BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES <br /> REDRESSAL FORUM, MANDYA<br /> <br /> PRESENT: 1. SIDDEGOWDA, B.Sc.,LLB., President,<br /> 2. M.N.MANOHARA, B.A.,LLB., Member.<br /> 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, <br /> <br /> ORDER<br /> Complaint No.MDF/C.C.No.95/2009<br /> Order dated this the 29th day of October 2009<br /> <br /> COMPLAINANT/S <br /> <br /> Sri.Bommegowda S/o Kalegowda, R/o Chamalapura Village, Keragodu Hobli, Mandya Taluk. <br /> (By Sri.C.L.Shivakumar., Advocate)<br /> <br /> -Vs-<br /> <br /> OPPOSITE PARTY/S<br /> <br /> The Manager,<br /> Karnataka State Industrial Co-operative Bank Ltd., (Karnataka Rajya Kaigarika Sahakara Bank Niyamitha), 2nd Cross, Ashoknagara, Mandya City. <br /> (By Sri.M.P.Usha., Advocate<br /> <br /> Date of complaint 05.08.2009<br /> Date of service of notice to<br /> Opposite party 20.08.2009 <br /> Date of order 29.10.2009<br /> Total Period 2 Months & 9 Days<br /> Result The complaint is allowed partly with a direction to the Opposite party to pay price of the gold at the rate of Rs.850/- per gram on net weight of the jewel to the Complainant with interest at 9% p.a. from the date of pledge till realization after deducting the loan due up to the date of theft with cost of Rs.1,000/-.<br /> <br /> Sri.Siddegowda,<br /> President<br /> <br /> 1. This complaint is filed under section 12 of Consumer Protection Act, 1986 against the Opposite party to direct the Opposite party Bank to return the golden ornaments weighing 32 grams pledged by the Complainant by receiving the principal amount of Rs.10,000/- with accrued interest and to pay damages of Rs.50,000/- with costs. <br /> 2. The case of the Complainant is that on 09.04.2007, the Complainant approached the Opposite party Bank for loan against the golden ornaments. As per the procedure of the Opposite party Bank, the Complainant borrowed the gold loan pledging golden ornaments weighing gross weight of 32 grams and net weight is 25 grams. The value of the golden ornaments based on the net weight as calculated by the Opposite party Bank itself, at the rate of Rs.850/- per gram comes to Rs.21,250/- and the Opposite party sanctioned loan of Rs.10,000/- in J.L. Account No.7843. Thereafter, the Complainant has paid interest of Rs.600/- on 11.09.2007. The Complainant on several occasions approached the Opposite party Bank in order to remit the interest, but the officials of Opposite party Bank did not allow to pay the interest stating that there was a robbery of the locker of the Bank in which the golden ornaments were kept which included the golden ornaments belonging to the Complainant also. However, the officials of the Opposite party Bank informed the Complainant to pay the principal amount, but they failed to give back the golden ornaments. In spite of several requests and legal notice, the Opposite party has failed to return. This act of the Opposite party amounts to dereliction of duty and also deficiency in service. The family members of the Complainant are put to much hardship and great inconvenience as they are unable to take part in the marriages and functions. Therefore, the present complaint is filed.<br /> 3. The Opposite party has filed version admitting the jewel loan obtained by the Complainant by pledging the gold ornaments as per the terms and conditions explained to the Complainant. Unfortunately, a huge quantity of gold ornaments pledged by various customers including the Complainant with the Opposite party Bank were stolen on 13.11.2007 and complaint has been lodged in Crime No.166/2007 and investigation is still pending. The matter of theft in the bank was published in all daily Newspapers and broadcasted by the media through television also. Keeping in view the larger interest of the gold loan borrowers, it was decided in the Board Meeting held on 22.12.2007 to settle the claims of the borrowers immediately on the basis of the value assessed by the appraiser of the bank at the time of pledging the jewels, which is on the basis of the settlement of insurance claim by the insurance company and also as agreed by the borrower after appropriating the loan dues till the date of theft. The complaint is premature. The question of return of gold ornaments would arise only after discharging the loan amount with interest. Since, the Complainant has not discharged the loan, the stage has not yet reached and so the complaint is liable to be dismissed. When the Opposite party is ready to settle the claim, the question of deficiency in service does not arise at all. The allegations that the Opposite party has not taken safety measures are absolutely false. There is strong Iron Safe Locker installed in the bank and Opposite party has sought for dismissal of the complaint. <br /> 4. During trail, the Complainant is examined and has produced the documents Ex.C.1 to C.3. The Opposite party is examined and the documents Ex.R.1 to R.4 are produced. <br /> 5. We have heard the counsel for the Complainant and Opposite party has filed written arguments.