O R D E R Sri. Santosh Kesavanath P., President Case of the petitioner filed on 14..7..2009 is as follows: Petitioner is the member of the opposite party society. Petitioner joined for a Recurring Deposit with the opposite party on 19..1..2000, where in he had to make a monthly deposit of Rs. 500/- for 108 months. Recurring Deposit was matured on 23..1..2009. Promised rate of interest was 13%. According to the petitioner he was to receive Rs. 101967/- on maturity. On 21..6..2008 when the petitioner approach the opposite party for receiving the matured amount opposite party given only Rs. 94347/- at the rate of interest of 11.5 %. Opposite party reduced the rate of interest with retrospective effect. According to the petitioner act of the opposite party in arbitrarily reducing the interest rate from 13% to 11.5 % amounts to unfair trade practice. So, petitioner prays for a direction to -2- the opposite party to pay Rs. 7620/- being difference in the amount deducted. Petitioner claims the deducted amount of Rs. 7,620/- with interest at the rate of 12% from 21..1..2009 till realization. Petitioner claims Rs. 5,000/- as compensation and Rs. 3500/- as cost of the proceedings. Opposite party entered appearance and filed version contenting that petition is not maintainable. Petitioner is a member of the opposite party society and specific provisions are made in the Kerala Co-Op. Societies Act for settlement of dispute between member and society. Further more petitioner is not a consumer of opposite party and the dispute is not a consumer dispute. Opposite party has not implemented any independent recurring deposit scheme promising to pay interest at a specified rate for a particular period like that of a fixed deposit. Recurring deposit account of the society is linked with the cash credit facility of the society. It was introduced by the committee of the society for enabling the members for the regular and prompt payment of the interest. Monthly installment of the recurring deposit account is compulsory deductible from the salary. The monthly amount collected in the recurring deposit with interest accrued their on would be credited to cash credit amount for the settlement. The rate of interest allowable to the recurring deposit amount is within the discretion of the society. Initially, by resolution No. 19 Dtd: 10..6..82, rate of interest fixed was 8% to 10%. Subsequently the rate of interest was periodically enhanced up to 15%. Later rate of interest for fixed deposit amount or loan were substantially reduced by the Registrar of Co.Op. Societies. -3- The interest charged on cash credit loan of the society was reduced to 10% by the society. High rate of interest paid by the society to the recurring deposit caused substantial loss to the society. The audit wing of Co-op. department directed the opposite party bank to reconsider the recurring deposit account, considering the huge loss of the society ,and directed the committee of the society to reduce the rate of interest paid from 13% and above to 11.5%. The proposal was unanimously accepted by the General Body . According to the opposite party the maturity value of the recurring deposit of the complainant was recalculated to Rs. 94,347/-. Opposite party contented that there is no deficiency in service on their part and they pray for dismissal of the petition with their costs. Points for determinations are: i) Whether petition is maintainable or not? ii) Whether there is deficiency in service on the part of the opposite party? iii) Relief and costs? Evidence in this case consists of affidavit filed by both parties and Ext. A1 to A6 documents on the side of the petitioner and Ext. B1 to B8 documents on the side of the opposite party. Point No. 1 Opposite party has a definite case that since petitioner is the member of the opposite party society complainant is bound to seek remedy under the Kerala Co.Op. Societies Act 1969. Moreover, the complainant is not a consumer and the -4- dispute is not a consumer dispute. In our view said contention of the opposite party is not sustainable. As per section 3 of the Consumer Protection Act. Provisions of the Consumer Protection Act are not in derogation of any other law but in addition. So, the consumer can redress his grievance either by approaching as per the remedy provided under Co-Op. Societies Act or by approaching the Consumer Forum. The other argument put forward by the learned counsel for the opposite party is that since the petitioner is a member of the society he cannot be considered as a ‘consumer’ as defined in the Consumer Protection Act. In our view said argument of the learned counsel for the opposite party is not sustainable. As a member petitioner is availing the service of the opposite party by joining the recurring deposit scheme. So, the petition is maintainable before the forum and the point No. 1 is found accordingly. Point No. 2 The crux of the case of the petitioner is that opposite party without notice unanimously reduced the promised rate of interest from 13% to 11.5 %. Opposite party admitted the reduction of interest rate. According to them recurring deposit account of the society is linked with cash credit deposit. The monthly installment of the recurring deposit is