Complaint No: 178 of 2019.
Date of Institution: 23.05.2019.
Date of order: 19.03.2024.
Rajiv Kumar Son of Sardari Lal, resident of Village Zaffarpur, Tehsil and District Gurdaspur.
….......Complainant.
VERSUS
1. Unimoni Financial Services Ltd., Registered Office at NG 12X13 Ground Floor, North Block, Manipal Centre, Dickenson Road, Bangalore – 560042, through its Manager H.C. No. 009108025594095. Pin Code – 560001.
2. Unimoni Financial Services Ltd., Shop No. 8, Hanuman Chowk, Near Improvement Trust Market, Gurdaspur, through its Manager. Pin Code – 143521.
….Opposite parties.
Complaint U/S 12 of the Consumer Protection Act.
Present: For the Complainant: Sh.Rajiv Bhatia, Advocate.
For the Opposite Parties: Sh.J.S.Randhawa, Advocate.
Quorum: Sh.Lalit Mohan Dogra, President, Sh.Bhagwan Singh Matharu, Member.
ORDER
Lalit Mohan Dogra, President.
Rajiv Kumar, Complainant (here-in-after referred to as complainant) has filed this complaint under section 12 of the Consumer Protection Act (here-in-after referred to as 'Act') against Unimoni Financial Services Ltd. Etc. (here-in-after referred to as 'opposite parties).
2. Briefly stated, the case of the complainant is that the complainant took the loan of Rs.37,340/- from the opposite parties on dated 22.02.2018 by pledging gold of Necklace of 10 Gm. of Rs.19,550/- and Chain of 9-10 Gm. of Rs.17,790/- which comes total amount of Rs.37,340/- @ interest of 2 % for the period of 12 months. The receipt with regard to same was duly issued by the office of the opposite parties. The complainant being faithful loanee approached the office of the opposite party No. 2 in February, 2019 after the stipulated period alongwith loan amount and interest to repay the loan and got his Gold articles released from the opposite parties. It is pleaded that initially the complainant was asked to wait for few days and their higher officials is on leave and asked the complainant to come in last week of March, 2019. The complainant believed on them and again visited the office of the opposite parties in last week of March, 2019, but this time, the complainant was informed that his file has been sent to the head office at Bangalore for clearance and release of Golden articles and it will take more than 1 month and he should come after 1 May, 2019 and uptill that all the necessary formalities and permissions will be completed to release the golden articles by taking back loan amount. It is further pleaded that the complainant went back to come after May, 2019. So when the complainant reached the office of the opposite parties at Gurdaspur alongwith loan amount and interest. He was firstly ignored by the officials of the opposite parties and thereafter told that they cannot release the Gold articles as per instructions of the opposite party No. 1. It is further pleaded that the complainant was surprised to hear and asked for the reason, but he was not heard properly and pushed out by giving firstly abuses. The complainant clearly told to them that he will approach Consumer Court, but the officials asked to the complainant that they do care for any Court. This act of the opposite parties is clear case of deficiency of service of the opposite parties as they cannot harass their customers in this manner. The valuable gold is lying with them and he is ready to pay the loan amount, but in order to grab the valuable gold and harass him, the opposite parties are showing this alleged attitude. Due to this illegal act and conduct of the opposite parties the complainant has suffered great loss and also suffered mental agony, Physical harassment and inconvenience. So, there is a clear cut deficiency in service on the part of the opposite parties.
On this backdrop of facts, the complainant has alleged deficiency and unfair trade practice on the part of the opposite parties and prayed that necessary directions may kindly be issued to the opposite parties to handover the valuable Gold articles of the complainant and receive the remaining loan amount if any and opposite parties be also burdened to pay the amount of Rs.50,000/- for causing mental and physical harassment. The opposite parties may be restrained to sell the Gold ornaments of the complainant fully detailed and described above. The complainant may also be granted any other relief which he may be found entitled to.
3. Upon notice, the opposite parties appeared through counsel and contested the complaint and filing their written reply by taking the preliminary objections that the present complaint of the complainant is not maintainable in the present form and no cause of action has accrued to the complainant against the answering opposite parties for filing the present complaint. It is pleaded that the present complaint of the complainant is sheer misuse and abuse of the process and the complainant has not come to the Hon’ble Court with clean hands and has filed a false complaint by concealing the true and material facts. It is further pleaded that the matter of the fact is that the complainant never visited the office of the opposite party No. 2 which is evident from the photocopy of Visitors Registered for the period from 1st March 2019 to 30th March 2019. When the complainant failed to get his gold redeemed after making payment of loan amount, notice was served upon him, but did not turn up. Thereafter, efforts were made to contact the complainant on phone from 23.04.2019 to 26.06.2019 on number of times, but his given phone number was not approachable. Thereafter, publication for auction of Gold of the complainant (Loan A/c No. 1143483) and other persons who committed default in repayment of loan amount was published in Newspaper “Jagbani” on dated 25.04.2019 for auction of the pledged Gold on dated 27.04.2019 at 10 A.M. It is further pleaded that inspite of the publication in newspaper, the complainant did not turn up. Ultimately, the Gold of the complainant was put on auction as per schedule mentioned above for an amount of Rs.50,300/- against the recoverable amount of Rs.56,521.05 paisa and in this way, an amount of Rs.6,221/- is still outstanding against the complainant, which is evident from the details of auction and the complainant has not come to the Hon'ble Commission with clean hands and filed the present complaint by concealing all the above mentioned facts. It is further pleaded that totally a false and concocted story has been put forth by the complainant in this present complaint. Gold of the complainant has been rightly auctioned by the opposite parties by completing all the formalities and the complainant is fully aware about the same. None of the official of the opposite parties ever told that they do not care for any court as alleged by the complainant and there is no deficiency in service on the part of the answering opposite parties, as it is the complainant who has failed to get his gold redeemed by making repayment of loan amount within stipulated period. The present complaint is nothing, but sheer misuse of the process and is liable to be dismissed.
