DISTRICT CONSUMER DISPUTES REDRESSAL FORUM  PALAKKAD

Dated this the  29th   day of July 2017

Present   : Smt.Shiny.P.R. President

               : Smt.Suma.K.P.  Member                                 Date of filing:  12/08/2016

               : Sri.V.P.Anantha Narayanan, Member

                                                      (C.C.No.123/2016)       

Suresh.M

S/o Mani,

Kalliyamkad House,

Moothedam, Mundur

Palakkad

(Adv’s.Jayachandran.G & P.Pradeep)             -        Complainant

 V/s

1.  The Secretary                                          -        Opposite Party

     Mundur Service Co-op Bank,

     No. F-1650,

     Mundur, Palakkad.

    (Shiju Kuriakkose)                

O R D E R

By Sri.V.P.Anantha Narayanan, Member

Brief facts of the complaint. 

          The complainant who is a member of a opposite party bank.  Availed gold loan Rs.33,000/- by pledging his two sovereign gold (16.5 gms) on 03/03/2014.   Since he has an urgent need for money, complainant pledged his wife’s thalimala for the above loan.  The complainant paid Rs.5,500/-towards the loan on 03/07/2015 as per chalan number 659622.  On 03/12/2015 complainant received a letter from the opposite party asking him to pay a sum of Rs.36,054/- towards the gold loan.  In the demand letter it is also stated that failure to pay the amount will result in public auction of the pledged gold on 06/02/2016 at 2 pm.  To stop the public auction and to protect his gold ornament complainant paid Rs.5,000/-to the opposite party towards the loan on 28/01/2016 as per chalan number 726287; in this amount, opposite party appropriated Rs.1,099/- towards principal, Rs.3, 851/- towards interest and Rs.50/- towards notice charges.  According to the complainant since opposite party accepted the amount towards the principal, it is clear that loan stands renewed and therefore the sale of pledged gold ornament in public auction is against the rules and regulations of the bank.  Complainant again approached opposite party with cash on 21/03/2016 for settlement of the above gold loan.  According to the complainant, opposite party then informed him that the pledged gold ornament was sold in public auction and there was no intimation by the opposite party to the complainant regarding the sale, the date of sale and the amount received on the sale etc..  Gold ornaments of members who availed loan prior to complainant’s loan were not sold in public auction by the opposite party, pleaded by the complainant.  The above act of the opposite party clearly shows deficiency in service and violation of rules and regulations of the bank.  The act of the opposite party also caused great mental agony for Rs.1,00,000/-, because no other gold ornament can replace the thalimala.  Complainant caused to send a registered lawyer notice through his counsel to the opposite party stating the above facts on 08/06/2016 which was received by the opposite party who sent a reply on 14/06/2016 through their counsel stating false and flimsy reason. 

          It is therefore prayed by the complainant to this Hon’ble Forum to direct the opposite parties to pay a compensation of Rs.1,00,000/- to him for mental agony, sufferings and loss suffered by the complainant and the cost of this proceeding incurred by him and also to record the deficiency in service of the opposite party in the sale of pledged gold ornament in public auction and appropriation of amount.

