BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT MANGALORE

Dated this the 30^th July 2010

COMPLAINT NO.71/2010

(Admitted on 26.02.2010)

PRESENT:              1. Smt. Asha Shetty, President                                                                                                                                                                                                                                                                                                                                   

2. Smt.Lavanya M. Rai, Member

BETWEEN:

P.Narayana Rao,

So. Subraya Bhat,

Aged about 64 years,

Guru Nilaya, Adkar,

Sullia Taluk,

Dakshina Kannada.                           …….. COMPLAINANT

(Advocate for the Complainant: Sri.Sanjay D)

          VERSUS

Maha Rashtra Apex Corporation Limited,

Syndicate House,

Manipal  576 119,

Represented by Chairman,

Sri.Ramesh Pai.                                  ……. OPPOSITE PARTY

(Advocate for the Opposite Party: Sri.Shashiraj Rao, Kavoor)

                                      ***************

ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:

1.       The facts of the complaint in brief are as follows:

This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Party claiming certain reliefs. 

The Complainant submits that, the Opposite Party has been running a financial institution having its head office at Manipal and had a branch office at Sullia.  The Complainant invested the money in fixed deposit and debentures at Sullia Branch as under:-

          It is stated that, the Opposite Party has applied for a scheme in High Court of Karnataka as per Company Petition No.37/2003.  After hearing the objection, the High Court allowed the scheme as per order dated 08.10.2004.  As per the scheme, the bond holders get interest till 31.03.2002 and the entire repayment will be complete in five years starting from 15.12.2004.  As per the scheme, the Opposite Party should repay the entire amount as under:-

The Opposite Party has paid Rs.2,500/- under certificate No.24/DC/F590 and Rs.3,500/- under certificate No.001242 and rest of the amount not paid by the Opposite Party, hence it is stated that, the service rendered by the Opposite Party amounts to deficiency and unfair trade practice.  Therefore, the above complaint is filed by the Complainant before this Forum under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Party to pay Rs.12,178/- with interest at 9% p.a. from 29.12.2002 till payment and Rs.24,493/- with interest at 9% p.a. from 01.05.2003 till payment and also claimed Rs.30,000/- as compensation and costs of the proceedings.

2.       Version notice served to the Opposite Party by RPAD. Opposite Party appeared through their counsel filed version and contended that there is no deficiency and stated that the Complainant had deposited Rs.10,000/- vide receipt No.24/DC/F590 and a sum of Rs.14,000/- vide receipt No.001242.  It is submitted that, in the year 2002 the Company had reached a position, wherein, it could not meet the redemption pressure from creditors of the company due to non-recovery of debts.  Thereafter, the Opposite Party had moved the High Court of Karnataka in Company Petition No.1108/2002 with a scheme of arrangement with creditors of the company.  Later a revised scheme was filed in Company Petition No.37/2003 where the Company had proposed to pay the creditors in 5 year installments i.e., 1^st year 15%, 2^nd year 20%, 3^rd year 25%, 4^th year 20% and 5^th year 20% of the principal amount from the effective date.  It is stated that, the Opposite Party has paid a sum of Rs.6,000/- i.e., 60% of the deposit under certificate No.DC24/DC/F590 and a sum of Rs.8,400/- i.e., 60% of the deposit under certificate No.NCD 001242 to the Complainant.  The aforesaid payments were made by the Opposite Party in confirmation of the aforesaid scheme as sanctioned by the High Court of Karnataka.  However, the 4^th and 5^th installment could not be paid as there were no funds readily available.  It is further stated that, the Opposite Party was constrained to file an application before the High Court seeking its permission to sell shares of KURLON Limited.  Process of selling the shares as per the direction of the High Court is in progress and prayed for dismissal of the complaint.

3.       In view of the above said facts, the points now that arise for our consideration in this case are as under:

1. Whether the Complainant proves that the Opposite Party has committed deficiency in service?

2. If so, whether the Complainant is entitled for the reliefs claimed?

3. What order?

4.         In support of the complaint, Sri.P.Narayana Rao (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him.   Ex C1 to C5 were marked for the Complainant as listed in the annexure.   One C.P.Dinesh (RW1), Authorized Officer of the Opposite Party filed counter affidavit and answered the interrogatories served on him.  Opposite Party produced two (2) documents as listed in the annexure.