<br /> 6. We have perused the records. <br /> 7. Now the points that arise for our considerations are:-<br /> 1) Whether the Opposite party has committed deficiency of service in not releasing the jewels pledged?<br /> 2) Whether the complaint is premature?<br /> 3) Whether the Complainant is entitled to relief sought for?<br /> 8. Our findings and reasons are as here under:-<br /> 9. POINTS NO.1 to 3:- The undisputed fact is that the Complainant has availed jewelry loan of Rs.10,000/- on 09.04.2007 by pledging gold ornaments weighing 32 grams gross weight and net weight is 25 grams and the value of the gold per gram at the time is assessed at Rs.850/- and the total value of the gold ornaments is Rs.21,250/- and the Complainant has availed loan of Rs.10,000/- only as per Ex.R.1 agreeing to pay interest at 13% p.a. with penal interest of 2%. There are terms in the application Ex.R.1 itself. The Complainant has admitted that when he went to the bank, saying that he would discharge the loan and to return the ornament, the bank official told that the ornament is stolen and the amount of the ornament on the basis of rate prevailing at the time of pledge would be paid. The Complainant has admitted this document Ex.R.1 the loan agreement. It is admitted that the Complainant has issued legal notice Ex.C.3 on 20.11.2008 and is served on the Opposite party Bank and Opposite party has sent letter as per Ex.R.3 by registered post as per Ex.R.4 and it is not claimed by the Complainant. In that letter dated 08.06.2009 it is informed the theft of jewels and the decision of the Head Office to settle the claim on the basis of the insurance deducting the loan and interest up to date of theft and in spite of publishing the notice board, the Complainant has not approached. Ex.C.1 is the identification card with regard to the pledging of jewel by the Complainant on 09.04.2007 and on 11.09.2007 he has paid Rs.600/- towards interest. It is undisputed fact that on 13.11.2007 robbery took place in the bank premises and gold articles pledged by the customers were stolen and complaint is filed before the police and investigation is pending. <br /> 10. The contention of the Opposite party that the complaint is not maintainable and it is premature, since the Complainant has not discharged the loan cannot be accepted, in view of the reply of Opposite party that the jewels are stolen and they would deduct the loan and interest up to the date of theft from the value fixed by the bank appraiser of the pledged jewels. The Opposite party has produced the copy of the insurance certificate and it proves that the Opposite party has insured the gold articles with Oriental Insurance Company. The Complainant has sought for return of the pledged golden article which is impossible for the Opposite party to comply. Therefore, to give relief to the Complainant, we have to assess the market value of the gold article pledged by him. The contention of the Complainant counsel is that there is no condition in the agreement Ex.R.1 that in case of theft, the Opposite party Bank is not liable to return the gold article, and therefore, the Opposite party is liable to purchase the gold ornament so as to return the same to the Complainant. But, it is apparent in Ex.R.1 as per condition no.3, that in case of unexpected reasons any damage or loss is caused to the pledged article, the bank is not liable to bear the loss. So, even the theft comes within the unexpected reason causing loss to the gold article. So, under the circumstance, it is unnatural and impossible to direct the Opposite party to return the pledge gold ornament of the Complainant, because it is impossibility and even we cannot direct the Opposite party to purchase the gold and return the same, because the Opposite party Bank would depend upon the insurance availed on the ornaments. As per the evidence of the Opposite party, the claim of some customers has been settled as per the direction of the Head Office. Now, as per Ex.R.1 the value of the gold article is assessed at the rate of Rs.850/- per gram on 09.04.2007 and the gross weight is 32 grams and net weight is 25 grams and on