THIRUVANANTHAPURAM: The National Consumer Disputes Redressal Commission (NCDRC) has directed Thrissur-based Manaloor Service Cooperative Bank to compensate 15 gold loan customers who lost their pledged gold in a burglary at the bank. The order came on an appeal petition filed by the cooperative bank against the state commission’s order.
The burglary happened at the bank in May 2006. The customers had secured favourable verdicts from the Thrissur district commission and the state commission. The state commission had directed the bank to provide the market value of the gold as on the date of payment after deducting the loan amount and interest. Also, it asked the bank to settle the loans as on the date of filing of complaints before the district commission without charging any interest after that date.
The bank argued before the national commission that the complaint was not maintainable in view of Section 69 of the Kerala Cooperative Societies Act. As per the Act and rules, the complaints are to be resolved through arbitration before the cooperative registrar. It challenged the state and district commissions’ orders to pay market value of the gold. Since BIS certification was not mandatory at the time of the incident, there are chances that the gold would not be 916 carat.
The bank further said that claims of 95% of customers were settled by paying the market price from the date of pledge to the date of theft.
The case was heard by the NCDRC bench comprising its members Dr Inder Jit Singh and Dr Sadhna Shanker. Advocates Sreevaraham N G Mahesh and Sheeba Sadasivan represented the complainants.
The national commission found that the bank lacked adequate security arrangements like security guards or CCTV cameras. It rejected the bank’s contention of non-maintainability of the complaint stating that the provisions of the Consumer Protection Act are in addition to and not in derogation of the provisions of other laws.
The argument on the purity of the gold was not valid as no bank would advance gold loans without checking purity and weight. The customers are entitled to get the market value of the gold on the date of payment, it said.
The national panel, however, disagreed with the state commission’s finding on interest payment. When the customer gets a refund on the date of refund, he is obligated to adjust this outstanding loan with interest till the date of adjustment. But the bank should charge interest only at the rate at which loan was granted and cannot charge any penalty, the order said.