State Consumer Disputes Redressal Commission
Managing Director And Proprietor, ... vs J.Sheikmydeen,Muslim Odai Theru, ... on 7 June, 2024
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IN THE CIRCUIT BENCH OF THE TAMILNADU STATE CONSUMER
DISPUTES REDRESSAL COMMISSION, MADURAI.
Date of Appeal filed:10.11.2022
PRESENT: THIRU.S.KARUPPIAH, PRESIDING JUDICIAL MEMBER
F.A.No.154/2022
FRIDAY, THE 07th DAY OF JUNE 2024
1. Managing Director and Proprietor,
Athirsta Financial Service,
No.56/J6, Ground Floor,
Kulanthaivel Complex,
Chairman Shanmugam Road,
Annai Hospital Opposite, Sivakasi,
Virudhunagar District-626 123.
2. The Branch Manager,
Athirsta Financial Service,
No.56/J6, Ground Floor,
Kulanthaivel Complex,
Chairman Shanmugam Road,
Annai Hospital Opposite, Sivakasi,
Virudhunagar District-626 123.
Appellant/Opposite parties.
-Vs-
J.SheikMydeen,
S/o.JohnBatcha,
No.265, Muslim Odaitheru,
Sivakasi,
Virudhunagar District-626 123.
Respondent/Complainant.
Counsel for Appellant/Opposite parties : M/s.Eddy & Embboss Law Firm.
Counsel for Respondent/Complainant : Called Absent.
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Aggrieved by the award passed by the District Consumer Disputes Redressal
Commission, Virudhunagar District @ Srivilliputhur in C.C.No.43/2021, dated
27.09.2022 the Appellants/opposite parties have preferred the appeal. This appeal
coming before me for final hearing on 18.04.2024 and upon perusing the material
records, this Commission made the following:
ORDER
THIRU.S.KARUPPIAH, JUDICIAL MEMBER.
1. The facts:
The complainant one Sheikmydeen pledged his jewels and obtained jewel loans from the opposite parties on 11.11.2020 as follows, S.No. Loan A/c No. Weighing of Jewels in gm Amount of Pledged
1. 233 51.100 Rs.1,89,500/-
2. 364 08.00 Rs.35,000/-
3. 365 59.500 Rs.2,40,000/-
4. 366 54.700 Rs.2,43,400/-
5. 367 06.600 Rs.28,700/-
6. 369 15.060 Rs.61,900/-
Totally the complainant pledged the jewels weighing 194.96 gm. for Rs.7,98,500/- Meanwhile, the complainant went to Munnar on 10.05.2021 and he was unable to return back to his home due to Corona Out break. Hence he was unable to repay his loan in time. On 26.11.2021 he approached the opposite parties to redeem the jewels, at the time the Manager informed that the jewels were already sold in 3 public auction after sending proper notices to him. So, alleging deficiency in service for selling the jewels wilfully at a low price and without prior intimation to him. Hence he filed the complaint claiming Rs.20 Lakhs towards compensation with costs.
2. The opposite parties in the written version submitted that the complainant initially pledged the jewels on various dates. He failed to repay the loan amount. But he again re-pledged the jewels as stated by the complainant. He was informed at the time of sanctioning the loan that interests is to be paid regularly and it should be redeemed on time. Inspite of whatsapp communication and registered notices which were sent to the complainant, he failed to repay the loan amount within the time. As such the jewels were sold in public auction and there is no deficiency in service on their part.
3. Before the District Commission both sides led evidence and marked Ex.A1 to A3 and Ex.B1 to B15.
4. The District Commission finally allowed the complaint in part directing the opposite party to realize the loan and interest amount after calculating the jewels value as on day and also directing the opposite party to pay Rs.5 lakhs towards compensation.
5. Aggrieved over the same the appeal has been preferred by the opposite party finance company in which the complainant/Respondent did not appear inspite of due notice to him. The learned counsel for the appellant in his argument would submit that the complainant is liable to redeem the jewels within time. The 4 complainant himself admitted that he was absent from his native place and he also further admitted that he did not pay any interest or principal amount towards the loan. When he failed to pay any amount towards the loan, then the finance company is entitled to auction the same. The District Commission wrongly found that the notice was not sent to the complainant, hence he prayed to allow the appeal.
6. Now the point for consideration is?
1. Whether the opposite parties committed any deficiency in service or unfair trade practice?
7. Discussion on the point:
It is an admitted fact that the complainant borrowed a loan from the opposite parties by pledging his jewels. The above loans have been proved by Ex.A1 as well as Ex.B1 to B11. From the above Ex.B1 to B11, it is elicited to this commission that the complainant obtained jewels loan by pledging the jewels for the second time. This commission perused in Ex.A1 it clearly mentions that the due date for redeeming the jewelsis 11.02.2021 and interest has to be paid every monthly/quarterly/half yearly/yearly. Admittedly the complainant did not pay any amount towards the loan before the due date. Even as per his case he was at Munner from 10.05.2021 and returned home only on 15.11.2021. So, 9 months after due date he returned to his home. Even as per his own pleadings he did not prove that he had enough money to redeem the jewels on the alleged date of his visit to the opposite party office (i.e on 26.11.2021). Further the complainant 5 failed to prove the availability of cash or his other sources to mobilise the same. The complainant alleged as if the opposite parties had committed deficiency in service. It is trite principle of law, before alleging failure of any obligation of the opposite party, the complainant must prove his readyness to perform his reciprocal obligations as per Sec.51 of Indian Contract Act which is reproduced here under,
51. Promisor not bound to perform, unless reciprocal promisee ready and willing to perform.-
When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promise is ready and willing to perform his reciprocal promise illustrations
(a). A and B contract that A shall deliver goods to B to be paid for by B on delivery. A need not deliver the goods, unless B is ready and willing to pay the goods on delivery. B need not pay for the goods, unless A is ready and willing to deliver them on payment.
