KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM. APPEAL No. 402/2009 JUDGMENT DATED: 08-04-2010 PRESENT: SHRI. M.V. VISWANATHAN : JUDICIAL MEMBER APPELLANT Sree Narayana Dharma Paripalana Yogam (S.N.D.P.Yogam), Kollam –1. rep. by its General Secretary, V.K.Natesan. (Rep. by Adv. Sri. R Bahuleyan & Sri. Narayan. R) Vs RESPONDENTS 1. Smt. Smithamol.S., Chakkanadu, Aryad South Village, Alappuzha. (Santhalayam, Avalookunnu.P.O., Alappuzha). 2. S.N.D.P.Yogam, Branch No.363, Kakkazham, Neerkunnam.P.O., T.D.M.C., Alappuzha-5. 3. Babu President, S.N.D.P. Yogam Branch No. 363, Kakkazham, Neerkunnam P.O., T.D.M.C., Alappuzha-5. 4. Bhaskaran Secretary, S.N.D.P. Yogam Branch No. 363, Kakkazham, Neerkunnam P.O., T.D.M.C., Alappuzha-5. ( R1. rep. by Adv. Sri. S.S. Kalkura & others) JUDGMENT SHRI. M.V. VISWANATHAN : JUDICIAL MEMBER The appellant was the first opposite party and respondents 1 to 4 were the complainant and opposite parties 2 to 4 respectively in CC No. 101/2007 on the file of CDRF, Alappuzha. The complaint therein was filed alleging deficiency of service on the part of the opposite parties 1 to 4 due to their failure to pay the deposited amount of Rs. 4,50,000/- with interest from September 2006 onwards. Thus, the aforesaid complaint was filed for getting the deposited amount with interest, compensation and costs. 2. The first opposite party entered appearance in the said CC No. 101/2007 and filed written version contending that there was no deficiency of service on the part of the first opposite party; that the complainant is not a consumer of the opposite parties; that the first opposite party is not a necessary party to the said proceedings; that the first opposite party has never entered into any transaction with the complainant; that the first opposite party SNDP Yogam is a company incorporated under the Indian Companies Act, 1882 with limited liability; that the first opposite party shall have Sakha and Union and that the internal management of Sakhas and Unions are vested with them. Thus, the first opposite party prayed for dismissal of the complaint with cost and compensatory cost. 3. The notices were issued to the opposite parties 2 to 4 and those notices were returned with the endorsement unclaimed. Thereby the opposite parties 2 to 4 were declared exparte. 4. Before the Forum below, the complainant was examined as PW1 and Exts. A1 and A2 documents were marked on the side of the complainant. No evidence was adduced from the side of the first opposite party. On an appreciation of the evidence on record, the Forum below passed the impugned order dated 30th October 2008 directing the opposite parties 1 to 4 to pay the principal sum together with interest capitalized to sum of Rs. 5,04,000/- together with interest at 18% per annum from the date of complaint till the date of realization and compensation of Rs. 10,000/- and cost Rs. 2,500/-. Hence the present appeal by the first opposite party therein. 5. We heard the learned Counsel for the appellant/first opposite party and the first respondent/complainant. Respondents 2 to 4 remained absent throughout this appeal proceedings. The learned Counsel for the appellant submitted his augments based on the grounds urged in the memorandum of the present appeal. He much relied on the admission made by the complainant as PW1 to the effect that the complainant has no cause of action against the first opposite party and the signature or seal of the first opposite party are not affixed on A1 and A2 Passbooks. It is further submitted that there is nothing on record to fasten liability on the appellant/first opposite party. Thus, the appellant prayed for setting aside the impugned order passed against the first opposite party SNDP Yogam. On the other hand, the learned Counsel for the first respondent/complainant supported the impugned order passed by the Forum below. The first respondent has also filed the petition to accept the regulations of the appellant/company and to mark the same as Ext.A3. He much relied on the provisions of the rules of the appellant/first opposite party SNDP Yogam and argued for the position that the appellant/first opposite party is having the control and management of respondents 2 to 4 (opposite parties 2 to 4) and that the assets of the opposite parties 2 to 4 were under the control and management of the first opposite party. Thus, the first respondent/complainant prayed for dismissal of the present appeal. 6. The points that arise for consideration are: 1. Whether the complainant in the said CC No. 101/2007 can be considered as a consumer of the opposite parties therein? 