ORDER

BY SRI.H.R.SRINIVAS, PRESIDENT.

This is the Complaint filed by the Complainant U/S Section 12 of Consumer Protection Act 1986, against the Opposite Party (herein referred in short as OP) alleging the deficiency in service in not sending the proper notice informing regarding auctioning of her pledged gold jewels, for return of the said jewels, for Rs.10,00,000/- as damages for causing her mental agony, trauma and hardship and Rs.1,00,000/- towards litigation expenses and for other reliefs as the Commission deems fit.

2.    This complaint was filed by Smt. Ruchira Kurup for the above reliefs.  During the pendency of the proceedings, she died on 01.08.2019 and her husband; her two sons have continued this proceeding as legal representatives.

3.     The brief facts of the complaint are that; Complainant obtained three loans by pledging her gold ornaments from OP 1.  The first loan was for Rs.1,20,000/- under gold loan number 6787, the second was for Rs.1,95,000/- under gold loan number 7371 and the third gold loan No.7498 for Rs.1,22,000/-.  For the first time, she obtained the gold loan during 2010 and subsequently renewed upto 2014.  Due to personal reasons, she could not pay the interest amount from November 2014 onwards in respect of the gold loan she borrowed.  OP intimated her and requested her to pay the money and regularize the account.  When she approached OP for making part payment, OP refused to receive the same.  OPs have sent notice to the complainant that the pledged jewels would be auctioned to recover the dues from her.  Legal notice was also sent to her by OP on 08.01.2015 to auction the jewels pledged.  She made attempts to arrange for the money to regularize the loan amount or to purchase the said gold ornaments in the auction.  In this connection, she personally visited the branch bank many a times and explained the situation and requested OP to not to auction the same.  She also agreed to show her bonafides to make part payment which was declined.  She enquired with the OP as to how much amount she is to pay for clearing the loan and on 30.04.2015 she was informed by OP that they sold the said jewels on 31.03.2015 itself. The same has been done behind her back without informing her regarding the date of auction.  It was also informed that the said auction was done by private negotiation.  She sought the details of private negotiation through email on 30.04.2015.  OP has given a reply on 07.05.2015 with misrepresenting facts.  When further detail was sought, the bank has not at all answered all the information she wanted.  Even during January 15 and February 15 also OP did not inform her regarding the auction to be conducted in respect of her pledged gold ornaments and also regarding no bidders participating in the public auction. She received a reply on 07.05.2015 and she has replied the same on 09.05.2015 detailing the inconsistencies of the stand of OP. Merely mentioning of the fact that the pledged gold items are going to be auctioned is insufficient in the eye of law.  The entire procedure adopted by the OP in bringing the pledged gold articles for sale and further sale through private negotiation are inherently illegal, irregular.  There are many lapses on the part of OP in disposing of the jewels.  No reasonable notice of sale to be conducted by the bank is given to her and she was kept in dark in respect of date, time and venue of the auction. Even she was not called or informed as to the results of sale through private negotiation. When she contacted over phone after a month or so, she was told that the jewels were sold.  She again wrote another letter on 14.09.2015 and also issued a legal notice on 31.03.2016.  However there was no favorable response to the same from OP.   The act of OP prima-facie indicates deficiency in service and unfair trade practice in not bringing to her notice the date of auction of the jewels pledged by her and also not giving opportunity for her to buy back the same. It has also not mentioned where, when and at what time the auction will be held, thereby disabling her to purchase her own jewellery.  Further the gold loan is given to her on a certain percentage less than the actual value of the gold ornaments.  The gold ornament auctioned by the OP was for a much lesser price.  The said jewelries were adorned with valuable stones and green stones, which has not been valued separately at the time of granting the loan.  The cause of action arose within the jurisdiction of this Commission when OP without informing auctioned the gold ornaments and hence there is negligence on the part of the OPs in not causing proper notice auctioning the same through private negotiation and for a lessor amount which amounts to deficiency in service, unfair trade practice and hence prayed the Commission to allow the complaint.

4.     Upon the service of notice, OPs 1 to 4 appeared before the Commission through their advocate and filed their version contending that the complaint is not maintainable either in law or on facts, misconceived, filed on untenable grounds, no cause of action for the complaint, no legal and valid grounds, filed with mollified intention and liable to be dismissed.

