Karnataka

Bangalore 4th Additional

CC/15/1872

Mr. Bablu Kumar, - Complainant(s)

Versus

The Manga er M/s India Infoline Finance Ltd., - Opp.Party(s)

Sri. P. Mahadevaswamy

31 May 2018

ORDER

Complaint filed on: 17.11.2015

                                                      Disposed on: 31.05.2018

 

BEFORE THE IV ADDL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

 1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H.ROAD, SHANTHINAGAR, BENGALURU – 560 027    

 

 

CC.No.1872/2015

DATED THIS THE31^stMAY OF2018

PRESENT

 

 

SRI.S.L.PATIL, PRESIDENT

SMT.N.R.ROOPA, MEMBER

 

	Complainant/s	V/s	Opposite party/s
	Bablu Kumar, R/at GL No.1801728, No.1, 20th Cross, Sir M V Nagar, Ramamurthy Nagar, Bangalore-16.   By.Adv.Manjula T.R.		The Manager, M/s India Infoline Finance Ltd., No.69/A, 1st Floor, Nanjappa Garden Main Road, Babusapalya, Bangalore-560 043.     By.Adv.K.Chandan

 

 

PRESIDENT: SRI.S.L.PATIL

1.       This complaint has been filed by the complainant as against the Opposite Party directing to pay the compensation of Rs.48,066/- + Rs.1,00,000/- for mental agony, travelling expenses, damages and inconvenience caused to the Complainant along with interest at 18% p.a. with costs of this complaint.

2.       The brief facts of the case of the complainant are that the Complainant is working as director in company by name M/s Neotecra India Pvt. Ltd., for the purpose of performing his sister marriage, the Complainant approached the Opposite Party for obtaining gold loan and Opposite Party agreed to lend gold loan by pledging gold ornament belonging to the Complainant.  The Complainant submits that25.09.2012, he pledge gold chain, solid and other gold items worth of Rs.3,73,175/- and Rs.3,72,000/- gold loan was sanction by Opposite Party. The Complainant as agreed upon started repaying the loan from 29.10.2012. The Complainant has made payment of Rs.53,419/- on different dates to the Opposite Party. The Complainant further submits that on 25.2.2014, he requested the Opposite Party to convert the present scheme to monthly payable option scheme so as to unable the Complainant to make the payment on monthly installments. As per the request of the Complainant, the Opposite Party has approved the same and the Opposite Party has issued a letter dt.25.2.2014 giving the details of monthly installment payable by the Complainant. After conversion of his gold loan account minimum scheme to monthly payable option scheme, the Complainant has made payment of Rs.48,066/- on different dates to the Opposite Party and the Opposite Party has issued the receipts for the same. Inspite of payment made by the Complainant and inspite of Opposite Party issuing the receipt for the same, the same has not being reflecting in the statement issued by the Opposite Party, but the Opposite Party has issued a notice dt.7.4.2014, claiming the total outstanding of Rs.4,27,964/-. The Complainant approached the Opposite Party and intimated that statement issued by Opposite Party is erroneous as the Opposite Party has not included the payment made by the Complainant to the tune of Rs.48,066/-. The Complainant approached to the Opposite Party several times and requested, the Opposite Party to include Rs.48,066/- in the statement but at that time Opposite Party gave evasive answer saying that all this receipts are issued by previous bank officials and same is not been remitted to the bank account and they have played fraud and misrepresentation with Complainant and they have been removed from service of the bank. Even though the Complainant said that it was not Complainant’s mistake and the Complainant is made the payment to the concerned bank official and has obtained official receipt of the same, but the Opposite Party did not heed to the request of the Complainant and showed Opposite Party arrogant attitude. The Opposite Party has illegally auctioned the gold ornament pledge by Complainant and has recovered Rs.3,95,000/- and now without there being any basis Opposite Party has issued legal notice dt.18.7.2015 demanding payment of deficit amount post auction of Rs.80,710/-. The Complainant is not liable to pay an amount as claim by Opposite Party in the legal notice and it is the Opposite Party without maintaining proper books of account have claimed amount which is not payable by the Complainant. The Opposite Party has deliberately to cheat the Complainant and without deducting the payment made by Complainant out of total balance outstanding Opposite Party has issued notice to the Complainant, hence the Opposite Party has committed fraud, mischief and has illegal auctioned the gold ornament pledge by Complainant. The Complainant has issued legal notice dt.15.9.2015. The notice was served on 19.9.2015, but the Opposite Party has given evasive answer. Hence, this complaint.

