STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH(APPEAL NO.125 OF 2010) Date of Institution: 19.03.2010 Date of Decision : 02.11.2010 Mukhtiar Singh, Inspector Cooperative Societies/Liquidator, The Nectar Cooperative House Building Society Ltd., Majri Block at Mullapur Garib Dass c/o Assistant Registrar Cooperative Societies, Kharar, District Mohali. ……Appellant V e r s u s1. Malwinder Singh Battu s/o Shri Karamjit Singh Battu 2. Mrs. Manpreet Kaur w/o Sh. Malwinder Singh Battu, Both residents of House No.1368, Phase 3B2, Mohali through their General Power of Attorney Shri Karamjit Singh Battu, s/o Sh. Khazan Singh Battu. 3. The Nectar Cooperative House Building Society Ltd., SCO No.208-209, Top Floor Sector 34-A, Chandigarh through its Secretary Balkar Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali. 4. Sh. Balkar Singh s/o Shri Kundan Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali. 5. Raj Kumar Goyal s/o Sh. Diwan Chand, Vice President, Nectar Cooperative House Building Society Ltd., resident of House No.47, Young Dwellers Society, Sector 49, Chandigarh 6. Sudeep Singh Sabharwal, House No.1235, Sector 34, Chandigarh (President) ....Respondents. Argued by: Sh. R.K. Sharma, Adv. for appellant. Sh. Mukhtiar Singh, Adv. for respondents No.1 & 2 Sh. Balwinder Singh, Adv. for respondent No.3 Sh. G.S. Arshi, Adv. for respondent No.4. Sh. Rajnish Gupta, Adv. for respondent No.5 None for Respondent No.6 (APPEAL NO.128 OF 2010) Date of Institution: 22.03.2010 Date of Decision : 02.11.2010 Sh. Balkar Singh s/o Shri Kundan Singh (Honorary Secretary), resident of House No.989, Sector 69, SAS Nagar, Mohali. ……Appellant V e r s u s1. Malwinder Singh Battu s/o Shri Karamjit Singh Battu 2. Mrs. Manpreet Kaur w/o Sh. Malwinder Singh Battu, Both residents of House No.1368, Phase 3B2, Mohali through their General Power of Attorney Shri Karamjit Singh Battu, s/o Sh. Khazan Singh Battu, H.No.1368, Phase-3B2, Mohali. 3. The Nectar Cooperative House Building Society Ltd., SCO No.208-209, Top Floor Sector 34-A, Chandigarh through its Secretary Balkar Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali. 4. Raj Kumar Goyal s/o Sh. Diwan Chand, Vice President, The Nectar Co-op. House Building Society Ltd., House No.47, Young Dwellers Society, Sector 49, Chandigarh 5. Sudeep Singh Sabharwal, House No.1235, Sector 34, Chandigarh (President) 6. Mukhtiar Singh, Inspector/Liquidator, The Nectar Co-op.House Building Society Ltd., c/o Assistant Registrar, Coop. Societies, Kharar, Punjab. ....Respondents. Argued by: Sh. G.S. Arshi, Adv. for appellant. Sh. Mukhtiar Singh, Adv. for respondents No.1 & 2 Sh. Balwinder Singh, Adv. for respondent No.3 and 6. Sh. Rajnish Gupta, Adv. for respondent No.4 None for Respondent No.5 (APPEAL NO.132 OF 2010) Date of Institution: 26.03.2010 Date of Decision : 02.11.2010 Raj Kumar Goyal s/o Sh. Dewan Chand (Vice President, Nectar Co-op. House Building Society Ltd.), House No.47, Young Dwellers Society, Sector 49, Chandigarh ……Appellant V e r s u s1. Malwinder Singh Battu s/o Shri Karamjit Singh Battu 2. Mrs. Manpreet Kaur w/o Sh. Malwinder Singh Battu, Both residents of House No.1368, Phase 3B2, Mohali through their General Power of Attorney Shri Karamjit Singh Battu, s/o Sh. Khazan Singh Battu, H.No.1368, Phase-3B2, Mohali. 3. The Nectar Co-op. House Building Society Ltd., SCO No.208-209, Top Floor Sector 34-A, Chandigarh (through its Secretary Sh. Balkar Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali). 4. Sh. Balkar Singh s/o Shri Kundan Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali. 5. Sudeep Singh Sabharwal, House No.1235, Sector 34, Chandigarh (President) 6. Mukhtiar Singh, Inspector/Liquidator, The Nectar Co-op.House Building Society Ltd., c/o Assistant Registrar, Coop. Societies, Kharar, Punjab. ....Respondents. Argued by: Sh. Rajnish Gupta, Adv. for appellant. Sh. Mukhtiar Singh, Adv. for respondents No.1 & 2 Sh. Balwinder Singh, Adv. for respondent No.3 and 6. Sh. G.S. Arshi, Adv. for respondent No.4 None for Respondent No.5 BEFORE: HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT. MRS. NEENA SANDHU, MEMBER S. JAGROOP SINGH MAHAL, MEMBER. PER JAGROOP SINGH MAHAL, MEMBER. 1. These are 3 appeals filed under section 15 of the Consumer Protection Act, 1986 (hereinafter to be referred as the Act) against the order dated 17.2.2010, passed by Learned District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be referred as District Forum), vide which the OP/appellants were directed to jointly and severely pay the amount of Rs.5,10,500/- alongwith interest @ 9% per annum as calculated from the respective dates of payment made by the complainants to them till the date the amount is paid in full and also to pay Rs.5,000/- towards costs of litigation. In the first instance, Mukhtiar Singh, Inspector/Liquidator OP No.5 (now appellant in appeal No.125 of 2010) was to make the payment within a period of 3 months from the date of order but if no payment is made or full payment is not made by the due date due to any technical, legal or other reason, then the remaining or the entire amount, as the case may be, was to be paid jointly and severely by Balkar Singh OP No.2 (Now appellant in Appeal No.128 of 2010) and Raj Kumar Goyal OP No.3 (Now appellant in appeal No.132 of 2010) within a period of one month from the expiry of the period of 3 months from the date of order. In case the order is not complied with as directed, they were liable to pay interest @ 18% per annum calculated from the respective dates of deposit by the complainants till the date of payment alongwith litigation costs of Rs.5,000/-. 