compulsory deductible from the salary. The monthly amount collected in the recurring deposit with interest accrued their on , which is the maturity value of the recurring deposit, would be credited in the cash credit account for its settlement. They further contented that due to the high rate of interest paid by the society to the recurring depositors -5- caused substantial loss to the society. Further more, considering huge loss and as per the direction of the department audit team the committee of the society proposed the reduction in the rate of interest and the proposal was unanimously accepted by the General body. Petitioner produced the information given by the public information officer of the opposite party to the petitioner as answer to the petition submitted under R.I Act said document produced is marked as Ext. A1. In Ext. A1 opposite party stated that there is 108 installments for petitioners deposit and the maturity amount of the petitioner is Rs. 1,01,967/- , interest rate is 13%. Ext. A3 is the amended byelaw of opposite party society. Section 22 C and D of the existing byelaw is amended to the effect that the recurring deposit and the group deposit and credit guarantee scheme shall be started only with the sub rules duly approved by the Joint Registrar. Opposite party has not produced any document to prove that the approval was given by the Joint Registrar. The definite case of the opposite party is that recurring deposit and the cash credit facility are direct linked. Opposite party has not produced any document to prove that the cash credit facility and recurring deposit are linked. The cash credit facility can be closed at any time but the recurring deposit cannot be closed before the maturity period. Further more the averment of the petitioner in the affidavit that the cash credit is given on security is not denied by the opposite party. Further more in the cash credit rules also it is stated that security is to be given for availing the cash credit facility. So, the case of the opposite party that recurring deposit and cash credit facility are linked is not legally -6- sustainable. The opposite party produced the audit report for the period 2003-2004, 2005-2006, 2007-2008 and same is marked as Ext. B3, B4 and B5. Audit party of the Co-Op. Department recommended for the reduction of the interest rate. Ext. B3, B4 and B5 report of the audit wing suggested that the society may rethink about the high rate of interest given to the recurring deposit. Further more opposite party has not given any substantial reason why they implemented reduction of interest rate only in 2008. Ext. A4is the list showing persons who accepted the recurring deposit amount from 1..4..2003 to 31..3..2008 at the interest rate of 13%. Opposite party has not produced any document to prove that a valid notice is given to the petitioner with regard to the reduction of interest rate . According to the opposite party since the decision was taken by the General body there is no need for any further notice. Petitioner produced the report of the 40th General Body Meeting same is marked as Ext. A5. In Ext. A5 no where in the agenda it is mentioned that the General Body will take the agenda of reduction of interest rate for the recurring deposit. So, said argument of the opposite party will not sustain. In our view act of the opposite party in unanimously, without any notice, reducing the assured interest rate is a clear deficiency in service. So, point No. 2 is found accordingly. Point No. 3 In view of the finding in point No. 1 and 2. Petition is allowed. In the result, opposite party is directed to pay the petitioner an amount of Rs. 7,620/-, that is the loss sustained to the petitioner as result of reduction of rate of interest -7- to the petitioner. Petitioner is also entitled for interest at the rate of 12% for the above said amount of Rs. 7,620/- from the date of filing of the petition till realization. Since interest is allowed no compensation is ordered. Petitioner is entitled to an amount of Rs. 2000/- as cost of the proceedings. Order shall be complied with within 1 month of the receipt of this order. Dictated by me transcribed by the Confidential Assistant corrected by me and pronounced in the Open Forum on this the 28th day of September, 2010. Sri. Santhosh Kesavanath P. President Sd/- Smt. Bindhu M. Thomas, Member Sd/- Sri. K.N Radhakrishnan, Member Sd/- APPENDIX Documents for the petitioner Ext. A1: Reply received to the petitioner under RIT Act. Ext. A2: Application of the R.D. Ext. A3: Amended byelaw Ext. A4: List of persons accepted the matured deposit from 1..4..2003 to 31..3..2008 Ext. A5: Notice of the 40th General Body meeting of the society. Ext. A6: Copy of the circular No. 31/99 issued by the Registrar of Co-Op. Societies. Documents for the Opposite parties: Ext. B1: Copy of cash credit sub rule Ext. B2: Copy of resolution Ext. A3: Audit report of 2003- 2004 Ext. A4: Audit report of 2005-2006 Ext. A5: Audit report of 2007-2008 Ext. A6: Copy of the General Body decision Dtd: 21..6..2008 Ext. A7: Copy of the agreement Ext. A8: Rate of interest. By Order,
| | [HONORABLE Bindhu M Thomas] Member[HONORABLE Santhosh Kesava Nath P] PRESIDENT[HONORABLE K.N Radhakrishnan] Member | | 