3.Notice was ordered issue to the Opposite Party who did appear and filed the version denying the allegations made by the Complainant against them.

4.       The sum and substance of the version filed by the Opposite Party are that the complaint is not maintainable and is totally misconceived and is based on the erroneous assumptions of facts and law.  The Opposite Party submits that it is financial services conglomerate and providing loan on gold in one of its various business activities. The Opposite Party submits that the Complainant approached the Opposite Party and availed gold loan by pledging some of his gold ornaments vide gold loan account bearing No.GL1801728 on 25.9.2012 for a sum of Rs.3,72,000/-. Thereafter, the Complainant failed and neglected to repay the loan amount and hence, the Opposite Party issued a notice dt.7.4.2014 recalling the loan and intimating the Complainant to pay the outstanding sum of Rs.4,27,964/-, failing which gold ornaments would be auctioned. As the Complainant neither repaid the loan amount, nor contacted the Opposite Party, all gold ornaments pledged with Opposite Party was sold on 6.12.2014 and the proceeds were appropriated towards balance due.However, it was found that even after appropriating the proceeds of auction sale, a sum of Rs.80,710/- was due and pending and hence, the Opposite Party issued a demand notice dt.18.7.2015 claiming the said sum of Rs.80,710/- from the Complainant. The Complainant approached the Opposite Party and to the utter shock and surprise of the Opposite Party, he informed about the gold loan being converted to monthly payable option scheme commencing from 1.3.2014 and closing on 1.9.2018 with a monthly EMI of Rs.10,000/-. The Complainant also furnished a letter dt.25.2.2014 and certain receipts for having paid some amount. Upon enquiry by officials of Opposite Party, it was found that one previous employee of the Opposite Party by name Prabhu had played fraud with Opposite Party by issuing unauthorized letter dt.25.2.2014 and also fake receipts without accounting for amounts received from Complainant. However, the said issue was sorted out with Complainant and a sum of Rs.40,000/- was paid to Complainant against his claim of Rs.48,000/- and the whole issue was settled. The Complainant has failed to bring the above aspect to the knowledge of this forum. The Opposite Party submits that as admitted by the Complainant himself, an auction notice was issued, calling upon Complainant to pay the balance due. However, the Complainant having failed to adhere to the terms of the contract agreed between him and the Opposite Party, having failed to pay the EMI promptly, having neglected to comply with demand notice, Opposite Party had no other option but to auction the gold pledged with them and claim for balance due.The complaint filed by the Complainant is liable to be dismissed as the Complainant does not fall within the meaning of the term “consumer” as provided under section 2 (d) of CP Act. The Opposite Party submits that the relationship of Complainant and the Opposite Party is that debtor and creditor and it is the right of Opposite Party to auction sale the items pledged with them in terms of section 176 of the Indian Contract Act, 1872.The Opposite Party submits that the term “service” as defined under the Act does not cover the allegations made by the Complainant. The Opposite Party submits that as the question raised by the Complainant is that of improper sale of pledge articles. It is a settled law that if the person who has pledged his article has any grievance regarding improper sale of pledged articles, his remedy if to file a suit for damages or recovery of articles.  Measure of damages is loss actually sustained and if the sale was not effected under the provisions of law Complainant could proceed against the bank by way of a civil suit for recovery of damages on account of the loss suffered by him. The Complainant resort to the remedies provided under CP Act. Hence, the complaint filed by the Complainant is liable to be dismissed. On these ground and other grounds, prays for dismissal of the complaint.

