MUTHOOT BANKERS vs N.SHADADHARAN

THE complainant in OP No. 208/97 on the file of the District Consumer Disputes Redressal Forum, Alappuzha is the appellant in appeal No. 764/98 whereas the opposite party in the said OP is the appellant in Appeal 617/98.

THE complainant approached the District Forum with the grievance that, he had pledged 72 grams of gold ornaments with the opposite party on 25.4.1994 and raised a loan of Rs. 10,000/-. THEn on 23.5.1994 he pledged another 40 grams of gold ornaments and raised a further loan of Rs. 12,000/-. While so, on 16.8.1996 he received a notice from the opposite party demanding him to pay the arrears of interest on the loan within 7 days, failing which the gold ornaments would be sold on 16.8.1996. THE date of the notice was 9.8.1996. THE complainant could not raise the amount immediately and, therefore, he approached the opposite party and requested the opposite party to postpone the auction. According to the complainant, the opposite party was not prepared to postpone the auction. He alleged, after a few days he met the manager of the opposite party and requested him to furnish him with the details of the auction. As the complainant did not get any communication, he sent a notice on 1.5.1997 to furnish details of the auction. THEy did not even sent a reply. He alleged, on the date of the auction maintained by the opposite party, the market price of gold was Rs. 450/- per gram and gold ornaments would have fetched Rs. 59,400/- if they were sold in open market. Inasmuch as they did not comply with the demand of the complainant in the matter of sale of the gold ornaments, there is deficiency of service and he claimed compensation. THE opposite party filed their version in which they denied the allegations in the complaint and sought to maintain, that the gold ornaments were taken for auction on 8.11.1996. It was also contended by the opposite party, in their version that, the opposite party had conducted the auction after complying with the required formalities. THErefore, they maintained there is no deficiency of services. THE complainant gave evidence as P.W. 1 and produced Ext. A1 to A3. On behalf of the opposite party R.W. 1 was examined and R1 and R2 were marked. The District Forum found deficiency of service and, therefore, made a direction to refund Rs. 15,000/- with 12% interest from the date of the order till realisation, in addition awarded Rs. 500/- as compensation for mental agony with costs of Rs. 1,000/-. Aggrieved by the same the opposite party filed the appeal. The complainant in his appeal seek to maintain the compensation awarded is inadequate.

The learned Counsel for the appellant contended that, the complaint itself was not maintainable as the complainant cannot be treated as a consumer. It was sought to be maintained that, the relationship between the complainant and the opposite party being debtor and creditor, the complainant cannot be a consumer. He made reliance on the decision of the National Commission reported in III (1997) CPJ 3 (NC) as well as a decision of this Commission reported in 1996 (2) CPR 44 in support of the aforesaid argument. The complainant relied on the decision of the National Commission reported in 1997 NCJ 289 to maintain that, a transaction of this nature is maintainable before the District Forum and, therefore, the complainant is a Consumer.

IT is not in dispute that, the complainant pledged the gold ornaments on two occasions with the opposite party and raised two loans. The fact that ornaments were pledged for availing loan having been admitted, the question for consideration is, whether such a transaction could create only a debtor and creditor relationship. The decision of the National Commission in. III (1997) CPJ 3 (NC) referred to early, concerned the pledging of shares and availing advance/over-draft facilities. Dealing with the same the National Commission in the contest of the argument by the revision petitioner that the complainant therein would not be a consumer came to the conclusion that, the transaction would not fall within the provisions of the Consumer Protection Act. In paragraph (10) of the said decision the relative right of the Bank and the pawnee is considered, the National Commission observes: "The Bank could file a suit for the recovery of the debt and retain the pledged good as a collateral security. In view of this, we are of the opinion that it was a relationship of a creditor and a debtor so far as pledged shares were concerned. As such, the question of hiring of service of the Bank would not arise in such an eventuality. 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 in violation of the provisions of Section 176, the 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. In the decision referred to relied by the complainant that is 1996 NCJ 289 the question regarding the character of the transaction as such did not arise for determination, neither was a dispute as to whether the complainant therein was a consumer. As such, there was no occasion for the National Commission to decide the charactor of the transaction. In that case though the complainant obtained loan from the Bank by pledging gold ornaments, the question was as to the fixing of the quantum of compensation. The argument of the complainant is inasmuch as the complaint was not held to be not maintainable, by necessary implication it must be assumed that, the National Commission acknowledged the status of the complainant therein as consumer. What is binding on this Commission is the ratio of a decision. As indicated early, since there was no contest in that decision as to the charactor of the transaction, naturally the National Commission did not go into that question; then it is not possible to deduce a ratio of the type canvassed by the complainant herein by implication where the said decision of the National Commission does not lay down any such ratio. This is more so, as the National Commission has clearly declares the law in this report in the decision in III (1997) CPJ 3 (NC) referred to early. Since the relationship of the complainant and the opposite party is that of creditor and debtor, in the light of the decision of the National Commission, we are of the view that, this matter had to be entertained only by a Civil Court. In that view, we need not go into the other questions raised in the complaint. We allow appeal 617/98 by the opposite party and dismiss appeal 764/98. In the facts and circumstances of the case, the parties are directed to suffer their costs. Appeal allowed.