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Manappuram Finance Ltd. Gold Loan Co. operates from Howrah Maidan Branch v/s Daniel Ray

    First Appeal No. 1328 of 2014

    Decided On, 29 November 2016

    At, West Bengal State Consumer Disputes Redressal Commission Kolkata


    For the Appellant: Anjan Dutta, Advocate. For the Respondent: In-Person, Advocate.

Judgment Text

Jagannath Bag, MemberThe present appeal, as filed under Section 15 of the Consumer Protection Act, 1986 , is directed against the impugned Order, dated 28.10.2014, passed by the Ld. District Consumer Disputes Redressal Forum, Howrah, in compliant case No. HDF/437 of 2013 , whereby the complaint was allowed on contest with cost and compensation against the OP.

The complaint case , in brief, was as follows:

The Complainant got a loan on pleading of gold for a sum of Rs. 91,400/- in November 2009 . Allegedly, the OP used a defective Demand Promissory Note, in lieu of a simple , effective and correct loan application. The OP asked the Complainant to sign the promissory note hurriedly, blindly and compulsorily without allowing the Complainant to glance, read and see the contents of such promissory note . A defective loan account was generated . Later the OP refused to accept the agreed rate of interest and claimed interest @ 33 % p.a. and up to 60 % p.a. The Complainant expressed his grievances, but the OP did not settle such grievances . At last the Complainant’s gold was sold in a privately organized auction without serving any notice upon the Complainant. Thus, the OP manipulated and mis-appropriated the gold weight and mis-calculated ROI – over due ROI-Penal ROI and grabbed the gold making 240% profit and delivering a defective cheque drawn for paying auction surplus. The cheque was returned to the OP who has not paid back. The Complainant suffered a huge amount of financial loss. In that position, the compliant petition was filed before the Ld. Forum below on grounds of restrictive / unfair trade practice praying for direction upon the OP to pay Rs. 9,99,888/- as compensation , apart from litigation cost.

The OP contested the complaint by filing W.V. In their W.V. the OP denied all material allegations. It has been stated that the Complainant took 3 loans out of which two were settled and the 3rdloan was not settled . The Complainant neglected in making payment of interest amount towards the loan account . As per terms and conditions of the loan application and agreement executed by the Complainant , if the full repayment of the loan is not made within 12 months from the date of the pledge , the company shall have the right to sell the gold ornaments at the risk of the borrower by public auction or by private arrangement. After notice being issued to the Complainant and the notice having returned with the postal endorsement ‘not known’ , the auction was published in a daily newspaper, apart from contact by the company staff with the Complainant. The Complainant did not take any step to settle or renew the pledge. The gold ornaments were auctioned at the rate of Rs.2,256.24 per gram for a total amount of Rs. 1,84,403/- . The amount due to the Company was Rs. 1,33,699/- . After adjusting the due amount , the company sent Rs. 50,664/- by a cheque drawn on Axix Bank Ltd. There being no deficiency in service on their part, the complaint was liable to be dismissed.

Ld. Forum below considered the petition of complaint and ‘Reply to questionnaire, affidavit in reply filed by the Complainant along with the documents and W.V. and its annexures filed by OP’. It was observed that OP took a plea of supplying document named ‘Pawn Ticket’ on which the ROI is mentioned. But, it was not supplied at the time of disbursing the loan amount of Rs. 91,400/- for which the Complainant pledged 94.5 grams (Gross) of gold . It was also observed that the excess amount of Rs. 50,664/- was sent to the Complainant on 14.11.2011 which was received by the Complainant on 31.01.2012 . Why there was delay in sending the cheque of excess amount was not explained by the OP. Ld. Forum below also observed that the Complainant having returned the cheque on 25.04.12 and OP having not issued any fresh cheque since 25.04.2012 , the amount was lying in the custody of the OP. Ld. Forum below being convinced about deficiency in service on the part of the OP allowed the compliant with cost of Rs.5,000/- and compensation of Rs. 1,00,000/- with further direction to issue a fresh cheque amounting to Rs. 50,664/- in favour of the Complainant.

Being aggrieved by the order of the Ld. Forum below , the OP – turned-Appellant has come up before this Commission with prayer for direction to set aside the impugned order.

