Date of filing : 20-11-2008 Date of order :06-07-2009 IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD C.C.No.256/08 Dated this, the 6th day of July 2009. PRESENT SRI.K.T.SIDHIQ : PRESIDENT SMT.P.RAMADEVI : MEMBER SMT.P.P.SHYMALADEVI : MEMBER Mohammed Shafi.B, S/o. Late Ibrahim, Bannathampady House, } Complainant Adhur Village and post. Kasaragod.Dt. (Adv. Abdul Nazir,Kasaragod) The Manager, Muthoot Finance Pvt.Ltd, } Opposite party Kasaragod Branch. (Adv. P.Babu shetty, Kasaragod) O R D E R SRI.K.T.SIDHIQ, PRESIDENT The case of the complainant is that the opposite party has collected excess interest by way of risk interest that was not mentioned at the time of availing loan by pledging gold ornaments. Thereby he had sustained a loss of Rs.9,167/-. Hence the complaint. 2. Opposite party resisted the claim and contended that the complainant entered in to an agreement as per that he has agreed to pay 17% interest and 12% risk interest. The stipulation was that if the complainant closes the account within 3 months then he will get a rebate of 6% in the risk interest and if it is paid after 3 months but before 6 months there will be a reduction of 3% in the risk interest. Since the complainant closed the loan within 6 months a rebate of 3% in risk interest is allowed and thus only a 26% interest is collected from him. 3. Complainant filed affidavit and cross examined by counsel for opposite party. Exts A1 & A2 are marked. For opposite party the branch Manager, filed affidavit and Ext.B1 marked. Both sides heard and documents perused. 4. The say of the complainant is that he was never agreed to pay risk interest @ 12% and the stipulation was to pay interest @ 17% and a rebate of 6% was offered if the loan is closed within 3 months. Accordingly he approached opposite party for closing the loan on 8-8-08 and at that time opposite party claimed interest @ 32% but he was ready to pay interest that is legally due. However to save his 129.8 grams of gold ornaments pledged he paid the interest demanded by opposite party. To substantiate his claim complainant relied on Ext.A2 copy of the loan card. There on the space provided to add the risk interest is seen left blank. According to complainant the opposite party was agreed to provide rebate in the basic interest if the loan is closed within the time specified. 5. But relying on Ext.B1 consent letter cum promissory note Opposite party contended that the complainant has agreed to pay basic interest @ 17% and risk interest @12%. Since the closure of the loan was within 6 months only 9% risk interest has collected from complainant. 6. According to complainant he has not executed Ext.B1 consent letter and at the time of putting his signature in Ext.B1 the column provided for risk interest was left blank. Further opposite party offered rebate in the rate of basic interest for the early closure of loan. But when he approached on 8-8-08 before 3 months opposite party did not agree to allow the rebate in basic interest. Hence he returned without closing the loan and subsequently on 10-10-08 he paid the interest @ 26%. According to him instead of collecting Rs.3132.70 towards interest opposite party collected Rs.12,300/-. Thus a sum of Rs.9,167/- is collected in excess towards interest. 7. On a close perusal of Ext.B1 it is seen that the revenue stamp affixed on the promissory note is subsequently affixed one and it proves that Ext.B1 is prepared for the purpose of the case. Hence no reliance can be placed on it. Where as Ext.A2 the copy of loan card shows that there is no risk interest rate is provided. Hence it appears that the complainant was not made aware about the risk interest at the time of availing loan by pledging gold ornaments. Had it been so the rate of risk interest should have find a place in Ext.A2. It is hard to believe that without even knowing or agreeing the rate of interest one should avail a loan especially from a non-banking finance company whose rate of interest is very higher than that of other banking institution. If that be so the case of the complainant that at the time of availing the loan opposite party fixed the rate of interest as 17% in appears to be true. Interestingly in Ext.B2 the terms and conditions are seen printed on the reverse side. The second condition stipulates that the loan amount has to be repaid on demand by the company and in case the rate of gold ornaments are diminishing then on demand by opposite party the consumer has to refund the amount immediately. If that be so where is the element of risk which enables the opposite party to collect risk interest? Moreover the concept of risk interest is also alien to the field of financing. Of course the opposite party can charge higher rate of interest but collecting higher rate of interest on different heads such as risk interest etc is definitely unethical and indefensible. 8. The contention of opposite party that the complaint is not maintainable since the relationship of the complainant and opposite party is that of a debtor and creditor is not legally maintainable Sec.2 (1) (o) of the Consumer Protection Act 1986 defines ‘service’ as follows. “Service” means service of any description which is made available to potential users (and includes, but not limited to the provisions of) facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”. From the above definition it is clear that financing is also comes within the purview of Consumer Protection Act. Admittedly the opposite party is a non-banking finance company engaged in the field financing. One of their way of financing is giving loan by accepting the gold ornaments on pledge . So definitely the service rendered by opposite party is that of financing which squarely comes within the purview of Sec.2 (1) (o) of the Consumer Protection Act. A person taking loan from a Bank by pledging gold ornaments may not be hiring any services of the bank, but in this case the money advanced after receiving gold ornaments by way of pledge by a non-banking finance company is definitely rendering the service of financing to a consumer which squarely comes within the ambit of service as defined in Sec.2(1)(o) of CP Act. Therefore the complaint is maintainable under the Consumer Protection Act. In view of the above, the complaint is allowed and the opposite party is directed to refund a sum of Rs.9,167/- to the complainant with interest @ 9% from the date of complaint till payment. Opposite party also directed to pay Rs.2,500/- towards the cost of this proceedings. Time for compliance is limited to 30 days from the date of receipt of copy of order. Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Exts. A1.10-10-2008 cash receipt A2. Photocopy of loan card B1. 12-05-08 Promisory note B210-08-08 Statement of account PW1. Muhammad Shafi. DW1. Appaya Naik. K. Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Pj/ Forwarded by Order SENIOR SUPERINTENDENT
......................K.T.Sidhiq
......................P.P.Shymaladevi
......................P.Ramadevi | | 
