CANARA BANK RAMAPURAM BRANCH DINDIGUL Vs. M CHANDRAN

JUDGEMENT

(1.) The complainant pledged certain jewels and raised a loan from the opposite party. The opposite party, on the ground that the loan amount was not paid back in time by the complainant, auctioned the jewels and, therefore, the present complaint is laid by the complainant claiming return of jewels and compensation of Rs.1 lakh.

(2.) The Lower Forum granted a sum of Rs.25,000/- as compensation with cost of Rs.500/-. Hence the present appeal.

(3.) The facts are not complicated enough in this case. The complainant pledged certain jewels with the opposite party and raised a loan. The loan was not repaid. The pledged jewels were sold in auction. Thus in short is the sum and substance of the complainant's case. The loan was availed of by the complainant in April 1996. The auction was held on 6th January, 1999 and the sale proceeds of Rs.12,800/- was appropriated towards the loan amount due from the complainant including the interest and the balance of Rs.17/- was kept in suspense account. Now in such circumstances, whether it can be held that any deficiency in service would lie. The service availed of by the complainant was to avail loan on pledge of jewels. That part of service has been completed by the opposite party by accepting the jewels and granting a loan. Now, it is for the complainant to perform his part viz. , repayment of the loan in instalments. Though the loan was availed of in 1996, till January 1999 the complainant did not choose to make any payment or discharge the loan either in part or in full. Thus it is the complainant who is at fault to perform his part of the contract of service or his part of the contract as the case may be. Therefore, there is no question of deficiency arising at all in this case. It is a loan transaction in which jewels were pledged by the complainant as security to show his intention to discharge the loan. The complainant had admittedly executed a letter of pledge which was part of the application for the loan. He has asked for a loan of Rs.9,000/- and has agreed to repay the same on or before 4.10.1998 with interest at 12.5% p. a. He has authorized under this document the Bank to waive his rights to notice and for sale of the pledged jewels described in the schedule and adjust the same towards the loan. He has also specifically empowered the Bank to sell the jewels and appropriate it towards the amounts due by him and also to waive of right of notice of such sale by the Bank of the jewels. Therefore, in such circumstances, the question of deficiency of service will not arise nor the matter can be brought under the umbrella of the Consumer Protection Act, 1986 . It is a simple transaction of loan with pledging of jewels as security for the proper repayment of the loan. The loan was not returned or repaid before the date undertaken. Therefore, in exercise of the powers vested in them under the agreement, the opposite party has auctioned out the jewels and utilized the sale proceeds towards the loan amount. If the complainant wants to question the right of the opposite party to auction, the Forum he has to chose is a Civil Court. Whether the condition in the agreement waiving the rights of notice is binding upon the complainant or not, whether such condition is enforceable or not are questions that can be agitated only before the Civil Court or in a civil suit. Therefore, the decision relied upon by the learned Counsel for the complainant , will not be of any avail in this matter. The decision referred to by the complainant is relatable to a civil suit where, while considering the sale of pledged goods, the Orissa High Court dealt with Sec.176 of the Contract Act and held that the pawner is entitled to a notice of sale. But that proposition cannot be made applicable in this case since this is not a proceeding questioning the auction nor it is a proceeding civil in nature. It is simply a complaint filed before a Consumer Forum for the recovery of the sum of Rs.1,00,000/- as compensation for auctioning the jewels. The remedy of the complainant is, therefore, only to approach a civil Forum. By merely stating that the sale of jewels by the opposite party has caused him loss of reputation and mental hardship, the law cannot be circumvented nor such a claim can be brought under the foliage of consumerism. In fact, the National Consumer Disputes Redressal Commission has held that in such a case, the question of deficiency in rendering service by the Bank would have arisen only when the complainant had made repayment of the loan and the Bank had not returned the ornaments to him and that before making payment even after the expiry of the period of mortgage, the complainant cannot complain that the Bank was in any way deficient in rendering service. It was also a case where the pledged jewels were sold in auction and the National Commission held that such a question cannot be decided by the Consumer Forum vide Janak M. Chandan V/s. Ahmednagar Sahakari Bank Ltd., 1993 2 CPJ 168 (NC ). Hence it follows that the complaint is misconceived and ought to have been dismissed by the lower Forum. In view of the stand we have taken above, it follows that the complaint is liable to be dismissed, which means that the appeal has to be accepted.