5.       The Complainant to substantiate his case, filed his affidavit evidence. Though the documents produced, did not marked.The Branch Manager of the Opposite Party has filed affidavit evidence and got marked Ex-B1 to B4. Both the parties have filed their written arguments.Heard the learned counsel for the Complainant and the Opposite Party.

          6.       The points that arise for our consideration are:

1)Whether the Complainant is a consumer comes under the

definition of 2 (1) (d) of CP Act?

 

2) Whether the complainant proves the deficiency in service on the 

part of the OPs, if so, whether he isentitled for the relief sought

for?

 

          3) What Order?

 

          7.  Our answers to the above points are as under:

Point No.1: In the Negative

Point No.2:Does not survive for consideration

Point No.3: As per the final order for the following

REASONS

          8. POINT NO.1:    We have briefly stated the contents of the complaint filed by the Complainant as well as version of the Opposite Party. It is the specific contention of the Complainant that on 25.9.2012, he pledged gold chain, solid and other gold items worth Rs.3,73,175/- and Rs.3,72,000/-. The gold loan was sanctioned by Opposite Party. The Complainant has agreed upon started repaying the loan from 29.10.2012. But according to the Complainant, the said gold items were auctioned in violation of the terms and conditions. Hence, he is entitled for the compensation of Rs.48,066/- + Rs.1,00,000/- for mental agony, traveling expenses and inconvenience caused to him along with  interest at 18% p.a.

9.       Per contra, the learned counsel for the Opposite Party vehemently urged before us stating that the Complainant is not a consumer comes under the definition of Section 2 (1) (d) of CP Act.

          10.     Pledgingof the said gold ornaments were not in dispute. But the question is whether service availed by the Complainant from the Opposite Party comes under the definition of section 2 (1) (o) and section 2 (1) (d)of the CP Act. In this context, the learned counsel for the Opposite Party submits that the relationship between the Complainant and the Opposite Party is that of the creditor and debtor. Hence, his claim will not come under the purview of the CP Act. Utmost, he has to approach the Civil Court to get redress his remedy. In this context, he placed reliance on the following decisions:

1. Standard Chartered Bank V/s P.N.Tantia and others –MANU/CF/0036/1997-equivalent to 1997 (2) C.P.C.411; relevant paras are at 7 to 9

7. We have considered the relevant contentions of the parties and have given our thoughtful consideration to the entire matter. The State Commission observed that the Bank acted as share’s bank of the Complainant inasmuch as the shares of different Companies were kept hypothecated or pledged with bank against cash credit facility upto the sanctioned limit granted by the bank could be availed of by the Complainant and thus by advancing loan to the Complainants in exchange of bank interest, the bank rendered service to the respondents for consideration earned by way of interest on account of the loan of Rs.2,40,000/- advanced in this regard. Therefore, the Complainants were con-submersing service of the bank for consideration by way of payment or interest for the loan received from it by pledging the shares of different companies.

8. In our opinion, the approach of the State Commission was not legally correct. In the normal course of business, it is not the function of the bank to indulge in for the sale and purchase of the shares. Section 176 of the Contract Act provides as under:

“176: Pawnee’s right where Pawner makes default.- If the pawner makes default in payment of the debt, or performance, at the stipulated time, of the promise, the respect of which the goods were pledged, the Pawner may bring a suit against the Pawnee upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the Pawner reasonable notice of the sale.

If the proceeds of such sale are less than the amount due in respect of the debtor promise, the Pawner is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the Pawnee shall pay over the surplus to the Pawner.  

