D.O.F:18/11/2019
D.O.O:30/12/2022
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KASARAGOD
CC.226/19
Dated this, the 30th day of December2022
PRESENT:
SRI.KRISHNAN.K : PRESIDENT
SRI.RADHAKRISHNAN NAIR.M : MEMBER
SMT.BEENA.K.G : MEMBER
M/s. Sumedha, aged about 22 years,
D/o.Sathya Shankara,
Poojapura house, Arikady, : Complainant
Post Kumbala, Kasaragod District
(Rep. by her father Sathya Sankar)
(Adv. A. Balakrishnan Nair)
And
The Manager,
South Indian Bank Ltd, : Opposite Party
Arikady branch, Kumbala – 671321
(Adv. O.Vinodkumar)
ORDER
SRI.KRISHNAN.K : PRESIDENT
The facts of the case is as follows:-
The Complaint relates to renewal of gold loan by complainant for agricultural purposes to the tune of Rs.1,36,000/- on 31/08/2018 from the Opposite Party. She received notice dated 02/09/2019 claiming Rs.1,49,962/- treating the loan as domestic purpose instead of agricultural purposes.
2. Though complainant sought return of gold ornaments request was denied despite request made on 31/07/2019, 31/08/2019, 23/10/2019 and 25/10/2019. Gold ornaments were put up for auction without notice. Complainant sent a notice dated 01/11/2019 followed by reply dated 06/11/2019 informing that complainant to deposit market value to release since a lien is created with gold ornaments.
3. There is negligence in services and relief is sought to direct the opposite party to receive amount shown in demand notice dated 25/10/2019 and to release gold ornaments or pay amount of Rs.3,500/- per gram, being the market rate and adjust loan amount as per demand notice dated 25/10/2019 and compensation and costs.
4. The Opposite Party filed their written version. Opposite Party admitted that complainant obtained Rs.1,36,000/- on 02/08/2018 as per gold loan account from Opposite Party. It is an agricultural loan with interest 9.9%.
5. The Opposite Party denied the averments that the Complainant approached the bank with amount due or Opposite Party misappropriated gold ornaments. Demand notice is sent dated 02/09/2019 since gold is not renewed. Complainant did not visit the bank but her father alone came to bank. Loan is classified as NPA as on 31/03/2018. Authorization was produced on 07/11/2019 bank is entitled for lien and also to conduct auction. Auction is held after following all prescribed rules contentions otherwise is false. Complainant’s her father and mother availed loans but still due and defaulters. The complainant is a student and not an agriculturist. The due amount is not paid by complainant. The complaint is filed to circumvent sarfaesi proceedings. The Opposite Party prayed to dismiss complaint with cost.
The Opposite Party filed IA- 41/21 for joint trial in CC-226/19 and CC-227/19. Petition allowed. Though petition is allowed order passed separately for convenience. For complainant her father filed chief affidavit and was cross examined and documents were marked. No oral evidence for opposite party Ext.B1 to B18 documents marked.
6. From pleadings of the parties the following points arise for consideration in the case.
a) Whether there is any Deficiency in service or negligence from Opposite Party in the matter of auction sale or in disposing off gold ornaments of complainant without following the rules and thus bank is liable for compensation to complainant and whether complainant is entitled to any reliefs and if so for what reliefs ?
7. The Complainant admits receipts of notice dated 25/10/2019 in which bank claimed Rs.1,49,962/- as on 31/08/2019. The complainant admit to pay the amount demanded therein but claims release of pledged gold ornaments.
Borrowers are liable to repay the total outstanding amount due within their repayment period, to release their gold pledged.
Gold loan auction process:-
It was ensured that all companies followed a unified transparent policy for the auction of pledged assets after duly informing a concerned loanee.
Gold loan auction procedure mandates that:-
- By policy the auctioneer is liable to serve an auction notice to a loanee at least 21 days ahead of such proposed auction date. This notice should be sent by registered post.
In the particular case, auction was held on 07/11/2019.Ext.B7 shows that complainant expressed his willingness to pay the amount due thereon and sought release of pledged gold ornaments.Ext.B8 reply to the advocate for complainant shows that reply notice dated 05/11/2019 is delivered to advocate only at 6.30 PM on 06/11/2019 informing confirmation of sale to be held on 07/11/2019
Notice to the complainant is not sent 21 days ahead of auction date by registered post.Postal acknowledgment of receipt of auction notice is not produced.So rules are not followed and is violation of mandate aforesaid.
As a loanee, complainant sent letter dated 07/11/2019 Ext.B7 for an opportunity to release the gold assets pledged by paying an entire due amount till the preceding working day of auction date.However, request is not accepted by the bank but proceeded with auction sale.
After this auction is concluded, the customer will be conveyed with details regarding the process.No notice by registered letter containing details like the value fetched in this auction, outstanding dues fetched, and any balance is not conveyed.
Considering the entire evidence, claim of both parties, there is serious Deficiency in Services and negligence in the service of Opposite Party bank in not following the procedure, in conduction gold auction process. The complainant, though expressed her willingness to pay entire amount even on the date of proposed sale, no reason is stated as to why not to allow the request. Thus complainant is entitled to compensation and other reliefs as admissible under law.
The complainant is liable to pay Rs.1,49,962/- (rounded to Rs.1,50,000/-) to the bank due as on 31/08/2019 with interest thereon till 31/12/2022 at 9.9% per annum which comes to Rs.50,000/-. Since gold ornaments are already sold in auction and thus not able to return it as it is, Opposite party bank is directed to pay the market value of the gold ornaments claimed at the rate of Rs.3,500/- to the complainant for the pledged gold ornaments namely 81.2 grams shown in Ext.B1 which amount comes to Rs.2,43,000/- set off is given to bank by adjusting its liability. Thus excess amount due by bank to complainant is Rs.43,000/- Opposite Party bank is directed to pay Rs.43,000/- being the difference amount as above to complainant.
The Complainant is entitled to compensation for Deficiency in services and for mental tension and agony suffered due to that complainant claimed Rs.5,00,000/- as compensation. The claim is on higher side. Under the circumstances and considering the facts of the case that auction is held for default in re-payment of loan in time, compensation is fixed as Rs.10,000/- which amount is found be reasonable. The complainant is also entitled for that amount as cost of litigation.
Thus complainant is allowed in part, Opposite Party bank is directed to pay Rs.43,000/- (Rupees Forty Three Thousand only) as described above and also to pay compensation of Rs.10,000/- (Rupees Ten Thousand only) with litigation cost of Rs.5,000/- (Rupees Five Thousand only) to complainant within 30 days of the receipt of the order.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Exhibits
A16: Token issued by the opposite party
A17: Notice
A18: Auction Notice
A19: Notice
A20: Notice
A21(a): Letter
A21(b): Postal Acknowledgement Card
A22: Authorisation
B1: Gold Loan Pledge Form
B2: Loan Application form
B3: Renewal of Credit facilities
B4: Statement of Account
B5: Gold Auction Sanction notice
B6: Gold Auction conducted proceedings
B7: Request letter
B8: Reply notice from the Bank
B9: Copy of Acknowledgement card
B10: Details of persons participated in Gold auction
B11: Notice issued by the bank
B12: Gold auction sale published in the newspaper Consumer CIR
B13: Notice of Gold pawn auction sale
B14: NPA summary of the complainant
B15: CIBIL statement of the complainant
B16: CIBIL statement of the complainant
B17: Notice under section 13(2) of SARFAESI Act issued to the complainant
B18: Decree and judgement passed by the Subordinate judge’s Court
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Forwarded by Order
Assistant Registrar
Ps/
