IN THE COURT OF THE LD. DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT S I L I G U R I.

CONSUMER CASE NO. : 124/S/2014.                           DATED : 25.07.2017.   

BEFORE  PRESIDENT              : SMT. KRISHNA PODDAR,

                                                              President, D.C.D.R.F., Siliguri.

                      MEMBER                : SMT. PRATITI BHATTACHARYYA.

COMPLAINANT             : SRI SHIBJI MAHATO,

  S/O Late Ran Dular Mahato,

  Resident of Khaokhaobhita,

  P.O. & P.S.- Kharibari, 

  Dist.- Darjeeling.     

O.Ps.              1.                       : THE BRANCH MANAGER,

  HDFC Bank Ltd., Hill Cart Branch, 

  Siliguri, P.O. & P.S.- Siliguri,

  Dist.: Darjeeling– 734 001.

                                    2.                     : THE MANAGING DIRECTOR,

  HDFC Bank Ltd.,

  C/O. C-470, TTC Industrial Area,

  PAWNE MIDC, Navi Mumbai.

  Pin- 400 705.

FOR THE COMPLAINANT         : Sri Arun Mishra, Advocate.

J U D G E M E N T

Smt. Krishna Poddar, Ld. President.

Brief facts of the case are that the complainant had availed gold loan of Rs.38,300/- from the OP bank on 20.04.2012 under the product name “Loan For Agri Collateralized By Gold” against the pledge of some gold ornaments i.e., one gold necklace and four pair of ear tops having gross weight 25.500 gms. and valued Rs.40,062/-.  The maturity date of the loan was 19.07.2012 which was subsequently extended till 12.09.2013 by the OP. 

In the month of July, 2013 the complainant went to the office of the OP for payment of entire outstanding dues and to collect the gold ornaments but the gold loan operation Manager of the OP No.1 instructed the complainant to come on 12.09.2013 to clear the outstanding dues and to collect the gold ornaments otherwise bank will charge 1% as prepayment charge on the outstanding loan amount.  Thereafter on 12.09.2013 the complainant again visited the office of the OP to liquidate the loan and to collect the gold ornaments, but the OP No.1 did

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not entertain him stating that due to non payment of interest within the stipulated period the OP has auctioned the gold ornaments of the complainant to realise the outstanding dues. 

It has been asserted by the complainant that without his knowledge and consent the OP has auctioned the gold ornaments which was ancestral ornaments of the complainant and not only that in spite of readiness and willingness of the complainant to liquidate the entire loan amount in the month of July, the OP avoided to receive the same stating that loan period is valid till 12.09.2013 (and the complainant has optioned to remit the entire outstanding loan along with interest at a time on or after the maturity date of the loan) and thereafter when the complainant visited to the office of h OP on 12.09.2013, the OP No.1 disclosed that the gold ornaments of the complainant has been auctioned for non payment of interest within the period.  The OPs have adopted mal trade practice by selling the gold ornaments of the complainant in auction without his consent and knowledge for its wrongful gain and prior to auction the OPs neither informed the complainant nor issued any demand notice to remit the loan amount.  Lastly in the month of May, 2014, the complainant visited the office of the OP No.1 to clear the entire loan amount and to collect the gold ornaments but the OP did not give any satisfactory answer.  Finding no other alternative the complainant issued a lawyers notice dated 17.06.2014 through his advocate Sri Arun Mishra by Registered Post with A/D to the OP No.1 but in spite of due receipt of the notice the OP did not send any reply.  Due to negligence and deficiency in service on the part of the OPs the complainant suffered a huge loss and injury and sustained harassment mental pain and agony and accordingly, the complainant has filed the instant case with a prayer to give direction to the OPs to return the gold ornaments weighing about 25.500 gms. and valued Rs.75,000/- and further compensation of Rs.35,000/- towards harassment, mental pain and agony suffered by the complainant, Rs.1,000/- towards the lawyer’s notice and Rs.15,000/- towards litigation cost.                

The OP Nos.1 & 2 entered appearance and contested the case by filing written version wherein the material averments made in the complaint have been denied and it has been contented inter-alia that the present case is not maintainable.  It has been stated by the OPs that the complainant availed a gold loan of Rs.38,300/- and the maturity date of the loan was on 12.09.2013 but even after the lapse of 90 days the complainant did not bother to pay the outstanding dues.  The OP bank started calling the complainant for a continuous period from 12.09.13 to 27.12.13 and made several calls to a number 09593214601 (Phone

