DATE OF FILING :16/11/16 

IN THE CONSUMER DISPUTES  REDRESSAL FORUM, IDUKKI

Dated this the 22nd  day of February 2019

Present :

SRI. S. GOPAKUMAR PRESIDENT

           SMT.ASAMOL P. MEMBER

CC NO. 316/2016

Between

Complainant       : George Joseph,

                                                                           Parathalackal Travels,

                                                                           Thodupuzha P.O.

(By Adv:  K.M.Sanu)

And

Opposite Party                                          : 1 . The Manager,

                                                                             Kerala  Permanent Benefit Fund Ltd.,

                                                                             Thodupuzha Branch, Thodupuzha.

                                                                             (By Adv: S.K.Muraleedhara Kaimal)

                                                                      2 .  The Manager,

                                                                             Kerala  Permanent Benefit Fund Ltd.,

                                                                             Head Office, Aluva,

                                                                             Sangeetha Sabha Road,

                                                                             Aluva P.O., Pin 683 101.

 

O R D E R

 

SRI. S. GOPAKUMAR (PRESIDENT)

 

The case  of the complainant is that,  

 

Complainant borrowed an amount of Rs.3,61,210/- by pledging his 146.4gm gold ornaments from the first opposite party financiers on 29/11/12.  At the time of sanctioning the loan, the complainant given signed papers as demanded by the first opposite party bank.  The loan sanctioned at the rate of 12% interest and at that time the first opposite party promised that, the complainant can extent the loan period by remitting its interest.  But complainant failed to remit the interest regularly and till 30/10/15 he remitted an amount of Rs.1,05,000/- towards interest.  While so, on 23/05/16, the complainant got a notice from the opposite parties company stating that his gold ornaments were  auctioned by them on 05/05/16, and further demanding an amount of  Rs.2,28,813/-  towards loan due within 15 days, from the date of

                                                                                                                          (Cont.....2)

-2-

receipt   of  notice.   Complainant   further   averred   that,  before   this   notice                                                                                                                         

complainant has not received any intimation from the opposite parties relating to the loan dues or their intention for conducting auction.  Opposite parties conducted auction illegally and  without complying the legal procedure.  More over the opposite parties bank issued a legal notice on 01/07/16 demanding the balance loan dues.  From this notice complainant came to know that, the opposite parties calculated 18% interest in the loan instead of 12% as they agreed and they further calculated 20% interest in the loan dues.  From the notice complainant further noted that opposite parties received an amount of Rs.3,84,458/- from the gold auction.  Through the notice opposite parties demanding an amount of Rs.7,18,271/- in total.  Opposite parties is having no right to realise such a huge amount from the complainant.  This act of the opposite parties is gross unfair trade practice and against this the complainant approached this Forum for getting the relief such as to direct the opposite parties to re-calculate the loan amount by imposing normal, legalised interest and return the balance amount or return the gold ornaments by receiving actual amount from the complainant and also direct them to pay cost and compensation.

 

Upon notice opposite parties entered appearance and filed detailed reply version challenging the maintainability of the complainant as a primary issue.  The opposite parties further contented that the opposite parties bank is incorporated as a Nidhi Company under the provisions of Section 620A of the Companies Act 1989.  The complainant is a share holder of this company and as such he cannot be a consumer as per the Consumer Protection Act.  More over a Civil Suit against the complainant for realisation of money in the same subject matter is already pending before the Munsif Court, Thodupuzha as OS No.254/16 and which filed much prior to initiating this petition.  Since the subject matter is subjudice in the competent civil court, this Forum lacks jurisdiction to entertain any claim for compensation in respect of the same or identical subject matter.  As such the complaint is neither maintainable nor entertainable in the circumstances.

 

Opposite parties contented that the complainant approached this Forum by concealing this matter with a malafide intention.  The attempt of the complainant is only to wriggle out of the contract to facilitate some favourable order malafide from this Forum.  Hence the suit is maintainable herein.

