CC Filed on 22.09.2009<br /> Disposed on 25.02.2010<br /> <br /> BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, KOLAR.<br /> <br /> Dated: 25th day of February 2010<br /> <br /> PRESENT:<br /> Sri. G.V.HEGDE, President.<br /> <br /> Sri. T.NAGARAJA, Member.<br /> Smt. K.G.SHANTALA, Member.<br /> ---<br /> <br /> Consumer Complaint No. 101/2009<br /> <br /> Between:<br /> <br /> <br /> Sri. M. Parthasarathi,<br /> C/o. S. Krishnamurthy,<br /> Aged about 61 years,<br /> No. 1987, 1st Cross-Extn.,<br /> Robertsonpet, K.G.F – 563 112,<br /> Kolar District.<br /> <br /> (By Advocate Sri. H. Pavana Chandra Shetty) <br /> <br /> V/S<br /> <br /> 1. The BEML Employees Credit<br /> Co-operative Society Limited,<br /> Est. ARK/B/Reg/3187/dt. 1976-77,<br /> Maharaj Road, Robertsonpet,<br /> K.G.F – 563 122, Kolar District.<br /> Rep. by its Secretary.<br /> <br /> <br /> 2. The BEML Employees Credit<br /> Co-operative Society Limited,<br /> Est. ARK/B/Reg/3187/dt. 1976-77,<br /> Maharaj Road, Robertsonpet,<br /> K.G.F – 563 122, Kolar District.<br /> Rep. by its President. <br /> <br /> <br /> <br /> <br /> ….Complainant<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> ….Opposite Parties<br /> <br /> ORDERS<br /> <br /> This is a complaint filed under section 12 of the Consumer Protection Act, 1986 praying for a direction against the opposite parties to refund the R.D. amount with interest at 21% p.a. and to pay compensation of Rs.1,00,000/- towards mental agony with costs, etc., <br /> <br /> 2. The material facts of complainant’s case may be stated as follows:<br /> That the OP-the BEML Employees Credit Co-operative Society Limited, K.G.F represented by its Secretary and President, is a society registered under the Karnataka Co-operative Societies Act 1959 and the complainant is a member/associate member of the said society. <br /> <br /> The complainant was one of the account holders of R.D. account. He was required to pay Rs.2,250/- per month commencing from 01.10.2005 and if he regularly paid installment for 36 months, the OP should pay Rs.1,00,000/- soon after 36 months. That the complainant regularly paid 36 installments and closed his account in September 2008 and the necessary entries were made in the pass book issued to complainant. Further that after the prescribed period OP failed to repay the amount of Rs.1,00,000/- inspite of repeated requests and demands. It is alleged that the interest payable on the amount deposited worked out to be at 8% p.a. and that for certain period interest accrued due was being paid for certain months and the principal amount is not at all paid. Therefore the complainant has filed the present complaint on 22.09.2009. <br /> <br /> 3. The OP appeared and filed version. The receipt of R.D. deposit and the terms agreed for repayment of matured R.D. amount and the interest worked out at 8% are not disputed. It is contended that for unforeseen events the financial status of the OP had deteriorated and therefore a meeting of depositors and members were called for and the circumstances were explained to them and it was agreed and resolved in the said meeting to pay the interest at reduced rate of 6% p.a. on the deposits from September 2008. The following are the grounds stated for the deterioration of financial status of OP.<br /> <br /> i) Heavy amount was taken as loan from DCC Bank, and reciprocally heavy amount was kept in deposit with the said Bank. As there was a ‘run-on-the’ said bank, the bank exercised general lien, without prior intimation, and closed the loan account pre-closing the deposits which was unexpected and unforeseen.<br /> ii) State Government took policy decision popularly known as HRMS-where under salary of State Government employees were not permitted to be deduced except for the Governmental loans. The salary deduction of instalments of the loan given by this society was abruptly stopped.<br /> <br /> iii) Many of the borrowers among State Government have either gone on transfer or dead or terminated from service. Their loans have been doubtful debts and this being a private loan, it does not find a place in ‘last pay certificate’.<br /> <br /> iv) Earlier the salary of staff of Education Department was disbursed by BEO and later the same was changed to clusters and now again the system is reverted to BEO. This change over has caused lot of problem in regular recovery of loans.<br /> <br /> v) The society gave loans to State Government employees of Kolar District earlier but now with the formation of Chickaballapur District, the entire administration has split and the borrowers from Chickaballapur District are dodging and are not paying the instalment regularly.