Haryana

StateCommission

A/227/2014

Parveen Kumar Jain - Complainant(s)

Versus

Satbir - Opp.Party(s)

Aman

27 Oct 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No:      227 of 2014

Date of Institution: 26.03.2014

Date of Decision: 27.10.2016

Parveen Kumar Jain s/o Sh. Firroji Lal Jain, Vice-President, The Haryana Bank Staff Cooperative Urban (S.E.) Non Agri Thrift & Credit Society Limited (Registered) Rohtak, Resident of 845, Sector-1, Rohtak.

                                      Appellant-Opposite Party No.3

Versus

 

1.      Satbir s/o Sh. Sheo Baksh deceased through his LRs:-

i)        Smt. Bimla Devi w/o late Satbir Singh

ii)       Pawan s/o late Satbir Singh

iii)      Rakesh son of late Satbir Singh

All Residents of House No.1810/1, Shyam Colony, Hisar Bye Pass, Rohtak.

Respondent-complainant

 

2.      The Assistant, Registrar, Co-operative Societies, Rohtak.

3.      The Haryana Bank Staff Cooperative Urban (S.E.) Non Agri Thrift & Credit Society Limited (Registered) Rohtak, Registration No.551 dated 23.12.1991, Jagdish Market, near Bata Showroom, Railway Road, Rohtak through its President Ved Parkash.

4.      Ved Prakash s/o Sh. Sube Singh, President, Resident of H.No.1491, Ward No.4, Shiv Nagar, Bhiwani Road, Rohtak.

5.      Rajinder Kumar Patni s/o Sh. Mansa Ram, Treasurer, H.No.794, Ward No.3, Quilla Mohalla, Rohtak.

6.      Madan Lal Sehgal s/o Sh. R.L. Sehgal, Manager, H.no.150, Sector-1, Rohtak.

                                      Respondents

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Mr. B.M. Bedi, Judicial Member.

 

 

Argued by:          Shri Parveen Kumar Jain-appellant with Shri Aman Jain, Advocate.

Shri Abhishek, Advocate for respondent No.1.

Shri Ashok Pasricha, Deputy Advocate General assisted by Sh. Mahabir Singh, Liquidator on behalf of respondent No.2.

                             Shri N.K. Malhotra, Advocate for respondent No.4.

None for respondents No.3, 5 to 7 (service dispensed with.)

 

                                                   O R D E R

B.M. BEDI, JUDICIAL MEMBER

                   Parveen Kumar Jain-Opposite Party No.3, is in appeal against the order dated February 20^th, 2014 passed by District Consumer Disputes Redressal Forum, Rohtak (for short ‘the District Forum’), whereby complaint was allowed.

2.                Satbir (since deceased) now represented through his representatives-complainants, filed complaint with the allegations that she deposited a sum of Rs.19,000/- vide Fixed Deposit Receipt (FDR) bearing No.9919 on 01.04.2004 with date of maturity as 01.04.2007 and maturity value as Rs.27,088/-.  The Opposite Party No.1 is Society; one Ved Parkash-President; Parveen Kumar Jain-appellant, Vice President; R.K. Patni-Treasurer; Sunil Sehgal-Ex Honorary Secretary/Manager and Opposite Parties No.2 to 5 are office bearers and managing affairs managing affairs of the opposite party No.1. The Society is registered with Assistant Registrar, Cooperative Societies.

3.                On maturity of the FDR, the complainant approached the opposite parties for payment of the maturity amount. However, the matter of payment was put off on one pretext or the other by the executive members of the Society. Thus, alleging deficiency in service on the part of the opposite parties, the complainant filed complaint before the District Forum.

 

4.                The opposite parties No.1 and 5 filed their joint written version raising preliminary objections regarding maintainability of the complaint, jurisdiction and Sunil Sehgal-Opposite Party No.5, filed objection that he had nothing to do with the working of the Society and was not holding any post. It was further submitted that he had resigned from the Society. On merits, the deposit of amount of FDR was not denied. Contradictory plea was raised that no FDR was issued in favour of the complainant. Denying their individual as well as joint liability, dismissal of the complaint was prayed.

5.                Opposite Party No.2-Ved Parkash in his written version denied any FDR having been issued. It was also denied that any assurance was given for payment of the amount.

