9 hrs ago
Shimla Consumer Panel Awards Man Rs 14.5 Lakh
A man borrowed money from a bank by giving his gold jewellery as security.
The bank checked the jewellery before approving three loans.
Later, the bank checked the gold again without telling the man and said it was completely fake.
The man worried that the jewellery might have been changed or damaged after he gave it to the bank.
He challenged the bank’s claim before a consumer commission.
The commission said the bank had not shown that the man agreed to secret checks.
It also said the man could not be blamed for a problem discovered during a check done without him.
The bank was ordered to pay roughly Rs 14.5 lakh altogether.
The bank had blamed the original gold valuer and said the case required a regular court investigation.
The Shimla District Consumer Disputes Redressal Commission ruled that a private bank provided deficient service and engaged in an unfair trade practice.
The case involved 103 grams of jewellery pledged as security for three loans totaling Rs 14.38 lakh between 2022 and April 2023.
The bank later called the jewellery 100 per cent spurious during an internal verification and demanded repayment of Rs 10.95 lakh plus charges and interest.
The commission said the bank failed to prove that the borrower had consented to, or been notified about, surprise verification conducted in his absence.
The bank was ordered to pay about Rs 14 lakh for the gold, Rs 30,000 compensation and Rs 20,000 in litigation costs.
- Who
- A borrower and a private bank; the Shimla District Consumer Disputes Redressal Commission decided the dispute.
- What
- The commission ordered the bank to compensate the borrower after it declared his pledged gold spurious following an unnotified internal verification.
- Where
- Shimla, Himachal Pradesh.
- When
- The loans were issued in 2022, March 2023 and April 2023; the bank reported the alleged problem in July 2023, and the order was dated September 23.
- Why
- The commission found that the bank failed to prove the borrower had consented to surprise verification in his absence and had not followed applicable Reserve Bank of India safeguards.
Borrower’s Position
Bank’s Position
Validity of the gold
Borrower’s Position
The borrower said the jewellery had been checked and accepted before each loan and suggested it may have been tampered with or replaced while in the bank’s possession.
Bank’s Position
The bank said an empanelled assayer found the jewellery 100 per cent spurious and blamed the original valuer, against whom it said it had filed a police complaint.
Unnotified verification
Borrower’s Position
The borrower argued that the later verification took place without notice or consent and offered to repay the loan if the jewellery was independently verified and returned in its original condition.
Bank’s Position
The bank relied on its periodic internal verification and denied that this amounted to deficient service; the commission said the bank failed to prove the borrower’s consent.
Forum for the dispute
Borrower’s Position
The borrower pursued the matter before the consumer commission as a service deficiency and unfair trade practice dispute.
Bank’s Position
The bank argued that allegations of fraud and complicated factual questions required investigation by a civil or criminal court rather than summary consumer proceedings.
Key facts
- Gold involved
- 103 grams of jewellery described as 22-carat gold
- Loans
- Three loans totaling Rs 14.38 lakh
- Bank’s later demand
- Rs 10.95 lakh outstanding, plus applicable charges, interest and taxes
- Award for gold
- About Rs 14 lakh, representing the stated market value
- Additional compensation
- Rs 30,000 compensation and Rs 20,000 litigation costs
- Commission
- Shimla District Consumer Disputes Redressal Commission
- Verification rule cited
- The article says Reserve Bank of India directions require consent for surprise verification, including checks conducted in a borrower’s absence
Quotes
Shimla District Consumer Disputes Redressal Commission
Consumer commission bench that decided the dispute
“The subsequent impurity of gold jewellery items has been found behind the back of the complainant, for which the complainant cannot be held liable;”
indianexpress.com
Sources
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