2. Whether the appellant/first opposite party was a necessary party to the complaint in CC No. 101/2007 on the file of CDRF, Alappuzha? 3. Whether the appellant/first opposite party can be made liable for the amounts deposited by the first respondent/complainant with the second respondent/second opposite party SNDP Yogam, Branch No. 363? 4. Is there any sustainable ground to interfere with the impugned order dated 30-10-2008 passed by CDRF, Alappuzha in CC No. 101/2007? 5. Whether the document produced by the first respondent/complainant at this appellate stage can be received in evidence? 7. Points 1 to 5: There is no dispute that the first respondent/complainant deposited a total of Rs. 4,50,000/- with the second opposite party SNDP Yogam Branch No. 363, Kakkazham, Neerkunnam. There is also no dispute that the respondents 3 and 4 (opposite parties 3 and 4) are the President and Secretary of the second opposite party SNDP Yogam Branch No. 363. The second opposite party is represented by its Secretary. The complainant as PW1 has also deposed about the deposit of Rs. 4,50,000/- with the opposite parties 2 to 4. It is the definite case of the complainant (first respondent) that the opposite parties 3 and 4 namely, the President and Secretary of the second opposite party SNDP Yogam Branch No. 363 approached her and canvassed deposits. The aforesaid case of the complainant has not been disputed. The evidence of PW1 to that effect stands unchallenged. Her evidence is further strengthened by A1 and A2 Pass Books issued by the second opposite party. A1 Passbook would show that the second opposite party accepted deposit of Rs. 2,00,000/- on 11-01-2005 and another sum of Rs. 50,000/- on 11-02-2005. It would also show that the second opposite party paid interest on the said deposits up to 12th September 2006. Ext A2 Passbook would show that the complainant deposited Rs. 2,00,000/- with the second opposite party on 07-10-2005 and that interest was paid on the said deposit up to 12-09-2006. It is also the case of the complainant that the opposite parties 2 to 4 agreed to pay interest at the rate of 18% per annum on the said deposit of Rs. 4,50,000/-. The amount paid by way of interest and endorsed in A1 and A2 Passbooks would also strengthen the case of the complainant regarding the assurance made by the opposite parties 2 to 4 to pay interest on the said deposits. It is also to be noted that the genuineness and correctness of A1 and A2 Passbooks are not challenged. So, the complainant has succeeded to establish her case that she effected deposit of a total of Rs. 4,50,000/- with the second opposite party SNDP Yogam Branch No. 363 and that the deposit was effected based on the assurance given by the President and Secretary of the second opposite party. 8. The case of the complainant (first respondent) is that the appellant and respondents 2 to 4 (opposite parties 1 to 4) are liable to return the deposit amount of Rs. 4,50,000/- with interest at the rate of 18% per annum from September 2006 onwards. The complainant has also claimed compensation and costs for the deficiency of service on the part of the opposite parties. It is to be noted that the respondents 2 to 4/opposite parties 2 to 4 remained absent, though notices were served on them in CC No. 101/2007. They also remained absent in this appeal. The aforesaid attitude of the respondents 2 to 4 would strengthen the case of the complainant regarding payment of a total of Rs. 4,50,000/- with opposite parties 2 to 4 with the understanding and agreement to get interest on the said amount at the rate of 18% per annum. 9. The first opposite party (appellant) alone filed written version denying the case of the complainant. It was contended by the first opposite party that the first opposite party SNDP Yogam is not a necessary party to the said proceedings. But, the Forum below was not pleased to accept the said case of the first opposite party and thereby passed the impugned order making all the opposite parties including the first opposite party liable to pay the deposit amount of Rs. 4,50,000/- with interest, costs and compensation. 