BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE

Dated this the 21^st of January 2011

PRESENT

        SMT. ASHA SHETTY           :   PRESIDENT                

                       SRI. ARUN KUMAR K.        :   MEMBER

COMPLAINT NO.315/2010

(Admitted on 12.11.2010)

1. Mr.H.L. Rao @ H.Lohithaksha Rao,

So. Vasudeva Rao,

Aged about 73 years.

2. Smt.Thara H.L,

W/o. H.L. Rao,

Aged about 62 years.

Both are RA. Studio Kala Kendra,

Near Head Post Office,

Puttur Taluk, Dakshina Kannada.       …….. COMPLAINANTS

(Advocate for the Complainant: Sri.Sanjay D)

          VERSUS

Manipal Finance Corporation Ltd.,

Regd. Office: “Manipal House”,

Manipal-576 119.

Udupi Dist.

1. Sri T.Narayana Pai,

    The Managing Director,

(Opposite Party No.1 : Appeared in person)

2. Shri. Chandappa Sherigar,

Director,

R/A. Mahalasa, Kundal Post,

Kundibettu, Udupi- 02.

3. Raghavendra Nayak,

Director,

R/at.D.No.4-75-1,

Kotathattu Village,

Post Kota, Udupi Dist.-21.         ……. OPPOSITE PARTIES

 (Opposite Party No.2 & 3: Exparte)

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

ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:

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

The brief facts of the case are as under:

The Complainants submitted that, the Opposite Parties have been running a financial institution having its head office at Manipal and branch office at Puttur.  The Complainants submit that, having been attracted by the advertisements made, they have invested in redeemable subordinated debts with the Opposite Parties at Puttur Branch.  The details of which are furnished herebelow:-

The Opposite Parties agreed to pay interest at 10.5% p.a. on the date of redemption.  The Complainants approached the Opposite Parties on the date of redemption but Opposite Parties sought some time stating that, the Opposite Party Company is in financial difficulty.  The Complainants waited for some time, thereafter, approached the Opposite Parties several times.  All amicable sorts of settlement of the dispute have gone in vain. Thereafter, the Complainants addressed a letter dated 01.10.2010 to the Opposite Parties to pay the amount and the same was served on 04.10.2010 without demur.  Hence, the Complainants contended that, the service rendered by the Opposite Parties amounts to deficiency and filed the above complaint under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Parties to pay Rs.21,000/- with interest at 10.50% per annum from 16.12.2001 till payment and also claimed Rs.30,000/- as compensation and cost of the proceedings.

2.       Version notice served to the Opposite Parties by RPAD.

Version notice served to the Opposite Party No.2 returned unserved with the postal endorsement ‘no such addresses’.  Subsequently, the Complainant filed not pressing memo against Opposite Party No.2.

Version notice served to Opposite Party No.3 was returned unserved with the postal endorsement “not claimed” and hence it is taken as deemed to be served and we have proceeded exparte as against Opposite Party No.3 in this case. The returned postal cover and acknowledgement placed before the FORA marked as court document No.1.

Opposite Party No.1 sent a version by post without furnishing the copies to other side submitted that the Complaint is barred by limitation and there is no consumer dispute and there is no territorial jurisdiction to entertain the Complaint.  And further submitted that the investment of the Complainant is not a deposit of any nature, the money was borrowed by the Opposite Party No.1 through Subordinated Debt Certificates and stated that, there is no deficiency and prayed for dismissal of the complaint.

3.       On the basis of pleadings, the points that arise for our consideration are as follows:  

1. Whether the Complainants are consumers?

2. Whether this Forum has territorial jurisdiction to entertain the complaint and the complaint is barred by limitation? 

3. Whether the Complainant proves that the Opposite Parties committed deficiency in service?

4. If so, whether the complainant is entitled for the reliefs claimed?

5. What order?

4.       In support of the complaint, Sri.H.L. Rao @ H Lohithaksha Rao (CW1) – Complainant No.1 filed affidavit reiterating what has been stated in the complaint and got marked Ex C1 to C11 as listed in the annexure. The Opposite Party No.1 sent version by post and not contested the case nor led any evidence.

We have heard and perused the pleadings, documents and evidence placed on record by the respective parties and answer the points are as follows:

                   Point No.(i) & (ii): Affirmative.

Point No.(iii) to (v): As per the final order.

REASONS

5.      POINTS NO. (i) & (ii):

In the instant case, the Shreyus Certificates produced by the Complainants reveal that, the investment was made in the name of the Complainants with the Opposite Party Company as evidenced from the Shreyus Certificates produced by the Complainant (i.e. Ex C1, C2, C4 and C5) bearing certificate No.023836, 023837, 023840 and 023841. 

The financial service is one of the services specifically mentioned in clause (o) of Section 2(1) of the Act.  It is settled preposition of law that, when the company transacting non-banking financial business accept deposits from the persons for particular period, the person who has deposited the money with such company hires the service of that company.  We have therefore, safely hold that the service undertaken to be rendered by the Opposite Party Company is a service within the purview of the Act and the Complainants are consumers. 

As far as jurisdiction is concerned, the Complainant filed affidavit before the FORA and stated that he had deposited the above amount before the branch office of the Opposite Party Company situated at Puttur which is within the jurisdiction of this FORA.  The above statement of the Complainant is not contradicted/ controverted by the Opposite Party Company.  In the absence of the same, we hold that, this FORA has territorial jurisdiction to entertain the complaint because the investment was made in Puttur which is within the jurisdiction of this FORA.