2. According to Malwinder Singh Battu and his wife Manpreet Kaur, complainants/respondents No.1 & 2 they obtained the services of the OPs/appellants by becoming member for allotment of a flat in the Housing Society floated by the OPs. It was alleged that Balkar Singh and Raj Kumar OPs/appellants got the Society registered in the name and style of Nectar Cooperative House Building Society Ltd. (OP-1) (hereinafter referred to as the Society) with its administrative office at SCO No.208-209, Top Floor, Sector 34-A, Chandigarh. Balkar Singh appellant was said to be Secretary and Raj Kumar Goyal Vice President of the Society who were incharge of its affairs running day-to-day work. They used to collect money for raising construction and to do all other works relating thereto. It was alleged that Balkar Singh, appellant as Secretary of the said Society met the complainants at house No.2854, Sector 38C, Chandigarh and induced them to become the members of the above said Society so as to enable them for allotment of a flat. He further assured that the land had already been purchased by the Society and the construction work would start soon. Acting on the inducement/assurance of Balkar Singh, the complainants paid the membership fee of Rs.10,500/- and they were enrolled as its members. Another sum of Rs.one lac was paid through Shri Balkar Singh in cash regarding which no receipt was issued by him. Thereafter the complainants paid a sum of Rs.5,00,500/- on different dates as mentioned in clause (3) of para 3 of the complaint. Balkar Singh had been telling the complainants that the land had already been purchased by the Society, that site plans have been prepared and Bhoomi Poojan would be held in December 2006 but the same was not performed as promised. When the complainants asked Balkar Singh to show them the papers regarding the purchase of the land by the Society, he neither showed the papers nor specified any date/month for starting the construction and rather issued them a share certificate dated 1.12.2006 (Annexure C-10). The complainants came to know that the registry of the land meant for construction of flats has not been executed by the Society and smelling fishy about the claims, they sent letter dated 28.3.2007 to the Society for opting out of it and requested for refund of their amount. However, Balkar Singh had been putting off the complainants on one pretext or the other and no payment was made by them. The complainants made numerous efforts and ultimately sent a legal notice but all in vain. They ultimately filed the present complaint for the refund of Rs.6,10,500/- alongwith interest @ 18% per annum from the date of payment till the date of realization, Rs.5,00,000/- as compensation towards mental agony and Rs.50,000/- towards litigation expenses. It was contended in para 9 of the complaint that the administrative office of the OPs was located in Chandigarh and, therefore, the Consumer Fora at Chandigarh have the jurisdiction to try this complaint. 3. Sudeep Singh Sabharwal (OP-4) and Mukhtiar Singh, Inspector/ Liquidator (OP-5) could not be served by ordinary process and were served by publication in Des Sewak dated 3.5.2009. They did not come present and were, therefore, proceeded against ex-parte vide orders dated 29.6.2009. 4. OPs 1 to 3 filed a joint written reply alleging that the Registrar of Cooperative Societies has already taken cognizance and appointed liquidator vide order dated 23.4.2007 who has taken over the affairs of the Society in his hands and the complaint is, therefore, liable to be dismissed. It was alleged that there was no relationship of ‘consumer’ and ‘service provider’ between the parties, all members of the Society are equal, the decisions are taken unanimously and the jurisdiction of the Court is barred under the Punjab Cooperative Societies Act, 1961 (hereinafter referred to as 1961 Act). According to them, there were 269 members of the Society out of which 207 members applied for flats and the remaining 62 members applied for plots. The Society had decided to purchase the total land of 22 acres vide an agreement dated 30.9.2006 and the sale deed was to be executed on 30.9.2007. The total amount of Rs.2,73,34,000/- was paid as per agreement to sell but 212 members of the Society did not pay the whole amount due to which the sale deed could not be executed. It was alleged that the members of the Society cannot be impleaded in their personal capacity. It was admitted that Raj Kumar and Balkar Singh (appellants) became members of the Society and that the complainants initially deposited Rs.10,500/- and became its members. It was denied if any cash amount of Rs.1,00,000/- was also paid to them. The share certificate was alleged to have been issued to the complainants by the Society and not by Balkar Singh. The contention of the OPs was that the Consumer Fora has no jurisdiction to entertain the complaint. 