DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION
THIRUVALLUR
BEFORE TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law) .…. PRESIDENT
THIRU.P.MURUGAN, M.COM.,ICWA (Inter),B.L., ......MEMBER-II
CC. No.126/2022
THIS MONDAY, THE 31ST DAY OF OCTOBER 2022
Mr.S.V.Sunil Kumar, S/o.SV Subrahmanyam,
J-57, 6th Street,
Anna Nagar East, Chennai 600 106. ……Complainant.
//Vs//
1.The Branch Manager,
M/s.Kotat Mahindra Bank Limited,
No.3, Ratinapuri Layout,
JN-100 Feet Road, Koyambedu, Chennai 600 107.
2.The Sonal Manager,
M/s.Kotak Mahindra Bank Limited,
Gold Loan Mailing Centre,
Zone-2, 8th Floor, TVH Agnitio Part,
No.141, Old Mahabalipuram Road,
Kandhanchavadi, Chennai 600 096.
3.The Managing Director,
M/s.Kotak Mahindra Bank Limited,
Regd.Office, No,C-27,“G“ Block,
Bandra Kurla Complex,
Bandra (East), Mumbai 400 51. …..opposite parties.
Counsel for the complainant : Dr.D.A.Prabhakar, Advocate.
Counsel for the opposite parties : exparte
This complaint is coming before us on various dates and finally on 21.10.2022 in the presence of Dr.D.A.Prabhakar Advocate, counsel for the complainant and the opposite parties were set exparte for non appearance and non filing of written version and upon perusing the documents and evidences of the complainant this Commission delivered the following:
ORDER
PRONOUNCED BY Dr.TMT. S.M. LATHA MAHESWARI, PRESIDENT
This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service against the opposite parties in claiming an exorbitant amount as interest from the complainant for the jewels pledged by him along with a prayer to direct the opposite parties to pay a sum of Rs.54,117/- towards refund of the excess amount collected by the 1st opposite party from the complainant and to pay a sum of Rs.50,000/- towards compensation for the mental agony and damages caused to the complainant due to the deficiency in service on the part of the opposite parties.
Summary of facts culminating into complaint:-
Dissatisfied with exorbitant rate of interest charged by the opposite parties with regard to the Jewel Loan availed by the complainant, the present complaint was filed. It was the case of the complainant that he approached the 1st opposite party on 23.07.2017 for getting a jewel loan weighing 343.05 grams. Jewel loan was availed for an amount to Rs.6,50,500/- with monthly compoundable interest rate of 11.50% per annum vide Account No.APAC-GLN-1104960. Though the complainant was always ready to repay the loan, the 2nd opposite party had issued a demand notice on 24.09.2018 to the complainant to settle the due of Rs.6,79,173/- inclusive of pending interest and penal interest or otherwise the pledged jewels would be subjected for Auction. The complainant had already remitted Rs.71,920/- as part repayment towards principal and interest. Hence the complainant needs to remit the balance amount of Rs.6,53,330/- as on 04.10.2018 including the admitted and accrued interest amount calculated at 11.50% per annum. On 16.10.2018 when the complainant went to the 1st opposite party’s branch office to hand over the balance due of Rs.6,53,530/- as on date, he was insisted by the 1st opposite party to remit Rs.7,07,447/- instead of Rs.6,53,330/- with no other alternative the complainant remitted the demanded amount of Rs.7,07,447/- to the 1st opposite party. As per the demand notice issued by the 2nd opposite party dated 11.09.2018 the complainant needed to remit only Rs.6,79,173/- towards full and final settlement of the jewel loan, but on 16.10.2018 the 2nd opposite party was adamant and contented the complainant has to remit Rs.7,07,447/- implied interest at the rate of 46% per annum for just 35 days. Thus aggrieved by the act of the opposite parties the present complaint was filed by the complainant to direct the opposite parties to refund Rs.54,117/- being the excess amount collected by the 1st opposite party from the complainant and to pay a sum of Rs.50,000/- towards compensation for the mental agony and damages caused to the complainant due to the deficiency in service on the part of the opposite parties.
On the side of complainant proof affidavit was filed and submitted documents marked as Ex.A1 to A7. Though valakath was filed by the opposite parties they did not appear before this Commission and hence they were called absent and set ex-parte on 12.03.2020 for non appearance and for non filing of written version within the mandatory period as per the statute.
Points for consideration:
Whether the opposite parties had committed unfair trade practice and deficiency in service in claiming an exorbitant amount as rate of interest for the jewel loan obtained by the complainant beyond the permissible/admitted rate of interest?
If so to what reliefs the complainant is entitled?
