BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT MANGALORE

Dated this the 30^th June 2010

COMPLAINT NO.58/2010

(Admitted on 15.2.2010)

PRESENT:    1. Smt. Asha Shetty, President.                                                                                                                                                                                                                                                                                                           

                            2.  Smt. Lavanya M. Rai, Member.

BETWEEN:

Mrs.Sharadha Baliga,

Wife of B.S.Baliga,

Aged 76 years,

Residing at Kadri Kambla Cross Road,

Vadhiraj Nagar,

Mangalore 03.                                        ……COMPLAINANT

(Advocate for Complainant: Smt.Suma R.Nayak)

          VERSUS

1.Manipal Finance Corporation Ltd.,

   Having its registered office at,

   Manipal House,

   Manipal 576 119.

   Represented by its Authorized Signatory.

2. Manipal Finance Corporation Ltd.,

    Having its Branch Office at

    L H H Road, Hampankatta,

    Mangalore.                                     …. OPPOSITE PARTIES

(Advocate for the Opposite Party No.1: Sri.M.S. Krishna Prasad)

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 Parties claiming certain reliefs. 

The Complainant herein is a senior citizen.  She had deposited a sum of Rs.5,000/- under ‘Shreyus Certificate’ bearing 015358/09/10/2001 on 16.1.2001 with the Opposite Parties for a period of 60 months @ 10.50% p.a. The date of maturity was 16.10.2006 and the maturity value was of Rs.8,235/-. 

It is stated that, Opposite Party No.1 and 2 had assured that the maturity value would be repaid on the date of maturity but on the date of maturity the Complainant had approached the Opposite Party No.1 and 2 and demanded his money as per the certificate.  But the Opposite Parties failed to repay the same on the ground that they were not in a position to reimburse the said amount to the Complainant due to financial stringency and therefore asked him to wait for some time.  Accordingly the Complainant waited for some time.  Inspite of lapse of several months, the Opposite Parties did not contact the Complainant. 

It is further stated that, the Complainant being a senior citizen suffering from several health problem required money urgently.  The original certificate was taken back by the Opposite Party with a promise to pay.  The Complainant has suffered mentally, physically and financially due to the deficiency of service and negligent attitude of the Opposite Parties towards its customer i.e., the Complainant.    But the Opposite Parties have committed fraud and have not paid even the principal amount deposited by the Complainant. Therefore, the above complaint is filed by the Complainant before this Forum under Section 12 and 13 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Parties to pay the maturity amount of Rs.8,235/- interest at the rate of 12% per annum from 16.10.2006 till 1.2.2010 and further pay compensation and cost of the proceedings.

2.       Version notice served to the Opposite Party No.1 by R.P.A.D.  Opposite Party No.1 appeared through their counsel filed version.   As against the Opposite Party No.2 Complainant filed a memo not pressing the Complaint. 

          Opposite Party No.1 stated that the Shreyus Certificate No.015358 has been paid in full and final settlement.  The amount was paid by cheque No.595520 dated 8.9.2009 in full and final settlement as per the consent letter given by the Complainant.  Since the Complainant/investor is common and bank account of the Complainant are common, single cheque bearing No.595521 was issued towards settlement of two investments.  In view of the full and final settlement, the above Complaint is not maintainable.  The Complainant has received and accepted the amount with full knowledge and on the condition that the matter is fully and finally settled, and therefore now it is not open for Complainant to make any claim against the Opposite Party either in fact or in law.

          The Opposite Party further states that, the Complainant has submitted the original receipt, consent letter and accepted the cheque towards full and final settlement of his investment and the claim is also barred by limitation.  The Complainant  has made a false and frivolous Complaint and prayed for dismissal of the Complaint.

3.      The points that arise for our consideration in this case are as follows:

1. Whether the complaint is barred by limitation and the complaint is maintainable?
2. Whether the Complainant proves that the Opposite Parties committed deficiency in service?
3. If so, whether the complainants are entitled for the reliefs claimed?
4. What order?

4.         In support of the complaint, Mrs. Sharadha Baliga (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on her. Ex C1 and C2 ere produced for the Complainant as listed in the annexure.  One Mr.M.Narendra Pai, Recovery Assistant of Opposite Party No.1 (RW1) filed counter affidavit and answered the interrogatories served on him. Ex R1 to R4 were produced for the Opposite Party as listed in the annexure. Complainant produced written notes of arguments.