On merits, the opposite parties have reiterated their stand as taken in legal objections and denied all the averments of the complaint and there is no deficiency in service on the part of the opposite parties. In the end, the opposite parties prayed for dismissal of complaint with costs.
4. Learned counsel for the complainant has filed Self-Attested affidavit of Rajiv Kumar, (Complainant) as Ex.CW-1 alongwith Self-Attested document as Ex.CW-2.
5. Learned counsel for the opposite parties has tendered into evidence affidavit of Sukhjinder Kaur, (Authorized Representative of Unimoni Financial Services Ltd., Gurdaspur) as Ex.OPW-1/A alongwith other documents as Ex.OP-1 to Ex.OP-4 alongwith reply.
6. Rejoinder not filed by the complainant.
7. Written arguments not filed by both the parties.
8. Counsel for the complainant has argued that complainant had obtained loan of Rs.37,340/- from opposite parties by pledging gold ornaments with opposite parties for a period 12 months. It is further argued that in February, 2019 complainant had visited the opposite parties to repay the loan amount with interest but opposite parties delayed the matter with the excuse that file of the complainant has sent to Banglore for clearance and complainant was advised to visit the opposite parties after May, 01 2019. It is further argued that since the complainant is ready to repay the loan amount as such he is entitled to receive gold ornaments and failure to return the gold ornaments amounts to deficiency in service.
9. In support of his submissions, learned counsel for the complainant has relied upon the judgments:
"Hon'ble State Commission, Kerala in Appeal No.128/2020 decided on 3.3.2011 case titled K V George Vs. Muthoot Finance Ltd., wherein it was held that registered notice was not served by the opposite party before auction of the gold ornaments, as such, the opposite party was directed to return gold ornaments to the complainant.
Hon'ble State Commission, U.T. Chandigarh, in First Appeal No.554 of 2013 decided on 1.1.2014 case titled Muthoot Finance Ltd., Vs. Sanjiv Kumar : In this case also, for want of proper notice, auction proceedings were held to be void.
Hon'ble State Commission, Uttarakhand, Dehradun, in First Appeal No.118/203, decided on 18-3-2019 case titled Ms. Esha Sharma Vs. Muthood Finance Ltd., : In this case also, Finance Company was held deficient in auction of gold ornaments without proper intimation to the complainant.
Hon'ble State Commission,Maharashtra, in First Appeal No.RBT/FA/12/1030 case titled Director, Muthoot Finance Vs. Shahnawaz Hiraz Hussain : In this case, it was held that auction proceedings without proper publication of notice is not valid".
10. On the other hand counsel for the opposite parties has argued that complainant had failed to repay the loan amount within stipulated period and never visited the opposite parties as alleged. It is further argued that copy of visitor book from 01 March, 2019 to 30.03.2019 shows that complainant never visited the opposite parties for repayment of the loan. Accordingly, on failure to repay the loan efforts were made to contact the complainant through phone but phone was not approachable and thereafter notice for auction of gold of complainant was published in newspaper Jagbani on 25.04.2019 for auction of pledged gold but inspite of publication of notice complainant failed to turned up. Accordingly, the gold of the complainant was auctioned for an amount of Rs.50,300/- against the recoverable amount of Rs.56521.05 Paisa. Accordingly, there is no deficiency in service on the part of the opposite parties.
11. We have heard the Ld. counsels for the parties and gone through the record.
12. To prove his case complainant has placed on record his self attested affidavit Ex.CW-1 and copy of receipt Ex.CW-2 whereas opposite parties have placed on record affidavit of Sukhjinder Kaur Ex.OPW-1/A, copy of visitor register Ex.OP-1, copy of auction detail Ex.OP-2, copy of news paper cutting Ex.OP-3 ad copy of E-mail Ex.OP-4.
13. It is admitted fact that complainant had availed loan of Rs.37,340/- from opposite parties on 22.02.2018 by pledging gold necklace and gold chain. It is further admitted fact that loan was for a period of 12 months. It is further admitted fact that opposite parties have failed to return the jewellary items to the complainant. The only issue for adjudication before this Commission is whether the complainant is entitled to receive pledged gold items after making payment of loan amount alongwith interest.