                                                                                                                          (Cont.....3)

-3-

 

Evidence adduced by the complainant by way of proof affidavit and documents.  Documents produced by the complainant is marked as Ext.P1 to Ext.P5.  Ext.P1 is the loan token, Ext.P2 is the receipt, Ext.P3 is the legal notice, Ext.P4 is the notice dated 01/07/16 and Ext.P5 is the certificate.  From the defence side one Sathee Bai, Chief Manager of KPB Nidhi Ltd., was examined as DW1, Ext.R1 to Ext.R6 marked.  Ext.R1 is the loan application form, Ext.R2 is the ledger copy (Objected), Ext.R3 is the gold loan register, Ext.R4 is the letter seeking time for payment, Ext.R5 is the prior  notice for auction, Ext.R5(a) AD card copy and Ext.R6 is the copy of the plaint of OS 256/14 Munsif Court, Thodupuzha.

 

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 both the parties and had gone through the documents.  The learned counsel for the complainant vehemently argued that the  act of the opposite parties in calculating the interest of the gold loan amount is against the prevailing norms and RBI.  They have no authority to realize huge amount by way of penal interest and other charges.  The counsel further pointed out that the proceedings adopted by the opposite parties for auctioning of gold ornaments  is illegal and no proper procedure is followed.  The counsel further argued that filing of Civil Suit is not a bar for approaching this Forum against the unfair trade practice follows by the opposite parties.

 

On the other hand the learned counsel for the opposite parties stated that, the complainant being a share holder of the opposite parties company, he cannot be a consumer as per Consumer Protection Act.  More over the matter is under the consideration of a Civil Court and hence this complaint cannot be entertainable herein.  The complainant further argued that, the gold ornaments pledged by the complainant were already sold in auction after due  notice to him.  Hence no grievance can submit which entails to  this complaint and thereafter.  Counsel further stated that, it is only after due execution of the

                                                                                                                         (Cont.....4)

-4-

 

loan documents, that loan was granted and there arises no  question of 12% interest, as he is fully aware of interest at the time and even before the execution of the application cum loan agreement.  The sale proceedings were initiated against him only after all the efforts to bring him to close the gold loan account was over at his request for the same.  There is no practice of charging any higher interest to any of their beneficiaries other than what is stipulated.  The complainant is not entitled for any of the relief sought for nor this Forum has jurisdiction to grant the same except for compensation for deficiency of any service.

 

On going through the evidence on record and the points of arguments.  It is an admitted fact that complainant availed a gold loan of Rs.3,61,210/- on 29/11/12 from the opposite parties financiers by pledging his  gold ornaments having a weight of 146.4 gram, as per Ext.R2 loan application cum agreement.  In this docket, interest is specified as 18% and approximate market value of the pledged gold ornaments in 4,36,272/-.  Ext.R3 is the gold loan register of the complainant.  On perusing the documents, it is seen that on 16/10/14, and on 31/01/15 complainant remitted Rs.50,000/- each, and on 04/09/15, remitted Rs.2,000/- and 30/10/15 he remitted Rs.5,000/-.  In total, in this loan account complainant remitted Rs.1,07,000/- and as on 30/10/15, the loan dues is Rs.3,75,709/-.  At that time also the loan dues is lesser than the approximate market value of the pledged loan.  No doubt the market value of the gold is comparatively very high than that of the date of gold loan.  On further perusing the next page of Ext.R3, it is seen that along with the loan due of Rs.3,75,709/-, they added Rs.2,37,562/- as interest from 30/10/15 to 20/05/16, and the total loan due as on 20/05/16 in Rs.6,13,271/- from this amount, the opposite parties bank deducted Rs.3,84,458/- as the auction sale amount and arrived a loan balance dues of Rs.2,29,313/-.  At this juncture it is  very pertinent to note that the opposite parties bank assessed the market value of 146.5 gram gold on 29/11/12 in Rs.4,36,272/- but while auction after 5 years, they got only 3,84,458/-.  It is an admitted fact that, the value of the gold increases day by day and there will be a considerable increase in the value of gold from 2011 to 2016.  This real fact cannot be brushed aside.  On verifying  the entries of Ext.R3 loan ledger, the Forum convinced that the act of the opposite parties is a clear case of unfair trade practice.  By adjusting a thrown away price as auction  sale  price, opposite  parties  defrauded  the poor customer.  Opposite

                                                                                                                          (Cont.....5)

-5-

 

parties has not adduced any clarification regarding the calculation of the interest, in this matter.

