D.O.F:18/11/2019
D.O.O:30/12/2022
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KASARAGOD
CC.227/19
Dated this, the 30th day of December2022
PRESENT:
SRI.KRISHNAN.K : PRESIDENT
SRI.RADHAKRISHNAN NAIR.M : MEMBER
SMT.BEENA.K.G : MEMBER
Sri. Sathya Shankara, aged 55 years.
S/o Keshava Deva Poojithaya,
Poojapura house, Arikady, : Complainant
Post Kumbala, Kasaragod District
(Adv. A. Balakrishnan Nair)
And
The Manager.
South Indian Bank Ltd, : Opposite Party
Arikady branch, Kumbala -671321
(Adv. O. Vinod Kumar)
ORDER
SRI.KRISHNAN.K : PRESIDENT
The Complainant filed under section 12 of Consumer Protection Act. The case of the complainant is that he availed a loan of Rs.3,00,000/- and another loan of Rs.2,30,000/- by pledging gold ornaments. This is renewal of old gold loan. Complainant received notices dated 31/07/2019 and 31/08/2019 directing to pay Rs.3,33,132.44/- and Rs.2,53,611/- towards principal amount and interest as on 31/08/2019.
2. The Complainant received notices dated 23/10/2019 intimating auction of gold loan scheduled on 07/11/2019 and 25/10/2019. Though complainant sought return of gold ornaments, request was denied despite willingness to re-pay amount due. He received notice dated 25/10/2019 to clear dues or renew the loan by paying interest. Though he is ready to comply, Opposite Party insisted to pay market value of gold ornaments though he is ready to pay amount claimed in notice dated 31/07/2019 and 31/08/2019, 23/10/2019 and 25/10/2019.
3. Gold ornaments were put up for auction without sufficient notice. Complainant sent a notice dated 01/11/2019 followed by reply dated 06/11/2019 informing that complainant to deposit market value to release gold ornaments since a lien is created with gold ornaments.
4. There is negligence in service and relief is sought to direct the Opposite party to receive amount shown in demand notice dated 25/10/2019 and to release gold ornaments or to pay value of Rs.3,500/- per gram, being the market rate and adjust loan amount as per demand notice dated 25/10/2019, along with compensation and costs.
5. The Opposite Party filed their written version. Opposite Party admitted that the complainant obtained a loan of Rs.3,00,000/- and another loan of Rs.2,30,000/- pledging the gold ornaments this is renewal of gold loan. Another loan obtained KCC loan of Rs.10,00,000/-. Sushmitha and Sathya Shankara who are liable to pay the principal amount plus agreed interest thereon, loan amount due with interest enhanced, complainant is informed by notices dated 31/07/2019 and 31/08/2019 directing to pay Rs.3,33,123.44/-and Rs. 2,53,611/- towards principal amount and interest as on 31/08/2019.
6. The Opposite Party denied the averments that complainant approached the bank with amount due or Opposite party misappropriated gold ornaments. Demand notice is sent since gold loan is not renewed. Bank is entitled for lien and also to conduct auction. Auction is held after following all prescribed rules, contentions otherwise is false. Complainant is defaulter, complaint is filed to circumvent serafasi proceedings. Opposite Party prayed to dismiss Complaint with costs.
7. The Opposite Party filed IA-41/21 for joint trial in cc-226/19and CC-227/19 petitioner allowed though petitioner is allowed separate order is passed in the convenience complainant filed chief affidavit and was cross examined as Pw1, Opposite Party’s documents marked.
Following points arise for considerations in this case:-
- Whether there is Deficiency in Service from Opposite party in the matter of auction sale or in disposing off gold ornaments of Complainant without following the rules and thus bank is liable for compensation to complainant and whether complainant is entitled to any reliefs and if so for what reliefs?
8. The Complainant admits receipt of notice dated 25/10/2019 in which bank claimed Rs.3,36,351/- as on 31/08/2019. Complainant admits to pay demanded but claims release of pledged gold ornaments. Notice dated 07/10/2019 Ext.A5 shows that demand is made for Rs.2,53,611/- as on 31/08/2019. Borrowers are liable to repay the total outstanding amount due within their re-payment period, to release their gold pledged.
Gold loan auction process: It was ensured that all companies followed a limited, transparent policy for the auction of pledged assets after duly informing a concerned loan.
