AT HYDERABAD.

F.A. 823/2008  against  C.C  755/2007, Dist. Forum-II, Hyderabad.       

Between:

K. Surya Rao, S/o. Late K. Subba Rao

Age: 72 years,

H.No. B. N. 482, Balaramnagar

Safilguda, Malkajigiri

Secunderabad.                                           ***                         Appellant/

                                                                                                Complainant.  

                                                                   And

1)  The Secretary

The A.P. Secretariat  Staff Co-operative Society Ltd.

Secretariat Building

Saifabad, Hyderabad.

2)  The President

The A.P. Secretariat  Staff Co-operative Society Ltd.

Secretariat Building

Saifabad, Hyderabad.                                 ***                         Respondents/     

                                                                                                Ops.

Counsel for the Appellant:                          M/s.  P. V. Rao.

Counsel for the Resp:                                 Mr. Y. V. Narasimha Charyulu

CORAM:

    HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT       

                                                                    &

                                         SMT. M. SHREESHA, MEMBER

FRIDAY, THIS THE THIRTIETH DAY OF JULY TWO THOUSAND TEN

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

                                                          *****

1)                Appellant is unsuccessful complainant. 

2)                The case of the complainant in brief is that  he invested the amounts  in fixed deposits  floated by the respondent.  They  are as follows :

When he claimed the  first  FDR  matured on  6.11.2005 the respondent offered to pay Rs. 1,64,500/-  calculating the reduced rate of interest  as against original agreed amount of Rs. 2 lakhs  and suggested to  re-invest the said amount  on monthly  interest payment basis  for one year  on the ground that they were facing  financial difficulties.    When it was re-invested and matured on  6.11.2006 the respondent failed to pay  not only the difference of Rs. 35,445/-   but also principal amount, instead it has issued a  post dated cheque  for encashment on 12.12.2007 only.    It is equally so with  FDR Nos. 2 & 3  matured on 3.2.2007, and on their suggestion he reinvested on the very same promise that they would pay   monthly interest and  assured refund of the amount along with previous FDR.     FDR at  Sl. No. 4 was matured on  13.2.2007 however the respondent refused to pay  but offered  to pay only Rs. 21,588/- and did not release the amount however issued a post dated cheque  for encashment on  9.5.2008 only.    The FDR  for Rs. 1,00,000/- matured on  29.1.2005 was reinvested  in FDR for Rs. 2 lakhs  on 14.2.2005  when it was matured on 30.1.2006  the respondent failed to pay the maturity value  instead issued a post dated cheque  to be encashed on  9.3.2007.  As he has no other go  he had accepted.     Non-payment of amount  viz., Rs. 62,745/-  towards difference of amount  and Rs. 53,200/-  towards of loss interest  for belated payment  besides non-payment of principal amount amounts to deficiency in service.    Therefore he claimed Rs. 62,745/- towards difference of amount, Rs. 84,408/- towards interest  @ 24% p.a., on difference of amount, Rs. 1,89,000/- towards refund of principal amounts, Rs. 32,907/- towards interest thereon, Rs. 53,200/- towards interest on reinvested amount of Rs. 2 lakhs  and further claimed interest on the  above said amounts besides compensation of Rs. 75,000/- and costs of Rs. 10,000/-.  In all  Rs. 5,07,815/-.

3)                 The respondents resisted the case.    It alleged that the Dist. Forum has no jurisdiction  to try the complaint.   The complainant himself  has acknowledged receipt of  post dated cheques   in respect of deposit of Rs. 1 lakh having received Rs. 2 lakhs which he had reinvested.   Against deposit of Rs. 50,000/- each  the complainant had received Rs. 1,64,000/-  which he had reinvested.    Against deposit of Rs. 12,500/- he had acknowledged receipt of Rs. 21,588/- by way of receipt.   This is quite substantial  in view of the financial problems being faced by it.    The amounts  received were  with interest ranging between  12% and 15%.    In fact the complainant had sent the discharge voucher   towards full and final settlement of all the FDRs.     The financial status  of the society was in a very bad shape since their funds were locked up in certain co-operative societies.  There were large number of defaulters.  It was making all efforts to recover  those amounts.   That was the reason why there was delay in repayment of dues at reduced rate of interest which is still  very attractive when compared with prevailing  interest rates in the schedule banks.   He did not suffer any pecuniary loss.     Even RBI permits repayment of deposits at reduced rate of interest.  In the said circumstances  there was no deficiency in service  on its part.    It denied any liability  to pay a sum of Rs. 5,07,815/- together with   damages and costs. 