Ld. Advocate appearing of the Appellant submitted that the Respondent / Complainant took 3 loans on pledging of gold ornaments. The rate of interest, due dates of repayment of the loan , overdue interest , tenure etc. were mentioned in the pawn ticket , which was duly signed by the Complainant. It is for the failure of the Respondent/ Complainant in regard to the repayment of loan that auction of the gold ornaments was conducted after due notice to the Complainant. Ld. Advocate referred to the decision of the Hon’ble National Consumer Disputes Redressal Commission as reported in 1997 ( 3) CPJ page 46 (NC) holding that pricing matter can not be decided in a consumer court. Ld. Advocate also referred to a decision of the Hon’ble National Consumer Disputes Redressal Commission as reported in 2013 (1) CPR 151 (NC) holding that the matter of loan can not be adjudicated under the provisions of the Consumer Protection Act. In the present case, the Respondent/ Complainant did not repay the loan in terms of the agreement and as such, the gold ornaments were auctioned after observing necessary formalities. There was no deficiency in service, but the Ld. Forum below allowed the complaint arbitrarily. The impugned order should be set aside.

The Respondent in person submitted that he was subjected to unfair trade practice. Instead of fixing the rate of interest as 12% p.a., the Appellant /OP claimed excessive interest which was not agreed to . The pawn ticket as said to have been signed can not be relied upon as the same was got signed in a hurried manner without giving him any opportunity of reading the contents carefully. The documents produced by the Appellant in support of auction was never produced before the Trial Forum as evidence. Again the document as placed under page 118 showing the auction details was not placed before the Trial Forum. The Appellant conducted auction privately and secretly without sending any registered notice within 6 months after the notice was first ever sent. The Appellant adopted unfair trade practice by asking for rate of interest @ 33 % to 60 % violating Reserve Bank of India Rules and laws of the land. The amount of compensation payable to the Respondent / Complainant is inadequate and there should be enhancement of such compensation from Rs. 1,00,000/- to Rs. 9,99,888/- . The impugned order needs to be modified for interest of justice.

The point for consideration is whether the impugned order suffers from any material irregularity or legal infirmity.

We have perused the memorandum of appeal together with copies of the petition of complaint, the W.V. filed by the OP and other records.

LCR being called for has been through carefully.

It appears from the order sheets as maintained in the LCR that the OP filed W.V. on 13.03.2014 with copy to the Complainant . A petition on the point of maintainability was also filed by the OP and the Ld. Forum below decided to hear the said petition at the time of final hearing . In their order of the same date , i.e. 13.03.2014 , Ld. Forum below directed the Complainant to file reply on affidavit in respect of the W.V. Why Ld. Forum below did not ask the Complainant to file evidence has not been mentioned in any order. The OP, vide order No. 6, dated 08.05.14, was directed for filing questionnaire. There being no evidence filed by the Complainant how the OP could be asked to file questionnaire also remains unexplained. It appears that the Complainant filed reply to the questionnaire and thereafter date was fixed for argument. Arguments were heard on 02.09.2014 when the Ld. Member who authored the final order was present. But, she ( Smt Jhumki Saha ) was not present in the hearing on 02.09.2014 when the hearing was completed.

It appears from LCR that Ld. Forum below did not discuss the maintainability point in the final order though such statement was made in their order dated 13.03.2014.

The fact goes that the Respondent / Complainant took a loan against gold and the said loan was not repaid in time for some reasons as noted in the petition of compliant. Accordingly, the Appellant/OP auctioned the gold and adjusted the dues against the sale proceeds of the gold and refunded Rs. 50,664/- . But the Respondent / Complainant did not receive such amount on the ground that the auction was not duly held with intimation to him.

Admittedly, the OP auctioned the ornaments on 24.05.2011. Though the Appellant has submitted a newspaper publication in regard to the auction of sum gold ornaments, such document was not submitted before the Ld. Forum below.

What is very important is that the adjudication processes suffers from some technical flaws , in so far as the Complainant was not asked to file evidence and it was only the W.V. of the OP against which the Complainant was asked to file reply on affidavit . Again, the Complainant not being asked t

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o file evidence and the OP being asked to file questionnaire, adjudication processes became irregular. Further , the final order authored by the Ld. Member who was not present during the final hearing does not appear to be lawful . In that view of the matter, we are inclined to hold that the impugned order was not passed by observing necessary formalities as required . We are of the considered view that it is a fit case for remand for fresh adjudication by the Ld. Forum below by observing all necessary formalities. Hence, Ordered that the appeal be and the same is allowed with direction upon the Ld. Forum below to adjudicate the matter afresh by giving opportunity of hearing to both parties who may file fresh evidence in their respective support. The impugned order is set aside. There shall be no order as to costs. Parties to appear before the Ld. Forum below on 10.01.2017 for necessary order. LCR be sent back to the Ld. Forum below along with a copy of this order.