10. The first respondent/complainant produced copy of the Rules of the SNDP Yogam. It is produced with a petition to receive the same in this appeal. Notice was also given to the appellant in the said petition for acceptance of the said document in evidence. The Counsel for the appellant submitted that the appellant has no objection in receiving the said document in evidence. In other words, the appellant admitted the genuineness and correctness of copy of Rules of SNDP Yogam produced by the first respondent. It is to be noted that the aforesaid Rules of the first opposite party SNDP Yogam was not produced before the Forum below. Considering the nature of the contentions adopted by the appellant/first opposite party, the Rules governing the first opposite party SNDP Yogam are necessary for a just and proper disposal of this appeal. So, this Commission have no hesitation in allowing the said petition to receive the said document namely Rules of the SNDP Yogam in evidence. 11. Copy of the Rules of the SNDP Yogam produced by the first respondent/complainant would take in the licence issued u/s 26 of Regulation 1 of 1063, the certificate of incorporation of Sree Narayana Dharma Paripalana Yogam No. 2 of 1078 with the Memorandum of association of the SNDP Yogam and also the Articles of association of SNDP Yogam (Rules of the SNDP Yogam). A reading of the entire Rules of the SNDP Yogam would make it clear that the SNDP Yogam is constituted by the members of the community by name 8VBM} \/TEM} $]KEM} EUDcEM} $]KEETfU*P and it is having a head office and its own emblem and identity and the same is a limited company incorporated under the provisions of the Companies Act. The Articles of association would also show that the SNDP Yogam is governed or managed by Board of Directors and the said Board of Directors will elect a Council consisting of members elected from the Directors Board and that the SNDP Yogam is having Branches (FT+T\BT,^) Unions and that the Board of Directors would elect President, Vice-president, Devaswam Secretary, General Secretary for its management. It would further show that the members from the branches and unions would be elected for their inclusion in the Board of Directors. Thus, the first opposite party SNDP Yogam is constituted and governed by the members of the Yogam including members of the Branches and Unions. 12. The Articles of association of the first opposite party SNDP Yogam would also make it clear that the Branches and Unions are controlled and managed by the first opposite party and the said Branches and Unions and its assets are under the direct control and management of the first opposite party SNDP Yogam. It may be correct to say that the Branches and Unions have been given some freedom with respect to the internal management of the said Branches and Unions, but the ultimate control over those Branches and Unions and their assets is vested with the SNDP Yogam. The Article 2(g) and (h) describes the Branch (sakhayogam) and Union. Article 12 deals with the constitution of such Branches and Unions. It is stated in article 12 of the Articles of association that the Yogam will be having Branches and Unions as specified in the Sub Rules framed under Article 12. The aforesaid sub rules of Article 12 would make it abundantly clear that Branches are being constituted by carving out wards and that the Unions are constituted from Taluks. Sub rule 5 of Article 12 would show the SNDP Yogam’s power to control and manage the Branches and Unions. It reads as follows; “"DcT BX7UB<W*JW^ FT+T\BT,hJW^ !EBW[3 AWKWEN Ha9T=<hJW^ HZfWdJW^ "Ha& "N& 5U& =U \BT,fU[NL *VKUDW^ <UB`x7fUDWAT*WkW’’. Sub rule 6 would give freedom to the said Branches and Unions in their internal management. Sub rule 7 would show that the direct supervision of one Branch could be brought under one Union at the instance of the Council of the SNDP Yogam. Sub rule 9 stipulates that the rules for management of the institutions under the Branches and Unions will be constituted by the Board of Directors of the first opposite party SNDP Yogam. There is also stipulation to get all the Branches and Unions registered with the SNDP Yogam and to get the certificate of registration from the SNDP Yogam. There is also stipulation for payment of registration fees in getting the registration and also for revival of those registrations. Sub rule 17 empowers the General Secretary of the SNDP Yogam to make enquiry about the Branches and Unions for sanctioning registration. Sub Rules 18, 19 and 20 specify the methods for keeping records by these Branches and Unions and their institutions. Sub Rule 21 and 22 would show that in the event of the Branches or Unions ceasing to functioning, their assets will be merged with the SNDP Yogam and the grievance of any party regarding the functioning of the Branches and Unions will be decided by the Council of the SNDP Yogam and the said decision will be final. It is true that sub Rule 9 of article 12 has given authority for the institutions under these Branches and Unions to formulate rules for their internal management; but those rules can be framed subject to the approval of the SNDP Yogam. Thus, the aforesaid sub rules framed under article 12 would make it clear that the Branches and Unions are controlled and managed by the SNDP Yogam and those Branches and Unions can function only under the supervision and direct control of the SNDP Yogam and that the said Branches and Unions have no independent existence; but they are directly under the control of SNDP Yogam. 