5. Both the parties were given opportunity to produce evidence in support of their contentions. 6. After hearing the arguments of the ld. Counsel for the parties and perusing the record, the ld. District Forum directed Mukhtiar Singh, Inspector/Liquidator (appellant) to pay the amount within 3 months of the passing of the order failing which the amount was to be paid by OPs 2 & 3 Appellants alongwith interest as mentioned in the opening para as per order dated 17.2.2010. 7. Since the appeals are against the same order, therefore, these are being decided through the present order. 8. The ld. Counsel for the appellants has argued that the complainants had become members of the Society and, therefore, in view of Section 55 of 1961 Act, the dispute between the Member and the Society is to be referred to Arbitration. The ld. Counsel argued that when there is a provision for arbitration, the proceedings before the Consumer Fora are bad in law and cannot sustain. We do not find any merit in this argument. This question has been raised several times before but did not cut ice. In case Smt. Kalawati & Ors. Vs. Unitedvaish Co-operative Thrift & Credit Society Ltd.-I (2002) CPJ 71 (NC), Nawal Kishore Kashyap Vs. Bihar State Housing Co-operative Federation Ltd. & Ors.-II (2009) CPJ 47 (NC) and KEB Employees Co-operative Society Ltd. Vs. V. Munivenkatappa-2006(3) CLT 302 (NC) such a question was raised but it was repelled by the Hon’ble National Commission holding that even where there is a provision for arbitration, where the dispute between the parties is to be decided by conciliation or by some other authority, the Consumer Fora would still have the jurisdiction to decide the dispute because the remedy, under Section 3 of the Act, has been afforded in addition to any other remedy available to the aggrieved. In case Secretary, Thirumurugan Co-operative Agricultural Credit Society Vs. M. Lalitha (dead) through L.Rs & Ors.-I (2004) CPJ 1 (SC). The Hon’ble Supreme Court held that the remedy under the 1996 Act is in addition to and not in derogation of other remedies available. There was a dispute between the members and the management of a Cooperative Society, which under Section 90 of the Tamilnadu Cooperative Societies Act was to be decided by the Registrar. In that case also a similar argument was raised but was not accepted. We are, therefore, of the opinion that this argument was rightly not accepted by the ld. District Forum. 9. The ld. Counsel for the appellants then referred to Section 82(2) of the 1961 Act and argued that where a cooperative Society is being wound up, no suit or other legal proceedings relating to the business of such Society shall be proceeded with or instituted against the liquidator as such or against the Society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose. It may be mentioned that Section 82 of the 1961 Act is pari materia with Section 93 of the Delhi Cooperative Societies Act, 1972. In case Smt. Kalawati & Ors. (supra) where a similar argument was raised before the Hon’ble National Commission, it was held that the said section does not bar the jurisdiction of the District Forum in the matter. In that case also as in the present case, deposits were accepted by the Society on the assurance that they would pay attractive rates of interest. This agreement also is, therefore, devoid of merit. 10. The ld. Counsel for the appellants cited the case of State Co-operative Spinning Mills Federation Vs. Shakti Traders Cotton and Oil Merchants & Ors.-2007(1) RCR (Civil) 825. In that case the decree holder had filed a suit for recovery against a cooperative Society, which was decreed. During the pendency of the suit, the Society went into liquidation and a liquidator was appointed. The decree holder took out execution proceedings, which was challenged by the liquidator. In an appeal before the Hon’ble Punjab and Haryana High Court at Chandigarh it was held that the civil suit and other proceedings were barred before the civil court in view of Section 82(2) of the 1961 Act. This authority does not apply to the present case because Section 82 makes it clear that “no civil or revenue court” shall have any jurisdiction in respect of the matters mentioned therein. There is no mention in Section 82 or sub clause (2) thereof to bar the jurisdiction of the Consumer Fora. Admittedly, the District Forum is neither a civil nor a revenue court. In view of the law referred to above, the proceedings before the Consumer Fora are not barred under Section 82 of the 1961 Act. 11. It is also argued by the ld. Counsel for the appellants that the District Forum did not have the territorial jurisdiction to try the complaint. According to him the Society was registered at Kharar and it had its registered office in Mohali. According to the ld. Counsel, no cause of action accrued within the jurisdiction of Chandigarh and, therefore, the complaint was liable to be dismissed. We