DATE OF FILING :25/10/17 

IN THE CONSUMER DISPUTES  REDRESSAL FORUM, IDUKKI

Dated this the  30th day of January  2019

Present :

SRI. S. GOPAKUMAR PRESIDENT

           SMT.ASAMOL P. MEMBER

CC NO. 225/2017

Between

Complainant       :  Sarala, W/o Rajappan,

                                                                            Jyothi Bhavan, 

                                                                            Vellayamkudy P.O., Suvarnagiri, 

                                                                            Kattappana Pin – 685 515.

(By Adv: V.C.Sebastian)

And

Opposite Party                                          :   1 . The Branch Manger,

                                                                              Idndel Money (P) Ltd., 

                                                                              Kattappana Branch, Ground floor, 

                                                                              Matha Building Near Gurumandiram,

                                                                              Kattappana, Pin – 685 508.

                                                                       2 . The Manager, 

                                                                           Indel Money (P) Ltd., 3rd Floor, Indel House,                 

                                                                           Changanpuzha Nagar, South Kalamassery, 

                                                                           Ernakulam – 682 033.

(Both by Adv:Sinu G Nath and Adv.Ajimon K.P.)

 

O R D E R

SRI. S. GOPAKUMAR (PRESIDENT)

 

The case  of the complainant is that,  

 

Complainant availed 7 loans from the opposite parties bank after pledging her gold ornaments on 29/07/16.  The details of the said loans are  Gold loan No.1185 dated 29/07/2016 of Rs.41,700/-, GL. No.1186 of Rs.43,800/-, GL. No.1187  of Rs.38,300/-, GL No.1188 of Rs.8,400/-,                 GL. No.1324 dated 27/08/2016 of Rs.91,700/-, GL. No 1325 dated 27/08/2016 of Ra.99,999, GL. No 2314 dated 20/06/2017 of Rs.25,500/-.  At the time of availing the loan, the complainant enquired about the interest details which is stated in the loan token, to the first opposite party and at that time the first opposite party promised that even though it is entered like that, they will charge interest @ of Rs.1 per Rs.100/-.  By believing the words of the opposite

                                                                                                                            (Cont...2)

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parties, complainant happened to avail the above said loans from the opposite party's financing company.

 

The complainant further contented that, she paid Rs.1714/- as interest in the GL.No1185 on 11/10/16, Rs.1800/- as interest in GL. NO 1186 and Rs.3595 on 28/02/17, and she remitted Rs.1574 in GL. No 1187 on 28/02/17.  At the time of remitting the above said interest, the complainant again enquired about the interest rate which is charging in the loan accounts with the first opposite party.  At that time the first opposite party replied that the interest details and additional charges are specifically stated in the reverse side of loan token as condition 1 to 22.  On perusing the loan token, it is seen that even though some conditions are stated its reverse side, no rate of interest or additional charges are stated therein.

 

While so, the complainant received one notice dated 18/07/17 from the corporate office of the first opposite party demanding to close all the above said loans along with its interest within 7 days from the date of receipt of the notice.  On perusing the notice complainant noticed that even though the opposite parties company demanded the loan dues along with interest, no specific amount of interest or actual loan dues, along with interest is specified in the notice.  Hence the complainant approached the first opposite party with this notice and at that time the first opposite party  stated that they will realize more than 30% interest and the opposite parties demanded a very huge amount by way of loan dues.  Complainant  alleges that the act of the opposite parties demanding a very huge amount by way of interest  is against the norms of the RBI and the prevailing Kerala Money Lenders Act, and the said act of the opposite parties is clearly unfair trade practice.  Against this the complainant approached this Forum for getting the relief such as to direct the opposite parties to settle the loan account by realizing 14% interest and also direct them to pay cost and compensation.

