DIST. CONSUMER DISPUTES REDRESAL FORUM
NORTH 24 Pgs., BARASAT.
C.C Case No: 256/2016
Date of Filing: Date of Admission Date of Disposal:
27.04.2016 06.05.2016 28.02.2018
Complainant = Vs. = O.P.
Sri. Manoj Kumar Agarwal, 1. The Corporate Head India
S/O Sri. Maliram Agarwal , Infoline Finance Ltd.
Resident of: 12A-10,13th Floor
4/4/4, Balurpara Road, Parinee Gescenzo C-38 & 39
P.O: Hazinagar,P.S: Naihati, G- Block, Bandra Kurla Complex
Dist: North 24 Parganas. Bandra(East), Mumbai
W.B Pin- 400051.
2. Branch Manager
India Infoline Finance Ltd.
44, K.G.R Path,
P.O: Kanchrapara, P.S: Bizpur,
Pin- 743145.
P R E S E N T : Sri. Bankim Chandra Chattopadhyay …………. President
: Sri. Siddhartha Ganguli………………………………Member
: Smt. Silpi Majumder…………………………………..Member
Ld Advocate for the Complainant: Mrs. Mahua Sen, Sreya Bagchi & Ors.
Ld. Advocate for the OPs: Sri. Gourab Majumder, K. Chakraborty & Ors.
FINAL ORDER & JUDGEMENT
An application has been filed by the complainant U/S 12 of the C.P Act, 1986 alleging deficiency in service against the O.Ps for causing deficiency in service for illegally sold out the pledged gold ornament of the complainant and praying for return of the golden ornament and also for appropriate compensation to the tune of Rs.3,00,000/.
The gist facts of the case is that the complainant hired service of the O.Ps, whose main business is to give gold loan after taking security of golden ornaments and therefore the complainant became the consumer of the O.Ps. The complainant stated in his complaint petition that he approached to the O.P No: 2 for grant of gold loan and his loan amounting to Rs.79, 500/ was sanctioned on 04.04.2014 after depositing a golden necklace weighing about 42.30 grams as security,being receipt No: 4094377, Gold Loan A/c no: GL 3965455 and unique I.D No: E 369e73B and the principal due date was fixed on 03.04.2016.
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The complainant stated that he has paid interest regularly and till the date of filing of the case he has paid Rs.27, 360/ to the O.P No: 2 against the said loan.
It is further stated by the complainant that inspite of said payment and regular communication with O.P No: 2, the O.P No: 2 sent one notice to the complainant, which the complainant received on 29.01.2016, being reference No: GL3965455/MTM85/WB/DECEMBER, 2015 122936, wherefrom the complainant came to know that the O.P No: 2 has called the complainant to pay the mark to market difference and also threatened him to initiate action against him. In the said letter it was instructed to communicate with the O.P No: 2 within 7 days from the date of issue of the letter. The said letter was issued on 06.01.2016 but the complainant received it on 29.01.2016. It is further stated that the said letter was posted on 19.01.2016.After receiving the letter the complainant went to the office of the O.P No: 2 where he met the Branch Manager, who informed him that the gold which he pledged as security has been sold out in auction. The complainant further alleged that the gold ornament was sold out without giving prior intimation to him and against the terms and conditions as stipulated in the clause of E & F as mentioned in the sanctioned letter. The complainant thereafter sent a legal notice through his Ld. Advocate on 03.02.2016 but in vain. The complainant therefor alleged deficiency in service against the O.Ps and files this case for proper redress as stated in the prayer, which are reproduced as below.
Relief Sought for:
- An order directing the O.Ps to return the gold necklace kept as pledge against the loan taken by the complainant after receiving the due amount of loan along with accrued interest thereon.
- An order directing the O.Ps to pay Rs.3,00,000/ as compensation for harassment, mental agony and also for negligent act and conducting the deficiency in service.
- All cost of the proceeding.
- Any other relief or reliefs as the complainant is entitled in law and equity.
The complainant files the following documents in order to prove his case:
- Copy of Advocate Letter dated 03.02.2016.
