Complaint filed on: 04-12-2020

                                                      Disposed on: 04-02-2022

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, TUMAKURU

CC.No.78/2020

DATED THIS THE 4^th DAY OF FEBRUARY, 2022

PRESENT

SRI.KUMARA.N, B.Sc., L.L.B, PRESIDENT (I/c)

SMT.NIVEDITA RAVISH, B.A., L.L.B. (Spl) LADY MEMBER

Complainants: -       

1. Sannarangappa

S/o Thimmanna

Aged about 76 years,

2. S.Srinivas

S/o Sannarangappa,

52 years,

Both are R/o Sidadaragallu

Dodderi hobli,

Madhugiri Taluk

(By Sri.Raj Kumar, Advocate)

V/s

Opposite party:-       

The Manager,

State Bank of India,

Badavanahalli branch,

Madhugiri taluk

(By Sri.Mohamed Afroze Ahamed, Advocate)

ORDER

SRI.KUMAR.N, PRESIDENT (I/c)

        This complaint has filed under Section 35 of the Consumer Protection Act, 2019 to direct the opposite party (hereinafter called as OP) to take back the said gold ornaments from concerned persons to who OP have given and enable the complainants to pay the entire debt including interest and take back their gold ornaments and reimburse the amount of the said gold ornaments as mentioned in the reply notice of OP under RTI dated 19-9-2019  i.e. list of gold ornaments and grant such other relief in the interest of justice and equity.

2. It is the case of complainants that they are the consumers of OP bank and wife of 1^st complainant and mother of 2^nd complainant by name Nagamma was also consumer of OP bank. They transact the money in OP bank by having different account nos.64132174493 and 64019316112. The said Nagamma W/o. Sannarangappa had pledged gold ornaments worth more than Rs.6,00,000-00 in OP bank and obtained gold loan. Thereafter, the OP bank has deducted the interest amount towards the loan from her SB account no.64019316112 regularly. The complainants have got SB account in the OP bank branch and they are regularly visiting the OP bank branch and making transactions. The said Nagamma was died on 20-10-2016. After demise of Nagamma, the complainants have orally asked the Nagamma’s ornaments pledged in the OP bank. Again and again the complainants approached the OP bank, they told the complainants that they have to give affidavit and declaration as per the forms supplied by the OP bank but without supplying the same the OP bank have postponed the matter, when the complainants approached the OP bank asking about the details of amount and interest so as to discharge the same. The OP bank has told that the ornaments were auctioned. Immediately the complainants asked the OP bank to give all details about the number of ornaments with weight of each of the ornaments etc. through notice. In addition to the legal notice, the complainants are frequently approached the OP bank to get details, but the OP bank deliberately not given any details. The complainants fed up with the OP bank attitude and the gold ornaments pledged in OP bank worth more than six lakh apart from the diamonds and stones fixed to the gold ornaments. Without their knowledge and notice by violating the principles of natural justice, the OP bank has auctioned the gold ornaments, it amounts to misappropriation and it is nothing but cheating. The OP being the public officer to discharge the duties and obligations towards the bank customers like complainants and to obey the direction of law it amounts to contempt of law and nothing but cheating the complainants. The complainants repeatedly requested and visited the OP bank to seek information about deceased Nagamma’s gold loan account and pledged gold ornaments.  The complainants further submitted that the OP bank deducted the interest amount regularly in deceased Nagamma’s account. After demise of Nagamma, the OP bank without intimated to the true LRs collusive with others created some documents and without followed the procedure as contemplated under law, the OP bank auctioned the same without knowledge of complainants. The complainants issued the legal notice to OP bank, but the OP bank not replied. Later the complainants applied through RTI for seeking information about gold loan/gold ornaments and other details  of dues and finally the OP bank replied to RTI application and given particulars stating that “the said gold ornaments already auctioned on 16-8-2018 and also stating that notice was sent through registered post regarding default on the address mentioned and there was no response from the applicant and then same was published in the Prajapragathi newspaper dated 6-9-2018 and it was auctioned. The OP bank authority not followed the procedure as contemplated under law and intentionally auctioned the gold ornaments. Now itself the complainants are ready to pay the amount to release the gold ornaments. Hence, this complaint.