          We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before the Forum and answer the points are as follows:         

                             Point No.(i): Affirmative.

                             Point No.(ii) & (iii): As per the final order.       

Reasons

5.  Point No. (i) to (iii):

In the given case, it is admitted that the Complainant deposited Rs.10,000/- under receipt No.24/DC/F590 on 29.12.1999.  The Opposite Party acknowledged the above said amount and issued a Dhanalaxmi Cash Certificate as per Ex C1 to the Complainant agreeing to pay Rs.14,678/- on 29.12.2002.   Further the Complainant deposited Rs.14,000/- on 01.05.1998 under the debenture certificate i.e., Ex C2, the Opposite Party acknowledged the above said amount and agreed to pay rate of interest at 16% p.a. for the period of 60 months and the redemption value agreed to be paid a sum of Rs.30,993/-.  It is also admitted before this Forum that, the Opposite Party Company has applied for scheme in Company Petition No.37/2003 on the file of the Hon’ble High Court of Karnataka, the said scheme was allowed as per order dated 08.10.2004, the Opposite Party directed to repay within 6 months 15% with 100% interest accrued upto 31.03.2002 and thereafter between 7 months to 18 months directed to pay 20%, 19^th month to 30^th month 25%, 31^st month to 42^nd month 20%, 43^rd month to 54^th month 20% plus accrued interest till 31.03.2002.

Now the point in dispute before this Forum is that, the Complainant contended that the Opposite Party paid Rs.2,500/- under certificate No.24/DC/F590 and Rs.3,500/- under certificate No.001242 to the Complainant and rest of the amount not paid, hence came up with this complaint.

The Opposite Party on the contrary contended that, Rs.6,000/- i.e., 60% of the deposit paid under certificate No.24/DC/F590 and a sum of Rs.8,400/- i.e., 60% of the deposit under certificate No.NCD 001242.  And further contended that, 4^th and 5^th installment could not be paid by the Opposite Party as there was no funds readily available and was constrained to file an application before the Hon’ble High Court of Karnataka seeking permission to sell shares of KURLON Limited so as to enable it to pay the subsequent installment in Company Application No.197/2009.  It is further stated that, the High Court permitted the Opposite Party to sell the shares.  The process of selling the shares is in progress and contended that there is no deficiency.

The Complainant and the Opposite Party filed their evidence by way of affidavit and produced Ex C1 to C5 for the Complainant and Opposite Party produced two documents in later stage.

However, from the entire record placed before this Forum  by the respective parties in the shape of documents and proof and affidavits, it is proved that, the Complainant deposited the above stated amount under the two receipts i.e., Ex C1 and C2.  It is also could be seen from the affidavit filed by the Complainant that, he received Rs.2,500/- under the certificate No.24/DC/F590 and Rs.3,500/- under certificate No.001242. 

On the contrary, the Opposite Party though taken a defence that Rs.6,000/- paid under Ex C1 and Rs.8,400/- paid under Ex C2 and produced bank statement before this Forum, wherein, the statement reflects that, they have sent one account payee cheque in the name of one Mr.P.N. Rao for Rs.1,500/- and another transaction details shows the name of the person is P.Narayana Rao i.e., Rs.2,100/-.  The Complainant’s name in this complaint is P.Narayana Rao and the cheque amount paid by the Opposite Party under the cheque No.735751 is admitted that they have received the amount.  But the amount stated to be paid under the cheque No.705232 is denied by the Complainant.  We have perused that, the name mentioned under the cheque No.705232 is one Mr.P.N. Rao.  There is no proof produced by the Opposite Party that the above said amount has been remitted to the Complainant and the same has been encashed by the Complainant in his account.  In the absence of the same, we cannot consider that one Mr.P.N. Rao and P.Narayana Rao is one and the same person without there being any cogent/credible evidence to that effect. 

