65/12/08

Sri.K.Gopalan, President

 6/12/08

            This is a complaint filed under section 12 of consumer protection Act for an order directing the opposite party to pay a sum of Rs.1, 00,000/- as compensation for mental agony and financial loss.

            The case of the complainant in brief is thus: The complainant is an Ex-serviceman, residing at Madai. As per the compulsion and the inducement of the then office bearers of the opposite party the complainant opened an account with the opposite party as S.B.No.49 dt.3.3.1993. The office bearer promised to repay the deposited amount to the complainant wherever he needs money. On 31.3.2006 there was an amount of Rs.87, 620/- in the account. The complainant due to urgency of money approached the opposite party with a cheque No.21460 dt.5.5.2006 through the Madai co-operative Rural Bank where the complainant has got account, for collection. The house and property where the complainant was residing was under acquisition for constructing a new road. For construction of a new house complainant was in urgent need of money. But the drawee Bank dishonored and returned the cheque unpaid to the collecting bank with a memo dt.9.5.06 stating that refer to drawer. The complainant approached the opposite party to know the reason. There was no clear answer for the dishonor. On repeated request the opposite party stated that the instruction was in a financial crisis and not in a position to repay the money to its consumers. The complainant sent legal notice dt.23.5.06. The opposite party received the notice but was not ready to pay the cheque amount. He issued reply notice dt.16.6.06 stating that complainant is now entitled to get an amount of Rs.57, 124/- only and the said amount can be withdrawn at any time. After receiving the notice the complainant again approached the opposite party to withdraw an amount of Rs.55, 000/- to purchase the property. On presenting the withdrawal form the opposite party informed the amount couldn’t be given without consulting President. Thus complainant returned. After 3 weeks complainant received a registered letter stating that SB account No.49 belongs to complainant is frozen till the disposal of the criminal case pending before the Judicial First Class Magistrate Court, Payyannur. The complainant due to the dishonor of the cheque filed the case.  The complainant suffered lot of mental agony and financial loss. The complainant lost the property since he could not raise the balance consideration and execute the sale deed in time. Due to deficiency of service of the opposite party he suffered a loss of Rs.1, 00,000/-. The opposite party has no right to freeze the account.

            Pursuant to the notice opposite party made appearance and filed version denying the main contentions. The contentions of opposite party are brief are as follows: The complaint is not maintainable. Complainant is an A class member of the society. The dispute between member and society has to be decided in arbitration as provided under section 69 of co. operative societies Act. The complainant is not a consumer. It admitted that complainant is having an S.B account with the opposite party as S.B Nbo.49. The complainant also had two fixed deposits viz.FD.955 and FD 956. The money due in the fixed deposit was transferred to his Savings Bank Account at his request. In the year2000 the inspector’s of the co. operative department t found irregularities in the Gold loan transaction of the society. The enquiry revealed that there then Honorary Secretary with the assistance of staff members advanced huge amounts to some of their customers without security and they conspired and cheated the bank causing heavy loss to the tune of sixty lakhs. These malpractices wiped out even the capital of the society. Therefore the General body of the society decided to impose restriction on the withdrawal of the deposits. The complainant who participated in the meeting is aware of all these facts. As per the above decisions all the account holders including the complainant were allowed to withdraw Rs.500/- to Rs.2000/- monthly except in very urgent and immediate necessitates. The complainant requested to withdraw Rs.83, 000/- from his S.B account. The same was placed before the general body on 8.1.2006 in which complainant was also present. It was decided to relase the amount subject to realization of money in execution of order in ARC 352/00, which the complainant also agreed. The audit for the year 2001/02 revealed that excess interest was given to the complainant in his FD 955 and 956 and it was mentioned in the defect report dated 10.3.2006. Knowing about the defect report and offering adjustment the complainant planned to withdraw nearly the whole amount in his S.B Account. So he presented a cheque for Rs.83, 000/- through Madayi Co.op Bank Ltd. Opposite party returned the cheque with a reply dt.14.3.2006 reminding him the decision of the General Body and also pointing out the defect report. Since the final audit report was not given to the opposite party the necessary amount could not be adjusted from the account of the complainant. If the amount is adjusted there will not be sufficient amount to honor complainant’s cheque.  The complainant presented another cheque with malafide intention to file a case like this. After the receipt of audit report Director Board decided to adjust Rs.30, 496/- with proportionate interest from the S.BN account to compensate the mistakenly given interest. It was communicated to the complainant by letter dt.25.8.06. The actual balance in the account of the complainant is Rs.57, 124/- only. The facts were detailed in the reply notice. The opposite party did not allowed to withdraw Rs.55000/- is false. The complainant did not present the withdrawal form for Rs.55, 000/-. The allegation that he returned the form saying that he could not pay the amount without consulting the president and directed to come another day etc. are false. The complainant filed a criminal complaint before the Judicial Fist class Magistrate Court, Payyannur accusing the Secretary and President for criminal misappropriation and cheating. When the matter was placed before the Board it was decided to freeze the account until the disposal of the case and the same was communicated to the complainant. He intended to withdraw money and purchase property and that he lost the property etc. are false. There is no deficiency in service on the part of opposite party. The complainant can withdraw the actual balance now available in the account. Hence to dismiss the complaint.