          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): Affirmative

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

REASONS

5.  POINTS NO. (i) & (ii):

The fact that, financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act.  It is a settled law that when a company/firm/Bank transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm/Bank hires the service of that Company/firm/ Bank which has accepted the deposits.  We have therefore, hold that service undertaken to be rendered by the Opposite Parties herein is a service within the meaning of the Act and the Complainant is a consumer.     It is well settled proposition that, the complaint under Consumer Protection Act is an alternative remedy and hence the complaint is very well maintainable before this Hon’ble Forum and this Forum has jurisdiction to entertain the Complaint.  

As far as limitation is concerned, 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, 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 Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum.  The Complainants’ right is denied for the first time in the version.   Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant. Hence, the point No. (i) is held in favour of the Complainant.

POINTS NO. (iii) & (iv):

          It is a case, wherein both the Parties admitted that the Complainant Mrs.Sharadha Baliga deposited Rs.5,000/- on 16.10.2001 for the period of 60 months at the rate of 10.50% with the Opposite Party under Shreyus Certificate.  It is also admitted that, the above said amount is matured on 16.10.2006 for a sum of Rs.8,235/- (as per Ex.C1).

          Now the point in dispute before this Forum is that, the Complainant in this case contended that after maturity of the above fixed deposit, the Complainant approached the Opposite Parties.  Opposite Party No.1 and 2 failed to repay the same on the ground that they were not in a position to reimburse the said amount due to financial stringency.  It is stated that, the Complainant being a senior citizen suffering from several health problem required money.  It is stated that, the Opposite Parties taken back the original certificate with a promise to pay the said amount, but the Opposite Parties not paid the principle amount deposited by the Complainant.  Hence it is contended that the Opposite Parties have committed fraud and have not paid even the principle amount.  Hence she came up with this Complaint.

          The Opposite Party interalia contended that, the Complainant received the amount by way of cheque in full and final settlement as per the consent letter given by her and therefore now it is not open for the Complainant to make any claim against the Opposite Parties in fact or in law. Since the Complainant issued consent letter and accepted the cheque towards the full and final settlement of her investments.  The Complaint cannot be reopened and produced Ex.R1 to R4.

          At the outset, we constrained to observe that the Complainant who is a senior citizen invested Rs.5,000/- on 16.10.2001 at the rate of 10.50% per annum with the Opposite Party company.  The Opposite Party Company on receipt of the above said amount issued a Shreyus Certificate as per Ex.C1, wherein, agreed to pay interest at the rate of 10.50% for the period of 60 months, the maturity date agreed as 16.10.2006 for the matured value of Rs.8,235/-.  We further observe that, the money invested by the Complainant is not a debt.  It is an investment made by the Complainant under Shreyus Certificate with the Opposite Party Company. 

          It is significant to note that, as much as 55% of the Indian savings find their way to bank Fixed Deposits over the past several years, fixed Deposit interest rates from nationalized banks have gone down, investor seeking higher returns by investing in company Fixed Deposits.  As we known, the Company Fixed Deposits are unsecured.  In case of bank deposits, the deposit insurance and credit guarantee Corporation of India guarantees repayment of Rs.1,00,000/- in case of default.  There is no such guarantee offered in Company deposits.  The safety of the deposits depends on the financial position of the company.  This means, as a depositor have no lien on any asset of the Company, in case it goes into financial difficulty and is wound up.  The depositors turn to get money back would come only when secured lender have been paid.  So investing the money in unknown company’s and unsafe company’s, one has to do take care before investing their money with them.

          Here in this case, we could see that the Complainant being a investor, invested the money seeking high returns by investing in Opposite Party company under Shreyus Certificate.  Now a days, as we know many companies are wound up and put under financial difficulties.  Under that circumstances, as a investor, it is quite natural/obviously receives the amount as much as paid by the company, or otherwise even that amount also not getting in right time.  Even in this case, we find that, the Complainant received Rs.2,500/- as against the principal sum of Rs.5,000/- invested by him with the Opposite Party Company. 

          No doubt, in the present case, the Opposite Party vehemently contended that, the amount was paid by cheque No.595520 dated 8.9.2009 in full and final settlement as per the consent letter given by the Complainant and the original certificate was handed over to the Opposite Party. In view of the full and final settlement the above complaint is not maintainable and produced Ex.R1 to R4.  The Ex.R1 is the original Shreyus Certificate and Ex.R2 is the original consent letter and Ex.R3 is the letter issued by the ICICI bank to the Opposite Party having deposited the amount to the Complainant’s account.  The Complainant while marking Ex.R2 i.e. the Consent letter raised an objection stating that it is a notarized copy.  Subsequently, the Opposite Party produced the original consent letter before this Forum. Our attention was drawn towards the contents of the consent letter, the same has been reproduced here below:

“  C O N S E N T       L E T T E R

I, SHARADA BALIGA, one of the Debt Holders of Manipal Finance Corporation Ltd., have invested a sum of Rs.****5000/- in Subordinate Debt of the Company.

