‘Refund or pay up’: Relief for woman after 11g gold pledged for education auctioned

4 min readNew DelhiUpdated: Jul 18, 2026 09:44 AM IST

The complainant had mortgaged gold ornaments for a loan. (Image generated using AI)

A district consumer commission in Kolkata recently held Muthoot Finance liable for deficiency in service and directed it to return 11.1 grams of gold ornaments pledged by a woman for an education loan, and if not possible, pay their current value of Rs 1.42 lakh, after it was allegedly auctioned.

President A H M Rahman and member Dibyendu Goswami noted that the opposite party had failed to prove their arguments with evidence, and therefore held that there was no reason to disbelieve the unchallenged evidence of the complainant.

“We also hold that the Complainant is entitled to get her gold ornaments of 11.1 grams returned from the OPs (Muthoot), in default, OPs are liable to pay an amount to the Complainant which is equivalent to the present value of 11.1 grams of gold ornaments,” the order dated June 30 read.

The commission further directed it to pay Rs 30,000 to the complainant as compensation and litigation expenses.

Sold at auction

According to the complainant, she wanted to pursue higher education but due to financial paucity, could not fulfill her wishes. Therefore, she approached Muthoot finance for a loan. The complainant stated that it agreed to sanction a loan but on the condition of depositing/mortgaging her gold ornaments.

She mortgaged a gold chain weighing 8.1 grams and two gold earrings weighing 3 grams, against which the company sanctioned loans totalling Rs 29,300 in two instalments. The complainant stated that said she could not repay the loan within the stipulated period because of the financial hardship caused by the Covid-19 pandemic.

When she later approached the branch to clear the dues and redeem her jewellery, she was allegedly informed that the ornaments had already been auctioned.

Feeling aggrieved by this, the complainant moved consumer commission.

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Muthoot Finance denied the allegations and contended that it had repeatedly requested the borrower through emails to repay the loan and had issued an auction notice before auctioning the gold after she failed to clear the dues. It argued that there was no deficiency in service or unfair trade practice and prayed for the dismissal of the complaint.

Relief to complainant

The commission observed that although Muthoot claimed to have issued auction notices and made repeated calls and emails, it failed to prove these assertions by producing any evidence.

“Although, the O.P No.1 (Muthoot) has claimed in his Written Version that they had issued auction notice to the Complainant on 21/07/2021 by post and their officials had made innumerable calls and sent several emails to the Complainant before auction and requested her to repay the loan amount and that she had not paid any heed to their requests. But such statements of the O.P. No.1 has not been proved by him,” the commission noted.

While holding Muthoot Finance liable for deficiency in service and unfair trade practice, the commission held that the complainant had made out a genuine cause of action to file the case.

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The commission directed Muthoot to return the gold ornaments to the complainant or, in case of default, pay the equivalent value of 11.1 grams of gold ornaments as per today’s rate, that is, Rs 1.42 lakh.

The company was further directed to pay Rs 20,000 as compensation, Rs 10,000 towards litigation costs, and deposit Rs 10,000 with the consumer legal aid.

Consumers facing similar grievances may contact the consumer helpline in their respective states (West Bengal: 033–2252–0448) or dial the National Consumer Helpline at 1915 for assistance.

Ashish Shaji is a Senior Sub-Editor at The Indian Express, where he specializes in legal journalism. Combining a formal education in law with years of editorial experience, Ashish provides authoritative coverage and nuanced analysis of court developments and landmark judicial decisions for a national audience.

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