14. Perusal of file shows that none of the party to the complaint have placed on record copy of the loan agreement to prove as to what was the terms and conditions of the loan obtained by the complainant and what was the terms and conditions of the auction and what was the procedure to be adopted by the opposite parties before auction of the gold items of the complainant. Although, it is plea of the opposite parties that opposite parties had tried to contact the complainant on phone from 23.04.2019 to 26.06.2019 but phone number was no approachable and thereafter public notice for auction was published in news paper Jagbani on 25.04.2019 but perusal of file shows that no notice through registered post or through ordinary post and through other electronic modes like E-mail or whatsapp was sent to the complainant to apprise the complainant about the proposed auction of his gold items. Perusal of publication item Ex.OP-3 shows that there is detail of around hundreds of account numbers mentioned without the name of the account holders and without the detail of gold items to be auctioned as mentioned. As such we are of the view that by publishing notice Ex.OP-3 which is totally vague in nature and has been published in such a manner that no prudent reader can came to know about the detail of his gold items being sold in auction. It is settled principle of natural justice that no one should be condemned unheard but in the present case opposite parties have the auctioned the gold jewellary of the complainant without giving notice to the complainant which definitely amounts to deficiency in service. It is further plea of the opposite parties that gold of the complainant was put on auction as per schedule mentioned above for an amount of Rs.50,300/- but perusal of file shows that opposite parties have failed to give detail as what was the price of the gold when the gold of the complainant was auctioned and who assessed the value of the gold and what was the procedure adopted during the auction and how many bidders had given bidder. Opposite parties have failed to provide the detail of the person who purchased the gold of the complainant.
15. Since the opposite parties have failed to place on record any auction policy, as such we have relied upon the Circular of Reserve Bank of India dated 02.07.2012 and 16.09.2013 placed on record by the counsel for the complainant. A perusal of Circular dated 27.02.2014 issued by Reserve Bank of India shows that Reserve Bank of India has issued guidelines for sale of gold ornaments in case of 'Lending against collateral of gold jewellary'. Guidelines (iv) (C) (i) (f) reads as under:-
"The Board approved policy with regard to auction of jewellary in case if non-repayment shall be transparent and adequate prior notice to the borrower should be given before the auction dated"
According to (iv) (C) (i) (g), "Auction should be announced to the public by issue of advertisement in atleast 2 newspapers, one in vernacular language and another in national newspaper".
As per Circular dated 16.09.2013 of Reserve Bank of India, Clause 17 C (2) - "Auction" - It has been laid down by Reserve Bank of India that "while auctioning the gold, the NBFC should declare a reserve price for the pledged ornaments. The reserve price for the pledged ornaments should not be less than 85% of the previous 30 days average closing price of 22 carat gold as declared by the Bombay Bullion Association Ltd. (BBA)".
Therefore, this Commission is of the view that while carrying out alleged auction proceedings, the opposite party deliberately failed to comply with rules and also violated the rules framed/Guidelines issued by Reserve Bank of India placed on record. The opposite party has failed to publish auction proceedings to be carried out in one local and one national news paper. The opposite party even failed to carry out the videography or photography of auction proceedings. The opposite party has also failed to place on record detail of participants in the auction proceedings. The opposite party even failed to place on record the detail of auctioned items and register where the detailed to bid price of all the bidders and the last bid price of all the bidders have been recorded and authenticated by Board approved auctioneer. The opposite party has also failed to place on record sale invoice and record of successful bidder who purchased the jewellary/gold ornaments. Meaning thereby that auction proceedings alleged by the opposite party was only a sham transaction and opposite party has itself not followed the rules and conditions of auction.
As such, this Commission is of the considered opinion that auction procedure carried out by the opposite party are held to be not valid for want of service of proper notice and publication of auction proceedings in local and national news papers.
16. Hence, from the above discussions and after going through the referred case law, this Commission is of the view that complainant is entitled to the relief prayed for.
Accordingly, present complaint is partly allowed and opposite parties are directed to determine the amount of loan with interest due from the complainant after deducting the payment, if any, made by the complainant, within one month after receipt of copy of this order and thereafter the complainant shall be under liability to repay the due amount within one month of such determination of loan amount with due interest. It is further held that on receipt of total amount with interest, the complainant shall be entitled to get back his pledged gold ornaments from the opposite parties as per details mentioned in para No.1 of the complaint or to pay present value of the gold ornaments. The opposite parties shall not impose any penalty while calculating interest on the loan amount.
17. Stay application which is pending in this case is also disposed off accordingly alongwith this main order.
18 The complaint could not be decided within the stipulated period due to heavy pendency of Court Cases, vacancies in the office and due to pandemic of Covid-19.
19. Copy of the order be communicated to the parties free of charges. File be consigned.
(Lalit Mohan Dogra)
President.
Announced: (B.S.Matharu)
March 19, 2024 Member.
*YP*
