N.A.SUDHARSAN vs MATHEW DOMINIC

THIS appeal is directed against the order dated 14th day of December, 1998 in O.P. No. 169/1995 on the file of the District Consumer Disputes Redressal Forum, Madurai.

THE appellant is the complainant while the respondents are the opposite parties. Short facts may be related in order to understand the crux of the issue arising for consideration in this action.

One Aiyalu Naidu (since deceased) is the father of one N.A. Sudharsan (complainant). The said Aiyalu Naidu whilst alive pledged a gold ottiyanam (gold waist belt) said to be weighing 22 sovereign with the first opposite party on 13.2.1992 and obtained a loan of Rs. 40,000/-. The loan is repayable on demand. If the loan is not paid up on a demand being made, the pledged jewels will be sold in public auction or through private negotiations and the pawner will be held personally liable for any deficit and if there is any balance left, it will be appropriated by the Bank towards any other loan, overdraft or debt owing by the pawner as debtor, guarantor or in any other capacity. It is expressly understood that such sale made by the Bank shall not be disputed by the pawner in any manner whatsoever.

IT appears that the opposite parties sent a notice to the said Aiyalu Naidu demanding the repayment of the loan which was returned as not claimed by postal endorsement dated 26.5.1993. Subsequently the opposite parties caused a publication in the Tamil newspaper Dinathanthi dated 7.10.1993 stating that the jewel pledged by the said Aiyalu Naidu will be sold in auction on 26.10.1993. Neither the complainant nor any of the representatives of the deceased repaid the amount due under the loan before the auction sale which happened on 26.10.1993. Consequently, the jewel pledged was sold in public auction and one Ramanujam, it is said, the highest bidder, who purchased the pledged jewel for Rs. 53,600/-. Thereafter the complainant knocked at the doors of the Forum below alleging deficiency in service on the part of the opposite parties and claiming certain reliefs as prayed for in the complaint.

THE opposite parties in pith and substance would contend that there was no deficiency in service on their part in effect that the sale of the pledged jewel by public auction and that the procedure contemplated had been duly complied with before ever the pledged jewel was sold in auction. As such, the complaint is liable to be dismissed. The Forum below after taking into consideration the materials placed on record, recorded a finding that there was no deficiency in service on the part of the opposite parties and dismissed the complaint without costs. Aggrieved by the order as above, the complainant resorted to the present action by engaging a Counsel of his choice, namely learned Counsel Mr. N.A. Ravindran.

THE opposite parties on service of process also entered appearance through a Counsel of their choice, namely learned Counsel M/s. Joseph & Rao.

WHEN the matter came up for hearing before us today, learned Counsel M/s. Joseph and Rao representing the respondents/opposite parties were called; absent and no representation is made on their behalf. The fact that the said learned Counsel were absent does not mean that we cannot dispose of the matter on merits, of course, after hearing learned Counsel Mr. N.A. Ravindran appearing for the appellant/complainant and on perusal of the materials placed on record and that is exactly what we have done in this action. From the pith and submission of learned Counsel Mr. N.A. Ravindran appearing for the appellant/complainant and on perusal of the materials placed on record, the one and only point that crops up for consideration is as to whether the order of the Forum below is sustainable in law on the facts and in the circumstances of the case. There is no pale of controversy that one Aiyalu Naidu, who was the father of the complainant N.A. Sudharsan pledged a gold waist belt said to be weighing 22 sovereign on 13.2.1992 to the opposite parties Bank and obtained a loan of Rs. 40,000/-. Ex. B1 is the pledge receipt dated 13.2.1992. From a perusal of Ex. B1, the said Aiyalu Naidu obtained a loan of Rs. 40,000/- from the opposite parties Bank by pledging the gold waist belt as security for the loan. The loan so obtained is a loan repayable on demand. This aspect of the matter is getting reflected in terms and conditions of the pledge receipt noted as No. 1. There is also a Clause 6 in the said pledge receipt and it reads as under : "6. If the loan is not paid up on a demand being made, the jewels pledged will be sold in public auction or through private negotiations and the pawner will be held personally liable for any deficit and if there is any balance left, it will be appropriated by the Bank towards any other loan, over-draft or debt owing by the pawner as debtor, guarantor or in any other capacity. It is expressly understood that such sale made by the Bank shall not be disputed by the pawner in any manner whatsoever."