9. The rights and duties of the pledger and a pledgee are set out clearly in Section 176. It is in the discretion of the Pawnee either to file suit for recovery of the debt and retain the pledged goods as collateral security or in the alternative to sell the pledged goods after giving reasonable notice to the Pawner. Apart from this right conferred upon the bank, the bank had no other legal right to sell the shares on behalf of the Complainants. Even otherwise it was not obligatory on the part of the bank to oblige the Complainant by selling his shares. The bank could file a suit for the recovery of the debt and retain the pledged goods as a collateral security. In view of this, we are of the opinion that it was a relationship of a creditor and a debtor so far as pledged shares were concerned. As such, the question of hiring of service of the bank would not arise in such an eventuality. No doubt, the bank could exercise the right conferred on it in accordance with law. The remedy of the Pawner for an improper sale of pledged property is for recovery of damages. Measure of damages is loss actually sustained. If the sale was not effected in terms of their instructions, or it was Complainant could proceed against the bank by way of a civil suit for recovery of damages on account of the loss suffered by them. The Complainant could not resort to the remedies provided under the consumer protection act, 1986. Even otherwise, we find the State Commission awarded compensation of Rs.20,000/- without any basis.  No material was placed on the record by the Complainant in support of their case that they had suffered a loss, if any, on account of the alleged improper sale of shares by the bank. We are of the opinion that the State Commission exercised its jurisdiction illegally and with material irregularity and its order cannot be sustained in law. In the result, we allow this Revision Petition, set aside the orders passed by the State Commission as well as the District Forum and dismiss the complaint of the Complainant with the observation that the Complainants, if they so desire, can pursue their remedy in a competent Court of Law. However, we, make no order as to costs.

2.       D.K.Lalwani and others V/s The President, Indian Bank Mutual Fund and Another-MANU/CF/0214/2001- equivalent to 2002 (1) C.P.C. 622

1. Miscellaneous petition for restoration of the revision petition which was dismissed in default on 27.8.2001 is allowed and the revision petition is restored to its original number.

2. Complainants are the petitioners before us. Their complaint was dismissed by the District Forum and appeal against that was dismissed by the Madhya Pradesh State Consumer Disputes Redressal Commission. Aggrieved, Complainants have filed this revision petition under clause (b) of section 21 of the consumer protection act, 1986. Both the District Forum and the State Commission held that the subject matter did not fell within the provisions of consumer protection act and as such complaint was not maintainable. Complainants had brought certain IND Ratna units (shares) in their joint names. Their case was that there was delay on the part of the respondents-bank is not splitting the units in marketable lots on which account they had lost money. It had been found units were in the custody of the bank and they were pledged against the loan advanced to the Complainants. No attempt was made by the Complainants to repay the amount. Assuming that there was delay in not splitting units in time for sale in marketable lots, complaints-respondents were not entitled to the return of the units as these were pledged as securities with the bank and the bank was not bound to return the same to the complaints. It is rightly held that there was relationship of creditor and debtor between the Complainant and respondent-bank. We find no merit in this petition and it is dismissed.”