The above said Subordinate Debt Is matured/fallen due for payment on 16/10/2006 (Date). With respect to refund of Subordinate Debt  of the Company, I hereby give my consent to accept a sum of  Rs. ****2500/- in full settlement (including accrued interest till maturity) of my above said Subordinate Debt kept with the company.

Further, I hereby surrender the Subordinate Debt Bearing No.015358 duly discharged in favour of the Company in full settlement of my Debt with the Company.

I further reaffirm that there is not further dues owed by the Company payable to me with respect to the above said Debt Account.  The Cheque crossed A/c Payee in respect of the refund may be drawn for credit of My SB A/c Number 0104220000365 with Syndicate Bank, Mission Street, Mangalore-575 001.

Signature :

Name       : SHARADA BALIGA

Address   : W/o B.S. Baliga

             “Sanjeeth” Vadiraja Nagar,

          Kambla Cross Road 575 003

Place: Manipal

Date: 27.06.09”

          We are very strange to see the contents of the consent letter, wherein, the Complainant treated as a debtor. We are very surprise the Complainant herein invested the amount with the Opposite Party Company and the Opposite Party Company is the debtor as far as the investment amount made by the Complainant is concerned.  As we discussed herein above, the invested money is not at all a debt the Opposite Party Company cannot treat the invested amount as a debt of the Complainant.  Apart from that the consent letter produced before this Forum is not proved in accordance with the provisions of evidence Act.  Mere production of document is not sufficient, the contents of the documents required to be proved in accordance with law.  Because the Complainant denied the execution of the above document.  Even though the document is executed by the Complainant, the above said document will not take away the legitimate claim of the Complainant in this case.  The Complainant is not a debtor, she is one of the investor with the company and the company shall refund the legitimate claim of the Complainant in this case. 

          In view of the above discussions, we are of the considered opinion that non refund of the entire amount under the Shreyus Certificate within reasonable time or thereafter till this date amounts to deficiency in service. 

          As far as relief is concerned, the Complainant received Rs.2,500/- under the above certificate and rest of the amount is entitled by the Complainant.  Therefore, we direct the Opposite Party No.1 i.e. Manipal Finance Corporation Limited Represented by its Authorized Signatory is hereby directed to pay a sum of Rs.5,735/- (Rupees Five thousand seven hundred thirty five only) i.e. the remaining balance of matured amount to the Complainant under the Shreyus Certificate bearing No.015358 along with interest at 12% per annum from the date of maturity till the date of payment and 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 Opposite Party No.1 i.e. Manipal Finance Corporation Limited Represented by its Authorized Signatory is hereby directed to pay a sum of Rs.5,735/- (Rupees Five thousand seven hundred thirty five only) i.e. the remaining balance of matured amount to the Complainant under the Shreyus Certificate bearing No.015358 along with interest at 12% per annum from the date of maturity till the date of payment and Rs.1,000/- 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 13 dictated to the Stenographer typed by him, revised and pronounced in the open court on this the 30^th day of June 2010.)

           PRESIDENT                                              MEMBER

ANNEXURE

WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:

CW-1 – Mrs. Sharadha Baliga – Complainant.

DOCUMENTS PRODUCED ON BEHALF OF THE COMPLAINANT:

Ex C1 – 9.10.2001: Photo copy of deposit certificate.

Ex C2 –  27.6.2009: Copy of the acknowledgement given by the Opposite Party for receiving the Original certificates.

WITNESSES EXAMINED ON BEHALF OF THE OPPOSITE PARTIES:

RW-1: Mr.M.Narendra Pai, Recovery Assistant of Opposite Party No.1

DOCUMENTS PRODUCED ON BEHALF OF THE OPPOSITE PARTIES:

Ex R1: 9.10.2001: Original Shreyus Certificate.

Ex R2: 27.6.2009: Original Consent Letter issued by

                          Complainant.

Ex R3: 10.3.2010: Notarized copy of Letter issued by ICICI Bank.

Ex R4: 9.10.2001: Notarized copy of Application Form.

Dated: 30.6.2010                                        PRESIDENT