Date of hearing : 22nd day of January, 2016

Date of Judgment : Tuesday, 9th day of February, 2016

HON’BLE MR. SAMARESH PRASAD CHOWDHURY, PRESIDINGMEMBER

                                                Judgment

            Challenge in this appeal under Section 15 of the Consumer Protection Act,1986 (hereinafter referred to as the Act) is to a judgment dated 8th October, 2013 made by the Ld. District Consumer Disputes Redressal Forum North 24-Parganas at Barasat  (for short, Ld. District Forum) in Consumer Complaint No. 258/2013 whereby the complaint initiated by the Respondent herein under Section 12 of the Act was allowed on contest with a direction upon the Appellants/O.P.’s to hand over all pledged ornaments given on payment of principal amount together with interests accrued thereon at the agreed rate of interest within one month from date together with a compensation and litigation costs to the tune of Rs. 25,000/-.

 The Respondent herein by filing the complaint under Section 12 of the Act has alleged that on 03.7.2009, he approached O.P. No. 3 to obtain loan after keeping some gold ornaments in mortgage and received Rs. 26,433/- in cash.  Subsequently, on 04.7.2009, 06.7.2009, 07.7.2009 and 10.7.2009 he went to the office O.P. No. 3 with different types of gold ornaments and obtained loan totalling a sum of Rs. 3,50,980/-.  After few months he has made arrangement  to repay the loan amount with statutory interests to the O.P. No. 3 to realise all the ornaments but O.P. No. 3 deferred the same on different pretexts. Finding no other alternative and considering the fact that interests was increasing day by day,  complainant issued a notice in writing addressing the O.P. Nos. 1 & 3 on 18.01.2012 and the O.P.s in response to the said notice replied by O.P No. 2 dated 23.02.2012 informed  the complainant that the ornaments were sold in auction and a surplus amount of Rs.1,04,021/- is lying with O.P. No. 1 to be paid to the complainant.  The complainant alleged that the notice of selling gold ornaments was never served upon him and the notice of auction was never been published.

The Appellants being Opposite Parties to the case by filing a joint written version have stated that the complainant have borrowed loan from the company by pledging gold ornaments as a security and as such the relationship between the Complainant and O.P. is one that of debtor and creditor and does not fall within the purview of the Act.  The O.P.s admitting facts about visit of complainant in branch office and obtaining money by pledging gold ornaments has submitted that as per the terms and conditions of loan agreement, after expiry of one year the company has the right and authority to dispose of the pledge gold by auction, if full payment of loan amount with interests is not made on or before 12 months  from the date of disbursement of loan.  On behalf of the O.P’s it has been stated that since the complainant did not release the pledge ornaments within one year register auction notice was issued to him on 18.02.2011 and 21.02.2011 which return with endorsement “left”.  The Opposite Parties submitted that as the complainant failed and neglected to pay the interests towards the loan availed by him, they were compelled to sell said gold ornaments in auction.

After assessing the materials on record the Ld. District Forum by impugned judgment allowed the consumer complaint as indicated above.

            Being aggrieved and dissatisfied with the said order, the Opposite Parties  have come up before this Commission with the present appeal.

            We have scrutinised the materials on record and considered the submissions advanced by the Ld. Advocates appearing for the parties.

            Upon hearing the Ld. Advocates for the parties and on going through the materials on record it emerges that the Opposite Party is a company engaged in giving loan against keeping gold.  The Opposite Party No. 1 has a branch office at Sodepur Barasat Road under P.S . Khardaha.  On 03.7.2009 the complainant went to the office of O.P. No. 3 and on that date he obtained a loan of Rs. 26,433/- after keeping 26.9 grams gold ornaments in mortgage.  Subsequently, on 04.07.2009 the complainant obtained Rs. 42,100/- and Rs.34,947/- after keeping change fingering etc.  The complainant  has also obtained cash of Rs. 60,192/-, Rs. 1,14,048/- and Rs.73,260/-on 06.7.2009, 07.7.2009 and 10.7.2009 respectively.

The fact remains that there was no documents whatsoever to show that prior to 18.01.2012 the complainant has ever made any claim for return of pledge ornaments on payment of statutory interests against the amount received by him.

            Mr. Anjan Kumar Dutta, Ld. Advocate for the appellant has referred us  some Pawn Tickets which indicate that on 3rd July,2009 the complainant have received Rs. 26,433/- after pledging gold ornaments of 26.9 grams and in the agreement it was stipulated that an interests of 14 % p.a. should be paid against the said amount.  Similarly pawn tickets also indicate that the cash amounts aggregating Rs. 3,50,980/- was given to the complainant from the Sodepur Branch of O.P. No. 1 company.  Ld. Advocate for the Appellants have submitted that in accordance with the Clause (3) of the terms and conditions of the agreement in which complainant put her signature after knowing pros and cons it would be clear if full repayment is not made within 12 months from the date of receipt of amount or within such period as demanded by the company penal interests will be levied from the date disbursement and the company shall have the right to sell ornaments at the risk of borrower either by public or private arrangement at any time.  The Ld. Advocate for the Appellant has submitted that in spite of expiry of one year when Respondent did not take any initiative to get back the pledge ornaments on payment of interests thereon, they issued notice upon the Respondent but the return has come back with endorsement ‘left’.  Ld. Advocate for the Appellant has also submitted that as per Clause 6 of the terms and conditions of loan, the loanee was bound  to furnish address for all communications regarding subsequent change of address.  In such a situation after giving public notice the ornaments was sold in auction and the surplus amount of Rs. 1,04,021/- was sent to the Respondent which was subsequently returned.  Ld. Advocate for the appellant finally submitted that as the Respondent violated the terms and conditions, the Ld. District Forum has committed a grave error by passing the order impugned.