            On the above pleadings the following issues were taken for consideration.

1.Whether the complaint is maintainable?

2.Whether there is any deficiency in service on the part of opposite party?

3.Whether the complainant is entitled for the remedy as prayed in the complaint?

4.Relief and cost.

            The evidence consists of oral testimony of PW1, DW1 and documentary evidence Ext.A1 to A9 and B1 to B15.

Issue No.1

            The opposite party is a co-operative society. The position of law is very clear that Consumer protection Act section 3 is over and above the facilities available under the co-operative societies Act. In the case “The Consumer & Citizens Forum Vs. Karnataka Power Corporation reported in 1994(I) CPR 130 it is made much more clear that the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The provisions of this Act give the consumer an additional remedy besides those that may be available under other existing laws. Thus we are in full agreement that Forum has jurisdiction to deal with the case. The issue No.1 is found in favour of the complainant.

Issue Nos.2 to 4

            Admittedly complainant is having an S.B Account with the opposite party. Complainant had two fixed deposits FD 955 and 956. The amount of those deposit transferred in the S.B account on 31.7.2000 at the request of complainant. Ext.A1 passbook proves that there was a balance of Rs.87, 620/- as on 31.3.2006. Complainant’s case is that he has approached the opposite party with a cheque through Madai co.op.Rural Bank, Payangadi. Complainant was in urgent need of money for the construction of new house since his house and property were under acquisition proceedings. Ext.A2 is the true copy of cheque which drawn for Rs.85, 000/-. Complainant produced Ext.A3 Gazette Notification and Ext.A4 assignment deed to prove that the government have directed the survey of lands the survey No.304 in Madayi Village, Kannur District.  But he has not produced any documents to show that he has tried to purchase any property and finally sustained loss. Ext.B2 is the certified copy of the entry in Audit report, which stated thus:

Item No.2 specified thus “FD.No.955-14/7/00                        31/7/00

FD.No.70-278993, FD.No.955-17208, FD.No.956-6313”. Ext.B4 audit certificate and Audit memorandum for the year 2001-2002 pages 20 consist of the same entry, which also proves that the complainant was given an excess amount of Rs.17208/- in FD 955 and Rs.6313/- in FD.956.

            After the dishonor of Ext.A2 cheque with Ext.A5 memo dt.9.5.2006 the complainant sent Ext.A6 lawyer notice dt.16.6.06 calling upon to pay the cheque amount. Ext.A7 is the reply notice dt.16.6.06. In Ext.A7 reply the opposite party stated that the opposite party has no objection in withdrawing the balance amount of Rs.57124/-.  Opposite party contended that complainant was not ready to accept the amount.  The complainant alleged that he has thereafter presented withdrawal form Ext.A8. Ext.A8 was prescribed to withdraw an amount of Rs.55, 000/-. Complainant further alleges that after receiving Ext.A8 the opposite party informed the complainant that he cannot pay the amount without consulting the President and after the elapse of 3 weeks complainant got a registered letterExt. A9 stating that his account No.49 has been frozen. Ext.A9 stated that the account has been frozen till the disposal of the case that pending before the JFCM, Payyannur.

            The opposite party contended that Ext.A8 cheques withdrawal form is manipulated by complainant to make a case against the opposite party. It is quite evident that there was no entry of or writing of the staff of the society on the leaf. It cannot be believed that Ext.A8 is a document that presented before the opposite party and returned by the opposite party. There is nothing to show that Ext.A8 is a document that was presented before the opposite party for withdrawing the amount. Whatever it maybe the cheque allegedly presented after about 6 months of Ext.A7 a document by which freezing of account of complainant has been informed.