- Copy of Gold loan sanctioned letter, in which terms and conditions are written overleaf.
- Copy of notice of recall of loan amount dated 06.01.2016.
- Copy of repayment receipt of Rs.7500/ dated 09.09.2015.
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The O.Ps appeared in this case and filed Written Version on 26.09.2016.
The O.Ps stated in their W/V that the complainant is not a consumer within the meaning of the C.P.Act, 1986 and this Forum has no jurisdiction to try the case as the matter in dispute is purely a violation of contract which should be guided by the Law of Contact and not by the C.P.Act. The gold loan agreement is purely a pledger-pledgee agreement and guided by the Contract Act, 1872. Sec-173 of the said Act defines the pawnee’s right of retainer. Section 176 of the said Act defines Pawnee’s right where pawner makes default.
Further the O.Ps stated in the W/V that the complainant himself stated that he is a defaulter in payment of the gold loan and therefore the issues in this case are purely civil in nature and the instant case of the complainant is liable to be rejected.
Further the O.Ps stated that as per terms and conditions annexed to the loan application duly signed and submitted by the O.Ps, there is an arbitration clause and therefore this Forum has no jurisdiction to entertain this complaint.
The O.Ps stated in their W/V that in the month of April,2014, the Complainant had approached to the O.P No:2 on the pretext of availing loan facility against the pledge of gold articles and in view thereof the complainant had deposited the gold with the O.P No:2 and thereafter the complainant had filled up gold loan application being account No: GL 3965455 dated 04.04.2014 and also signed the terms and conditions governing gold loan facility and DPN which are mentioned overleaf of the loan facility. The copies of the respective loan application along with terms and conditions governing the usage of gold loan facility were promptly given to the complainant. The agreement was duly and voluntarily signed by both parties, wherein the terms and conditions were stipulated, but later, the complainant had failed to observe the same. It is further stated by the O.Ps that after due valuation of gold articles, based on the then prevalent market rate of the gold ornaments, the complainant had taken the loan facilities to the extent of amount Rs.79500/ as more particularly mentioned in the petition and the same was required to be paid to the O.Ps within 3/4/16 months, after the execution of the terms and conditions of the loan application. Further as per terms and conditions of the gold loan agreements, the company may further call for the difference in mark to
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market value in case the value pledged gold ornaments goes down, as per RBI norms.
It is further submitted that the O.Ps had time and again through various communication letter reminded the complainant to repay the deficit mark to market amount but the complainant had always turned down to the repeated requests made by the O.Ps. The complainant knowingly ignored the same. In such an event the O.Ps stated that such loan account go into overdrawn status and it reflected as a non performing asset in the O.P’s book. The O.Ps thereafter in order to recover the dues in the loan account informed the complainant repeatedly and due to failure to make repayment of the mark to market difference amount the O.Ps were constrained to issue public auction notices of the gold ornaments pledged by the complainant. The public auction was then advertised in newspapers including the English Daily “Business Standard” and the Bengali Daily “Duranto Barta” wherein all the details of the auction that was to be held by the O.Ps were provided. Subsequently, when the complainant paid no heed to the same, the O.Ps were compelled to hold the auction on 22.01.2016 and sold the gold to recover the money. The O.Ps therefore, pray for dismissal of the case.
The complainant and the O.Ps both filed written Examination in Chief. The O.Ps filed some documents such as copy of application form, copy of notice dated 28.08.2015, copy of notice dated 06.01.2016, Xerox copy of paper publications, copy of sanction letter dated 04.04.2014, copy of ledger balance etc.
From the complaint petition, written version, evidence of both sides the following points have been framed.
- Is the complainant as consumer?
- Are the O.Ps deficient in service?
- Is the complainant entitled to get any relief or reliefs as prayed for?
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Decision With Reasons
All the points have been taken together for the sake of brevity and in order to avoidance of repetition of facts.
