BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD. OF 2008 AGAINST C.C.NO.94 OF 2007 DISTRICT CONSUMER FORUM-II HYDERABAD
Between
- K.S.Choudary
Director, Gold Teak Groves Ltd.,
D.No.7-1-215/1, Ameerpet,
Hyderabad-500 016 - Gold Teak Groves Limited
D.No.7-1-215/1, Ameerpet
Hyderabad-500 016
Rep. by its Director K.S.Choudary
Appellants/opposite parties
A N D
M.Yadaiah
Father of Scheme Holders
M.Sritha, M.Srikanth, M.Prasanth
E.Sai Krishna (Rep. by his father)
All are R/o Plot No.43, D.No.1-1-318
Balaji Colony, Mohan Nagar, Kothapet
Hyderabad-500 035
R.R.Dist. A.P.
Respondents/complainants
Counsel for the Appellant Sri V.Gourisankara Rao
Counsel for the Respondent Sri V.Umapathi Sarma
QUORUM: SRI SYED ABDULLAH, HON’BLE MEMBER
&
SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER
WEDNESDAY THE TWENTY EIGTH DAY OF JULY
TWO THOUSAND TEN
Oral Order ( As per R.Lakshminarsimha Rao, Member)
***
The opposite party in C.C.94 of 2007 on the file of District Forum-II, Hyderabad is the appellant.
The facts of the case as narrated by the complainants are that the complainants purchased 4 teak plants in the name of their children in the scheme floated by the opposite parties no.1 and 2. According to the terms of the scheme the opposite parties no.1 and 2 will either sell the trees or pay the profit on the wood of the tree after a period of 20 years. The complainants paid `4,000/- for four trees and accordingly the opposite parties allotted four trees in the names of the children of the complainant even tree certificates were issued. After five years, the complainant, realized that no trees were grown nor office of the opposite parties was located at the address given by them. The complainants tried to contact the opposite parties no.1 and 2 but in vain. Finally, the complainants got issued notice in response to which the opposite party offered refund the deposit amount to the complainants but the complainant refused the same as the opposite parties offered the principle amount without any interest. Hence, the complainant filed the complaint before the District Forum seeking direction to the opposite party to pay `1,40,000/- .
The opposite parties filed counter admitting the deposit of amount by the complainants and contended that they were not in a position to hand over the trees or the profit on the wood of the said trees. The opposite parties stated that due to lack of water facility the growth of the plants got stunted and as the plants did not grow properly they cannot offer the amount as per the terms and conditions. As per clause 1 and 7 the opposite parties offered to refund the deposit amount of `1,000/- only but the complainant refused to accept the same. The opposite parties further contended that the complainant is not a consumer as the trees were not in the name of the complainant but were in the name of their children. Hence, the complaint is not maintainable and prayed for dismissal of the complaint.
The complainant filed his affidavit and got marked exhibits, A1 to A8. On behalf of the opposite party company, Mr.K.Sharath Choudary, Director filed his affidavit and ExB1 to B3 were marked.
The District Forum allowed the complaint directing the opposite parties no.1 and 2 to pay an amount of `1000/- on each tree for three trees together with interest @ 9% per annum from 1.8.1992 till payment and also further directed to pay an amount of `9,000/- towards compensation and `1,000/- towards costs.
The point for consideration is whether the impugned order is vitiated by misappreciation of fact or law?
The complainant deposited an amount of `1,000/- each in the name of his three children, Srilatha, Srikanth and Prashanth for purchase of there trees in the scheme introduced by the appellants where under each depositor was promised to be paid an amount of Rs.50,000/- over a period of twenty years. The appellants had issued the deposit certificate bearing number 2763 on the 1st August,1992. Infact, the deposit of the amount and issuance of the certificate in the names of the complainant’s is not disputed. The learned counsel for the appellants submitted that in pursuance of the scheme 8,000 teak trees were planted in 17 acres of leasehold land in survey numbers 325,334, 336,337,338 and 339 and 340 in Mambapur village of Jinnaram Mandal, Medak district. The appellants have not established the fact of plantation of such number of trees particularly in the light of the contention of the respondents that the appellants have not taken any steps in pursuance of the scheme. The defence put forth by the appellants is that in the midst of the scheme, SEBI has issued regulations in the year, 1999 to register the scheme introduced by the appellants and if they failed to get it registered, wound up the scheme by following due procedure. The appellants had not chosen to register the scheme and instead they intended to wound up the scheme. The appellants stated that they had intimated their decision to all the members of the scheme.
