Editor’s Note
This ruling highlights the critical importance of transparency and due process in digital lending and asset recovery, serving as a cautionary tale for India’s rapidly growing fintech sector.
A South Delhi consumer court has held Indian fintech company ‘BharatPe’ guilty of ‘unfair trade practice’ for auctioning a customer’s pledged gold without informing them. The District Commission ordered the company to pay the victim ₹1.4 lakh as the value of her pledged gold and ₹20,000 as compensation for causing mental agony.
The forum, presided over by President Monica Agrawal Srivastava, took serious note that despite receiving a copy of the complaint, the opposing company did not file its reply within the stipulated time period, which reflects its casual attitude towards the complainant’s grievances. This decision was delivered last month on October 25 on the complaint of Rushda, a resident of Zakir Nagar.
According to the complaint, the woman had taken a loan of ₹1 lakh from BharatPe for one year. This included ₹74,000 as a gold loan and ₹26,000 as a personal loan. As per the agreement, the loan was taken by pledging gold earrings, a gold chain, and a pendant at a fixed interest rate. Due to financial difficulties, she could not repay the entire loan on time.
Despite paying ₹60,000, a loan amount of ₹65,381 remained outstanding. Later, when she went to the company to get her jewellery back after paying the outstanding amount, she was treated badly. The company said that due to non-payment of money on time, the jewellery had been auctioned. The complainant alleged that she was never informed about the auction or the outstanding amount. Despite the complaint, the company kept demanding its outstanding money and refused to return the jewellery. On this, she filed a complaint in the forum.