BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

O.P. No. 390/2005 Filed on 25.11.2005

Dated : 16.04.2010

Complainants:

1. P.K.Sumam, 'Sooraj', T.C 17/2429 (2), Jagathy, Thycaud P.O, Thiruvananthapuram.

Addl. Complainants:

2. Aswani. R.S, 'Sooraj', T.C 17/2429 (2), Jagathy, Thycaud P.O, Thiruvananthapuram.

    

3. Reshma. R.S, 'Sooraj', T.C 17/2429 (2), Jagathy, Thycaud P.O, Thiruvananthapuram.

Opposite party:

The Secretary, Kalliyoor Service Co-operative Bank, Kalliyoor, Thiruvananthapuram.

(By adv. M. Ananthapadmanabhan)

This O.P having been taken as heard on 15.03.2010, the Forum on 16.04.2010 delivered the following:

ORDER

SMT. BEENAKUMARI.A: MEMBER

1^st complainant is the widow of the late K.J. Raju, who expired on 25.08.2002 and 2^nd & 3^rd complainants are their children. During his life time, on 02.01.2000, he had availed a Gold Loan for Rs. 11,000/- from the opposite party, Society, by pledging gold ornaments weighing 44.500 grams. On 18.03.2001 the deceased husband of the 1^st complainant remitted up to date interest amounting to Rs. 2,412/- in the said gold loan account and renewed the loan for another one year on receipt of a registered notice from the opposite party. Immediately thereafter the borrower fell sick and was hospitalized for prolonged treatment. On 25.08.2002, the borrower, i.e, the husband of the 1^st complainant died in hospital. The death of the borrower is personally known to the Secretary of the Society, who participated in the death ceremony. By October 2002, the complainant informed the opposite party that she is making arrangements for closing the gold loan account availed by her deceased husband. Accordingly by December 2002 when the complainant approached the opposite party with money for closing the said gold loan account, it was advised that the gold ornaments were auctioned for appropriating the gold loan account. Auctioning of gold ornaments without following the legal formalities prescribed by RBI is illegal, unjust and arbitrary. Upon the death of a borrower, it is the legal duty of the Society to inform the legal heirs of the borrowers about the auction of the gold ornaments. The address of the legal heir was already provided in the loan application form itself by the deceased husband of the complainant. When the complainant came to know this illegal activity, she filed a complaint No. 27/2005 before the Hon'ble Lok Ayukta which was withdrawn on 28.07.2005, without prejudice to the complainant's right to move appropriate Forum for appropriate relief.

The opposite party in this case, the Secretary, Kalliyoor Service Co-operative Bank filed their version contending the entire allegations. The opposite party stated that they conducted the auction sale as per the terms and conditions of the gold loan pledged agreement. The opposite party has no information regarding the death of the husband of the complainant. Nobody informed the matter to the bank. Before the auction sale, notice has been issued to the borrower even though it was not mandatory. The opposite party further stated that there is no need to follow RBI directions in connection with gold pledging loans. It is as per the terms and conditions of the loan agreement. The opposite party stated that they have complied all the legal formalities in auction sale proceedings. Hence they prayed for the dismissal of the complaint.

The complainant has filed proof affidavit and produced 10 documents for evidence which were marked as Exts.P1 to P10. The opposite party also filed affidavit and produced 3 documents and that documents were marked as Exts. D1 to D3.