 

Upon notice opposite parties entered appearance and filed detailed reply version by denying all the complaint averments.  In their version opposite parties further contented that they are a company  registered under the Companies Act of 1956 and registered as a Non Banking Finance Company under the Reserve Bank of India Act.  The complainant wrongly relied on the provisions of  Kerala  Money  Lenders  Act  in  challenging  the  rate  of  interest

                                                                                                                            (Cont...3)

-3-

 

charged by the opposite parties.  Even if it is presumed for argument sake that the law governing the charging of interest by the opposite parties is the Kerala Money Lenders Act, the complainant ought to have filed a suit before a competent  Civil Court having jurisdiction, in compliance of section 8 of the Money Lender Act after depositing the loan amount with interest.   The complainant has no dispute as to the principle loan amount or as to 14% interest as averred by her, and the only dispute raised is regarding the rate of interest allegrdly demanded by the opposite parties in excess of the said rate of 14%.  Nothing  is stated in the accompanying affidavit, about the reason for not depositing the principal amount or the agreed rate of 14% interest as stipulated in section 8 of KML Act, before a Civil Court or this Forum.  Opposite parties further contented that, since they are governing by the provisions of RBI Act and RBI Rules, the charging of interest at a rate as revealed to the complainant, is lawful.  The charging of interest at the rate applicable to the loan availed by the complainant is not in violation of any provisions of RBI Act and the RBI rules.  The complainant complied the pattern of rate of interest fixed at the time of granting the loan and had raised the issue of dispute with regard to the rate of interest only after recalling of the loan after the completion of loan  period.  The complainant is estopped from challenging the rate of interest or interest or interest rate pattern and she paid the interest at the rate already revealed to her at the time of releasing the loan.  Hence the complainant is not entitled for any of the relief claimed in the complaint.

 

Evidence adduced by the complainant by way of proof affidavit.  Complainant was examined as PW1. Ext.P1(s) to Ext.P5 were marked.  Ext.P1(s) are the copy of loan token 7 in numbers, Ext.P2 is the receipt for the payment of interest, Ext.P3 and Ext.P4  are notices issued by the opposite parties bank, Ext.P5 is the copy of reply to the notices .   From the defence side one Renjith Kumar, Branch Manager of the first opposite party examined as DW1.  Ext.R1 to Ext.R5 were marked.  Ext.R1 is the copy of Registration certificate, Ext.R2 is Master Circular of RBI dated 01/07/2011, Ext.R3 is the bank circular of RBI dated 02/07/2012, Ext.R4 is the updated bank circular of RBI dated 01/07/2015, Ext.R5 is the Fair Practice Code of opposite parties (malayalam version),Ext.R5(a) is the fair  practice code of opposite parties company (English Version).

 

                                                                                                                           (Cont...4)

-4-

Heard both sides,

                                                                                                             

The point that arose for consideration is whether there is any deficiency in service from the part of opposite parties, and if so, for what relief the complainant is entitled to ?

 

The Point:- We have heard the counsels for the parties and had perused the records.  The learned counsel for the complainant argued that the opposite parties finance company realizing huge rate of interest and is against the prevailing norms.  They are permitted to realizing only 12% interest and 2% as penal interest.  But as per the loan token opposite parties bank is realizing 30% and more by way of interest.  More over at the time of availing the loan opposite parties company promised that they will realize only 12% interest in this loan.  The learned counsel further stated that in Ext.P4 notice, opposite parties has not stated the rate of interest and default rate of interest and other charges.  The notice is vague and this practice of the opposite parties is a trap and by issuing such type of notices is a gross unfair trade practice and this caused much mental agony and hardship to the complainant.

 

On the other hand the learned counsel for the opposite parties argued with vehemence that the act of the complainant be considered as unfair, because they are governed by the norms of RBI Act and RBI Rules.  He further argued that at the time of availing the loan the Branch Manager clarified the interest pattern and after convincing all these aspects, the complainant availed loan by pledging her gold ornaments.  More over she remitted interest in some of the above said gold loans as per the pattern of interest which was already revealed for her at the time of availing the loan.