that basis the value of the gold articles fixed at Rs.21,250/- on 25 grams and the Complainant has admitted the same. Admittedly, the jewels had been stolen on 13.11.2007. Though, the term in the insurance policy reveals that the value for the purpose of settlement of any claim in respect of jewellery/ornaments under the policy shall be as per the 100% value as recorded in the register of the Bank at the time of pledging jewellery, it is mandatory to obtain the policy every year, the policy is obtained from 01.04.2007 to 31.03.2008 and when the jewel of the Complainant is stolen in November 2007, the Opposite party has contended that it is liable to pay the value of the jewel fixed in the agreement and not as on the date of complaint. The Opposite party has relied upon decision in Appeal (Civil) 4724/2006 in the case of Raythara Sahakari Bank Ltd., -Vs- Chandrakala R. Das wherein by judgement dated 08.11.2006, the Hon’ble Supreme Court set aside the order of the Hon’ble National Commission and also the Hon’ble State Commission, and remanded the matter to consider the decision taken in the meeting in the presence of borrowers with regard to the claim for stolen jewels which were pledged. In the present case, the Governing Body of the Opposite party Bank has taken decision to settle the claim of the borrowers on the basis of the value fixed by the appraiser at the time of pledging, after deducting the loan due and obtaining the indemnity bond. But, the Opposite party has not called for meeting of the borrowers to decide as to how the claim of the borrowers for pledged jewels which were stolen shall be settled. The Hon’ble Supreme Court in the said case has held that “the decision has taken in the meeting of the borrowers to the effect that the value of the gold on the date of theft was to be paid”. It is undisputed that the claim of so many borrowers has been settled as per the list. It is commonly known that to sell the jewels, the purchasers will deduct some percentage of the weight on the ground of wastage and stones while melting the jewel for making another jewel and they will not pay the cost of the jewel on gross weight. In view of the terms of the insurance wherein the insurance has been taken on the basis of the value of the gold on net weight recorded in the Opposite party Bank records and further when already claim of some borrowers has been settled as per the decision taken by the Head Office of the Opposite party Bank, the claim of the Complainant that he is entitled to the present market value on gross weight cannot be accepted. If such claim is entertained, all borrowers including the borrowers whose claim is settled, would rush to the Forum. Even the gold rate will be fluctuating from time to time and the Complainant has not established the rate of gold at the time of theft or at the time of demand to return the jewel. In fact, this Forum dismissed complaints in C.C.24, 25 & 26/08 on the ground that the complaints are premature as the Opposite party Bank was ready to settle the claim, the Complainants have not accepted. In the Appeal No.1516/08 & 1517/08 against the order of this Forum, the Hon’ble State Commission has allowed the complaints with a direction to Opposite party to pay the price of the gold at the rate of Rs.850/- per gram to the Complainants with interest at 9% p.a. from the date of pledge till realization and further observed that if the loan borrowed by the Complainant is not discharged, it is open for the bank to adjust the amount if any payable by the Complainants while paying the amount as ordered above. In those complaints also the jewels were pledged in October 2006, March 2007 and June 2007. So, in view of the judgement of the Hon’ble State Commission in similar cases, it is just and proper to allow this complaint directing the Opposite party to pay the price of the gold at the rate of Rs.850/- per gram to the Complainant with interest at 9% p.a. after deducting the loan due. In view of the insurance taken by the Opposite party and the value fixed by the appraiser. <br /> 11. In the result, we proceed to pass the following order;<br /> ORDER<br /> <br /> The complaint is allowed partly with a direction to the Opposite party to pay price of the gold at the rate of Rs.850/- per gram on net weight of the jewel to the Complainant with interest at 9% p.a. from the date of pledge till realization after deducting the loan due up to the date of theft with cost of Rs.1,000/-.<br /> <br /> (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 29th day of October 2009).<br /> <br /> (PRESIDENT) (MEMBER) (MEMBER)