            Ext.B1 is the extract of minutes dated 16.1.2007, which shows that he was asked the society to permit him to withdraw Rs.80, 000/- from his account and the same was rejected. Opposite party contended that it was rejected for want of funds as the society was in crisis due to the large-scale financial malpractices. As per the contentions of opposite party the amount of misappropriation comes to more than Rs.60, 00,000/-. On perusal of the documents it reveals that there was some malpractices. It is under such a background the decision of the general body imposing restriction on financial dealing can only be considered to be inevitable to save the institution and the complainant knew the same.  Complainant has directly participated in the meeting.Ext.B3 letter explained to complainant the reason for returning of the cheque pointing out the possible change of balance amount in the account due to finding of error of calculation of interest on F.D. Ext.B10 dt.25.3.2006 is the letter that has informed the complainant with respect to the deduction of amount Rs.30, 496/- from the Account No.49 as a measure of curing the defect found in the audit report. It also contains the details of balance. Hence there is substances in the contention of opposite party that Ext.A2 cheque was rejected to the reason that there was no sufficient amount. Opposite party returned the cheque with Ext.B3 letter detailing the facts. More over, Ext.B6 letter made it clear that the opposite party has no objection in withdrawing the balance amount Rs.57124/-. Hence it cannot be held that there is deficiency in service on the part of opposite party in returning the cheque Ext.A2.

            Ext.B13 dt.17.1.2007 is the letter informed the complainant that his account had been frozen till the disposal of the case that pending before the Judicial First Class Magistrate, Payyannur. Ext.B12 is the true copy of the decision taken by the Director Board to freeze the account of complainant in its meeting held on 16.1.2007. Board of Directors decided to freeze the account of the complainant till the disposal of the case. This decision has been taken not to protect the economic interest of the society. The freezing of the account does not guard or help any of the interest of the opposite party except the satisfaction revenge upon complainant as a consequence of filing the case against opposite party. Opposite party has not given any evidences to show that the Director Board is entitled to take such decision of freezing of the account. Hence we are of opinion that the freezing of account is a deficiency on the part of the opposite party.

            Complainant could prove that his property and house was under acquisiti0on by Ext.A3 and A4. But there is no evidence to prove the loss sustained by the complainant. He has sated that he was in emergent need of money to purchase property so as to build a new house. But he could not adduce evidence even to prove that he has made effective attempt to purchase property. So also he has failed to prove the mental sufferings that he has suffered. Except assuming that there was some usual trouble suffered in the ordinary course of life there is nothing special to be considered so as to assess the damage. Hence we are of opinion that Rs.5000/- as compensation together with Rs.2000/- as cost of this proceedings will meet the ends of justice. The issues 2 to 4 found in favour of complainant and order passed accordingly.

            In the result, the complaint is allowed partly directing the opposite party to pay Rs.5000/- (Rupees Five thousand only) as compensation for deficiency and a sum of Rs.2000/- (Rupees Two thousand only) as cost of this proceedings within one month from the date of receipt of this order, failing which the complainant is entitled to execute the order against the opposite party under the provisions of the consumer protection Act.

                          Sd/-                        Sd/-                      Sd/-

                      President                      Member        Member

                APPENDIX

Exhibits for the complainant

A1.Copy of the savings Bank account of complainant

A2.Copy of the cheque dt.5.5.06 of Ex. serviceman co.op.society.

A3.Copy of the gazette notification dt.3.8.05

A4.Copy of the assignment deed No.2518/81 ofSRO, Payangadi.

A5.Copy of the memo issued by OP dt.9.5.06.

A6, Copy of the lawyer notice dt.23.5.06sent to OP

A7.Replynotice dt.16.6.06 sent by OP

A8.Withdrawal form dt.26.12.06

A9. Letter dt.17.1.07sent by OP

Exhibits for the opposite party

B1 Annual meeting conducted on.8.1.06 of Ops bank question & reply of complainant

B2.copy of the audit certificate and Audit memorandum for the year 01-02

B3.Copy of the letter dt.14.3.06

B4.Copy of the Audit certificate and audit memorandum

B5.Notice dt.23.5.06sent byAdv.K.Padmanabhan

B6.Reply notice dt.16.6.06sentto Advocate.

B7.Copy of the letter dt.29.7.06 sent to complainant

B8.Postal acknowledgement card

B9.copy of the page 152 of minute’s dt.22.8.06

B10.copy of the letter dt.25.8.06 sent to complainant

B11. Copy of the CMP filed before the Judicial Magistrate, PayyannurNo.2385/06

B12.Minutes of the meeting conducted on 16.1.07of OP

B13. Copy of the letter dt.17.1.07 sent to complainant

B14.Postal acknowledgement card

B15.copy of the savings account ledger page NO.49

Witness examined for the complainant

PW1.Complainant                  

Witness examined for the opposite party

DW1.V.P.Renji

                            /forwarded by order/

                                 Senior Superintendent

Consumer Disputes Redressal Forum, Kannur