do not find any merit in this argument. It was mentioned by the complainants in para 3 (b) of the complaint that Balkar Singh (OP/appellant) met them at House No.2854, Sector 38-C, Chandigarh and induced them to become the members of the above said Society. It was further mentioned in para 3 (d) that acting on the inducement or assurance of Balkar Singh, the complainants became the members of the Society and paid initial membership fee of Rs.10,500/- and thereafter paid the remaining amount from time to time. Since the amount was collected from the complainants at Chandigarh, the District Fora at Chandigarh would have the jurisdiction to try the complaint. Apart from that, it is clear that the OP-Society has its Administrative office in Chandigarh and were operating therefrom. Annexure C-2 is the letter issued by the President of the Society informing the complainants from their administrative office in SCO No.208-209, Top Floor, Sector 34-A, Chandigarh that they have purchased the land for construction of flats for its members. Another letter Annexure C-4 was also issued from Sector 34-A, Chandigarh. Annexure C-10 is the share certificate issued to the complainants in which also the office of OP-1 is shown to be in Sector 34-A, Chandigarh. The OP also issued a letter Annexure C-3 acknowledging the receipt of Rs.one lac from the complainants. On this letter also the administrative office of the OP is shown to be at Chandigarh. It has been admitted by the ld. Counsel for the appellant that the OP-1 has its bank account in Sector 35/C, Chandigarh. It all shows that not only the cause of action had accrued at Chandigarh but the OPs had their office at Chandigarh and were operating therefrom and, therefore, the District Forum at Chandigarh would have the jurisdiction to try this complaint. 12. It is also argued by the learned counsel for the appellant that in this case, as per the complainants, they had become the members of the Society for allotment of flats to them and admittedly, no flats had been allotted. The learned counsel referred to the decision dated 23.11.2009 passed by the Hon’ble National Commission in the case of PUDA Vs. Krishan Pal Chander, Revision Petition No.1583 of 2005 in which case, it was held that where the complainant applied for allotment of flat/plot and the same was not allotted, he no longer remains a consumer of the service provider. The learned counsel, on the basis of this authority, has argued that since no flats/plots were allotted to the complainants, they, therefore, did not fall under the definition of ‘consumer’. We do not find any merit in this argument. This authority is not applicable in the present case because in the case referred to above, it was not a cooperative Society formed by the complainants themselves for obtaining or procuring land and thereafter to build flats thereon. The complainant had applied to PUDA for allotment of the plot and if the same was not allotted, he no longer remained their consumer whereas in the present case, the complainants and the OP/Appellants are themselves members of the Society and the money was collected from them on the pretext of purchasing land and building flats for them. It is, however, an open secret that no land was purchased and it was only a sham transaction, which would be discussed in the succeeding para. The complainants have deposited the amount with the OPs and if the purpose, for which the amount was deposited, is not achieved, it is their duty to refund the amount to them. It was specifically the service, which was to be provided by the OPs and if they failed to refund the amount, the complainants would fall under the definition of a “consumer” competent to file the consumer complaint. This argument of the learned counsel, therefore, cannot succeed. 13. As regards the purchase of land, the learned counsel for the appellants have argued that in fact the agreement was entered into for purchase of about 22 acres of land when some earnest money was paid but majority of the members of the Society failed to pay their share of the land due to which the agreement for purchase of land lapsed and the earnest money was forfeited. However, it all appears to be a madeup story. The OPs produced an Agreement to Sell dated 30.9.2006 vide which M/s J. S. Dwellers and Infrastructure Pvt. Ltd. through Sh. Sudeep Singh Sabharwal (now OP) and Smt. Amandeep Kaur Sabharwal agreed to sell their land to the OP Society again through Sh. Sudeep Singh Sabharwal and Sh. Balkar Singh, Secretary/ appellant. It is specifically mentioned in the said agreement that the land belonged to Harpal Kaur and others. It was never the property of M/s J. S. Dwellers and therefore, M/s J. S. Dwellers could not have sold the same to the OP Society. It may also be noticed that Sh. Sudeep Singh Sabharwal, OP was the Director of M/s J. S. Dwellers and on the other side, he was the President of the OP Society. Since the land did not belong to M/s J. S. Dwellers, a fictitious agreement appears to have been prepared to siphon off the amount of the Society under the garb of this agreement. When M/s J. S. Dwellers did not have any ownership rights in the land, which admittedly was owned by the third party, M/s J. S. Dwellers were not entitled to the earnest money. The land by Sh. Sudeep Singh Sabharwal was, therefore, sold to himself and the amount collected by the Society members was usurped by the OPs. The contention of the OPs that they had entered into an agreement to purchase the land or that the amount was forfeited for non performance of agreement is therefore all false. In fact, it was a device to cheat the Society of its property. 