PointNo.1:-
The following documents were filed on the side of complainant in support of his contentions;
Jewel loan sanctioning letter dated 23.08.2017 was marked as Ex.A1;
Jewel appraisal certificate dated 23.08.2017 was marked as Ex.A2;
Demand notice dated 11.09.2018 was marked as Ex.A3;
Loan recall notice dated 24.09.2018 was marked as Ex.A4;
Statement of Account dated 16.10.2018 was marked as Ex.A5;
Legal notice dated 20.12.2018 was marked as Ex.A6;
Reply legal notice dated 28.01.2019 was marked as Ex.A7;
Heard the oral arguments and perused the written arguments and pleadings and material evidences produced by the complainant. It was the case of the complainant that he obtained gold loan of Rs.6,50,000/- by pledging his jewel weighing 345.05 grams at the rate of 11.50% interest per annum. Though he was remitting the interest without any default the 2nd opposite party issued a notice demanding the complainant to settle the dues of Rs.6,79,173/- and also sent a pre-auction notice for auctioning the jewel. On 16.10.2018 when the complainant had approached to remit the amount he was asked to pay Rs.7,07,447/- instead of the actual due of Rs.6,53,330/- or Rs.6,79,173/- as found in the notice. When calculated it is seen that the opposite parties are charging interest at the rate of 46% for just 35 days from 12.09.2018 to 16.010.2018. Thus he sought for refund of the excess remitted amount to the tune of Rs.54,117/- along with Rs.50,000/- as damages. He also submitted a decision rendered by SCDRC, Madurai in FA.No.97/2016 in support of his allegations.
It is seen that though the opposite parties did not appear before this commission the complainant had produced a notice dated 28.01.2019 (Ex.A7) issued by the opposite parties as reply for the legal notice sent by the complainant. In the said notice there is no proper explanation given by the opposite parties for the allegation raised by the complainant in the legal notice. However, it was replied for the extra amount that the expenses was incurred by the Bank for auctioning the jewels. It is seen that though in the reply notice it is stated that the additional expenses was made towards the process of auctioning the jewels no auction was held. Hence, their explanation could not be accepted. It is also seen that vide the decision relied upon by the complainant it has been clearly discussed and held that charging exhorbitent interest is probitited by financial companies. A judgment rendered by Hon’ble High Court of Madra holding that the Tamil Nadu Lenders Act and the Tamil Nadu Prohibition of Charging Exorbitant Interest Act could be pressed into service in the matter of charging interest by the finanical company in respect of the jewel joan was discussed in the said order rendered by SCDRC, Tamil Nadu. In such circumstances when it is the specific allegation by the complainant that the opposite parties has charged rate of interest at 46% against the admitted rate of interest of 11.50%, it is the duty of the opposite parties to appear and prove the contra. Hence, when no contra evidence was produced by the opposite parties to show that they have not charged 46% interest, and when the Reserve Bank of India has fixed the rate of interest for the financial company to claim on jewel loan as interest, we are of the view that the opposite parties had committed clear unfair trade practice and deficiency in service in the matter of claiming an additional amount of Rs.54,117/- from the complainant. Thus the point is answered accordingly favour of the complainant and as against the opposite parties.
Point No.2:-
With regard to the reliefs to be granted when it is proved that the opposite parties has claimed and received an amount of Rs.54,117/- extra apart from the admitted rate of interest, this commission is of the view that directing the opposite parties to refund the said amount to the complainant would be the appropriate relief. Further for causing mental agony and hardship to the complainant we award a sum of Rs.25,000/- as compensation. We also award Rs.5,000/- towards cost of the proceedings to the complainant.
In the result, the complaint is partly allowed against the opposite parties 1 to 3 directing them
a) to refund a sum of Rs.54,117/- (Rupees fifty four thousand one hundred seventeen only) to the complainant within six weeks from the date of receipt of copy of this order;
b) to pay a sum of Rs.25,000/- (Rupees twenty five thousand only) towards compensation for the mental agony caused to the complainant;
c) to pay a sum of Rs.5,000/- (Rupees five thousand only) towards litigation expenses to the complainant;
d) Amount in clause (a) if not paid within six weeks from the date of receipt of copy of this order, interest at the rate of 6% will be levied on the said amount from date of complaint till realization.
Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 31st day of October 2022.
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MEMBER-II PRESIDENT
List of document filed by the complainant:-
Ex.A1 23.08.2017 Jewel loan sanctioning letter. Xerox
Ex.A2 23.08.2017 Jewel appraisal certificate. Xerox
Ex.A3 11.09.2018 Demand notice. Xerox
Ex.A4 24.09.2018 Loan recall notice. Xerox
Ex.A5 16.10.2018 Statement of Account. Xerox
Ex.A6 20.12.2018 Legal notice. Xerox
Ex.A7 28.01.2019 Reply notice. Xerox
List of documents filed by the opposite parties:-
Nil
-Sd- -Sd-
MEMBER-II PRESIDENT