3.       Muthoot Bankers V/s N.Shadadharan-MANU/SQ/0048/1999-equivalent to 2000 (1) C.P.C. 401.

 It is not in dispute that, the Complainant pledged the gold ornaments on two occasions with the Opposite Party and raised two loans. The fact that ornaments were pledged for availing loan having been admitted, the question for consideration is, whether such a transaction could create only a debtor and creditor relationship. The decision of the National Commission in III (1997) CPJ 3 (NC) referred to early, concerned the pledging of shares and availing advance/over draft facilities. Dealing with the same the National Commission in the contest of the argument by the revision petitioner that the Complainant therein would not be a consumer came to the conclusion that the transaction would not fall within the provisions of the consumer protection act. In paragraph (10) of the said decision the relative right of the bank and the pawnee is considered, the National Commission observes: “the bank could file a suit for the recovery of the debt and retain the pledged good as a collateral security. In view of this, we are of the opinion that it was a relationship of a creditor and a debtor so far as pledged shares were concerned. As such, the question of hiring of service of the bank would not arise in such an eventuality. No doubt, the bank could exercise the right conferred on it in accordance with law. The remedy of the pawner for an improper sale of pledged property is for recovery of damages. Measure of damages is loss actually sustained. If the sale was not effected in terms of their instructions or it was in violation of the provisions of Section 176, the Complainant could proceed against the bank way of Civil suit for recovery of damages on account of the loss suffered by them. The Complainant could not resort to the remedies provided under the consumer protection act, 1986. In the decision referred to relied by the Complainant that is 1996 NCJ 289 the question regarding the character of the transaction as such did not arise for determination, neither was a dispute as to whether the Complainant therein was a consumer. As such, there was no occasion for the National Commission to decide the character of the transaction. In that case though the Complainant obtained loan from the bank by pledging gold ornaments, the question was as to the fixing of the quantum of compensation. The argument of the Complainant is inasmuch as the complaint was not held to be not maintainable, by necessary implication it must be assumed that, the National Commission acknowledged the status of the Complainant therein as consumer. What is binding on this Commission is the ratio of a decision. As indicated early, since there was no contest in that decision as to the character of the transaction, naturally the National Commission did not go into that question; then it is not possible to deduce a ratio of the type canvassed by the Complainant herein by implication where the said decision of the National Commission does not lay down any such ratio. This is more so, as the National Commission has clearly declares the law in this report in the decision in III (1997) CPJ 3 (NC) referred to early. Since the relationship of the Complainant and the Opposite Party is that of creditor and debtor, in the light of the decision of the National Commission, we are of the view that, this matter had to be entertained only by a Civil Court. In that view, we need not go into the other questions raised in the complaint. We allow appeal 617/98 by the Opposite Party and dismiss appeal 764/98. In the facts and circumstances of the case, the parties are directed to suffer their costs.”

We place reliance on the entire text of the 3 judgments cited by the learned counsel for the Opposite Party. All the three decisions are squarely applicable to the contention taken by the Opposite Party. In the said judgment, it is specifically discuss with regard to the kind of service obtained by the Complainant therein which is nothing but the relationship of creditor and debtor. In this context, the only option left to the Complainant, to approach the Civil Court to get redress his remedy. Accordingly, we come to the conclusion that the complaint filed by the Complainant before this Forum is not maintainable. Accordingly, it is liable to be dismissed with a liberty to the Complainant approach Civil Court to get redress his remedy. Accordingly, we answered the Point no.1 in the Negative.

11.     POINT NO.2:  In view of our finding on Point No.1, this issue does not arise for our consideration.

12.     POINT NO.3: In the result, we proceed to pass the following:

ORDER

        The complaint filed by the Complainant is dismissed.

Looking to the circumstances of the case, we direct both the parties to bear their own cost.

Supply free copy of this order to both the parties.

          (Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the open forum on 31^st May 2018).

 

(ROOPA.N.R)     MEMBER	(S.L.PATIL)  PRESIDENT

 

 

 

1. Witness examined on behalf of the complainant/s by way of affidavit:

 

Bablu Kumar, who being the Complainant was examined.

 

Copies of Documents produced on behalf of Complainant/s:

 

1	Loan sanction letter
2	Book of accounts
3	Payment receipts
4	Gold loan account monthly payment option issued by the Opposite Party
5	Legal notice issued by the Opposite Party on 18.7.2015
6	Legal notice issued by the Complainant on 15.9.2015
7	Postal receipt and acknowledgement

 

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

 

Ms.Priyadarshini Sunil, Branch Manager., who being the Opposite Party was examined.

 

Copies of Documents produced on behalf of Opposite Party

 

Ex-B1	Letter of Authorization dt.4.12.2017
Ex-B2	Auction notice dt.7.4.2014
Ex-B3	Deficit payment notice dt.18.7.2015
Ex-B4	Receipt issued by Complainant

 

(ROOPA.N.R) MEMBER

(S.L.PATIL) PRESIDENT