            On the other hand, Ld. Advocate for the Respondent has contended that his client was trying his level best to pay the interests accrued for such loan and has made attempt to repay the loan amount with interests but the Appellants deferred the same for various pretexts and ultimately on 18.01.2012 he issued a notice to the Appellants to which the appellants took up the story of auction sale. Ld. Advocate for the Respondent has also placed reliance to Clause (3) of the Agreement and submitted that no notice was published with regard to the alleged auction.

                        After giving due consideration to submission advanced by the Ld. Advocate appearing for the parties it has come to our notice that in accordance with the terms and conditions the Respondent was under obligation to repay the amount of loan with interests accrued thereon as per agreed term within 12 months.  The Respondent has alleged that he tried to release all the ornaments kept in mortgage after repayment of loan amount with interests but the appellants deferred the same on different pretexts.  There is no document whatsoever to show that within stipulated period of one year as per terms of the agreement the respondent has ever wrote any letter to the Appellant No. 1 company about his intention to get ornaments return on repayment of loan with interests thereon.  All the Pawn Tickets available with the record containing the terms and conditions like the rate of interest, receipt date, items of gold pledge and tenure of loan etc.  It is true in accordance with the terms of the agreement respondent as spelt the Respondent has failed  to make payment within the period of one year and as such it cannot be said that there was no deficiency  on the part of the Complainant/Respondent.

However, from the materials on record we find the appellants by filing evidence on affidavit have stated that the ornaments  kept in mortgage on 10.7.2002 in respect of 88.1 grams by which the respondent obtained loan of Rs. 73,207/- have not been sold in auction and still are lying with them.  In the written version the O.P.s/Appellants  have not mentioned the date when the ornaments sold in auction and to whom it was sold and even it has not been mentioned where such public notice was given in respect of such auction and further no such public notice was placed  before the Ld. District Forum.

            Mr. Anjan Kumar Dutta, Ld. Advocate for the Appellant has submitted that when the Respondent could not repay the amount of loan with interests thereon according to agreed terms and conditions and the appellant company sold the ornaments in auction by following the procedure as contained in agreed terms and conditions there was no deficiency on service on the part of the appellant.  In support of his contention Ld. Advocate for the complainant has placed reliance to a decision reported in 1(2006) CPJ 621 ( C. Kandasamy

-vs-  Urban Co-operative Bank).   The above decision has no manner of application in our case because on that case the notice of auction was published in a newspaper.  Ld. Advocate for the appellants has also drawn our attention to a decision reported in 1(2005) CPJ 609 ( Canara Bank –vs- M Chandran) and submitted that when the terms of the agreement specifically empowered the Bank to sell the ornaments, question of deficiency of service will not arise.  The said decision is distinguishable with the facts and circumstances of our case  because although this case is also a loan transaction in which ornaments were pledged by the respondent as security to show his intention to discharge the loan but in the referred case, the borrower waived his right of notice.  But in our case, there is a clear stipulation that the appellant company was under obligation to issue notice of sell to the respondent  (borrower).  The company was also under obligation to issue notice of public auction.  But admittedly the notice was issued printed in ‘Hindi’ and does not bear any seal of the appellant company or signature of any person authorised by the company.  Mr. Dutta has also referred a decision of this Commission reported in 1(2007) CPJ 203 (Hemant Kumar Chokani –vs- Bank of America) and submitted that since the relation between Appellant Company and Respondent was of debtor and creditor, the Respondent /Complainant  cannot be treated as ‘consumer’.  In Clause 9 (vii) of the Agreement of referred case, complainant agreed that he would not raise any dispute as to sale of pledged shares by the Bank.  Therefore, the refund decision has no manner of application in the case before hand.

            According to Section 176 of the Indian Contract Act, 1872 before putting pledged goods on sale, pawnee has to give a reasonable notice to debtor, before the actual action.  The owner or pledge should have an opportunity to redeem the pledged goods.  When the notice appears to be defective one which does not contain any signature or seal of the pawnee company and it is only in a printed form written in ‘Hindi’ language and further no publication was made to the public for such auction, it was a clear deficiency on the part of Appellant  Company.

Therefore, on evaluation of materials on record we find that both the parties were in default in complying with the agreed terms and conditions  arrived at in between them at the time of giving or taking loan.   Since the appellant company have failed to prove that the ornaments kept in mortgage by the respondent was sold in auction we think the Ld. District Forum was quite justified in allowing the consumer complaint  with a direction upon the O.P.s  to hand over all the pledged ornaments to the O.P.s on payment of principal amount together with interests accrued thereon.

            However, we do not subscribe the view of the Ld. District Forum in imposing compensation and litigation costs upon the Appellants/Opposite Parties in as much as there was negligence on the part of both the parties.  Had respondent been careful in repayment of loan with interests within the time frame this litigation  could have been avoided and as such we do not find any justification for assessment of Rs.25,000/-  as compensation and litigation costs.  Accordingly, this part of order is liable to be set aside.

            For the reasons aforesaid, the appeal is allowed on contest in part but without any order as to costs.

            The impugned judgment is modified  to the extent that the appellants being O.P’s  jointly  shall handover all the pledged ornaments given in security to them the Respondent/Complainant on payment of principal amount together with interest thereon to be calculated till the date of filing of this complaint from the date of taking loan within one month from date.

            In the event failure on the part of appellants to comply with the order, the Respondent/Complainant shall have liberty to execute the same before the Ld. District Forum   in accordance with Sections 25 and 27 of the Act.