealed high BP and diabetes. The respondent No.1 has issued two notices for gold loan F-520 and 521 dated 29-2-2012 which was received by the complainant on 1-3-2012 asking him to close/renew the loan account, after lapse of 01 years. On receipt of the said notice, the complainant approached the respondent No.1 to clear the loan, but the same was not entertained stating that the FIR 197/2011 is pending in respect of gold loan GI/HSPT/03. Thereafter, the respondent No.1 auctioned the gold articles of loan No. F 520 and F 521 without serving any auction notice. The police filed B report in respect of FIR 197/2011. The respondent No.1 challenged the said report in the court. The court ordered re-investigation by Dy.SP also gave B-report to the court stating that the said FIR 197/2011 is false. After keeping the gold article in their custody for 8 months, they made false/fabricated police complaint alleging that the gold articles were nakli/spurious in respect of gold loan GL/HSPT/03. Legal notice was issued to the respondent No.1 dated 27-5-2013 seeking statement of accounts pertaining to all three gold loans and the same was not provided. The respondent No.1 gave vague reply dated 5-6-2013 without enclosing the statement of accounts. Again the complainant got issued legal notice dated 13-6-2013 to the respondent No.1 seeking information regarding his gold loan accounts under Right to Information Act. Again the complainant got issued legal notice date 4-7-2013 to provide 3 statements of accounts of this gold loan. But they did not reply to the said notice. Auction notice of gold loan GL/HSPT/03 was received from Jawahar Auctioner, Bangalore on behalf of the respondent No.1 on 22-7-2023 stating that the said gold articles will be auctioned at Dharwad on 3-8-2013 with a condition to deposit Rs.1,00,000/- to participate in the auction. All the facts narrated clearly show that there was grave deficiency in service and the respondent No.1 has practiced unfair trade practice with assistance of the respondent No.2 to make unlawful gain and to cheat the complainant. The complainant wanted to settle the loan amount and the respondent No.1 intentionally never wanted settle the same and wanted to sell the gold articles. Hence the complainant seeking reliefs as prayed for.
3. The respondent No.1 filed the written version stating that the complainant is not a consumer as defined under Consumer Protection Act. Hence, the complaint is not maintainable either in law or on facts and it liable to be dismissed. The allegations made in the complaint are al false, frivolous and vexatious and are denied, except the facts which are specifically admitted. The complainant is filed against the employees of the company whereas the company has not been arrayed as a party. The same is bad for non joinder of necessary parties and mis joinder of parties. After loan was availed the complainant never repaid any amount towards the loan or interest accrued thereon despite repeated requests and reminders made by the respondents. The respondent No.1 resorted to the acid test to test the purity of the gold ornaments which was done by the staff of the branch and the same cannot be considered as foolproof test for ascertaining the purity of the ornaments. The complainant had committed default in paying the interest in time and redeeming the ornaments within the tenure of loan, thus, committed breach of terms and conditions of the loan agreement. Therefore, the respondent No.1 conducted gold inspection of the ornaments pledged by the complainant only to realize the ornaments pledged vide gold loan No.GL/HPT/03 was spurious. Therefore the respondent No.1 filed the complaint against the complainant before the Town Police Station, Hospet. The police authorities failed to conduct proper investigation and filed B-report. The pledges made by the complainant has become overdue, the respondent No.1 was constrained to auction the gold ornaments pledged vide gold loan No.F-520 and 521 after adhering to all the terms and conditions for conduction of auction. There is no deficiency in service on the part of the respondents.
4. After trial, District Consumer Commission, Bellary has partly allowed the complaint.
5. Being aggrieved by the said order, the appellant/complainant has preferred this appeal on various grounds.
6. Heard.
7. Perused the appeal memo, order passed by the District Consumer Commission, we noticed that, it is an admitted fact that, the appellant has availed three gold loans of Rs.2,80,967/- from the respondents’ company by pleading totally 196.6 grams of gold ornaments in February, 2011. It is also an admitted fact that, at the time the respondent No.1 verified the said gold ornaments through their gold appraiser and after that only the gold loan was sanctioned to the appellant.
