The district consumer disputes redressal forum, Panchkula, has imposed a fine of Rs 3.30 lakh on a finance institution for auctioning mortgaged gold ornaments belonging to a Chandigarh resident even after the latter made interest payments.
Sonika Bajaj, a resident of Sector 27, had secured a loan of Rs 2.18 lakh from Karvy Finance in 2012 at 18% per annum against 14 gold ornaments.
While the forum, presided by Dharampal, observed that Bajaj did not pay the interest on time, it said that she had paid Rs 43,036 in five installments.
The finance firm did not contest Bajaj's claim of making all her interest payments, but cited its terms and said payments made beyond the stipulated time cannot impede the auction process.
The forum commented, "Karvy Finance, which accepted the interest payments without demur, cannot be allowed to behave like a Shylock to its pound of flesh. The validation of the impugned auction, in our considered view, would amount to approval of an unconscionable transaction in which the lender was in a dominant position to dictate terms to the loanee."
In Shakespeare's The Merchant of Venice, Shylock, the principal antagonist, is a moneylender who lends money to his rival Antonio setting the security at pound of loanee's flesh.
"In our welfare state, a sizeable number of population lives under poverty line. While schemes may have been formulated for the benefit of the masses, the state of poor in the country doesn't appear to have improved much. The poor have to raise a loan by pledging whatever is available with them, including gold. Except under compelling and emergent eventuality, an Indian female of whatever economic pedestal would not like to part with her jewellery. Money lenders impose onerous terms upon a needy loanee. Such like apparently onerous and unconscionable terms cannot be upheld by forums of adjudicatory hue," said the judgment.
The forum ordered the company to either furnish an amount equal to the cost of gold after deducting the remaining interest or pay 3.10 lakh to the complainant.
An additional fine of Rs 20,000 has been imposed on the lender for causing mental harassment and towards litigation cost.