The appellants introduced the scheme promising those who joined the scheme would be paid the amount of `50,000 after the period of twenty years. The appellants by way of issuing the pamphlet and the application form guaranteed that the scheme would be continued for the prescribed period. The appellants knew well in advance about the nature of the land, water resources etc and after making a detailed enquiry of all the aspects for growing the teakwood plantation, they had invited deposits from the subscribers of the scheme. There is no hint of any manner or kind from the appellants that they would stall the scheme abruptly at their will much to the bewilderment of the members of the scheme. It is not the case of the appellants that SEBI had wound up the scheme. SEBI had not issued regulations keeping in mind the appellants only and a perusal of the regulations make it clear that all the schemes such as the scheme introduced by the appellants has necessarily to be registered as the regulations would go much to the rescue of the innumerable depositors who are gullible and prone to be deceived at the hands of the greedy business entities.
The appellants had paid the amount invested by the complainant. The members of the scheme had invested the amount relying upon the promise made by the appellants that certain amount would be paid after the prescribed period. Interestingly, the appellants had issued Revised Information Memorandum informing the members of the scheme who approach them would be paid the amount in accordance of the procedure laid down in the Revised Information Memorandum. The 8th paragraph of the counter reads as under:” Meanwhile we have been paying those Tree Holders who approach in the manner detailed in the Revised Information Memorandum which provides for the repayment of the initial amount invested by the Tree holder and also that should the prorate price fetched by the sale of trees after the Forest permission is got, the same will be sent to the Tree holders. This Revised information Memorandum is enclosed as Annexure III.”
Contrary to the contention that the amount is payable in terms of Revised Information Memorandum, it is submitted in the appeal that the amount promised under the scheme would be paid to the respondent at the end of the scheme period. In the appeal it is stated as;
“The District Forum failed to see that as per clause no.5 of terms and conditions of the scheme, at the end of scheme period, the Company will sell the timber and remit the proceeds to the Free Certificate Holders”.
The appellant by appeal thus nullifies importance if any, the Revised Information Memorandum seek for consideration. In the circumstances, the appellants cannot rely upon the Revised Information Memorandum. The appellants had taken mutually destructive pleas which itself is sufficient to hold the guilty of rendering deficient service to the respondent no.1.The appellants had not shown any reason for not registering the scheme in accordance with the regulations of the SEBI. The appellants opted to wind up the scheme instead of registering it. It is not as though the appellants had opted for winding up the scheme since they had not been in a position to continue it any longer, it is the option that the appellants voluntarily adopted without assigning any reason. The only reason that the appellant’s attempted to show is that the appellantno.2 being a small company could not register the scheme in terms of the Regulations of the SEBI. The appellants were aware of their capacity and the scope and ambit of the scheme when it was introduced and it is also to be noted that SEBI had not imposed any onerous conditions to be satisfied for registration of the scheme introduced by the appellants. The appellants garnered the deposits from the members of the scheme by way of guaranteeing the payment of `50,000/- at the end of twenty years and failed to pay the amount so promised to the respondents. The failure on the part of the appellants in making payment of the amount to the respondent no.1 constitutes deficiency in service.
The contention of the appellants that the respondent no.1who deposited the amounts in the name of children is not a consumer is discussed in detail by the District Forum. It is the respondent no.1 who deposited the amount with the appellants. The children of the respondent no.1 are entitled to the amount due from the appellants. The appellants cannot deny the just amount due to the children of the respondent no.1. Insofar as the contention that the amount deposited with the purpose of investing on the teakwood trees is concerned, the purpose of the scheme is to invite the subscribers to deposit the amount with the end result that the amount payable to them after the period of 20 years would be an amount of `50,000/- and as such the purpose of the introduction of the scheme by the appellants being to earn profit on the amount received in the shape of the deposits from the subscribers is an activity relating to financial service. The respondent no.1 as such, is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act.
The appellants have committed deficient service by retaining the amount principle with them and thereafter by making payment of the only amount that was deposited by the respondent no.1 without any interest on it. The District Forum should have allowed the complaint for the amount the appellants promised to have paid at the time of receipt of the deposit from the respondent no.1. As the respondent no.1 by not filing appeal against the impugned order, accepted the amount as awarded by the District Forum, we are not inclined to disturb the findings recorded by the District Forum. The claim of the respondent no.1 is rightly dismissed as the respondent no.2 is a minor was not represented by his father or guardian. The complaint not being filed in proper manner was rightly held to be not maintainable in regard to the complainant no.2. The appeal is devoid of any merit and is liable to be dismissed.
In the result, the appeal is dismissed. The order dated 15.10.2007 passed by the District Forum is modified to the extent that the amount awarded is payable to the Tree Certificate holders ,M.Srilatha, M.Srikanth and M.Prashanth, i.e., the children of the complainant. Time for compliance four weeks.
Sd/-
MEMBER
Sd/-
MEMBER
Dt.28.07.2010
KMK*