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no. as provided by the complainant to the OP bank).  The OP bank had also sent several SMS and thus by phone calls and SMS constantly reminded the complainant for the payment but the complainant never paid any heed to the same.  Finding no other alternative the OP bank vide letter date 14.10.2013 reminded the complainant that he has to renew/repay the loan liability within 90 days of the maturity i.e., 12.09.2013 failing which he shall be treated as defaulter and his loan shall be shared with CIBIL.  The complainant did not respond and then OP bank sent another notice dated 28.10.2013 repeating the same reminder (photocopy of notice dated 14.10.13 and 28.10.13 are filed by the OP and are marked Annexure A & B).  finally the OP bank on 18.11.2013 sent a notice of sale of pledged gold to the complainant and categorically stated that if the loan is not liquidated within seven days of the date of notice the OP bank shall have no other option then to proceed further with the sale of pledged gold (photocopy of the notice dated 18.11.13 along with postal receipt are submitted by the OP and marked Annexure C series).  Thereafter, finally the pledged gold was sold on 28.12.2013 and their remained an excess amount of Rs.8,707.43/- (photocopy of cheque in the name of complainant is submitted by the OP and marked Annexure-D and photocopy of letter dated 28.12.13 issued by the gold valuer as bidding quotation are submitted by the OP and marked Annexure-E and the photocopy of notice dated 28.12.2013 issued by the OP is marked Annexure F).  It has been contended by the OPs that there was no misconduct or negligence or unfair trade practice on the part of the OPs and as such the complainant is not entitled to any relief and this case is liable to be dismissed with cost.     

To prove the case, the complainant has filed the following documents:-

1.       Original copy of Loan Sanction Order dated 20.04.12.

2.       Original copy of Valuation Certificate dated 20.04.2012.

3.       Original copy of Loan Sanction Letter dated 28.09.12.

4.       Original copy of Loan Sanction Order dated 10.03.13.

5.       Original cop of Advocate’s Notice dated 17.06.14.

6.       Original copy of Postal Registry slip dated 17.06.13..

7.       Original copy of Acknowledgement card.

OPs have filed the following documents :-

1.       Original GOLD loan Application Form with Agreement details.

2.       Original KYC.

3.       Original Valuation Certificate.

4.       Original Auction Quotation from two valuers.

5.       Original GL 3 Letter.

6.       Original Acknowledge from Deptt. of Post. 

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          Complainant has filed evidence in-chief.

Complainant has filed written notes of argument.

          OPs have filed evidence in chief and Written Notes of Argument.

Points for determination

1.       Is there any deficiency in service and unfair trade practice on the part of the OPs ?

2.       Is the complainant entitled to get any relief as prayed for ?

Decision with reason

          Both issues are taken up together for the brevity and convenience of discussion.

It is admitted fact that that the complainant had availed a gold loan of Rs.38,300/- on 20.04.2012 from the OP bank against the pledged of some gold ornaments i.e., one gold necklace and four ear tops having gross weight 25.500 gm.  It is also not disputed that the maturity date of the loan was 19.07.2012  and it was subsequently extended till 12.09.2013. 

The case of the complainant is that in the month of July, 2013 he visited the office of the OP No.1 for payment of the entire outstanding dues and to collect the gold ornaments but the Gold Loan Operation Manager of the OP No.1 instructed him to come on 12.09.2013 to liquidate the loan amount and to collect the gold ornaments otherwise bank will charge 1% as prepayment charge on the outstanding dues.  Thereafter the complainant again visited the office of the OP on 12.09.2013 to liquidate the loan amount and to collect the gold ornaments but the OP did not entertain him rather stated that due to non payment of interest the OP has auctioned the gold ornaments of the complainant.  It has been further stated by the complainant that without the knowledge and consent of the complainant the OP has illegally ad arbitrarily auctioned the gold ornaments and prior to auction the OP has neither informed the complainant nor issued any letter or given any information that they are going to auction the gold ornaments of the complainant or never issued any demand notice to remit the loan.  In spite of willingness of the complainant to remit the entire loan amount the OPs illegally and most arbitrarily auctioned the gold ornaments for their wrongful gain which is against the unfair trade practice.  Under such circumstances, the complainant has filed the instant case for proper redress. 

The OP on the other hand has submitted that the complainant has taken loan from the OP against pledge of some gold ornaments, but it was the duty of

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the complainant to repay the loan within due time, but the complainant did not repay the loan within due time and thus became defaulter.  The bank sent several reminder notices and even contacted him personally but the complainant never turned up to pay the loan and thus the bank did not have any other option then to sell the pledged gold to recover the money and the excess amount after selling the gold was paid to the complainant by cheque.  It has been further contended by the OP that the complainant had no intention to liquidate the loan. 

It is a settled legal proposition that at the time of availing gold loan there was a contract between the parties on terms and conditions which are binding upon them.  Complainant claims that he intended to repay the loan and visited the office of the OP No.1 before the date and also on the date of expiry of the loan period to repay the loan and to receive the gold ornaments kept with the OPs as security but the OPs denied to settle the matter and without any intimation and without the knowledge and consent of the complainant have auctioned the gold ornaments on the plea that he is a defaulter.   