          The complaint was admitted and notices were sent to both parties.  In the version submitted by opposite party, the opposite party contend that his complaint does not legally sustain.  This complaint was filed experimentally inorder to cause difficulties to the opposite party.  The basis of this complaint is a loan transaction which is commercial.  Hence the complaint is not sustainable, according to the opposite party.  The statement by the complainant that on n 03-03-2014 complainant took a loan of Rs.33,000/- from the opposite party pledging 16.5 gms gold is correct.  Opposite party agrees that loan no. and membership no. were shown.  But the statement that complainant’s wife’s Thalimala was pledged in the opposite party bank and for the Thalimala complainant and his family have sentimental attachment is not correct and hence denied by the opposite party; Opposite party also agrees to the complainant’s statements that on 03.07.2015 the complainant paid Rs.5,500/- to opposite party bank and after that on 03.12.2015 opposite party sent a notice to the complainant to pay Rs.36,054/- in the name of the opposite party.  On 28.01.2016 towards the above loan complainant paid Rs.5,000/- is also correct.  But the statement that this amount was paid to stall auction proceedings and to protect the pledged ornaments is not correct and hence the same was denied.   The above mentioned amount was paid and consequently loan transaction was renewed is not correct and hence denied.  Also the statement that the pledged ornaments were auctioned unlawfully is not correct and is denied.    On 21.03.2016 complainant, to complete the above loan transaction, contacted the opposite party with money, pledged ornaments was auctioned, complainant was not given any information regarding the auction, complainant was not informed about auction date and amount, the pledged ornaments of persons before the above transaction were not sold in auction, in auction sale of complainant’s pledged ornaments, opposite party was having some ulterior motives are not correct and hence denied.  The ct of the opposite party amounts to deficiency in service, is against rules and regulations of the bank are not correct and hence denied.  The act of the opposite party caused huge mental agony of Rs.1,00,000/- is also not correct and is denied.  Actually, on 03.03.2014, 16.5 gm’s gold belonging to the complainant were pledged in the opposite party bank and for commercial purpose Rs.33,000/- was possessed by the complainant at 13.75% interest rate. The period of the loan was 12 months within which pledged amount and interest were to be paid and the pledged ornaments were to be taken back for which complainant is liable.  The above loan period expired on 03.03.2015.  For the above transaction, since the loan period was over, on 13.03.2015 registered notice was sent by the opposite party.  After receiving the notice, on 03.07.2015 the complainant paid Rs.5,500/- including notice charges towards the loan transaction.  Even after that the complainant was not prepared to close the loan transaction; hence on 04.12.2015 registered notice was sent to the complainant.  After receiving this notice on 28.01.2016 Rs.5,000/- was paid by the complainant towards loan arrear amount.  At that time, according to the opposite party the complainant was not prepared to settle the loan transaction nor renew the pledge of the ornament.  The complainant willfully defaulted in repaying the amount due to be paid to the opposite party bank.  Opposite party contends that the opposite party bank is working under the co-operative Laws and is liable to comply the guidelines of the co-operative department.  On that basis, since over dues of the bank is increasing and according to the instruction of the Co-operative Assistant Registrar that pledged gold ornaments which were over due for more than six months should be auctioned, accordingly the above overdue pledged ornaments were decided to be auction on 11.03.2016.  This matter through news paper advertisement and registered letter was informed to the borrower.  Accordingly complainant’s pledged ornaments were auction for Rs.40,013/-.  From this amount, amount due to the bank towards principal and interest was deducted and the balance amount of Rs.7,325/- was set up on in suspense account for paying to the complainant.  This amount can be obtained by the complainant from the opposite party at any time.  Opposite party contends that after complying all the legal formalities auction was conducted.  Other gold loans taken by the complainant from the opposite patty were also overdue.  According to the opposite party there was no deficiency in service on their part. 

          Therefore opposite party prays to the Hon’ble Forum to dismiss the complaint with cost to opposite party. 

          Complainant filed chief affidavit and document marked as Exts.A1 to A6.  From the side of opposite party Exts.B1 to B5 were marked.  Both parties were heard. 

The following issues that arises for consideration are.

1.Whether there is any deficiency of service and/or unfair trade practice from the part of opposite party ?

2.If so, what is the relief and cost?

Issue No.1 & 2

Ext.A1 showing that the complainant has availed gold loan for

 Rs.33,000/- from the opposite party by pledging 16.5 gms of gold on 03/03/2014.  The complainant paid Rs.5,500/- on the gold loan on 03/07/2015 as per chalan no. 659622 marked as Ext.A2.  He received a notice  dated 03/12/2015 from the opposite party, which is marked as Ext.A3 asking the complainant to pay Rs.36,054/- towards the gold loan plus interest, failing which the pledged ornaments would be sold at public auction at 2 pm on 06/02/2016.  To protect the gold ornament complainant paid Rs.5,000/- to the opposite party which was appropriated by the opposite party as Rs.1,099/- towards principal, Rs.3,851/- towards interest and Rs.50/- towards notice charges as per chalan no. 726287 which is marked as Ext.A4.  The stand of the complainant is that since opposite party accepted Rs.1,099/- towards principal from the complainant, the loan is renewed and the sale of pledged gold ornament in public auction is against the rules and regulations of the bank.  On 03/06/2016, when complainant approached the 1st opposite party with cash for settling the above gold loan he was informed of the sale of pledged gold ornament in public auction on 11/03/2016.  According to the complainant opposite party did not intimate him about the sale of the pledged ornament in public auction, date of sale and the amount received on the sale. 

          In his version opposite party contends that on 03/03/2014 complainant availed gold loan of Rs.33,000/- at 13.75% interest for commercial purpose by pledging 16.5 gms of gold which is indicated by Ext.B1.  It also indicates that the period of the loan was 12 months within which the complainant is liable to pay principal amount of the gold loan and interest and get back the pledged ornament.  The above loan expired on 03/03/2015 and on 13/03/2015 complainant was sent a registered notice by the opposite party bank and consequently on 03/07/2015 complainant paid Rs.5,500/- towards the loan transaction.  On 04/12/2015 a registered notice was sent to the complainant and after receiving the notice on 28/01/2016 Rs.5,000/- was remitted by the complainant towards loan arrear amount.  As per the instruction of the Assistant Registrar of Co-operative Societies pledged ornaments which fell due over six months should be auctioned and accordingly complainant’s pledged ornament was decided to be auctioned on 11/03/2016 at 2 pm at the Head Office of the opposite party bank which was intimated to all defaulters including the complainant through “Deshabimani” news paper advertisement vide Exts.B2.  As per Ext.B3 all defaulters of gold loan including the complainant were informed through News Paper advertisement in the “Mathrubhumi” that their pledged ornaments were decided to be auctioned on 04.07.2015 at 2 pm at the Head Office of the opposite party bank.  The opposite party also filed loan ledger report marked as Ext.B4 which indicates all information about the complainant’s gold loan.  Acknowledgement card received from the complainant dated. 07.05.2016 was marked as Ext.B5 which shows registered letter sent by the opposite party was received by the complainant.  Accordingly complainant’s pledged ornaments were legally auctioned for Rs.40,013/- and after adjusting principal amount and interest due to the opposite party bank the balance of Rs.7,325/- was set apart in suspense account for paying to the complainant. 