Points that would arise for consideration are:-

1. Whether there is deficiency in service from the side of opposite party?

2. Whether the complainant is entitled to get the reliefs?

Points (i) & (ii):- The husband of the 1^st complainant pledged the gold ornaments weighing 44.500 grams for an amount of Rs. 11,000/- on 02.01.2000. He died on 25.08.2002. On 18.03.2001 the husband of the complainant remitted interest amounting to Rs. 2,412/- to the opposite party and renewed the loan for another one year on receipt of a registered notice from the opposite party. In December 2002 when the complainant approached the opposite party for closing the gold loan then only the complainant knew that the gold ornaments were auctioned by the opposite party for appropriating the gold loan account. The complainant alleges that the auction conducted by the opposite party in not following the legal formalities prescribed by RBI is illegal, unjust and arbitrary. The opposite party stated that they have complied all the legal formalities before the auction sale as per the terms and conditions agreed by the borrower at the time of availing loan. To prove their contentions both parties adduced evidence. Ext. P1 is the pledge token dated 02.01.2000 in the name of the husband of the 1^st complainant, K. Raju, loan amount received is Rs. 11,000/-. As per this document the due date is 18.03.2001, interest payable is Rs. 2387/-. In this document it is clearly stated that the opposite party has the authority to sell the gold without notice after 12 months from the date of availing loan by auction. Ext. P2 is the cash receipt dated 18.03.2001. As per the agreement mentioned in Ext. P1 the husband of the 1^st complainant paid an amount of Rs. 2,412/- to the opposite party as per Ext. P2. Ext. P3 is the order of Lok Ayukta dated 28.07.2005. Ext. P4 is the intimation letter issued by the opposite party to the husband of the complainant on 25.11.2002 informing that the gold ornaments pledged by him was sold in the auction sale conducted by the opposite party and closed the loan account and the balance amount of Rs. 4,696/- was kept in suspense account. This letter was issued on 25.11.2002 i.e, before the death of K.J. Raju. The complainant argued that they did not get that letter. The complainant further stated that it is a fabricated document. But she could not prove that contention. From this document we are of the view that before the death of the husband of the complainant, the opposite party sold out the gold ornaments, the husband of the complainant renewed the loan on 18.03.2001. But the opposite party sold the gold on 17.11.2002, i.e, after one year. Ext. P5 is the photocopy of application form for the gold loan filled by the husband of the complainant. In this document the name of the successor is seen written as that of the complainant. Ext. P6 is the copy of gold loan ledger. From this document we cannot understand what is the amount received by the opposite party in the auction sale of the gold ornaments of the complainant. We can see that an amount of Rs. 4,696/- is in suspense account and also see an endorsement that Registered with A/D notice on 02.01.2001. From this document it is clear that after 02.01.2001 the opposite party did not send any intimation to the complainant or to her husband. Ext. P7 is the copy of a piece of paper publication of the opposite party regarding the auction sale. As per this document the date of auction sale is 29.04.2002. But the opposite party conducted the auction sale only on 17.11.2002. Ext. P8 is the copy of petition filed by the complainant before the Lok Ayuktha. Ext. P9 is the copy of lawyer's notice dated 10.11.2004 issued by the complainant to the opposite party. But there was no response from the side of opposite party. Ext. P10 is the acknowledgement card signed by the opposite party. To defend the case of the complainant the opposite party has produced 3 documents. Ext. D1 is the loan application form and its terms and conditions. As per this document the term of loan is for one year and within that period the borrower should redeem the pledged gold, otherwise the opposite party has the right to sell the gold in auction without notice to the borrower. But in this case the husband of the complainant renewed the loan on 18.03.2001 by paying the entire interest till then. Hence the opposite party has no right to sell his gold before 18.03.2002. The opposite party sold the gold on 17.11.2002, i.e, after 12 months. Ext. D2 is the Desabhimani daily dated 21.04.2002 in which the opposite party published the auction sale. Ext. D3 is the copy of bank decision to conduct auction sale regarding the gold loan upto 31.03.2001. The husband of the complainant pledged the gold on 02.01.2000. He renewed the loan on 18.03.2001. The opposite party published the auction notice on 21.04.2002 that the auction will be conducted on 29.04.2002 and they conducted the auction on 17.11.2002. As per the terms and conditions the auction sale conducted by the opposite party is legal as they published the matter in newspaper and also the opposite party has the right to conduct auction sale without notice as per the terms and conditions of the loan agreement. Hence there is no deficiency in service from the side of the opposite party. This Forum is always with the bonafide consumer. But in this case our efforts to allow this case failed because we cannot find any deficiency in service from the side of opposite party. Hence we have no other way than to dismiss the complaint with liberty to the complainant to receive the amount kept in the opposite party's bank as suspense account (Rs. 4,696/-) with 12% annual interest from 25.11.2002 till the date of realization.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 16^th day of April 2010.

BEENAKUMARI. A : MEMBER

G. SIVAPRASAD : PRESIDENT

S.K. SREELA : MEMBER

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O.P. No. 390/2005

APPENDIX

I COMPLAINANT'S WITNESS :

PW1 - P.K.Sumam

II COMPLAINANT'S DOCUMENTS :

P1 - Pledge token dated 02.01.2000

P2 - Cash receipt dated 18.03.2001

P3 - Order of Lok Ayukta dated 28.07.2005

P4 - Photocopy of intimation letter issued by the opposite party

P5 - Photocopy of application form for the gold loan

P6 - Photocopy of gold loan ledger

P7 - Photocopy of a piece of paper publication of opposite

party.

P8 - Photocopy of petition filed by the complainant before the

Lok Ayuktha.

P9 - Photocopy of lawyer's notice dated 10.11.2004 issued by

the complainant

P10 - Acknowledgement card signed by the opposite party.

III OPPOSITE PARTY'S WITNESS :

DW1 - C. Vidyadharan

IV OPPOSITE PARTY'S DOCUMENTS :

D1 - Loan application form and its terms & conditions

D2 - Desabhimani daily dated 21.04.2002

D3 - Copy of bank decision to conduct auction sale regarding gold loan upto 31.03.2001

PRESIDENT