Further Sub Section (2) of Section 24A of the Consumer Protection Act states that, not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period.  Now it is a well established proposition that, when the person who received the fixed deposit has failed to repay the deposit on the date of maturity/redemption, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit.  The Opposite Party has no case that he has denied the Complainant’s right to recover the deposit until Opposite Party No.1 sent version before this Forum.  The Complainant’s right is denied for the first time in the version.  Therefore, we are of the view that the Complainant had a recurring cause of action.  In this connection, we have been referred to a decision of the Uttar Pradesh State Consumer Disputes Redressal Commission, Lucknow in Gurumeeth Singh And Others V/S Rakesh Kumar Sharma And Another in II (2002) CPJ 209 wherein:- “it is held that the cause action will continue till such time the payment along with interest is made”.  We therefore, hold that the complaint is maintainable not barred by limitation.   In view of the above said reasons, the point No.(i) and (ii) held in favour of the Complainant.

POINTS NO. (iii) to (v):

As far as deficiency is concerned, the Complainants filed affidavit in order to substantiate their case and produced Ex.C1, C2, C4 and C5 i.e., the original Shreyus Certificate bearing No.023836, 023837, 023840 and 023841.  The Opposite Parties though served with the version notice not appeared before this Forum and not bothered to contest the case on hand.  The entire oral as well as documentary evidence filed by the Complainants are not controverted nor contradicted by the Opposite Parties. 

Where a party to the proceedings not entered the witness box and does not offer themselves to be cross-examined by the other side, a presumption would arise that the case set up by them is not correct.  Similarly, in the given case, the Opposite Parties though filed version not rebutted the evidence of the Complainant as stated supra, which requires no further proof. 

However, we have perused the Ex.C1, C2, C4 and C5 i.e. the Shreyus Certificates, wherein, the Complainant deposited Rs.10,000/-, Rs.5,000/-, Rs.5,000/- and Rs.1,000/- on 16.12.2001.  The Opposite Parties agreed to pay interest thereon at 10.5% per annum on the above said amount and the date of redemption shown as 16.12.2006.  On receipt of the above said amount from the Complainants, the Opposite Parties issued a Shreyus certificates i.e., Ex.C1, C2, C4 and C5 by acknowledging the above said amount.  There is no evidence to show that the Opposite Parties paid the amount to the Complainant till this date.  Non-payment of the fixed deposit amount by the Opposite Party Company till this date amounts to deficiency. 

In view of the above discussions, we hold that, the Opposite Parties i.e. Manipal Finance Corporation Limited, Represented by its Managing Director i.e., Opposite Party No.1 and Director i.e., Opposite Party No.3 are hereby directed to pay to the Complainants a total sum of Rs.21,000/- being the deposited amount under the four Shreyus Certificates along with interest thereon at 10.5% per annum from the date of deposit i.e. 16.12.2001 till the date of redemption and thereafter, the Opposite Party No.1 and 3 are hereby directed to pay interest at the rate of 12% p.a. from the date of redemption till the date of payment. 

In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded. Rs.1,000/- awarded as cost of the litigation expenses.  Payment shall be made within 30 days from the date of this order.

The Complainant filed a memo on 15.12.2010 not pressing complaint against Opposite Party No.2; hence, complaint against Opposite Party No.2 is hereby dismissed. 

6.       In the result, we pass the following:  

ORDER

The complaint is partly allowed.  The Opposite Party No.1 and 3 are hereby directed to pay to the Complainant a total sum of Rs.21,000/- (Rupees twenty thousand only) being the deposited amount under the four Shreyus Certificates along with interest at 10.5% per annum from the date of deposit i.e. 16.12.2001 till the date of redemption and thereafter, Opposite Party No.1 and 3 are hereby directed to pay interest at the rate of 12% p.a. from the date of redemption till the date of payment.  And 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.

Complaint against Opposite Party No.2 is hereby dismissed.

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 10 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 21^st day of January 2011.)

         PRESIDENT                                             MEMBER

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 – Mr.H.L. Rao @ H.Lohithaksha Rao – Complainant No.1.

Documents produced on behalf of the Complainant:

Ex C1 – 13.12.2001: Original of the Shreyus Certificate No.023836 issued by the Opposite Party.

Ex C2 – 13.12.2001: Original of the Shreyus Certificate No.023837 issued by the Opposite Party.

Ex C3 – 16.12.2001: Allotment letter issued by the Opposite Party to the Complainant.

Ex C4 – 13.12.2001: Original of the Shreyus Certificate No.023840 issued by the Opposite Party.

Ex C5 – 13.12.2001: Original of the Shreyus Certificate No.023841 issued by the Opposite Party.

Ex C6 – 01.10.2010: Letter addressed by the Complainant No.1 to the Opposite Party.

Ex C7 -                  : Postal acknowledgement.

Ex C8 to C11 – 04.10.2010: Consent letters sent by the Opposite Parties (4 in numbers).

COURT DOCUMENTS:

Doc No.1: Unserved postal cover along with acknowledgement.

Witnesses examined on behalf of the Opposite Parties:

- Nil -

Documents produced on behalf of the Opposite Parties: 

- Nil -

Dated:21.01.2011                                                PRESIDENT