The other clause, which is relevant in the said pledge receipt, is traceable to Clause No. 11, which gets reflected as under : "11. The Bank is at liberty to re-pledge the jewels."

THE loan being a demand loan, the opposite parties bank officials issued a notice under Ex. B2 to the said Aiyalu Naidu which was returned ''unserved'' by the Postal Department bearing the date 26.5.1993. THE Bank left with any other option also caused a publication to be made by way of an advertisement in the Dinathanthi newspaper dated 7.10.1993 which had been marked as Ex. B4 stating that the jewel pledged by the said Aiyalu Naidu will be sold in public auction for the realisation of the loan amount on 26.10.1993. On or before the effecting of the auction sale of the jewel, neither the complainant nor any of the legal representatives of the said Aiyalu Naidu approached the opposite parties and repaid the amount. In such a situation, the opposite parties bank officials sold the pledged jewel by Aiyalu Naidu in public auction and realised an amount of Rs. 53,600/- from one Ramanujam, who was stated to be the highest bidder. THE fact that the condition No. 11 prescribes that the Bank is at liberty to re-pledge the jewel does not mean that the opposite parties bank officials are not entitled to sell the jewel pledged for the realisation of the due as per Clause No. 6 as adumbrated in the pledge receipt marked as Ex. B1. Pertinent it is to refer to at this juncture Sections 176 and 177 of the Indian Contract Act, 1872 (Act No. 9 of 1872). Section 176 deals with the pawnee''s right where pawner makes default. The said section prescribes that if the pawner makes default in payment of the debt, or performance, at the stipulated time, of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawner upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawner reasonable notice of the sale. What is further prescribes therein is that if the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawner is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawner. Probably it is on the basis of Section 176 of the Act, 1872, Clause 6 of the pledge receipt had been framed.

SECTION 177 of the Act, 1872 deals with the defaulting pawner''s right to redeem. The said section provides that if a time is stipulated for the payment of the debt, or performance of the promise, for which the pledge is made, and the pawner makes default in payment of the debt or performance of the promise at the stipulated time, he may redeem the goods pledged at any subsequent time before the actual sale of them; but he must, on that case, pay, in addition, any expenses which have arisen from his default. It is thus crystal clear from the salient provisions as adumbrated under Sections 176 and 177 of the Act, 1872 that the opposite parties bank officials are entitled to bring the pledged jewel by Aiyalu Naidu for sale for the recovery of the amount due under the loan after making a demand for the payment of the same. The demand having been made by the opposite parties for the payment of the loan under Ex. B2 and also caused a publication under Ex. B4, the jewel had been sold in public auction and before the sale took place neither the complainant nor any of the legal representatives of the deceased, Aiyalu Naidu, approached the Bank and repaid the loan. In such circumstances, it cannot at all be stated that the opposite parties bank officials committed any sort of a deficiency in service even assuming for argument sake that the transaction between the complainant and the opposite parties is falling under the definition of the relationship of complainant being construed as a consumer qua the opposite parties. True it is the Forum below did not take into consideration these aspects of the matter as we have taken into consideration while arriving at such a conclusion. That fact that the Forum below did not take such aspect of the matter is of no consequence. The reasons are rather obvious. This Commission before which the appeal had been preferred by the complainant is a Forum of first appeal. The appeal is a continuation of the original proceedings. Such being the case, this Commission is entitled to take into consideration the materials placed on record and arrive at a conclusion different from the one as arrived at by the Forum below or the same conclusion for altogether different reasons. The appeal as such deserves to be dismissed.

IN fine, the appeal fails and the same is dismissed. We, however make no order as to costs on the facts and in the circumstances of the case. Appeal dismissed.