<br /> <br /> vi) The management of BEML, K.G.F permitted Bharat Earth Movers Employees Association (BEMEA) the official Union, to given loans to employees and the deduction for such BEMEA loans is given preference than the loan of this society. <br /> <br /> <br /> The OP has further contended that it has been making all hectic efforts to come out of the crises and has been repaying the deposits to depositors in installments and this scheme was approved and accepted by the members. Further it is contended that many of the depositors have rushed to this Forum, though they knew the above facts and circumstances. Hence it is contended that there was no deficiency in service and OP stated that it is ready to repay the deposits to the depositors in easy installments. <br /> <br /> 4. The complainant filed affidavit in support of the allegations made in the complaint. The OP filed the version at belated stage, therefore further time was not granted to file its affidavit thinking that it would be repetition of the contentions taken in the version. <br /> <br /> 5. Heard the Learned Counsel for the parties and perused the records. <br /> <br /> 6. The following points arise for our consideration:<br /> Point No. 1: Whether there is deficiency in service by OP?<br /> Point No. 2: What should be the rate of interest on the deposits?<br /> Point No.3: To what order?<br /> <br /> 7. After considering the rival contentions and the records our findings on the above points are as follows:<br /> Point No.1: The OP stated so many grounds for contending for which reasons it is facing financial crisis. Even if the said grounds are true, the non-payment of R.D. amount soon after its maturity still amounts to deficiency in service. The unforeseen events leading to financial crisis may be a ground for reducing the rate of interest for the period subsequent to maturity of deposits, but it cannot be a ground to hold that there was no deficiency in service. Hence point No.1 is held in affirmative.<br /> <br /> Point No.2: During the arguments it is admitted that interest has been paid at 6% p.a. on monthly basis subsequent to the maturity of R.D. amount of Rs.1,00,000/- from October 2008. However the Learned Counsel for complainant claims the rate of interest should have been at 8% p.a. from October 2008 but not at the reduced rate of 6% p.a. and he also claims that the principal amount of Rs.1,00,000/- should have been immediately returned after maturity of R.D. amount. The payments of interest if governed by the terms of agreement, the parties are bound by the said terms. In the present case, after payment of 36 installments the total amount payable was Rs.1,00,000/-. That amount became due from 01.10.2008. The payment of interest subsequent to 01.10.2008 is not governed by any terms of agreement. The OP came forward to pay interest at 6% p.a. We think the reasonable rate of interest may be fixed at 7% p.a. considering the financial status of the OP at the rate of interest being paid by Nationalized Banks in recent years. Hence we hold that from 01.10.2008 the OP should pay interest at 7% p.a. on the amount of Rs.1,00,000/-. <br /> <br /> The Learned Counsel for complainant relied upon the following decisions to contend that interest at 18% p.a. may be awarded in this case. <br /> a) S.C. & N.C. C.L.A (1996-2005) page 753 between M/s. Spring Meadows Hospital and another V/s. Harjol Ahluwalia through K.S. Ahluwalia and another of S.C.<br /> b) S.C. & N.C. C.L.A (1996-2005) page 578 between Vishnu Kumar Bhargav V/s. The Chairman LDA and another of N.C.<br /> c) S.C. & N.C. C.L.A (1996-2005) page 443 between Pushpa Builders Flat Buyers Association V/s. Pushpa Builders Limited of N.C.<br /> d) S.C. & N.C. C.L.A (1996-2005) page 5 between Haryana Urban Development Authority V/s. Meenakshi Goyal. <br /> e) S.C. & N.C. C.L.A (1996-2005) page 398 between Sri. Venkateshwara Tractors & Farm Equipment Limited. V/s. N. Somanath Gowda and another of N.C. <br /> f) Original Petition No.98/94 between M/s. Shri. Lakshmi Cotton Traders Limited V/s. Central Warehousing Corporation and others of S.C. decided on 21.06.1996.<br /> <br /> We perused the above decisions. The first four decisions relate to real estate business, where plot or flat is not allotted even after the receipt of full or substantial amount. The escalation in real estate price and cost of construction and the conduct of defaulting party were taken into consideration and the interest was allowed at 18% p.a. while ordering the return of deposit. The fifth case related to unlawful withholding of entire price of tractor because of some dispute between manufacturer and dealer and non-supply of tractor to the customer who had paid the entire price. In such case, the price of tractor was ordered to be refunded with interest at 18% p.a. The last case related to a Fire Insurance Claim in which it was held that the refusal to settle the claim was wholly untenable and therefore interest at the rate of 18% p.a. was awarded on the claim amount. <br /> <br /> We think these decisions are based on the facts and circumstances of those cases and they cannot be taken as precedents to award interest at 18% p.a. We think the award of interest at the rate stated by us appears to be just and reasonable. Hence point No.2 is held accordingly.<br /> <br /> Point No. 3: Hence we pass the following:<br /> <br /> O R D E R<br /> <br /> The complaint is allowed with costs of Rs.1,000/-. The OP-Society shall repay the R.D. balance of Rs.1,00,000/- (rupees one lakh only) to complainant with interest at 7% p.a. from 01.10.2008 till the date of payment less the interest already paid if any. The amount due under the award shall be paid within 6 weeks from the date of order. <br /> <br /> Dictated to the Stenographer, corrected and pronounced in open Forum this the 25th day of February 2010.<br /> <br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> <br /> <br />