14. It is also argued by the learned counsel for the OPs that in fact Sh. Sudeep Singh Sabharwal was the President of the Society but no liability has been fastened on him and rather the other office bearers namely the Secretary and the Vice President have been burdened with this liability. Initially, Sh. Sudeep Singh Sabharwal was not a party to this complaint but subsequently, on the objection raised by the other OPs, he along with the liquidator were arrayed as OPs. They were duly served by publication but did not put in appearance and were proceeded against exparte. The learned District Forum, however, did not impose any liability for payment on Sh. Sudeep Singh Sabharwal similar to one imposed on other two office bearers. No reasons have been given as to why he was let free. OPs in the present complaints have specifically raised this objection that the complaint should have been allowed against him. Notice of the appeal was given to Sh. Sudeep Singh Sabharwal but he did not put in appearance to defend this contention of OPs/appellants. We are, therefore, of the opinion that Sh. Sudeep Singh Sabharwal, OP now respondent No.6 cannot evade his liability to pay the amount in question to the complainants. 15. The learned counsel for the OPs have argued that since a liquidator has been appointed, now it is his responsibility to satisfy the claims of the members including the complainants. The Society came under liquidation vide order (Annexure A-4) dated 23.4.2007. Initially Simar Singh and subsequently Mukhtiar Singh/Appellant was appointed as liquidator but the record shows that none of them made any efforts to recover the amount to satisfy the claims of the investors. The procedure is given under Sections 58, 59 and Chapter VIII of 1961 Act as to how the liquidator is to proceed after taking charge of the Society. Unfortunately, the liquidators did not do anything in the matter and interestingly, nobody has asked them as to why they were not proceeding against the defaulters to recover the amounts of the creditors/members. It appears, the Registrar, Cooperative Societies feels that his duty is only limited to the passing of an order putting the Society under liquidation and thereafter, he is not bothered to see whether the liquidators are performing their duties under the rules or not. That is why; nothing is being done by the liquidators. In the present case, a period of three months was given to the liquidator to recover the amount but even during this period, he did not make any efforts to perform any of the actions provided under the 1961 Act and the Rules made there under. Instead of complying with the order, he has come forward in this appeal to challenge the order as if he has been asked to do something unusual. It is unfortunate that the liquidators have not performed their duty and they should be proceeded against for this lapse on their part by the appropriate authority so that in future, prompt action is taken by them against the members of the defaulting Society to recover the amount and to see that the property of the Society is not siphoned off in this manner. A copy of the order shall be sent to the Registrar Cooperative Societies, Punjab to take appropriate action in the matter including the one against the Liquidators as he deems fit so that the mandate of 1961 Act and the rules is complied with. 16. It is argued by the learned counsel for Sh. Balkar Singh, appellant that he was never appointed as a Secretary nor was it his duty to render any service to the complainants and therefore, order against him should be set aside. Incidently, the appellant himself has produced sufficient evidence to suggest that he was the Secretary of the Society. There is a resolution dated 29.3.2006 produced by the appellant along with his appeal showing that he along with Sh. Sudeep Singh Sabharwal and Sh. Raj Kumar Goyal were members of the Society. There is then a copy of resolution dated 1.6.2006 vide Para No.5 of which, he was appointed as Secretary of the Society. There are other resolutions dated 19.6.2006, 20.7.2006 and 7.8.2006 showing him as Secretary of the Society. The Share Certificate (Annexure C-10) is signed by him on behalf of the Society. It, therefore, cannot be said that if he was not the Secretary of the Society. 