It is the admitted position that the complainant took a gold loan of Rs.79, 500/ from the O.Ps on 04.04.2014 after depositing a golden necklace weighing about 42.30 grams as security, being receipt No: 4094377, Gold Loan A/c no: GL 3965455 and unique I.D No: E 369e73B and the principal due date was fixed on 03.04.2016.The complainant has paid Rs. 27,360/ in total for repayment. Therefore the complainant is a consumer of the O.Ps as per the definition given under the C.P Act,1986.Further the O.Ps are service providers as defined in the said Act and this Forum has jurisdiction to try the case, irrespective of the fact that there is an arbitration clause in the agreement. As per the decision of the Skypak Couriers Ltd Vs Tata Chemicals Ltd (2000) 5 SCC 294 it was held by the Hon’ble Supreme Court that existence of an arbitration clause in the agreement is no bar to the entertainment of complaint under the C.P. Act as the remedy under the Act is in addition to the provision of any other law. Hence, this case is maintainable in this Forum and has jurisdiction to try the case.
Now, the main point of determination is whether the O.Ps were deficient in service or not. For the ascertainment of that we have to again look into the evidence of the parties and the materials of the record.
It is evident from the materials on record that the complainant availed a gold loan of Rs.79, 500/ from the O.Ps as aforesaid on 04.04.2016 after giving security of a gold necklace weighing about 42.30 grams with certain terms and conditions to repay the same with interest as fixed by the O.Ps. The complainant did not repay the loan regularly as per the terms and conditions of the agreement. Therefore, he has become a defaulter. The complainant has paid only Rs. 27,360/ in total in the entire span from 04.04.2014 to till filing of the case. It is further evident from the materials on record that the O.Ps issued notice to the complainant on 28.08.2015 giving opportunity to the complainant 10 days time to pay the mark to market difference amount of Rs.13,933/. The complainant did not mention about the said notice in his application. It is not clear whether the said notice has been sent to the complainant or not, or the complainant has received the notice dated 28.08.2015 or not. As the complainant denied that he did not receive any notice prior to 29.01.2016, it is the incumbent duty of the O.Ps to prove the same that the O.Ps sent notice to the complainant on 28.08.2015 and the complainant received the same. No document was forthcoming from the end of the O.Ps that the complainant received the notice.
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Further a notice dated 06.01.2016 was sent to the complainant by the O.Ps giving opportunity to the complainant 7 days time. It is the allegation of the O.Ps that the complainant did not respond against the said two notices and no payment has been made by him and therefore the O.Ps sold the golden ornament by holding an auction on 22.01.2016 in order to recover the money as per the terms and conditions made by and between the parties.
It is seen from the Clause 5( c ) of the terms and conditions written on the back side of sanction letter dated 04.04.2014 that “In case of any default in the repayment of interest /installment/principal amount/any other amount, charges I authorize you to sell all or any of my pledged articles in any order deemed favorable and most profitable by IIFL and recover the principal amount of the loan and interest along with cost ,charges and all other amounts payable in respect of the loan in case of any deficiency after the above sell, I authorize you to recover the amount from me personally. In case, I default in repaying the said deficit amount, you have the right to initiate legal action against me to take possession and sale the movable and immovable properties belonging to me.”
Further on a plain reading of Clause 5 (e) of the terms and conditions written on the back side of the sanction letter dated 04.04.2016 that “ In the event I fail to settle the loan account or repay interest /installments/principal amount/any other amount, chares (“the total outstanding”), post the completion of loan tenure or otherwise , IIFL shall issue the notice at my address given in this application by giving 10 days time from the issue of the notice to me for repayment of the total outstanding. In the event, I fail to repay the total outstanding even after giving 10 days notice for repayment, my pledged gold articles may be sold by IIFL in a public auction as per IIFL policy. The auction will be announced to the public by way of the issue of the advertisement in at least two news papers of which at least one news paper shall be of a vernacular language and another shall be a national daily newspaper. If any of the pledged articles are sold at a price lower than the amount due from me, I shall pay the deficit amount to IIFL. In case I default in repaying the deficit amount, the IIFL has all the right to initiate legal action against me and take possession of all the movables and immovable property belonging to me. If the pledged articles are sold at a higher price than the amount due from the surplus amount if any, may be refunded to me after adjusting all the other amounts payable by me to IIFL. If losses are incurred on sale, the same shall
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be reimbursed by me to IIFL and in the event I am unable to make good such losses, IIFL may institute legal proceedings to recover the losses from my assets/property. IIFL shall not be responsible for any loss or costs incurred for selling the same if caused by such sales of pledged articles.”