Gold loan auction procedure mandates by policy, the auctioneer is liable to serve auction notice to a loanee at least 21 days ahead of such proposed auction date. This notice should be sent by registered post. In the particular case auction notice was sent on 07/11/2019 Ext.B8 shows that complainant expressed his willingness to pay the amount due thereon and sought release of pledged gold amounts. Ext.B9 reply to advocate for complainant received at 6.30 PM on 06/11/2019 informing confirmation of sale to be held on 07/11/2019 notice to the complainant is not sent 21 days ahead of auction date by registered post. Postal acknowledgment of receipt of auction notice is not produced. Rules are not followed and auction is violation of mandate aforesaid.
As a loanee, he sent letter dated 07/11/2019 Ext.B8 for an opportunity to release his gold assets pledged by paying entire due amount till the preceding working day of auction date. However request is not accepted by the bank but proceeded with auction sale.
After this auction is conducted, the customer will be conveyed with details regarding the process. No notice by registered letter containing details like the value fetched in their auction, outstanding dues fetched and any balance is not conveyed.
Considering the entire evidence, claim of both parties, there is serious Deficiency in Service in the part of opposite party. The bank is not followed the procedure in conducting gold auction process and the complainant though expressed his willingness to pay entire amount even on the date of proposed sale. No reason is stated as to why not allow the request. Thus complainant is entitled to compensation and other relief as admissible under law.
The Complainant is liable to pay amount due with interest. Complainant admits to pay the amount demanded there in but claims release of pledged gold ornaments. Notice dated 01/10/2019 Ext.A5 shows that demand is made for Rs3,36,351/- and Rs.2,53,611/- as on 31/08/2019 with interest thereon till 30/12/2022 at 9.9% per annum which comes to Rs. 1,12,117/- in one loan. In the other loan amount due with interest upto 31/12/2022 comes to Rs.84,537/- as total of amount due with interest in first loan comes to Rs.3,38,148/-. Since gold ornaments are already sold in auction and thus not possible to return in it as it is, Opposite Party bank is directed to pay the market value of gold ornaments claimed at the rate of Rs.3,500/- in the complaint for the pledged gold ornament mainly 135 grams as shown in Ext.B1 which amount comes to Rs.4,72,500/- plus for another loan 115 grams comes to Rs.4,02,500/- set off is given to bank by adjusting its liability. Then excess amount due by bank to complainant is Rs.24,132/- plus Rs.64,352/- thus the total excess amount due by bank is Rs.88,432/-. Opposite party bank is directed to pay Rs.88,432/- being the difference amount as above to complainant.
The Complainant is entitled to compensation for Deficiency in Service and for mental tension and agony suffered by him. The complainant claimed Rs.5,00,000/- which is on higher side. Under the circumstances and considering that the fact auction is held for default in re-payment of loan in time compensation is fixed at Rs.10,000/- which amount is to be reasonable . The complainant is entitled for cost of litigation also.
In the result complainant is allowed in part. Opposite party is directed to pay Rs.88,482/- (Rupees Eighty Eight Thousand and Four hundred and Eighty Two only) as above and also pay Rs.10,000/- (Rupees Ten Thousand only) for compensation with litigation cost of Rs.5,000/- (Rupees Five Thousand only) within 30 days of receipt of the order.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Exhibits
A1: Token issued by the Opposite Party
A2: Token issued by the Opposite Party
A3: Notice issued by the Opposite Party
A4: Notice issued by the Opposite Party
A5: Notice issued by the Opposite party
A6: Auction Notice
A7: Auction Notice
A8: Notice
A9: Notice
A10: Lawyer Notice
A11: Lawyer Notice
A12: Postal Acknowledgement
A13: Postal Acknowledgement
A14: Application filed by the Complainant
A15: Copy of complaint
B1: Copy of Gold Loan Pledge Form
B2: Copy of Gold Loan Pledge Form
B3: Application form for loan
B4:Renewal of credit facilities
B5: Statement of account
B6: Gold Auction Sanction letter
B7: Details of Gold Auction Conducted
B8: Request letter issued by complainant
B9: Reply notice from the opposite party
B10: Details of Persons participated in Gold Auction
B11: Notice issued by the bank
B12: Gold auction sale notice published in the newspaper
B13: Gold auction sale notice
B14: NPA Summary
B15: CIBIL statement of the complainant
B16: CIBIL statement of the complainant
B17: Notice under section 13(2) of SARFAESI Act issued to the complainant
B18: Copy of the plaint in O.S.No.37/2020 filed by the opposite party
B19: Copy of the written statement filed by sumedha and Sujatha Shankar
B20: Copy of the plaint filed before the DRT Ernakulam by the opposite party
Witness Cross examined
PW1: Sathyashankara
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Forwarded by Order
Assistant Registrar
Ps/