17. It is not the first case in which the liability has been fastened on Sh. Balkar Singh as the Secretary of the Society. Even earlier also, in First Appeal No.106 of 2008 titled ‘Engineer Balkar Singh Vs. Sh. Sukhbir Singh and another’, Sh. Balkar Singh had claimed immunity from his liability to pay the amount collected from the complainant of that case under similar excuse of constructing and providing a house/flat to him in the project of the Society. The learned counsel for Sh. Balkar Singh had in that appeal argued that as Secretary of the Society, he was not involved in the financial dealings of the Society but this contention was not accepted and it was held by this Commission that being the Secretary of the Society, he was an important member of the governing body of the Society and therefore, was entrusted with responsibility of safeguarding the amounts paid by the members of the Society as well as their interests qua the purchase of the land and construction of flats. It was further held that the funds received by the Society have been misappropriated because neither there was any land on the name of the Society nor had any construction been done. It was further held that admittedly there are no assets of the Society and that Sh. Balkar Singh totally failed to perform his duties as secretary of the Society and was thus, clearly deficient in service. Ultimately the appeal filed by Sh. Balkar Singh was dismissed with costs of Rs.2,100/- vide order dated 16.2.2010. He challenged the same before the Hon’ble National Commission through Revision Petition No.1115 of 2010 but it was dismissed vide order dated 29.3.2010. As such, the status of Sh. Balkar Singh as secretary of the Society deficiency in service on his part and his liability to pay the amount has since been finally settled, which cannot be agitated by him time and again. 18. According to Sh. Raj Kumar Goyal, appellant, he also had no liability and never acted as President of the Society and therefore, he cannot be fastened with this liability of paying back the amount to the complainants. The resolution dated 29.3.2006 referred to above shows that Sh. Raj Kumar Goyal became the Member of the Society. As per resolution dated 15.5.2006, he was selected as Executive Member of the Society and as per resolution dated 1.6.2006, he got the position of a Vice President of the Society. The resolutions dated 30.6.2006 and 18.7.2006 show that as Vice President of the Society, he was given the duty of Honorary Secretary of the Society. The contention of Sh. Raj Kumar Goyal also is, therefore, incorrect in this respect when he says that he was only a sleeping member of the Society. 19. It is also argued that Sh. Raj Kumar Goyal as Vice President of the Society has got a criminal case registered against Sh. Sudeep Singh Sabharwal, which shows that the entire misappropriation of the property of the Society was done by Sh. Sudeep Singh Sabharwal and not by him. There is no doubt about it that the property of the Society i.e. the cash amounts collected from the members have been squandered by its office bearers. It is for the criminal Court to decide the truth of the FIR but on its basis, we cannot exonerate Sh. Raj Kumar Goyal, Vice President simply because he lodged the FIR against his co-member. In other words the lodging of FIR by Sh. Raj Kumar Goyal does not prove his innocence or his exoneration from the liability he owes to the members of the Society. 20. The learned counsel for the OPs have referred to the case Surjit Singh and others Vs. Harbant Kaur, 1981 (1) RRR 44 and argued that in the present case, the amount was received on behalf of the cooperative Society, which is a juristic person and if there is any misappropriation, its members cannot be prosecuted under Sections 406 and 420 IPC. This legal position is not disputed by the learned counsel for the complainants/respondents as prevalent under the criminal law. However, the present one is not a criminal case of cheating and misappropriation under the Indian Penal Code and therefore, this authority is not applicable to the present case because in a criminal case, the charge against the accused is to be proved beyond all reasonable doubt. The proceedings before the civil courts or the Consumer Fora are to be decided on preponderance of evidence. We may again refer to the evidence in brief against the OPs. This fact is admitted that OP No.2 was the Secretary, OP No.3 the Vice President and OP No.4 the President of the Society. They all floated a Society and induced unsuspecting persons from the public to become the members of the Society on the pretext that they would purchase land, raise construction thereon and would allot flats or plots to its members. Sh. Sudeep Singh Sabharwal prepared a fake Agreement to Sell for selling land on behalf of his company to the OP Society though he was not having any right or title to the said land. Sh. Balkar Singh, OP joined him on behalf of the Society to purchase the said land, which did not belong to M/s J. S. Dwellers and both of them claim to have paid a huge amount to M/s J. S. Dwellers i.e. to Sh. Sudeep Singh Sabharwal, OP and (his wife Amandeep Kaur) in the alleged fake agreement to sell. It was alleged that the owners of the land had earlier entered into some agreements with M/s J. S. Dwellers to sell the said land to them but the affidavit of none of those owners has been produced nor even copy of Jamabandi was produced to suggest that any of those persons had ownership rights