13. Article 56 of the Articles of association would show that the source of income for the SNDP Yogam. It is also by contributions from Branches and Unions. Article 61 would show that the accounts of the Unions and Branches are annually audited by the SNDP Yogam. Article 63 would show that the SNDP Yogam can sue and be sued by the General Secretary of the Yogam. Article 70 empowers the Council of the Yogam to frame rules and standing orders for the Branches and Unions. Article 71 stipulates appointment of an arbitrator by the Board of Directors or the Council of the SNDP Yogam to settle the disputes among the members of the Branches, between the Branches etc. 14. Article 43 would show that the General Body Meeting of the SNDP Yogam will be attended by the members nominated by the Branches and Unions. Thus, the articles of association of the SNDP Yogam would make it crystal clear that the Unions and Branches are the integral parts of the SNDP Yogam and those Branches and Unions are under the direct control and management of SNDP Yogam and the assets of the said Branches and Unions are also under the control of the first opposite party. There are provisions in the articles of association empowering the SNDP Yogam to proceed against Branches and Unions, which are mismanaged or there are mal-administration of those branches and unions. There is also authority for the SNDP Yogam to suspend any such Branches or Unions, which are mismanaged by its office bearers. There is also provision to safeguard the interest of the public and the members of the Branches and Unions from mismanagement of such Branches and Unions. Thus, in all respects it can safely be held that the first opposite party SNDP Yogam is answerable and liable for the mismanagement of the Branches and unions by its office bearers like President, Secretary etc. So, the inaction on the part of the first opposite party SNDP Yogam to control and manage the second opposite party Branch No. 363 functioning under the first opposite party SNDP Yogam would amount to negligence on the part of the first opposite party. Had there been proper control and management of the second opposite party branch there would not have any such failure on the part of the opposite parties to return the deposited amounts with the agreed interest. So the first opposite party SNDP Yogam is a necessary party to the proceedings in CC 101/2007 on the file of CDRF, Alappuzha. The Forum below is also justified in making the first opposite party also liable to pay the fixed deposit amounts due to the complainant with interest thereon. 15. The Forum below has also awarded a sum of Rs. 10,000/- by way of compensation for the mental agony, loss and inconvenience suffered by the complainant. It is to be noted that the complainant has been awarded the amount deposited by her with interest at the rate of 18% per annum. Thus, the complainant is compensated by awarding refund of the deposited amount Rs. 4,50,000/- with the interest capitalized with a further interest at the rate of 18% from the date of the complaint till realization. In such a circumstance, the further compensation of Rs. 10,000/- can be treated as unnecessary and unwarranted. Hence the compensation of Rs. 10,000/- awarded by the Forum below is deleted. But, the cost of Rs. 2,500/- ordered by the Forum below is upheld. These pointes are answered accordingly. In the result, the appeal is disposed of with the aforesaid modification to the impugned order dated 30-10-2008 in CC. No. 101/2007. Thereby the appellant and respondents 2 to 4 (opposite parties 1 to 4 in CC No. 101/2007) are directed to pay a sum of Rs. 5,04,000/- with interest at the rate of 18% per annum from the date of the complaint in CC No. 101/2007 till the date of realization with costs of Rs. 2,500/-. The compensation of Rs.10,000/- ordered by the Forum below is deleted. The appellant and respondents 2 to 4 are made jointly and severally liable to pay the decreed amount due to the 1st respondent/complainant. As far as the present appeal is concerned, there will be no order as to costs. M.V. VISWANATHAN : JUDICIAL MEMBER Sr. | 