 

On going through the documents and points of arguments, it is seen that the complainant availed four loans from the opposite parties finance on 29/07/16 and availed two loans on 27/08/16 and one loan on 20/06/17.  The loan account numbers are 1185/16, 1186/16, 1187/16, 1188/16 (dated 29/07/16), 1324/16, 1325/16 (dated 27/08/16) and 2314/16 dated 20/06/17.  In the face of each loan receipts, the rate of interest and its period are specifically stated.  Out of these loans, complainant remitted Rs.1714 on 11/10/16 in GL. No.1185, Rs.1800/- on 11/10/16 in GL. No.1186, Rs.3595 on 28/02/17 in GL. No. 1186 and Rs.1574 on 11/10/16 in GL. No.1187.  As per the

                                                                                                                            (Cont...5)

-5-

documents it is seen that the complainant remitted this amount by way of interest within 90 days from the date of loan.  Hence we persume that she remitted interest @ 20% as per the interest pattern which is stated in Ext.P1 series loan receipt.  It is also noted that complainant raised her voice against the rate of interest  only after receiving the Ext.P3 notice on 18/07/17.  As per the version of the complainant she approached the first opposite party immediately after receiving the notice and enquired about the outstanding loan dues, since the notice is vague, and incomplete.  At that time opposite parties demanded interest more than 30% as its penal interest and other charges.     On perusing Ext.P3 notice, the Forum convinced that the notice lacks the basic details of interest, and it cannot be accepted as a demand notice.  On going through this notice Forum further noticed that, issuing such type of incomplete or vague notice, is only to defraud the customers, in order to grab a huge rate of interest.  It is also noted  that, complainant issued a legal notice to the opposite parties, immediately after receiving their demand notice, for disclosing the rate of interest and other penal charges.  Even though the opposite parties received the notice, the failed to respond and it shows the adamant attitude of the opposite parties  to realise money illegally from the complainant.  Such type of practice of a Non Banking Finance Company is unfair and it cannot  be allowable.  It is the bounden duty of the opposite parties company to issue a fair and transparent demand notice to the complainant by stating all the details of the loan account, which the complainant legally bound to pay.   More over opposite parties failed to disclose it even after the receipt of the legal notice issued to them in return of their demand notice.  The above said act of the opposite parties clearly pointing out unfair trade practice in this matter.

 

Hence on the basis of above discussion the Forum is of a considered view that the allegation against the opposite parties is sustainable and it is proved by the complainant with clear and cogent evidence.  Hence the complaint allowed.  Opposite parties is directed to issue a statement of account to the complainant by calculating 14% of interest in this loan account from the date of each loan by deducting the amount already paid by the complainant in the respective gold loans, within 30 days from the date of receipt of the copy of this order.  The complainant is directed to remit the loan dues   as   per   this   statement   of   account  as directed within 30 days from the  date  of  receipt  of   the   statement  of  account  of  the  opposite  parties.

                                                                                                                          (Cont...6)

-6-

Opposite parties is at liberty to charge interest @ 24% if the complainant failed to remit the loan dues as directed above.  No cost or compensation is ordered.

 

Pronounced in the Open Forum on this the 30th day of January, 2019.

 

                                                                                                     Sd/- 

                                                                                      SRI. S. GOPAKUMAR (PRESIDENT)

                                                                                                            Sd/-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

             SMT.ASAMOL P.  (MEMBER)

 

APPENDIX

Depositions :

On the side of the Complainant :

PW1               -Sarala Rajappan

On the side of the Opposite Party :

DW1              - Renjith Kumar T.R.

Exhibits :

On the side of the Complainant :

Ext.P1 (s)      -  The copy of loan token 7 in numbers

Ext.P2            - The receipt for the payment of interest

Ext.P3          - The  notices issued by the opposite parties bank

Ext.P4        - The  notices issued by the opposite parties bank

Ext.P5         - The copy of reply to the notices

On the side of the Opposite Party :

Ext.R1     -The copy of Registration certificate

Ext.R2    -The Master Circular of RBI dated 01/07/2011

Ext.R3 -The bank circular of RBI dated 02/07/2012

Ext.R4 -The updated bank circular of RBI dated 01/07/2015

Ext.R5 -The Fair Practice Code of opposite parties (malayalam version)

R5 (a) -The fair  practice code of opposite parties company (English Version).

 

 

             Forwarded by Order,

 

 

                   SENIOR SUPERINTENDENT