8. Perusing this case, on hand, there is no pleading or proof that the complainant was willing to redeem the above jewels with money during or before the above due date. The alleged deficiency i.e. selling the jewels in auction was done by the opposite party only after the due date. The relationship between the parties is"pawnor and pawnee". The complainant has pledged the gold ornaments as collateral security for the purpose of securing the loan and for there payment of loan availed by him from the opposite party, which is a non-banking Company, registered under the Reserve Bank of India. So, it is relevant to know What is the duty and power of the pawnee when the Pawner failed to redeem the jewels 6 within the stipulated period given by the pawnee. In this regard, Section 176 of the Transfer of Property Act is relevent and reproduced hereunder for ready reference.
Pawnee's right where pawnor makes default -
If the pawnor makes default in payment of the debt, or performance, at the stipulated time or the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledge as a collateral security;
or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale.
If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount the pawnee shall pay over the surplus to the pawnor".
Thus keeping in mind, the law and the terms and conditions, it can be clearly evidenced that within the stipulated period the complainant ought to have re-paid the loan with interest and get back the gold ornaments given as collateral security. But, he failed to do so hence due notice was issued, paper publication was also effected and the gold ornaments were sold in auction which was held in compliance of RBI guideline. On this aspect the opposite parties did not commit any deficiency in service.
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9. The commission also relied upon the following judgment In S. L. RamaswamyChetty v. MSAPL Palanlappe Chettiar 1930 AIR(Mad) 364 (DB) wherein, the Madras High Court said :
"The respondent (pledgor) could not compel the appellants to exercise the power of sale as a means of discharging or satisfying the decree. His only rights were : (1) in case the appellants (a pawnee) exercised the power, to insist that it should be honestly and properly done and the sale proceeds applied to the debt, (2) in case the appellants did not exercise the power, to redeem the pledges on payment of the debt or so much of it as remained otherwise unpaid and (3) in case the sale was improperly exercised, to get damages caused thereby."
In yet another judgment in III (1997) CPJ 3 (NCDRC) Standard Chartered Bank -Vs- P.N.Tantia and Another, the National Commission has held "No doubt the bank could exercise the right conferred on it in accordance with Law. The remedy of the pawner for an improper sale of pledged property is for recovery of damages. Measure of damages is loss actually sustained. If the sale was not effected in terms of their instructions, or it was complainant could proceed against the Bank by way of civil suit for recovery of damages on account of the loss suffered by them. The complainant could not resort to the remedies provided under the Consumer Protection Act, 1986".
Similarly TNSCDRC Circuit Bench Madurai has held in C.C.No.32/2012 (Pitchaimaniamal -Vs- The Secretary Paramakudi Co-operatve Housing Society Limited....
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"It is significant to note that the averments and the prayer in the complainant do not come under the purview of Consumer Protection Act and on the other hand it is purely a Civil dispute. The Hon'ble National Consumer Disputes Redressal Commission has held in the following case and that disputes pertaining to settlement of accounts are not maintainable before Consumer Forum"
10. Keeping those views in mind, when analysing this case, the opposite parties sent a final auction notice through registered post dated 04.05.2021, 01.06.2021 which were marked as Ex.B12, similarly the acknowledgment cards received by the complainant were marked as Ex.B13. The notices were sent to correct address given by the complainant in the loan documents and in the Consumer Complaint. It was also received by one person after signing the acknowledgement card. The complainant did not deny that those acknowledgment cards were not signed by his family members. As per General Clauses Act, if the notice was sent to a correct address and was received by a person then it amounted to a valid service to the concerned party. But the District Commission wrongly held that the opposite parties did not send any valid notice to complainant before selling the jewels in public auction. So the sale was after due registered notices and after whatsapp communications. So only the complainant alone failed in his basic duties to redeem by paying loan amount as per section 51 of the Contract act and the opposite parties did not commit any deficiency in service or unfair trade practice but exercised their right under section 176 of the Transfer of Property Act. 9
11. Apart from that the order of the District Commission in directing the opposite parties to calculate the market value for the jewels as on date and deduct the principal and interest amount also tantamount to passing an award on accounts. The above award is out of the purview of the commission as there was no pleadings made either by the complainant or by the opposite party about the market value of the jewels at the time of filing the complaint. However the opposite party pleaded that the loan principal and interest exceeded the jewels value at the time of sale and this was not controverted by the complainant. This commission found that there is no paper publication and there is no pleading and proof to that effect. However the opposite parties pleaded that it was sold in auction and marked a document as Ex.B14. Even if there is a default in not conducting the auction properly, the remedy for the complainant is to claim damages only through Civil Court as discussed earlier. So, the order of District Commission is erroneous and liable to be set-aside. The basic principle that a person who seeks equity must do equity was not taken note of by the District Commission. As such the above order and award is liable to be setaside the complaint is liable to be dismissed and the appeal is allowed without costs.
12. In the result,
1. The appeal is allowed.
2. The order of the District Consumer Disputes Redressal Commission, Srivilliputhur in C.C.No.43/2021, dated 27.09.2022 is hereby set aside and the complaint is dismissed.
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3. No order as to costs.
4. The Registry is directed to refund the mandatory deposit to the appellants/Opposite parties with accrued interest thereon duly discharged in favour of the appellants/Opposite parties.
Dictated to the Steno-typist transcribed and typed by her corrected and pronounced by us on this the 07thday of June 2024.
-Sd/-xxx S.KARUPPIAH, PRESIDING JUDICIAL MEMBER.
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