in the land, which they agreed to sell to M/s J. S. Dwellers, which further claims to have agreed to sell it to the OP Society. Sh. Sudeep Singh Sabharwal and Sh. Balkar Singh, appellant who was acting as Secretary, closed their eyes to this aspect of the matter and they thereby squandered the amount collected from its members. They were authorized to do so by the executive members, of which Sh. Raj Kumar Goyal was a part. It all shows that these three OPs did not perform their duty properly to safeguard the interest of the members of the Society and thus, due to this deficiency in service on their part, the amount of the Society was squandered and 269 members of the Society lost their money. When a cooperative Society collects money from its members, it is the duty of the executive committee to safeguard the interest of the members and to refund the amount to them without any defalcation therein. 21. It appears, the formation of a cooperative Society has become a lucrative business in this part of the country. Any seven persons can join together to form a cooperative Society and collect from the public as much money as they can on any false pretext such as construction and allotment of flats to them. Thereafter, they join together to squander the said amount or misappropriate it to themselves and ultimately when no assets are left, to handover the reins of the Society to the Registrar and further to the liquidator so that none of the members or investors gets anything from the Society or the liquidator. On the other hand, if the contention of learned counsel for the OPs is accepted that the office bearers of the Society are not liable to safeguard the assets/interest of the Society, there would be no relief to the members who invested the amount in good faith and did not suspect the malafide intentions of office bearers in forming the Society. From this point of view also, it would be necessary that the liability of the members shall co-exist with the Society itself to reimburse the amount collected from the members and to compensate them for the loss suffered by them because of the misappropriation or non-performance of their duties towards the Society thereby leading to the deficiency in service. OPs No.3, 4 and 5, therefore, cannot escape their liability if the amount along with interest is not refunded to the members from whom it was collected. 22. In view of the above discussion, we are of the opinion that there is no merit in any of the appeals so far as their liability is concerned. However, it is made clear that Sh. Mukhtiar Singh would start liquidation proceedings in accordance with rules and law even beyond the period of three months to recover the amounts so as to satisfy the claim of the members of the Society. A copy of the order be sent to the Registrar Cooperative Societies, Punjab, Chandigarh who shall take appropriate action against the liquidators who are not performing their duties. The order passed by the learned District Forum is modified to the extent that along with Sh. Balkar Singh and Sh. Raj Kumar Goyal (OPs No.2 and 3), Sh. Sudeep Singh Sabharwal (OP No.4) would also be liable jointly and severally to pay the said amount of Rs.5,10,500/- along with interest and costs as ordered by the learned District Forum. With this modification, all the three appeals are dismissed with costs. Each of the appellants shall pay a sum of Rs.5,000/- to the complainants towards costs of litigation. 23. Copies of this order be sent to the parties free of charge. Pronounced. 2nd November, 2010. [JUSTICE PRITAM PAL] PRESIDENT [NEENA SANDHU] MEMBER [JAGROOP SINGH MAHAL] MEMBER Ad/-
STATE COMMISSION (F.A. NO. 125 OF 2010) Argued by: Sh. R.K. Sharma, Adv. for appellant. Sh. Mukhtiar Singh, Adv. for respondents No.1 & 2 Sh. Balwinder Singh, Adv. for respondent No.3 Sh. G.S. Arshi, Adv. for respondent No.4. Sh. Rajnish Gupta, Adv. for respondent No.5 None for Respondent No.6 Dated the 2ND day of November, 2010. ORDER Vide our detailed order of even date recorded separately, this appeal along with connected appeals bearing No.128 of 2010 and 132 of 2010 have been dismissed with cost of Rs.5,000/- each. (JAGROOP SINGH MAHAL) (JUSTICE PRITAM PAL) (NEENA SAHDHU) MEMBER PRESIDENT MEMBER
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH(APPEAL NO.128 OF 2010) Date of Institution: 22.03.2010 Date of Decision: 2.11.2010. Sh. Balkar Singh s/o Shri Kundan Singh (Honorary Secretary), resident of House No.989, Sector 69, SAS Nagar, Mohali. ……Appellant. V e r s u s- Malwinder Singh Battu s/o Shri Karamjit Singh Battu,
- Mrs. Manpreet Kaur w/o Sh. Malwinder Singh Battu,
Both residents of House No.1368, Phase 3B2, Mohali through their General Power of Attorney Shri Karamjit Singh Battu, s/o Sh. Khazan Singh Battu, H.No.1368, Phase-3B2, Mohali. 3. The Nectar Cooperative House Building Society Ltd., SCO No.208-209, Top Floor Sector 34-A, Chandigarh through its Secretary Balkar Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali. - Raj Kumar Goyal s/o Sh. Diwan Chand, Vice President, The Nectar Co-op. House Building Society Ltd., House No.47, Young Dwellers Society, Sector 49, Chandigarh.