4)                 The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A12  marked while the respondents filed Exs. B to B3.

5)                 The Dist. Forum after considering the plea taken in the  additional written arguments filed by the respondents  opined that in view of  clause-59 of the Bye-laws of the co-operative society where  a provision for  arbitration was metnioned, directed the complainant to approach the arbitrator  for settling the matter. 

6)                 Aggrieved by the said decision, the complainant preferred the appeal contending that  the Dist. Forum did not appreciate either facts or law in correct perspective.    It ought to have seen that the amounts that were matured under the FDRs  were reinvested and the principal and the interest accrued thereon  were not paid.  The clause in the bye-laws for resolving the dispute between the complainant and the respondent through arbitrator  had no application  to  the complaint under the Consumer Protection Act, and therefore  prayed that the order be set-aside  and the amounts  be paid. 

7)                 The point that arises for consideration is whether the order of the Dist. Forum is vitiated by  mis-appreciation of fact or law?

8)                 It is an undisputed fact that the complainant invested the amounts by way of  FDRs and re-invested  on the maturity date when  the respondent  pleaded  its inability to pay the amounts due to financial constraints.    The respondent did not file any document  to show that it was incurring losses and was unable to collect the amounts from the defaulters and therefore its proposal  for repayment of amount at reduced rate of interest was  agreed upon.

9)                 The fact remains that the complainant had made the  following investments  in FDRS  and the payments were made as shown against each.

In other words he was deprived of  interest on the above  amounts.     According to the complainant he was  entitled to an amount of   Rs. 2,51,745/- as shown in Colomn No. 8.  

10)              Learned counsel for the  respondents contended that  unless the  FDRs and cheques were surrendered  he was not entitled to the amounts.   The complainant has agreed to surrender  provided the amounts are paid.    It is not the case of  the respondents at any time they were ready to pay the amount on  return  of original FDRs.   They themselves got the FDRS reinvested without paying the maturity value evident from re-investment  FDRs filed by the complainant.     Though the respondents contended that the complainant himself agreed to receive   reduced  rate of interest  which proposal was approved by RBI Rules,   no rule or provision was  placed for adopting this practice.    When the respondents had agreed to pay the amounts covered under the FDRS  together with interest  it  ought to have  paid whatever be the circumstances.    They ought to have taken steps for realization of amounts from the defaulters.    On that ground it cannot deny  the amount due to the complainant. 

11)              Learned counsel for the respondents contended that   as per Bye-laws of the  co-operative society  clause-59  stipulates  arbitration in case of any dispute.    At the outset, we may state that the respondents did not file  the so called bye-laws  in order to find out  as to the exact provisions  for  referring the matter to arbitration. 

12)           The Hon’ble Supreme Court in   The Secretary Thirumurgan Co-operative Agricultural Credit Society Vs.  M. Lalitha  reported in I (2004) CPJ 1 (SC)   opined that  the clauses referring to arbitration  shall not prevail over   the provisions of Consumer Protection Act.  In the light of above decision the respondents are not entitled to contend that the Dist. Forum has no jurisdiction.    Therefore the order of the Dist. Forum directing  the complainant to approach  the arbitrator is patently  illegal.    In fact if we may say so, such a contention was not taken in the counter  or it came up with  a petition to resolve the dispute by referring the dispute to an arbitrator on the ground that  Clause-59 of bye-laws  prohibits the complainant from approaching the consumer fora.    In additional written arguments such a belated contention was taken and unfortunately  the Dist. Forum  up-held it. 

13)               In the result the appeal is allowed setting aside the order of the Dist. Forum.  Consequently the complaint is allowed  in part directing the  respondents to pay  balance of  Rs. 2,51,745/-  due to the complainant with interest @ 10% p.a., as agreed upon  from the date of complaint till the date of realization together with costs of Rs. 2,000/-.  Time for compliance four weeks. 

1)       _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER          

   Dt.  30.  07.  2010.

*pnr

“UP LOAD – O.K.”