BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION

AT HYDERABAD

F.A.  1683/2007  against C.C. 52/2006, Dist. Forum, Karimnagar.          

Between:

Katipally Narasimha Reddy

S/o. Malla Reddy

Age: 50 years, Managing Partner

M/s.  Sri Raja Rajeswara Hire

Purchase Finance, Jagitial

R/o. 1-4-128, Aravindnagar,

Jagtial, Karimnagar Dist. .                           ***                        Appellant/

                                                                                                O.P. No. 2.  

                                                                   And

1)  Smt. Guggilla Laxmi

W/o. Guggilla Thirupathi

Age: 30 years, Household

Ogulapoor, Mallial

Karimnagar.                                                ***                         Respondent/

                                                                                                Complainant

2)  M/s.  Sri Raja Rajeswara Hire

Purchase Finance, Jagitial

Karimnagar Dist – 505 327.

3)  Baddam Nageswar Reddy

S/o. Raja Reddy, Age: 38 years

Managing Partner,

M/s.  Sri Raja Rajeswara Hire

Purchase Finance, Jagitial

R/o. A-24, Dharoor Camp

Jagitial, Karimnagar Dist.

4)  Akkinpally Muttaiah,

S/o. Rajaiah, Age: 40 years

Managing Partner

M/s.  Sri Raja Rajeswara Hire

Purchase Finance, Jagitial

R/o. Balaji Engineering Shop

Opp. L.G. Ram Lodge

Jagitial, Karimnagar Dist.                           ***                         Respondents/

                                                                                                Ops 1, 3 & 4.

Counsel for the Appellants:                         M/s. V. Gourisankara Rao.  

Counsel for the Resps:                                M/s.  P. Rajasripathi Rao.

CORAM:

                HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT     

&

                                 SMT. M. SHREESHA, MEMBER

TUESDAY, THIS THE TWENTIETH DAY OF APRIL  TWO THOUSAND TEN

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

                                                          *****

1)                Opposite Party  No. 2 preferred this appeal  against the  order of the Dist. Forum  directing  him  to pay Rs. 4 lakhs  covered under the Fixed Deposit Receipt (FDR)  together with interest and costs.

2)                The case of the complainants  in  brief is that  appellant  along with  R2 to R4  started  finance business under the name and style of M/s. Raja Rajeshwara  Hire Purchase Finance at Jagitial inviting the public to invest their amounts in fixed deposits  promising to pay  double the value after maturity period of six years.    On that she invested  Rs. 1,85,000/- under various  deposits wherein she was entitled to Rs. 3,70,000/-.   The particulars of the deposits made by the complainant  are  as follows :

She learnt that the appellant along with other  partners had closed the  finance business  without  paying the maturity value in order to cause loss to the depositors.    When her  repeated demanded did not yield  any result, she got issued a lawyer notice  on   28.2.2006  calling upon  the appellant and others to refund the amount, however, they were returned un-served.   As they did not pay the amount  she filed the complaint claiming the amount covered under the  FDRs  together with compensation and costs. 

3)                The appellant and other  partners did not choose to contest the matter and they were set-exparte. 

4)                The  complainant in proof of her case filed her affidavit evidence and got Exs. A1 to  A28 marked. 

5)                The Dist. Forum after considering the material on record opined that  appellant along with other partners  having established the finance business  and collected Rs. 1,85,000/-  from the complainant evidenced under  Ex. A1 to A18  original FDRs ought to have paid the amounts.  Holding that     despite notice demanding  the amount they did not pay directed them to pay the maturity value covered under the FDRs  with interest @ 9% p.a., from the date of complaint till the date of realization together with costs of Rs. 1,000/-.