Further it is evident from the postal track report; being postal receipt No: RM947737040IN that the said notice dated 06.01.2016 has been posted on 19.01.2016 at BULK CRC DADAR.As a matter of fact, the said notice dated 06.01.2016 could not have been reached in the hands of the complainant prior to 22.01.2016.
Further, on scrutiny of the copy of ledger as submitted by the O.Ps it is found that the complainant made payment of Rs.6500/ on 10.08.2015 and Rs.7500/ on 09.09.2015 respectively.
The O.Ps in the letter dated 06.01.2016 gave 7 days time to the complainant but whereas in the terms and conditions it is specifically written that 10 days prior notice must be given for repayment.
From the above discussion it is clear that though the complainant was a defaulter in repayment of gold loan but the O.Ps clearly violated the terms and conditions of the said loan as stipulated in cl 5( c) & 5 (e) as stated above. The O.Ps adopted a tricky manner in order to hold auction by not following its own terms and conditions. The O.Ps failed to prove that they have issued notice on 28.08.2015 or that it was received by the complainant. Further the notice dated 06.01.2016 was posted on 19.01.2016 at Mumbai. But the O.Ps hurriedly sold the gold necklace on 22.01.2016 by holding an auction. The O.Ps should have given 10 days time to the complainant for repayment of loan and the O.Ps should have waited 10 days which should be counted from the date of receipt of notice before holding the auction. Therefore in our view the O.Ps were deficient in providing service to the complainant and the complainant is entitled to get relief from this Forum but in part.
From the copy of ledger filed by the O.Ps it is seen that an amount of Rs.1, 01,371.63 was due in the loan account of the complainant after deducting the amount of Rs.27360/ which was paid by the complainant, and the O.Ps were entitled to recover Rs.1, 01,371.63 from the complainant .On the other hand, from the documents filed by the complainant at the time of argument it is seen that on 31.01.2016 the cost of 24 carat gold was Rs.2664/ per gram. If we deduct 8% from the amount then we simply get the rate of 22 carat gold of the then date which come approx Rs.2664- Rs.213= Rs. 2451/per gram.
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Therefore the cost of 42.30 grams gold on 31.01.2016 was Rs. 42.30 X Rs.2451/=Rs.1,03677.30
From the simple mathematical calculation, the complainant is entitled to get back Rs.1, 03,677.30- Rs. 1, 01,371.63= Rs.2305.67 (Rounded off Rs.2306/) from the O.Ps.
The O.Ps adopted tricky manner in holding public auction by not following the terms and conditions of the agreement and the O.Ps could sold out the gold in a more transparent way by giving reasonable opportunity to the complainant as per terms and conditions of the agreement. When the notice was posted only on 19.01.2016 and the gold ornament was with them then what prompted them to sell the golden ornament in auction on 22.01.2016 in a hurried manner is totally not understandable. It is not desirable for such an unfair conduct from the O.Ps.
Considering the nature of the case and the mental and physical sufferings suffered by the complainant, we quantify Rs.30, 000/ as compensation and Rs.10, 000/ as cost of the proceedings which should be paid by the O.Ps to the complainant. Therefore, all the points have been discussed and disposed of.
Hence
It is ordered that the Consumer Complaint, being No: CC 256 of 2016 is allowed on contest, but in part.
The O.Ps are jointly and severally directed to pay Rs.2306/ to the complainant as excess amount of gold within two months from the date of this order.
O.Ps are further directed to pay Rs.30, 000/ as compensation and Rs.10, 000/ as cost of the proceedings to the complainant within two months from the date of this order.
Failing which the complainant is at liberty to file an execution application before this Forum as per the provisions of law for execution of the order.
Let free copies be given to the parties concern at once.
Member Member President
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