The Opposite Party took another contention that, they have filed Company Application No.197/2009 the copy of the order, in the above said application, wherein, the application was allowed by the Hon’ble High Court of Karnataka and permitted to issue paper publication, a draft notification was approved and directed the company to obtain a latest valuation report and produced the same in a sealed cover.  The above said order was passed on 14.8.2009, the above complaint came to be filed before this Forum on 23.2.2010 i.e., almost all after 7 months.   But there is no material produced before this Forum to show the latest position of the order passed by the Hon’ble High Court of Karnataka.  But it is not the case of the Opposite Party Company that notice of such proceedings before the Hon’ble High Court is served on the Complainant or that the Complainant is party to the proceedings before the Hon’ble High Court.  Under that circumstances, we are of the view that, pendency if any company petition before the Hon’ble High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act, until and unless a specific order to that effect.   When the Opposite Party Company has failed to repay the deposit as per scheme fixed by the Hon’ble High Court of Karnataka by way of installments on or before 15.6.2009 or within a reasonable time thereafter.  Even if the Opposite Party has filed a company petition before the Hon’ble High Court and even if a company petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the Hon’ble High Court.  And further as we stated herein above, there is no specific order by the Hon’ble High Court of Karnataka that the amount involved in this complaint is withheld or earlier scheme is modified/ altered till receiving the proceeds of the KURL ON shares.  In the absence of any specific order, we are constrained to hold that the Opposite Party i.e. Maharastra Apex Corporation Limited without complying the order passed in Company Petition No.37/2003 on the file of the Hon’ble High Court of Karnataka till this date amounts to deficiency in service. 

In view of the forgoing reasons, we hold that the Opposite Party without paying the rest of the installments on or before 15.6.2009 or till this date amounts to deficiency.  Therefore, the Opposite Party i.e. Maharashtra Apex Corporation Limited represented by its Chairman is hereby directed to pay the balance amount i.e., Rs.12,178/- with interest at 9% p.a. from 29.12.2002 till payment under Ex C1 and also pay Rs.27,493/- with interest at 9% p.a. from 01.05.2003 till payment.  Further Rs.1,000/- awarded as cost of the litigation expenses.  Payment shall be made within 30 days from the date of this order.                                                                                            

6.       In the result, we pass the following:          

ORDER

The complaint is allowed.  Opposite Party i.e., Maharashtra Apex Corporation Limited represented by its Chairman is hereby directed to pay to the Complainant the balance amount i.e., Rs.12,178/- (Rupees twelve thousand one hundred and seventy eight only) with interest at 9% p.a. from 29.12.2002 till payment under Ex C1 and also pay Rs.27,493/- (Rupees twenty seven thousand four hundred and ninety three only) with interest at 9% p.a. from 01.05.2003 till payment.  Further Rs.1,000/- (Rupees one thousand only) awarded as cost of the litigation expenses.  Payment shall be made within 30 days from the date of this order. 

The F.D.R., if any, deposited by the Complainant be returned fourth with by substituting the certified.

The copy of this order as per the statutory requirements be forwarded to the parties free of charge and therefore the file be consigned to record.

(Page No.1 to 9 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 30^th day of July 2010.)

          PRESIDENT                                     MEMBER

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 – Sri.P.Narayana Rao – Complainant.

Documents produced on behalf of the Complainant:

Ex C1 – 29.12.1999: Dhanalaxmi Cash Certificate No.24/DC/F590.

Ex C2 – 01.05.1998: Debenture Certificate No.001242.

Ex C3 – 27.05.2005: Pamphlet issued by the Opposite Party.

Ex C4 – 24.08.2009: Lawyer’s notice sent to the Opposite Party on behalf of the Complainant.

Ex C5 –                  : Postal acknowledgement.

Witnesses examined on behalf of the Opposite Party:

RW1 – C.P.Dinesh, Authorized Officer of the Opposite Party.

Documents produced on behalf of the Opposite Party:   

Doc. No.1 – Copy of the bank statement.

Doc. No.2 – Copy of the Company Petition No.37/2003.

Dated:30.07.2010                            PRESIDENT