SRI G.APPALA NAIDU, MEMBER

O   R   D   E   R

          This is a complaint filed under Section 12 of Consumer Protection Act seeking the reliefs to direct the O.P. to return the Gold pledged in Gold loan No.1661842006637 immediately to the complainant, to pay compensation of Rs.20,000/- for causing mental agony and sufferance to the complainant and to pay Rs.10,000/- towards expenses incurred by the complainant in visiting and follow up with O.P. with the O.P. with regard to the return of original documents and legal expenses all of which have been caused due to the negligent attitude and in actions of the O.P. to pay costs of the complaint and to pass such other orders as the Hon’ble Forum deems fit under the circumstances of the case on the following averments:

The complainant is a permanent resident of Vizianagaram and availed Gold loan bearing No. 1661842006637 from O.P. bank by pledging the gold ornaments and the same is subsequently extended to Rs.86,000/- on                  27-1-2012.  The complainant has been paying the said gold loan amount regularly from time to time and there was a due amount of Rs.49,891/- as on 31-3-2013 as per the bank statement.  While it is so the complainant’s son               Sri Manikantam was granted education loan amount Rs.1,87,000/- by O.P. Bank on 23-12-2006 under loan account No.1661-651-2761 for which the complainant stood as guarantor and the said loan was sanctioned earlier to the gold loan and the complainant’s son is alone is discharging the said education loan.

The complainant is ready and willing to discharge the gold loan outstanding amount but he never pledged the gold loan items against the aforesaid educational loan sanctioned to his son who is regular by paying education loan amount.  However with a view to harass the complainant the O.P. is linking up both the loans which are different.  When the complainant approached the bank with a request to release the gold items pledged with the O.P. bank against the said gold loan the O.P. refused to release the same though the bank is under obligation to return the pledged gold loan items to the complainant as and when the gold loan amount is cleared.   In view of the above, the complainant got issued a registered lawyer notice to the O.P. on 19-4-2013 to return the gold items since the complainant paid the entire gold loan amount by way of pay order bearing No.003034 dt.18-4-2013 for Rs.49,900/- drawn on IDBI Bank in favour of O.P.  In the said notice, the complainant also categorically expressed that if any amount is due in respect of the said gold loan he is ready and willing to pay on receipt of reply from the bank but there is no response from the O.P.

The complainant when approached the bank in the 3^rd week of May, 2013 a clerk in the bank informed him that without discharging education loan the gold items cannot be released to the complainant.  Unless the said gold items are returned to him, the complainant cannot pledge the said gold items elsewhere in order to get financial assistance to meet his requirements.  Since the bank did not do so even after payment of the outstanding amount in the gold loan account, there is deficiency of service and dereliction in the duty of the O.P. bank.  Hence this complaint.

          Counter filed by the O.P. denying the allegations leveled by the complainant in the complaint except those which are specifically admitted therein and puts the complainant to strict proof of the same.  It is submitted  that the educational loan was sanctioned to the son of the complainant for which the complainant also executed all necessary loan documents as             co-obligant but not under the capacity of guarantor.  It is further submitted by the O.P. that the complainant failed to pay the education loan which has become NPA (Non Performing Asset) and the O.P. also got issued registered notice demanding them to pay the education loan but the complainant failed to discharge the same and also he failed to pay the gold loan amount in full as per Bank norms.    The O.P also got general lien over the gold ornaments. 

          It is also pleaded that the complainant is not a consumer as per the C.P.Act.   Hence the petition is liable to be dismissed in limini.  It is further submitted that in view of all the above, there is no deficiency of service on the part of O.P. and hence the complaint is liable to be dismissed with costs.  Ex.A.1 to A.4 are marked on behalf of the complainant and Ex.B.1 is marked on behalf of the O.P.  Heard arguments. Posted for orders. The orders are as follows:

          The counsel for both the parties submitted oral arguments by reiterating what they have stated in the complaint, counter, evidence affidavit and brief written arguments respectively.  The main contention of the complainant is that even though he cleared the entire outstanding loan in the gold loan account and is also ready to pay the balance amount if any, the banker has not released the gold ornaments which are sentimental to him and also there is a need to mobilize further amount by way of pledging the same from other sources.  Further the bank unwarrantedly linking  this gold loan account with that of education loan account of his son which is against the process of law and also against the principles of natural justice.  The action of the bank in withholding the gold ornaments even after the closure of the said loan account and also after expressing the readiness and willingness of the complaint to pay the balance amount if any, amounts to deficiency in service on the part of the bank and also dereliction in their duty towards the complainant for linking of the gold loan account with that of the education loan account which is unwarranted, illegal and unjustified by subjecting the complainant to financial loss, harassment and untold suffering and mental agony.

          The contention of the O.P. is that the bank has general lien and also the fact that the complainant is not a guarantor but a co-obligant to the education loan availed by his son and therefore the bank is unable to release the gold ornaments to the complainant.

          As seen from the record available in the Forum it is evident that the Bank has not produced the relevant documents to establish the proof that the complainant is the co-obligant and the Bank has also general lien.  Even if that is the case, the Bank has no right to link the gold loan account to that of the education loan account.  When the gold loan account is closed or if some balance is due from the complainant, he is ready to pay the same and requesting the bank to release the gold ornaments which are not only sentimental to him but also enable the complainant to borrow further amount from other sources by pledging the same.  The action of the bank in withholding the said gold ornaments not only amounts to deficiency in service but also causing financial loss, untold suffering and mental agony, inconvenience and hardship to the complainant.  By withholding the said gold ornaments and linking the gold loan account to that of the education loan account is an unfair trade practice on the part of the bank.  If the education loan account is irregular, the bank can as well recover the same from the concerned by due process of law and also from the securities available with them on that particular account.  But they have no right to link the gold loan account with that of the education loan account.

          In view of the forgoing discussions, the complaint is partly allowed.

          In the result, the O.P. is directed to release the gold ornaments pledged by the complainant in respect of the gold loan A/c No.1661842006637 by collecting the balance if any, from the complainant immediately and to pay compensation of Rs.5,000/- (Rupees five thousand only) for causing mental agony, hardship, inconvenience and suffering to the complainant and to pay Rs.2,000/- (Rupees two thousand only) towards costs of the complaint which includes advocate fee of Rs.750/- (Rupees seven hundred and fifty only).  This order shall be complied with by the O.P. within one month from today.

Dictated to the Typist, transcribed by her, corrected by me and pronounced by us in the open Forum, this the 22^nd day of July, 2014.

Member                                                           President

CC. 56 of 2013

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

     For P.W.1                                                                  For R.W.1                                                                               

DOCUMENTS MARKED.

For complainant:-

1. Ex.A.1 Original copy of Gold Loan account
2. Ex.A.2 Xerox copy of Pay Order for Rs.49,900/- dt.18.4.13
3. Ex.A.3 Office copy of Registered Lawyer’s Notice dt.19.4.2013
4. Ex.A.4 Acknowledgement.

For O.P:-   

1. Ex.B.1  Application –cum-letter of pledge for OD/loan against Gold

            Jewellery.                                             

                                                                                       President.