 

For substantiating the question of auction sale opposite parties produced Ext.R5 copy of notice dated 15/01/16.  Through this notice opposite parties directed the complainant to pay loan dues of Rs.5,41,380/-, and further intimated that failing which the ornaments will be  auctioned by displaying the date, place and time of auction in their notice board.  This procedure of auction cannot be accepted and it is dead against the usual procedure that should be followed by the financial agencies.  It is mandatory that the financiers must intimate the defaulter, the place, date and time of auction in writing and also give them a chance for participating the auction.  If any financing company conducted auction without complying the mandatory procedure, such auction cannot be acceptable and justifiable.  Here the opposite parties has not produced any evidence to convince that they conducted the auction properly by intimating the complainant and also by giving him a chance for participating the auction sale.  Without having sufficient materials to prove these things, the version and defence of the opposite parties cannot  having any legal footing.

 

Then regarding the question of maintainability of this complaint since the subject matter is subjudice before a Civil Court.  For substantiating the plea opposite parties produced attested copy of a plaint in OS.  No 254/16, of the Sub Court, Thodupuzha.  On perusal of this plaint it is seen that it is a case of realisation of money.  But the complainant approached this Forum and filed this complaint challenging the deficiency in service and unfair trade practice that he suffered on the part of the opposite parties.  As per the decision of the  Hon'ble National Consumer Disputes Redressal Commision in Yeshwant Rane Yadav Vs Shoukath Hussain Sheikh (2017 CPJ November), it is held that the jurisdiction of Consumer Protection Act is not ousted on the same subject matter is subjudice.  

 

Hence on the basis of the above discussion, Forum is of a considered view that the act of the opposite party's bank in calculating the interest and conducting the auction proceedings and adjusting the auction price in the loan account is gross unfair trade practice  and  such  practice  cannot  be  allowable

                                                                                                                          (Cont.....6)

-6-

and they should  suffer the consequences of such illegal activities.  Hence under the above circumstances, the complaint allowed.  Opposite parties are directed to re-calculate  the loan amount with 18% interest and also direct the opposite parties to cancel the illegal auction  proceedings  and return the gold ornaments to the complainant by receiving the loan dues as  per law, opposite parties is further directed to pay Rs.5000/- as litigation cost to the complainant, within 30 days from the date of receipt of the copy of this order.  If the gold ornaments are unrecoverable, opposite parties are directed to pay the market value of the gold to the complainant as on date of closing the loan dues by the complainant within the stipulated time as stated above.

 

Pronounced in the Open Forum on this the 22nd  day of February, 2019.

 

                                                                                                       Sd/-

                                                                                      SRI. S. GOPAKUMAR (PRESIDENT)                                                                                                           

                                                                                                              Sd/-

                                                                                      SMT.ASAMOL P.  (MEMBER)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                                                                          (Cont.....7)

-7-

 

 

APPENDIX

Depositions :

On the side of the Complainant :

PW1               - George Joseph

On the side of the Opposite Party :

DW1              - Satheebai N.

Exhibits :

On the side of the Complainant :

Ext.P1            -  The loan token

Ext.P2            -  The receipts

Ext.P3          -  The legal notice

Ext.P4          -  The notice dated 01/07/16

Ext.P5          -  The certificate

On the side of the Opposite Party :

Ext.R1         - The loan application form

Ext.R2         - The ledger copy (Objected)

Ext.R3         -  The gold loan register

Ext.R4         -  The letter seeking time for payment

Ext.R5         -  The prior  notice for auction

Ext.R5(a)    -  AD card copy

Ext.R6         - The copy of the plaint of OS 256/14 Munsif Court, Thodupuzha.

 

 

                   Forwarded by Order,

 

 

                         SENIOR SUPERINTENDENT