5.   It is further contended that the complainant after availing the three gold loans became defaulter in repaying the amount due to the bank for the reasons best known to her only.  Complainant had no intention to repay the gold loan and the interest accrued thereon. Several notices, reminders were made to complainant demanding the repayment of the gold loan. Inspite of it, she never approached the branch or the officer and paid the loan amount and got released the jewelries pledged.  The allegation of there were no bidders for purchasing the gold jewelries and hence the same was knocked down by the officials of the bank for a throw away price are all false and far from truth.  After the expiry of 12 months from the date of loan within which time, the complainant had to repay the same, did not pay the amount and even did not approach the bank at the right time by making the payment and getting the ornaments released from the pledge.  She was only writing letter after letter, whereas she failed to abide by the agreed terms and conditions of the gold loan.  Complainant is an intentional defaulter.

6.   It has admitted granting three loans to the complainant.  First in the year 2013, Gold ornaments weighing 60 grams were pledged and obtained Rs.1,20,000/- as loan on 22.11.2013 agreeing to repay the loan amount on or before 21.11.2014 and signed the various forms and pledged forms.  She promised to pay the amount of loan within 12 months but failed to pay the same. Hence OP issued notice on 08.01.2015 demanding for the payment of the amount and inspite of service of the same, complainant remained silent without paying the amount. The said loan became non-performing asset and hence it was to be auctioned in public and notices in newspaper of the auctioning of the said jewelries were published on 20.01.2015, to auction the same on 25.02.2015.  Since no bidders came forward to participate in the said auction again the same was put to re-auction on 23.03.2015. For want of bidders, again the said auction, could not be held and hence by obtaining necessary permission from the authorities the same was put to auction through private negotiation on 31.03.2015 and the same was purchased by third party for Rs.1,45,120/-.

7.   In respect of second loan No.7371, a sum of Rs.1,95,000/- was given to the complainant on 21.02.2014 and complainant pledged gold ornaments weighing 97.5 grams. She ought to have got it released on or before 20.02.2015. Since she did not pay the money inspite of demand and notice, dated 06.03.2015 and 13.03.2015 the same became non-performing asset and put to auction vide paper publication on 23.03.2015 and as no bidders came forward to purchase the same, by obtaining orders from higher authorities to dispose the same through private negotiation, the same was sold to third party for Rs.2,25,410/-.

8.     In respect of third loan account No.7498, complainant received Rs.1,22,000/- as loan by pledging gold ornaments weighting 61 grams on 14.03.2014 and liable to pay the entire loan amount with interest on or before 13.03.2015.  Inspite of notice issued on 13.03.2015 and informing complainant that auction to be held on 23.03.2015, since no bidders came forward to purchase the same, by obtaining necessary order from the higher authorities, the same was sold through private negotiation on 31.03.2015 and the same was purchased by third party for Rs.1,39,830/-.  

9.      Even after hearing the said sale and the realization of the amount, complainant kept quite all days and with a mollified intention and ulterior motive, caused a notice on 31.03.2016 through her advocate seeking details of the amount payable with interest and wanted to settle the loan amount within 15 days from the date of notice for which, a detailed reply was given. Denying all the allegations made against it in the complaint, OP has further contended that since already the said jewelries were sold through private negotiation, the same cannot be handed over to the complainant even if she is ready and willing to pay the loan amount along with interest.  Since complainant became a defaulter, and did not come forward to pay the amount, as per the rules and terms and conditions by issuing public notice, they put the jewelries pledged into auction and when no bidders came forward to purchase the same, they by obtaining permission from the higher authorities sold the same through private negotiation and realized the amount and adjusted towards the loan and interest due from the complainant and the balance of amount was credited to her SB account.  All the allegations that the bank officials involved in knocking of the said jewelries for a throw away price, are all far from truth and there is no merit in the complaint and the claim made by the complainant cannot be acceded to and hence prayed the Commission to dismiss the complaint.

10.        In order to prove the case, both the parties have filed their affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Party?

2) Whether the complainants are entitled to the relief prayed for in the complaint?

11.   Our answers to the above points are:-

POINT NO.1 & 2:             In the Negative

                                        For the following.

REASONS

12.   POINT No.1:-

   Perused the complaint, version, affidavit evidence and the documents produced by respective parties.  It is not in dispute that the complainant borrowed 3 loans from the OP by pledging her gold ornaments. It is also admitted that since the complainant did not clear the loan borrowed along with interest, said pledge ornaments were put to auction by OP to realize the dues to the bank.