6.                Opposite Party No.3- Parveen Kumar Jain (appellant), in his written version submitted that the complaint was not maintainable and the complainant had no cause of action against him-Opposite Party No.3. The complainant not being consumer and it was not a consumer dispute. The opposite party No.3 had no concern with the affairs of the Society. No amount was received by him from the complainant. A criminal case was also registered. The management was taken over by Registrar Cooperative Societies who appointed Board of Directors/Administrators. Besides that as per byelaws of the Society, the liability was limited to 10 times of the share capital subscribed by the members. It was also stated that the inquiry initiated by Registrar Cooperative Societies, the name of opposite party No.3 does not figure as the delinquent and the names of delinquent are only Madan Lal Sehgal, R.K. Patni and Sunil Sehgal.

7.                Opposite Party No.4- R.K. Patni (Treasurer)in his written version stated that being manager of the opposite party No.1 – Society, he worked on the instructions of his father Shri M.L. Sehgal. He also raised plea that he resigned from the executive membership of the Society on 31.03.2001, however continued to be a Honorary Secretary. F.I.R. was lodged against the office bearers of the Society and the management was taken over by Registrar Co-operative Societies and the Board of administrators has been appointed by the Registrar Cooperative Societies. Denying the liability, it was prayed that the complaint be dismissed.

8.                The opposite party No.6 only submitted that it need not defend the complaint.

9.                After hearing the learned counsel for the parties and going through the case file, the District Forum vide impugned order allowed complaint and issued direction as under:-

“……….it is observed that the respondents No.1 to 5 are jointly and severally liable to return/refund the amount deposited by the complainant. As such it is directed that respondent No.1 to 5 shall return/refund the maturity amount of F.D.R. Ex.C1 alongwith interest @ 9% p.a. from the date of maturity of deposit till its actual realization to the complainant. The complainant is also entitled for a sum of Rs.2000/- (Rupees two thousand only) as litigation expenses. Complaint is allowed accordingly.”

 

10.              It was contended by Parveen Kumar Jain by referring to byelaws No.15 and 39 of the Society that in the departmental inquiry held at the instance of the Registrar Cooperative Societies, he has been totally exonerated of the charges and the liability has been fixed upon the other executive members.  Similar argument was raised on behalf of Ved Parkash.

11.              Undisputedly, the complainant had purchased FDR from the Society on 01.04.2004 for Rs.19,000/- and the maturity date and amount was 01.04.2007 and Rs.27,088/-. Thus, the liability of the opposite parties continued, as amount was not paid.

12.              Dealing with the argument that the appellant-Parveen Kumar Jain has been exonerated of the charges of embezzlement of the funds of by Registrar Cooperative Societies, this was only an inquiry conducted by the Registrar Cooperative Societies restricting to embezzlement of funds of the Society. Neither the complainant was associated in the inquiry nor the complainant was a party in the said proceedings. That was limited to the funds of the Society. Therefore, any findings arrived at by the Registrar Cooperative Societies while dealing with the embezzlement of the Society, cannot be thrusted upon the complainant. Those proceedings have nothing to do with the consumer complaint.

13.              As regard the second limb/line of argument regarding Bye Laws of the Society No.15 and 39, the same are reproduced as under:-

“15.   The liability of a member for deficit in the assets of society in the event of its being winding up shall be Ltd. to ten times of value of the share capital subscribed by him.”

“39.   In the conduct of the affirms/affairs of the society the members of Managing or Executive Committee shall exercise the prudence and diligence of ordinary men of business and shall be responsible for any loss sustained through acts. Contrary to the law, the byelaws and the stated objects of the society.”

14.              The byelaws reproduced above, are of no help to the appellant-opposite party No.3 Bye-laws of Society are only for the purpose of functioning of the society. The liability as mentioned in byelaws No.15 is only in the event of deficit in assets of the Society in case of winding up. It does not deal with the liability to the depositors of the society, which was doing the business in shape of banking/financial institution by taking deposits from the third party and advancing loan to members as well as non-members. Similarly bye-laws No.39 only refers to conduct in the affairs of the Society viz. conduct of Managing Committee/Executive Members of the Society viz exercising prudence diligence. This rather goes against the appellant as the appellant being one of the members of the Management Committee of the society did not exercise due diligence in its functioning. It is not disputed that the complainant deposited the amount of Rs.19,000/- in the shape of FDR. It is also not disputed that the amount has not been paid to the complainant on the date of maturity. The Society and its executive members were trustees of funds of depositors and liable to return their funds as per agreements, that is, FDR.