8. The contention of the respondent is that, the loan was sanctioned only after the terms and conditions of was accepted by the appellant. However, the appellant never repaid any loan amount toward the loan, despite of repeated requests and letters were issued to him. After expiry of the prescribed period as per the terms and conditions and after issuing notices, the respondents have auctioned the gold ornaments pledged by the appellant for realization of loan amount pertaining to the loan account No.520 and 521 and while conducting inspection of gold ornaments vide gold loan No.GI/HSPT/03 were found spurious and hence they filed the complaint against the appellant before the Town police Station, Hospet against the appellant only.
9. Perused the order passed by the District Consumer Commission, the respondents admitted that they have sanctioned the loan after verifying the said gold ornaments through their gold appraiser. Such being the case how the respondent contended that the gold items were spurious pledged by the appellant under loan account No.GL/HSPT/03. At the time of gold loans, the said gold was verified by the appraiser who was appointed by the respondent company and any company cannot sanction any gold loan without verifying the gold. Further respondent contended that, they came to knowledge about spurious gold when they verified the same before auction. The appellant has availed the loan in the month of February, 2011 and as per contention of the respondent they auctioned the gold after lapse of 8 months. The golds ornaments were in the custody of the respondent then how it is possible that the appellant has pledged the gold which was spurious. Moreover during the pledging of the gold ornaments, the respondents have checked it and certified and then sanctioned the loan to the appellant. The burden on the respondent that, test conducted by the respondent gave wrong result, it is duty of the company to ensure proper checking of pledged ornaments before sanction of loan, once it is certified after inspection it attains higher value from the point of view of law. Moreover on the police complaint of the respondent against the appellant that the appellant has pledged spurious gold, after inspection and investigation, the police filed final report which shows that the respondents have made false/fabricated complaint against the appellant before the Town Police Station, Hospet for unlawful gain. Moreover the respondents have not produced agreement executed between them at the time of taking the gold loan to show the interest rate of the gold loan. Moreover the respondents contended that they have auctioned the gold loan pertaining to the loan account No.F-520 and F-521. However they have not produced the documents to show that prior to the auction of gold the respondents have followed due test.
10. After trial the District Consumer Commission came to conclusion that, the appellant lost the gold ornaments totally 196.6 grams worth about Rs.5,85,000/- towards which the loan was granted only Rs.2,80,967/- which was huge loss to the appellant and allow the complaint partly and directed to the respondent to pay Rs.50,000/- towards compensation for deficiency in service and Rs.1,000/- cost of proceedings which is not in just and proper, when the District Consumer Commission came to conclusion that, the gold of Rs.5,45,000/- was lost by the appellant and due to which the appellant suffer the heavy loss, then the District Consumer Commission has to directed the respondent to return the gold after taking the loan amount with interest as agreed from the appellant. However there is no specific order of the District Consumer Commission about the gold ornaments. Hence, it is just and proper to direct the respondents to return the gold ornaments pledged by the appellant or return the amount of gold ornaments pledged by the appellant as per today’s market value/rate per grams by deducting the principal loan amount with agreed rate of interest upto the gold ornaments auction date. Accordingly, the respondent/Opposite Parties are directed to return the gold ornaments weighting 196.6 grams to the appellant, if they failed to return the gold ornaments, the respondents/Opposite Parties are directed to pay the today’s market rate/value of the gold ornaments of 196.6 grams to the appellant, after deducting the loan amount availed by the appellant with agreed rate of interest upto the date of auction of gold ornaments. Accordingly, we proceed to pass the following:-
O R D E R
The appeal is allowed with litigation cost of Rs.10,000/- to the appellant/complainant.
The Respondent/Opposite Parties are directed to return the gold ornaments weighting 196.6 grams to the appellant, if they failed to return the gold ornaments, the respondents/Opposite Parties are directed to pay the today’s market rate/value of the gold ornaments of 196.6 grams to the appellant, after deducting the loan amount availed by the appellant with agreed rate of interest upto the date of auction of gold ornaments.
Further the Respondents/Opposite Parties are directed to pay compensation of Rs.50,000/-.
Further the Respondents/Opposite Parties are directed to pay litigation cost of Rs.10,000/- ordered by the District Consumer Commission in CC.No.271/2013 on 21-4-2014 to the complainant.
Further the Respondents/Opposite Parties are directed to comply the above order within 60 days from the date of receipt of the order.
Send a copy of this order to both parties as well as concerned District Consumer Commission.
Lady Member Judicial Member