          3. After the service of notice, the OP has appeared through its learned counsel and filed objections stating that the complainant’s mother was the costumer of OP bank and wife of the 1^st complainant and mother of the 2^nd complainant by name Smt.Nagamma is true and correct. Further stating that Smt.Nagamma died on 20-10-2016 is not within the knowledge of this OP bank and nobody has intimated the death of Smt.Nagamma to the OP bank. The OP bank issued the demand notice to Smt.Nagamma then the postal RPAD cover returned with a shara mentioning that Smt.Nagamma has died. Other averments made in the complaint are false and baseless and put to strict proof of the same.         The OP bank further stated that Smt.Nagamma had pledged 6 items of gold ornaments of 167.20 grams in the OP bank and availed the gold loan of Rs. Rs.2,56,000-00 on 10-12-2013 under loan account no.64132174493. Smt.Nagamma has not paid the interest amount/ principal to the OP bank in spite of demands and personal visit as such the final notice was issued by way of registered post on 11-12-2017 and the postal cover returned with a Shara Smt.Nagamma has died. There was no response from the legal heirs of Smt.Nagamma and the same notice was published in the “Prajapragathi” daily newspaper on 6-9-2018. Even after paper publication none of them have approached the OP bank as such as per the norms of the bank, the gold ornaments pledged by Smt.Nagamma was auctioned in public auction on 16-8-2018 and the gold ornaments has handed over to the successful bidder/auction-purchaser and the same amount has been debited to the borrowers account i.e. Smt.Nagamma and there will be no any dues from the borrower side. The question of taking back the gold ornaments from the auction–purchaser dose not arise and the complainants have not challenged the auction sale and there is no any room for the complainants to pay the entire debt including interest amount at this stage and to take back the pledged gold ornaments of deceased Nagamma. The complainants have no loco-standi to file this complaint and the same is not maintainable and dismissed in limine. Account statement of Smt.Nagamma clearly reveals that the sale amount of Rs.3,77,264-00 is credited to the Nagamma’s account and account has been closed on 18-9-201. As per terms and conditions para 3 of the application it has clearly stated that “In the event of my failure to repay the amount and demand by you, you should have the right to sell at my/our risk and expenses, without any reference to me/us all or any of the securities lodged herein either by private sale or public auction and appropriate the net sell proceeds after deducting all charges and commissions incurred in effecting the sale towards the loan in my/our account”. Hence, there is no deficiency of services on the part of OP and as per norms and procedures of the bank the ornaments has been sold to the highest bidder in public auction hence, the OP prayed to dismiss the complaint.   

          4. The Complainant has filed affidavit in lieu evidence and produced documents Ex.P1 to P8. In spite of granting sufficient time, the OP bank did not choose to file affidavit and advanced arguments.  

          5. We have heard the oral arguments advanced by the learned counsel for complainant and the points that would arise for determination are as under:

1)      Whether the complainant proves deficiency in service by the OP?

2)      Is complainant entitled to the reliefs sought for?  

6. Our findings on the aforesaid points are as follows:

Point No.1: In the affirmative.

Point No.2: In the partly affirmatively as per      

final order for the below

REASONS

          7. Point No.1 and 2: The learned counsel for the complainant has vehemently argued that deceased Nagamma was wife and mother of 1^st and 2^nd complainant respectively. Smt.Nagamma had availed gold loan of Rs.2,56,000-00 on 10-2-2013 in the OP bank by pledging six items of gold ornaments weighing 167.20 grams worth of Rs.6,00,000-00 and loan interest was deducted from her SB account no.64019316112 regularly and said Smt.Nagamma died on 20-10-2016. The OP bank not followed the procedure and even not replied to the notice of complainants, without issuing notice to legal heirs i.e. complainants. The OP bank auctioned the said gold ornaments on 16-8-2018 and paper publication in this regard given by the OP bank in Prajapragathi daily news paper on 6-9-2018 and further stated that the OP bank has given paper notification in Prajapragathi daily newspaper after 20 days of gold ornaments auctioned. The complainants in their affidavit evidence have reiterated the averments of complaint.

8. Ex.P5 proves that deceased Nagamma pledged 167.20 grams of gold ornaments in the OP bank and availed gold loan of Rs.2,56,000-00. The detail of ornaments pledged in the OP bank is mentioned below;

9. The complainants counsel produced Ex.P1and Ex.P8 which proves that the complainant no.1 and 2 are husband and son of deceased Nagamma who are the legal heirs and were having SB account in the same OP bank. Ex.P2 and P3 were copy of legal notices of complainants to the OP bank and Ex.P7 copy of cause of death of Nagamma who died on 20-10-2016.

10. The OP counsel in objections filed in para-b of page no.2 stated as under;

“Further the opponent submits that Smt.Nagamma due to so many demands and personal visits has not paid the interest amount/principal to the opponent bank, as such the final notice was issued by way of registered post on 11-12-2017 and the postal cover returned with a shera that Smt.Nagamma has died. Hence, it is returned, the same is produced herewith as ANNEXURE A-1 and the Un-served postal cover is produced herewith as ANNEXURE A-2 and there was no response from the Legal Heirs of Smt.Nagamma and the same notice was published in the “Prajapragathi” daily newspaper on 06.09.2018, even after Paper Publication none of them have approached the Opponent Bank as such as per the norms of the Bank, the gold ornaments pledged by Smt.Nagamma was auctioned in Public Auction on 16.08.2018 and the Gold ornaments has handed over to the Successful Bidder/ Auction-purchaser and the Sale amount has been debited to the Borrowers account i.e. Smt.Nagamma and there will be no any dues from the Borrower side”.