15.              In a similar cases in Revision Petitions No. 3733 to 3741 of 2013, wherein also a Cooperative Non Agriculture Thrift & Credit Society Limited accepted deposits from non-members in the shape of FDRs and amount not being paid on maturity, they filed consumer complaints which were allowed by the District Forum directing the society as well as the members of the governing body to pay the liability jointly and severally. Appeal being filed by Ex-Vice President, raising similar plea that he had resigned from the executive membership of the society, the plea was negated and the appeal was dismissed. Revision Petition was also dismissed by Hon’ble National Commission observing as under:-

                                      “10.   We are unable to locate some substance in these arguments, for the following reasons. First of all, the law cited above is not applicable to the facts of this case.  The facts of this case are different.  The law enshrined in Haryana Cooperative Societies Act, 1984 has crystalline clarity.

                                      11.    Moreover, the petitioner has made a vain attempt to keep the real facts under the hat. This is an admitted fact that the Assistant Registrar accepted the resignation of Sh. M.L. Sehgal and an appeal was preferred before the Registrar, Co-operative Societies and the said Appeal was accepted by the Deputy Registrar, Co-operative Societies by setting aside the order passed by the Assistant Registrar, Co-operative Societies.

12.    As per the order of the State Commission, on the one hand, Mr. M.L. Sehgal was feigning that he had resigned from the Society, but at the same time he was taking part in day-to-day functioning of the Society by issuing cheques, drafts, etc., to various customers as is evident from the photocopies of the cheques dated 13.06.2007 to 13.07.2007 which were issued by Mr. M.L. Sehgal and one Mrs. Poonam Mittal, in capacity of Authorised Signatory, had also issued cheques in the capacity of Secretary of the Society, favouring different persons on 29.05.2005 and 07.08.2005 and also in his own favour on 27.03.2005, 27.03.2005 and 20.03.2006. He also signed FDRs bearing Nos. 6505, 6026, 1021 on 29.05.2005, 14.04.2005 and 07.08.2005, respectively. The State Commission came to the conclusion that this fact is indicative that Sh. M.L. Sehgal was not only actively participating in the day-to-day functioning of the Society, but has also been signing important financial documents in the nature of issuing cheques and fixed deposit receipts.

13.    This is an unsavoury volte face on his part. The petitioner cannot ride both the horses, at the same time. A flip-flop attitude adopted by him, further casts a film of doubt over his bizarre conduct.

14.    The State Commission has also mentioned that he has written various letters, including one dated 13.11.2005, which was received in the Office of the Registrar, Co-operative Societies under Receipt No.2542 dated 14.11.2005. In this way, he tried to manipulate the records. The State Commission rightly came to the conclusion that the entire theory of resignation of Mr. M.L. Sehgal is mere concoction to avoid his liability being fixed upon him in the litigation. The State Commission correctly did not accept the contention that he has resigned. Moreover, the petitioner himself admitted that he had attended the proceedings on 25.06.2004, i.e., after his ‘so-called’ resignation, on 14.04.2004.

15.    As a matter of fact, the Society is not running after the year 2008. The Society does not have any amount. There were as many as 250 complaints against the petitioner and an amount of Rs.2.00 crores is involved. He has never resigned and is at the helm of all affairs. All the signatures belonged to him. He has to account for the money.”

16.    In another incident, he had issued cheque which was dishonoured, he has been sentenced to two months’ simple imprisonment by the learned Judicial Magistrate – 1^st Class, Ambala though the appeal is still pending.

17.    It was argued by the counsel for the respondent that the respondent was posted as GMA, State Bank of Patiala, where his services were terminated.  To our mind, the main liability lies with the petitioner himself.  The love of money is the root of all evil.  The petitioner has made a vain attempt to put the wool in the eyes of law and in the Members of the Society.  Money without brains is always dangerous.  The State Commission has nowhere missed the wood for trees.  We add our voice to them.

18.    The revision petitions are dismissed with costs of Rs.25,000/- in each of the nine cases, which be paid to each of the complainants/consumers, by the Petitioner, in equal proportion, through demand drafts, directly, drawn in the name of each of the complainants, within 90 days; from the receipt of this order; otherwise, it will carry interest @ 9% p.a. till its realization.”                

16.              In The Secretary, Thirumurugan Co-operative Agricultural Credit Society vs. M. Lalitha and Ors (2004) 1 SCC 305, it was held that remedy against deficiency in service of the co-operative societies is permitted under the Consumer Protection Act, 1986.  

17.              In view of the above, the appeal fails and is hereby dismissed.

18.              The statutory amount of Rs.14,550/- deposited at the time of filing the appeal be refunded to the complainant against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced: 27.10.2016

(B.M. Bedi) Judicial Member

(Nawab Singh) President

 

CL