For argument sake if we hold that the complainant had no intention to liquidate the loan amount or to receive the pledge gold deposited as security for loan or the complainant was found defaulter even in that case the OPs bank cannot ignore the terms and conditions as embodied in the declaration cum terms and conditions of the gold loan.  In clause 14 of the said declaration cum terms and conditions it has been stated that upon the occurrence of an event of default, the bank shall be entitled to sell the gold security in the open market after giving borrower a notice of seven business days which the borrower/borrowers agree is a reasonable period for the purpose of Section 176 of the Contract Act, 1972.  The proceeds so realized from the sale of gold security shall be utilized towards the repayment of dues under the loan.  Again we find in clause 15 of the said declaration it has been stated that borrower/borrowers agree that any notice (including notice of sale of gold security) be addressed at the address mentioned in the application form and may be sent via : a) registered A/D b) hand delivered, c) via email to the email address mentioned in the application form, d) short message service/to the mobile phone of the borrower.  Such service shall be deemed to have been effected in case of delivery by hand on the date on which it is delivered.  In case of delivery by Registered A/D post, the expiry of the fourth day of such posting and in case of email, short message service (SMS) of fax on receiving the delivery of the same the time required for delivery will be included in the notice period provided in clause 14 hereinabove and shall not be in addition to the said notice period. 

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In this case the OPs have stated that bank sent several reminder notices to the complainant and even contacted him personally and in this regard OP submitted computerised copy of letter dated 14.10.2013, 28.10.2013, 18.12.2013 but in respect of the letters dated 14.10.13 and 28.10.13 (Annexure A & B) we do not find any materials to hold that said letters were at all sent to the address of the complainant/ borrower.  If those letters were sent to the address of the complainant, then there must be acknowledgement receipt of service or the letters would be returned unserved to the address of the sender.  But here we do not find anything to hold that the aforesaid two letters were sent to the complainant at his address given in the application form.  Complainant all along claimed that no notice was issued upon him by the OP informing that for non-payment of loan amount the OPs are going to auction the gold.  As per terms and conditions between the parties it was the obligation on the part of the OPs to intimate the complainant before auction or sell of the pledged gold.  But here we find that OPs did not perform their part of contract.  OPs submitted one Postal Envelop addressed to the complainant dated 21.11.2013 sent by Speed Post which returned unserved with the postal endorsement “no such addressee in the address hence return to sender”.  So, it is clear that notice was not reached to the address of the complainant but from the terms and conditions of the gold loan it appears that in case of default bank shall be entitled to sell the gold security in the open market after giving notice to the complainant.  In this case bank without serving any notice or without informing the complainant has sold the gold in violation of the terms and conditions of the gold loan which is unfair trade practice on the part of the OPs and the OPs for their illegal gain have arbitrarily auctioned the gold ornament of the complainant in an illegal manner which is absolutely against the fair trade practice.  The gold ornament of the complainant was auctioned by the OP keeping the complainant in dark and without giving any opportunity to remit or liquidate the loan amount. 

So, considering the facts and circumstance of the case with regard to the materials and evidence of the parties on record, this Forum is of the view that OPs are liable for deficiency in service and there was unfair trade practice on the part of the OPs for which the complainant suffered loss. 

Under such circumstances, complainant is entitled to get return of the Gold Ornaments/Gold weighing about 25.500 Gram and a sum of Rs.10,000/- towards compensation for harassments and mental pain and agony and a sum of Rs.5,000/- towards litigation cost after adjustment of the loan amount together with interest thereon as per banking rules from the OP Nos.1 & 2. 

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In the result, the case succeeds.

Hence, it is

                           O R D E R E D

that the Consumer Case No.124/S/2014 is allowed on contest in part against the OP Nos.1 & 2 with cost.

The complainant is entitled to get return of the Gold Ornaments/Gold weighing about 25.500 Gram from the OP Nos.1 & 2 after adjustment of the loan amount together with interest thereon as per banking rules from the OP Nos.1    & 2.

The complainant is further entitled to get a sum of Rs.10,000/- towards compensation for harassments and mental pain and agony from the OP Nos.1     & 2.

The complainant is further entitled to get a sum of Rs.5,000/- towards litigation cost from the OP Nos.1 & 2.

The OP Nos.1 & 2, who are jointly and severally liable, are directed to return the Gold Ornaments/Gold weighing about 25.500 Gram after adjust of the loan amount together with interest thereon as per banking rules within 45 days from the date of this order.

 The OP Nos.1 & 2, who are jointly and severally liable, are further directed to pay a sum of Rs.10,000/- by issuing an account payee cheque in the name of the complainant towards compensation for harassment and mental pain and agony, within 45 days of this order

The OP Nos.1 & 2, who are jointly and severally liable, are further directed to pay a sum of Rs.5,000/- by issuing an account payee cheque in the name of the complainant towards litigation cost, within 45 days of this order,

In case of default, the awarded amount will carry interest @ 9% per annum from the date of this order till realization.   

Failing which, the complainant will be at liberty to put the decree into execution.

           Copies of the judgment be supplied to the parties free of cost.