          From the documentary evidences produced we observe that the complainant who is a member in the opposite party bank availed a gold loan for Rs.33,000/- on 03/03/2014 from the opposite party bank by pledging his 16.5 gms of gold ornaments.  We understand that complainant paid Rs.5,000/- on 28/01/2016, to opposite party bank out of which Rs.1,099/- (Rupees one thousand ninety nine only) was seen appropriated by the opposite party bank towards principal amount which indicated that complainant’s loan was renewed for another six months from 28/01/2016.  It is also observed that before the expiry of six months from the date of renewal, on 11/03/2016, complainant’s pledged ornaments were seen auctioned by the opposite party bank which act shows commission of deficiency in service and unfair trade practice by the opposite party bank. 

          Hence complaint is allowed.

          Opposite party bank is directed to pay to the complainant Rs.7,325/- (Rupees seven thousand three hundred and twenty five only) being the balance amount set apart by the opposite party bank for paying to the complainant after the conduct of auction sale of his pledged ornaments on 11/03/2016 and Rs.10,000/- (Rupees ten thousand only) towards the difference between the market price on 11/03/2016 of 16.5 gms of gold ornaments sold by the opposite party in public auction and Rs.40,013/- (Rupees forty thousand thirteen only) for which 16.5 gms of gold ornaments were stated to be sold by the opposite party bank in public auction on 11/03/2016, compensation for mental agony and difficulties faced by the complainant and litigation expenses incurred by the complainant. 

          This order shall be executed within one month from the date of receipt of this order, failing which interest at the rate of 9% p.a  on the total amount due from the date of this order till realization should also be paid to the complainant. 

Pronounced in the open court on this the 29th day of July 2017.

                                                                                                      Sd/-

                      Shiny.P.R.

                      President 

                          Sd/-     

                      Suma.K.P.

                      Member

                   Sd/-

    V.P.Anantha Narayanan

                    Member

Appendix

Exhibits marked on the side of complainant

Ext.A1   –  Original Gold Loan Receipt dated. 03.03.2014 for Rs.33,000/-

Ext.A2   –  Original chalan No. 659622 dated. 03.07.2015 for Rs.5,500/- issued by the

                opposite party bank       

Ext.A3   –  Notice dated. 03.12.2015 issued by opposite party bank to the complainant

     asking the complainant to pay Rs.36,054/- towards the gold loan plus

               interest, failing which the pledged ornaments would be sold at public

              auction at 2 pm on 06/02/2016

Ext.A4   - Chalan No. 726287 dated. 28.01.2016 issued by opposite party bank to

             the Complainant for  Rs.5,000/- received from the complainant,

              appropriating Rs.1099/- towards principal, Rs.3,851/- towards interest and

               Rs.50/- towards notice charge

Ext.A5            - copy of the registered lawyer notice sent by the complainant’s advocate

                to the  opposite party, dated. 08.06.2016

Ext.A6          -  letter sent by the opposite party’s advocate to complainant’s

                advocate dated. 14.06.2015

Exhibits marked on the side of Opposite parties

Ext.B1 - copy of application for availing gold loan of Rs.33,000/- submitted by the

            complainant, dated. 03.03.2014

Ext.B2 - notice dated. 23.2.2016 for sale of pledged ornament in public auction

            on 11/03/2016 at 2.00 pm at Head Office of the opposite party bank               published in “Deshabimani” News Paper

Ext.B3 - notice dated. 19.06.2015 for sale of pledged ornament in public

            Auction on 04.07.2015  at 2.00 pm at Head Office of the opposite

            party bank  published in “Mathrubhumi” News Paper

Ext.B4 - Loan Ledger report given by Mundur Service Co-operative Bank  

            giving all details of gold loan availed by the complainant dated.

            10.06.2016

Ext.B5 - Acknowledgement card dated. 07.05.2016 received from the

            complainant for receipt of registered notice

Witness examined on the side of complainant

Nil

Witness examined on the side of opposite party

Nil

Cost    

Difference between the market price on 11.03.2016 of 16.5 gms  pledged gold ornaments sold in public auction and Rs.40,013/-, compensation for mental agony and litigation costs-  Rs.10,000/-