THE CONSUMER DISPUTES REDRESSAL FORUM, KOZHIKODE.
C.C. 230/2012
Dated this the 26th day of September 2017
(Smt. Rose Jose, B.Sc, LLB. : President)
Smt.Beena Joseph, M.A : Member
Sri. Joseph Mathew, MA, LLB : Member
ORDER
Present: Joseph Mathew, Member:
This petition is filed Under Section 12 of the Consumer Protection Act 1986.
The case of the petitioner is that, he had availed a gold loan for Rs.61,000/- after pledging a gold chain vide pledge No.0100140701074310 on 01.06.2010 and another loan for Rs.24,500/- on pledging a gold bangle vide pledge No.0100140701075419 on 13.07.2010 from the opposite party. But due to some financial crisis he could not take back the pledged articles within the time period. Thereafter on 28.12.2010 he received a notice from the opposite party demanding either to renew the gold loan account after remitting interest or to close the loan account after paying the amount with interest. It is stated by the petitioner that in that notice the amount calculated as interest or the rate of interest was not mentioned by the opposite party. So he issued a letter to the opposite party on 20.04.2011 requesting to inform the amount calculated as interest and the rate of interest at which they have calculated the interest etc., but the opposite party has not replied to that letter. Again on 08.07.2011 the opposite party sent another notice demanding payment of amount and interest to which he had sent another letter dtd.05.07.2011 repeating his requests. The opposite party received that letter and sent a reply dtd.27.07.2011 intimating him that the rate of interest calculated towards the amount of Rs.61,000/- was at the rate of 29.4% per annum and the interest amount is Rs.19,511/- and Rs.14,890/- as miscellaneous expenses towards that loan account.
According to the petitioner collecting exorbitant interest at the rate of 29.04% per annum towards god loan is illegal and the opposite party has no right to collect interest at this rate. This amounts to unfair trade practice on the part of the opposite party. Likewise the negligence and indifferent attitude of the opposite party in not informing him the amount calculated as interest towards the loan amount and the rate of interest at which they have reached to that amount even after repeated requests through letters is deficiency in service on their part. Hence this petition is filed to direct the opposite party to release the pledged articles after collecting the legally permissible interest towards the loan amounts and to pay compensation for his mental agony and other difficulties suffered and also cost of the proceedings.
The opposite party filed version contending that this petition is not maintainable either in law or on facts. The petitioner is not a consumer as per sections of Consumer Protection Act. It is contended that, the opposite party Company is a leading Financial services Group having branches in 22 states in the country. They are functioning strictly within the regulatory frame work laid down by the R.B.I Act 1934 and are the highest credit rated and listed gold loan Company in the country.
Admittedly the petitioner had availed gold loan for Rs.61,000/- on 01.06.2010 and Rs.24,500/- on 13.07.2010 as stated in his petition. But it is stated that the petitioner has not ‘Reset’ the pledged articles at any time and has not paid any amount towards interest till date. The petitioner had filed complaints before the vadakara Taluk legal service Authority and before the Asst. Commissioner of Commercial Taxes, Kozhikode for the same cause of action and these complaints were dismissed by these Authorities on finding that there is no merit in the complaints filed by the petitioner. Only as an experimental basis this petition is filed before this Forum now. The statement of the petitioner is that they have not replied to his letters requesting to inform the interest rate and amount of interest was denied by them as false and stated that they have sent reply to that letters on 27.07.2011 stating all the details concerned with the gold loans. Even after receiving their letter the petitioner has not approached them or take any efforts to r renew the loan account or to settle the loan amount.
It is further stated that taking into account the need of the petitioner, the pledge for Rs.61,000/- was given under the ’Scheme B’ having a ‘Reset’ period of 180 days and the interest rate applicable to that period was 21%per annum. The rate of interest after the reset period will be 24% which will be applicable to the next 30 days. If the loan is not settled within this period the interest rate will be 29.04% per annum afterwards. The loan amount of Rs.24,500/- was given under the ‘Scheme X’. They further stated that at the time of taking the loan they have given sufficient information regarding the scheme, period and rate of interest of the loan amount, penalty interest rate etc .to the petitioner. A pawn ticket was issued to him showing the details and was acknowledged by the petitioner also. Knowing all the details, the petitioner had availed the loan. Regarding loan amount of Rs.61,000/- dtd.01.06.2010 at the rate of interest 29.04% per annum, and amount of Rs.1,08,111/-and towards the loan amount of Rs.24,500/- dtd.13.07.2010, an amount of Rs.42,443/- is due to them till date. The statement of the petitioner that they have demanded Rs.14,890/- under the expenditure head is not true or correct. They have not demanded any amount illegally as alleged. All the details regarding the loan accounts of the petitioner were displayed at their notice board. The petitioner has not approached them at any time after availing the loan or enquired about the rate of interest or anything in this regard. They have acted only as per law and there is no unfair trade practice or any deficiency in service on their part as alleged. The petitioner is bound to pay the amounts with interest as agreed. This petition is filed without any basis and only with the malafied intention to harass them. The petitioner is not entitled for any reliefs sought for in the petition and hence prayed to dismiss the same with compensatory cost.