6)                Aggrieved by the said order, the appellant preferred the appeal contending that the Dist. Forum did not appreciate the facts or law in correct perspective.    It ought to have seen that the alleged FDRs  were matured on  27.12.2002, 29.12.2002, 28.1.2003   and the complaint was filed  on  8.3.2006  beyond limitation.    She did not even file an application to condone delay u/s 24A of the Consumer Protection Act.    There was material alternation in the  FDRs.   He did not give any receipt.    No legal notice was served on him, and therefore  prayed that the appeal be allowed, consequently dismiss the complaint. 

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

8)                The complaint evidently deposited Rs. 1,85,000/-  on various dates mentioned above with opposite party No. 1 M/s.  Sri Raja Rajeswara Hire Purchase Finance, Jagitial  a non-banking financial institution  wherein they had agreed to pay  Rs. 3,70,000/- after expiry of the  maturity date which we have earlier mentioned evidenced under Exs. A1 to A18 FDRs.     The appellant   as well as other partners in fact engaged  an advocate, however, they did not choose to file  their written version nor contested the matter.   No doubt  the appellant filed his affidavit evidence  taking the very same pleas that were raised in the grounds of appeal.  He did not  controvert the evidence of complainant  by filing  documents nor  substantiated the  pleas  raised by him. 

9)                Ex. A28 is the partnership deed wherein  the appellant  was shown as partner at Sl. No. 1, while the  opposite parties 3 & 4 were shown as partners at Sl. Nos.  14 & 8 respectively.    This fact was not   disputed by the appellant.    Therefore it is futile to contend that he has nothing to do with the  firm or  FDRs issued.    Clause-6 of the partnership deed mentions   that   Sri K. Narasimha Reddy (appellant)  Sri B. Nageswara  Reddy (Op3) and Sri A. Muthaiah (OP4)  are  Managing Partners of the  partnership firm.      His signature finds place  on  Exs. A1 to A9 FDRs  while Exs. A10 to A18  were signed by authorized signatory  besides  Op3 as Managing Partner.   The appellant contends that there was an interpolation in one of the receipts.  In that case he could have examined   Sri B. Nageswara  Reddy or filed his affidavit evidence  to controvert the said evidence.    Except taking this plea,   it was not substantiated.    Therefore, we are of the opinion  having collected the amount  and issued the FDRs  they are bound to repay the same. 

10)              The complainant had issued a registered lawyer notice  on  28.2.2006  under Ex. A27 demanding  the amount.   The said covers  were returned  with endorsement  “intimation given, party unclaimed’.   When the party refused to receive notices  it must be held that  they were aware  of the demand made by the complainant.   An adverse inference can be drawn against their version.  They are afraid if they received it they had to give a reply – by spelling out some defence. 

11)               It is admitted by the opposite parties that first opposite party is engaged in  financial transaction of lending money to the public and receiving deposits  on the strength of documents.  Accordingly it is non-banking financing institution coming within the purview of  the Reserve Bank of India Act, 1934.  Section 44-1(b) of R.B.I. Act defines deposit as follows :          

“Deposit’ includes and shall be deemed always to have included any receipt of money by way of deposit of loan or in any other form, but does not include……”

12)               The period of limitation will start  in the case of deposits  under Article 22 of Limitation  Act, only from the date of demand.   The opposite parties have not established that 3 years have elapsed after demand is made.   Therefore no question of limitation arises. 

13)              In regard to the FDRs  the cause of action arises from the date of demand viz., 28.2.2006.  Having waited for  reasonable period after maturity date  and the demand was not met  the complaint was filed on 8.3.2006 within one month  form the date of demand  and therefore it cannot be said that  it was barred by limitation.   The question of filing  an application u/s 24A of the Consumer Protection Act will not arise.    The appellant Managing Partner  having collected the amount, intends  to deny the  lawful amount due.    The contentions raised by the appellant in this regard are devoid  of any merits. 

14)              In the result the appeal is dismissed with costs computed at Rs. 5,000/-.    Time for compliance four weeks.

  1)    _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER

          Dt.  20.  04. 2010.         

*pnr

“UP LOAD – O.K.”