13.   It is the specific case of the complainant that she was not at all informed by the bank regarding the auction to be held to realize the amount. Though she has stated so in the complaint, she herself at para 4, 5 and 6 of the complaint has admitted the receipt of the legal notice and the legal correspondences made between herself and the OPs.

14.     It is also admitted by the OP that the pledge articles were sold in a private negotiation as no bidders came forward to bid the jewelries in the public auction. The OPs have also produced the letter correspondences through email and the copies of the notices and the replies exchanged and also the circulars regarding the procedure to be adopted while bringing the pledge jewellary to auction. Further they have also produced the pledged jewelries auction register. OPs have also produced the paper publication dated 08.01.2015, 17.02.2015, 17.03.2015 and 14.03.2015 wherein the public were invited to participate in the auction on the date mentioned therein in respect of the selling the gold ornaments, the owners of which, have failed to pay the loan amount along with interest. OPs have also produced the relevant registers and the document to show that the auction was held as per the rules and the amount realized out of the said auction.

15.     When the complainant was issued notice, if she was interested to get the ornaments released, she would have paid the loan amount with interest and got the ornament to her possession. Inspite of receiving the notice, she didn’t make any attempt to pay the amount.

16.     After the auction was over, and the money was paid to the bank and pledge jewelries were handed over to the purchasers, the complainant has come up with this complaint. On perusing the entire record and evidence, we see no deficiency in service or illegality of the procedure followed by the OP in bringing the jewelries to auction. The rules clearly provides for the bank people to sell or auction the pledged gold jewelries to realize the amount due to it without suffering further deterioration in the value of the gold and also to arrest the loss that is going to suffer on account of delay in bringing the auction and fall in the price of the gold. Hence we answer point 1 in the negative holding that there is no deficiency on part of OPs in auctioning the gold jewelries pledged by the complainant and further there is no illegality or procedure lapse on the part of OPs. Hence we answer point 2 also in negative holding that the complainant is not entitled for any of the relief prayed in the complaint and pass the following order.

ORDER

1. Complaint is Dismissed. Parties to bare the cost of litigation.
2. Send a copy of this order to both parties free of cost.

Note: You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Commission on this 02^nd Day of November 2020)

MEMBER                                PRESIDENT

ANNEXURES

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

Copies of Documents produced on behalf of Complainant/s:

Ex A1: Copy of the tokens issued by the OP at the time of availing the Gold Loans.

Ex A2: Copy of the terms and conditions.

Ex. A3: Copy of the Notice issued by the OP dated 08.01.2015.

Ex A4: Copy of the printout of the RBI Circular No. DNBR/PD (CC)/No. 002./03.10.001/2014-15 dated 10.11.2014.

Ex A5: Copy of the email communication calling upon the OP and certain information about the so-called private negotiation on 31.03.2015.

Ex A6: Reply to the email communication dated 07.05.2015.

Ex A7, A8 & A9: Copies of email communications.

Ex A10 & A11: Copy of the Notice dated 31.03.2016 and the reply dated 02.05.2016.

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

RW-1: P. Rajani.

Copies of Documents produced on behalf of Opposite Party/s

Ex R1 to R3: Copy of 3 Gold Loan Applications with Appraisal Memo dated 22.11.2013, 21.12.2014 and 14.03.2014.

    Ex R4 to R6: Copy of Three Statements of Accounts.

Ex R7:     Copy of the Letter / Mail dated 06.02.2015, received from the Complainant.

Ex R8:     Demand Notice dated 08.01.2015, issued by OP to the Complainant.

Ex R9:     Demand Notice dated 13.03.2015, issued by OP to the Complainant.

Ex R10:   Postal Acknowledgement, relating to service of Notice, dated 13.03.2015.

Ex R11:   Letter dated 12.03.2015, issued by OP to the Post Master, R.T. Nagar, with Postal Receipts and Information from the Postal Department.

Ex R12:   Postal Acknowledgements, relating to service of Notices on the Complainant.

Ex R13:   Copy of Reply dated 02.05.2016, issued by the OP Bank to the Lawyer Notice, issued on behalf of the Complainant.

Ex R14:   Letter dated 29.05.2015, received from OP to the Complainant.

Ex R15:   Postal Acknowledgement, relating to service of Letter, dated 29.05.2015 on the Appellant.

   Ex R16 to R19: 4 Paper publications, relating to Publications of Auction Sale Notice dated 08.01.2015, 17.02.2015, 04.03.2015 and 14.03.2015.

MEMBER                                PRESIDENT