The matters for determinations are:-
- Whether there is any unfair trade practice or deficiency in service on the part of the opposite party?
- Reliefs and costs if any?
Evidence consists of the affidavits filed by the petitioner and the opposite party, Exts.A1 to A6, B1 & B2 and deposition of PW1.
Point No.1:- Admittedly the petitioner had availed gold loans for Rs.61,000/- vide pledge No.0100140701074310 on 01.06.2010 and Rs.24,500/- vide pledge No.0100140701075419 on 13.07.2010. According to the petitioner the opposite party has not informed him the rate of interest they are charging for the amounts even after repeated requests through letters. Now they are demanding Rs.1,08,111/- and Rs.42,443/- towards the loan amounts for settling the loan accounts. This amount was reached on calculating interest at 29.04% per annum towards the loan amounts. The said interest rate is highly exorbitant and illegal. They have no right to charge interest at this rate. This is unfair trade practice and deficiency in service on the part of the opposite party. The opposite party also admitted that the said amount was due to them towards the said loan amounts. Admittedly the interest rate calculated is 29.04% per annum. According to them all the details regarding the interest rate etc. were informed to the petitioner at the time of availing the loan and knowing fully the interest rate and other terms and conditions he had availed the loan. Moreover all the details are printed on the pawn ticket issued to him also. So there is no unfair trade practice or any deficiency in service on their part as alleged and they have acted as per law only. The petitioner is bound to pay the interest at this rate and to settle the loan account.
The opposite party produced the pawn tickets for the amounts of Rs.61,000/- and Rs.24,500/- and was marked as Exts.B1 & B2. In Ext.B1 it is written as “Interest after Reset period -181-210 days 24% P.a., 211& above days 29.04% p.a.. In Ext.B2 it is written as “Interest after Reset period 31-60 days 26.04% p.a., 61 and above days 29.04% p.a. It is true that the petitioner was aware of the said interest rates and knowingly he had availed the loan as he has also produced the pawn tickets as Exts.A1 & A2 which corresponds to Ext.B1 & B2. But it is to be considered that a person who is badly in need of money will accept any demands or terms and conditions for getting the amount, but it does not mean that he had accepted the demands with free will and consent. The doetrine ”Neecessity knows no law” is applicable here. In any case 29.04% interest rate is highly exorbitant and collecting amount at this rate of interest is not fair and also against public interest. Taking advantage from the helplessness of the poor and needy customers and making them prey to the business interest of the opposite party is highly injustice and unacceptable also. More over the opposite party in their version stated that they functions strictly within the regulatory frame work of RBI Act 1934. But they have not produced any evidence to show that charging of interest at the rate of29.04% per annum is permitted by the R.B.I.
Considering all the facts stated and evidence on record, we are of the considered view that, whether the customer is aware or not, in any case, collecting interest at 29.04% p.a. is highly exorbitant, unfair and also against public interest and hence not acceptable or permissible at all. So the demand of the opposite party to pay interest at the said rate towards the gold loan amounts of Rs.61000/- and Rs.24500/- is no doubt unfair trade practice on the part of the opposite party. Point No.1 found accordingly.
Point No.2:- In view of the finding in point No.1 the petition is to be allowed and the petitioner is entitled for reasonable reliefs.
In the result, the following order is passed.
The opposite party is ordered to release the pledged gold articles on charging 18% interest per annum towards the loan amounts from the date of pledge along with permissible expenditures, if the petitioner is remitting the loan amounts with interest at the stated rate within 45 days from the date of receipt of this order. The opposite party is also ordered to pay Rs.5000/- to the petitioner as cost of the proceedings.
Dated this 26th day of September 2017
Date of filing: 29.05.2012.
SD/-MEMBER SD/- PRESIDENT SD/- MEMBER
APPENDIX
Documents issued by the complainant:
A1.Receipt issued by Opposite party dtd.13.07.2010
A2. Receipt issued by opposite party dtd.01.06.2010.
A3. Letter issued by the complainant to the opposite party dtd.20.04.2011.
A4. Letter issued by the complainant to the opposite party dtd.15.07.2011.
A5. Registered letter issued by opposite party to the complainant.
Documents issued by the opposite party:
B1. Copy of receipt issued by opposite party to the complainant dtd.1.06.2010.
B2. Receipt issued by opposite party to the complainant dtd.13.07.2010
Witness examined for the complainant:
PW1. Venu.M(Complainant)
Witness examined for the opposite party:
None
Sd/-President
//True copy//
(Forwarded/By Order)
SENIOR SUPERINTENDENT