11. Further the reply of OP bank dated 19-9-2019 to the RTI application of complainants dated 9-9-2019, in para no.4 it is stated as under;

“4. Notice was sent through registered post regarding the default on the address mentioned and there was no response from the applicant (or his legal heir) then same was published in the Prajapragathi newspaper dated 06.09.2018 and it was auctioned (as per systems and procedure laid by bank).

Auction was conducted in branch on 16.08.2018 and ornament was handed over to successful bidder.

Further in response to your notice we wish to inform that Mr.Sannarangappa never came forward for settlement of dues due to which bank has auctioned the ornaments. As SBI is transparent organization for any other information feel free to contact us”.

12. The OP bank counsel and OP bank replied as above which is contrary as the OP bank counsel/OP bank has not produced any documents i.e. Annexure-A1 and Annexure-A2 to prove his case that the notice was duly served to Smt.Nagamma, Mr.Sannarangappa and other legal heirs.

13. Ex.P5 copy of the reply of OP bank to the complainant’s counsel dated 19-9-2019 and objections filed by the OP bank counsel in Para-b of page no.2 admitted the fact of gold ornaments auctioned on 16-8-2018 and paper publication in Prajapragathi taken on 6-9-2018 by the OP bank which proves that after 20 days of gold ornaments auctioned the OP bank has taken paper notification in Prajapragathi to seek response / reply of legal heirs of deceased Nagamma to the said gold ornaments auctioning. This proves that the OP bank not given opportunity and not served the notices to legal heirs of deceased Nagamma amounting to gross negligence on the part of OP bank which amounts to deficiency of service.

14. The complainant produced Ex.P6 which was loan account statement (Account no.64132174493) of deceased Nagamma for the period from 10-12-2013 to 19-9-2019 which reveals that interest paid regularly/transferred from Nagamma’s SB account upto 31-1-2018, further on 15-2-2018 amount of Rs.9,122-00 and Rs.24,000-00 transferred to Nagamma’s gold loan account as sweep payment and deposit transfer respectively which was transferred from Nagamma’s SB account which proves that Nagamma’s account active and paid interest upto 15-2-2018, then question of account default not arised.

15. On perusal of objections of OP bank in Para-d of page no.3 and “Statement of account of Smt.Nagamma is produced herewith, which clearly reveals that the sale amount of Rs.3,77,264-00 is credited to the Nagamma’s account and account has been closed on 18-9-201, which is contrary, Ex.P6 of complainants, which was deceased Nagamma’s loan statement of account where Rs.3,77,264-00 credited on 18-9-2018 by OP bank after the gold ornaments auctioned. Further Ex.P6 (a) of complainant proves that deceased Nagamma’s SB account active upto to 25-3-2019 with balance amount of Rs.21,249-00 as on 25-3-2019. Further on 20-9-2018 the OP bank has credited a sum of Rs.2,736-00 as “GL auction on 18-9-2018 the excess amount was transfer from sundry deposit acc.”, which proves that the deceased Nagamma’s gold ornaments were auctioned for Rs.3,77,264-00 and the said gold loan balance amount inclusive interest Rs.3,74,528-00 as on the date of auction, by deducting the same from gold ornaments auctioned amount, the balance of Rs.2,736-00 credited to the deceased Nagamma account.

16. Though the complainants has prayed to take back the said ornaments from the concerned persons to whom the OP bank has given and enable the complainants to pay the entire debt including interest and take back their gold ornaments, which is not possible at this stage as the OP bank has already auctioned the said gold ornaments on 16-8-2018 at the OP bank branch and the same was handed over to the successful bidder as stated in Ex.P5.

17. The price of gold as on gold auction date i..e 16-8-2018 was Rs.2,783-00 per grams for 167.20 grams of gold ornaments of deceased Nagamma which were pledged workout by Rs.4,65,317.60 rounded to Rs.4,65,318-00. By deducting Rs.3,74,528-00 gold loan amount of deceased Nagamma as on gold ornaments auctioned date i.e. 16-8-2018. The OP bank is liable to pay remaining amount of Rs.90,789.60 rounded to Rs.90,790-00 to the complainants. The complainant has suffered mental agony and frustration to the OP bank act for its negligence and deficiency in service the OP shall pay compensation of Rs.30,000-00 and litigation cost of Rs.15,000-00 to the complainants. Hence, we proceed to pass the following:

ORDER

The complaint is allowed with cost.

The OP bank is directed to pay a sum of Rs.90,790-00 with interest @ 8% per annum on the said amount from date of auction of the gold ornaments of deceased Nagamma i.e. 16-8-2018 to the complainants within 30 days from the date of this order, otherwise it carries interest at the rate of 10% per annum from 16-8-2018 till its realization.  

          It is further ordered that the OP bank shall pay a sum of Rs.30,000=00 as compensation along with litigation cost of Rs.15,000=00 to the complainants within 30 days from the date of this order, otherwise it carries interest at the rate of 10% per annum from the date of filing of complaint till the date of payment.

Furnish the copy of order to the complainants and opposite party at free of cost.

          (Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open forum on this the 4^th day of February, 2022).

LADY MEMBER                                         PRESIDENT (I/c)