- Sudeep Singh Sabharwal, House No.1235, Sector 34, Chandigarh (President).
- Mukhtiar Singh, Inspector/Liquidator, The Nectar Co-op.House Building Society Ltd., c/o Assistant Registrar, Coop. Societies, Kharar, Punjab.
....Respondents. BEFORE: HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT. MRS. NEENA SANDHU, MEMBER S. JAGROOP SINGH MAHAL, MEMBER. Argued by: Sh. G.S. Arshi, Adv. for appellant. Sh. Mukhtiar Singh, Adv. for respondents No.1 & 2 Sh. Balwinder Singh, Adv. for respondent No.3 and 6. Sh. Rajnish Gupta, Adv. for respondent No.4 None for Respondent No.5 PER JAGROOP SINGH MAHAL, MEMBER. For orders, see the orders passed in Appeal No.125 of 2010 titled as ‘Mukhtiar Singh Vs. Malwinder Singh Battu & Others’ vide which the present appeal has been dismissed with costs of Rs.5,000/-. Copies of this order be sent to the parties free of charge. Pronounced. 2nd November 2010. Sd/- Sd/- Sd/- (JAGROOP SINGH MAHAL) (JUSTICE PRITAM PAL) (NEENA SAHDHU) MEMBER PRESIDENT MEMBER Ad/-
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH(APPEAL NO.132 OF 2010) Date of Institution: 26.03.2010 Date of Decision : 2.11.2010. Raj Kumar Goyal s/o Sh. Dewan Chand (Vice President, Nectar Co-op. House Building Society Ltd.), House No.47, Young Dwellers Society, Sector 49, Chandigarh ……Appellant V e r s u s- Malwinder Singh Battu s/o Shri Karamjit Singh Battu.
- Mrs. Manpreet Kaur w/o Sh. Malwinder Singh Battu,
Both residents of House No.1368, Phase 3B2, Mohali through their General Power of Attorney Shri Karamjit Singh Battu, s/o Sh. Khazan Singh Battu, H.No.1368, Phase-3B2, Mohali. 3.The Nectar Co-op. House Building Society Ltd., SCO No.208-209, Top Floor Sector 34-A, Chandigarh (through its Secretary Sh. Balkar Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali). 4. Sh. Balkar Singh s/o Shri Kundan Singh, resident of House No.989, Sector 69, SAS Nagar, Mohali. 5. Sudeep Singh Sabharwal, House No.1235, Sector 34, Chandigarh (President) 6. Mukhtiar Singh, Inspector/Liquidator, The Nectar Co-op.House Building Society Ltd., c/o Assistant Registrar, Coop. Societies, Kharar, Punjab. ....Respondents. BEFORE: HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT. MRS. NEENA SANDHU, MEMBER S. JAGROOP SINGH MAHAL, MEMBER. Argued by: Sh. Rajnish Gupta, Adv. for appellant. Sh. Mukhtiar Singh, Adv. for respondents No.1 & 2 Sh. Balwinder Singh, Adv. for respondent No.3 and 6. Sh. G.S. Arshi, Adv. for respondent No.4 None for Respondent No.5 PER JAGROOP SINGH MAHAL, MEMBER. For orders, see the orders passed in Appeal No.125 of 2010 titled as ‘Mukhtiar Singh Vs. Malwinder Singh Battu & Others’ vide which the present appeal has been dismissed with costs of Rs.5,000/-. Copies of this order be sent to the parties free of charge. Pronounced. 2nd November 2010. Sd/- Sd/- Sd/- (JAGROOP SINGH MAHAL) (JUSTICE PRITAM PAL) (NEENA SAHDHU) MEMBER PRESIDENT MEMBER Ad/-
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE PRITAM PAL, PRESIDENT | HON'BLE MR. JAGROOP SINGH MAHAL, MEMBER | |
