BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 18^TH DAY OF AUGUST 2023

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the Ops;

1. Direct the Ops to refund the amount deposited under Suvarna Nidhi Scheme with accrued interest and share certificate deposit amount with declared dividend in totally amounting to Rs.3,25,800/- and grant interest @ 18% p.a., till the date of realization.
2. Also grant an award of Rs.1,00,000/- towards the hardship and mental agony undergone by the complainant in pursuing the matter.
3. For costs and grant such other reliefs as this Hon’ble Court deems fit.

2. The case set up by the complainant in brief is as under:-

The opposite party no.1 is Sree.Kanva Souharda Co-operative Credit Limited, Bengaluru(SKSCCL) registered under Karnataka Souharda Sahakari Act, 1997 and also a member of the Karnataka State Souharda Federal Co-operative Limited.   The opposite party no.2 is its Founder-President and Director, opposite party no.3 & 4 are the President and Vice President of opposite party no.1, the opposite party no.5 to 15 are the Directors of opposite party no.1 and opposite party no.16 is the Chief Executive Officer of opposite party no.1 respectively.  Further, the complainant has become the member of opposite party no.1 in the month of September 2018 and out of his savings, had deposited a sum of Rs.2,90,000/- under “Kanva Suvarna Nidhi” Scheme and also invested in shares for an amount of Rs.1,000/- with the opposite party no.1.  Further, as the complainant was in need of funds and due to financial constraints approached opposite party no.1 to withdraw the amount of Rs.3,24,800/- and the share amount of Rs.1,000/- along with the benefits such as accrued interest declared dividend and requested to refund of the deposit amount.  The opposite party no.1 to 16 had failed and neglected to return the said amount.  Hence, the complainant got issued legal notice dt.07.01.2022.  In spite of that, the opposite party did not repay the amount.  Hence, the complaint came to be filed. 

3. Even though notice been served on opposite parties, except opposite party no.1 none had contested the case.  Hence, the opposite party no.2 to 16 are placed ex-parte. 
4. It is pertinent to note here that the OP1 is represented by the competent authority and they are managing the day to day affairs of OP1. The OP1 have filed their version and they have sent the same through the registered post.
5. It is the case of the OP1 that, the OP1 invited money from public assuring excess interest shall be paid in return. Whereas the OP FE failed to repay the deposits received from the public in view of this the state government of Karnataka exercising powers u/s 3(2) of Karnataka Protection of Interest of Depositors in Financial establishment act 2004 provisionally attached the assets held by the FE.  In addition the state government appointed the MD Karnataka Public Land Corporation as the competent authority u/s 5(1) to administer the assets and filing petition u/s 5(2) of the act before the Hon’ble Special court constituted under the act and for repayment of deposits after realization of said assets attached.
6. The competent authority called the claims from the depositors of the respondent FE for a period of one month as stipulated u/s 7(2) of the act 2004 i.e., from 02.11.2022 01.12.2022. The public notice issued by the competent authority which were notified in the newspaper.  The state government vide order dated 12.10.2022 has appointed respondent 1 Additional Regional Commissioner (Admn & Development) as the competent authority u/s 5(1) of the Act 2004.
7. The 1^st respondent received the total of 38746 claims from the depositors of the respondent FE during the above stipulated period. Whereas the complainant who states to be a depositor in the respondent FE should have filed claim application along with necessary documents with respect to the deposits made by her. Instead the complainant has filed this instant petition seeking relief before this Commission.
8. It is also the contention taken by the OP1 that the state government has notified and attached the assets held by the respondent FE u/s 3(2) of the Act 2004 and also appointed the competent authority to administer the assets file petition u/s 5(2) of the act repay depositors after realization of the assets under the act. They have further stated and reproduced sec 19 of the act 2004 which reads as follows;

“19. Act to override other laws:- Save as otherwise provided in this Act, the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any custom or usage or any instrument having effect by virtue of any such law.”

9. The act 2004 has an overriding effect on all other laws and in view of the above the complainant has to be considered as a depositor u/s 2 of the Act 2004 and the complainant ought to have file claim application u/s 7(2) of the act 2004 before this competent authority during the stipulated period. Instead the complainant filed this complainant which is not tenable under law.  This commission has already passed an order in CC36/2022 Sri.Srikantaiah B.C.,-vs- KSCCL and others on 02.02.2022 and disposed of the complaint as not maintainable before this Commission and directed to return the complaint with documents to invoke the provisions of Karnataka Protection of Interest of Depositors in Financial establishment act 2004.  Hence OP prayed for dismissal of the complaint as not maintainable.
10. The complainant has filed his affidavit evidence and relies on 06 documents. OP1 has neither adduced any evidence nor submitted any arguments.
11. Heard the arguments of advocate for the complainant and also perused the written arguments filed by the complainant. 
12. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

13. Our answers to the above points are as under:

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

14. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version filed by OP1, affidavit evidence of complainant and written arguments of complainant and documents 1 to 6 filed by the complainant.

15. Inspite of service of notice OP2 to 16 remained absent. Hence OP2 to 16 are neither challenged the allegations made in the complaint and also documents and they remained unchallenged.

16. In support of the evidence, PW1 has filed affidavit and reiterated all the allegations made in the complaint. In support of her evidence she has produced EX.P1 copy of broacher and EX.P2 is the Copy of the Nidhi Certificate, EX.P3 Copy of the share certificate. EX.P4 is the copy of legal notice, Ex.P5 is the original acknowledgement and unserved covers and Ex.P6 is the copy of reply notice. 

17. It is the contention of the learned counsel for the complainant that even though the complainant had demanded for refund of the FD, the opposite party did not pay the same.

18. Even though the OP1 represented by the competent authority have filed their objections stating that this commission has no authority to grant the relief in view of the act 2004 which has an overriding effect on all other loss.  The complainant considered as a depositor u/s 2 of the act 2004 ought to have filed the claim application before the competent authority. Instead of filing the same before the competent authority the complainant has filed this complaint and hence it is not maintainable.

19. It is pertinent to note here that the OP1 has also relied on the order passed by this Commission in CC No.36/2022 dated 02.02.2022.  This Commission has disposed of the complaint as not maintainable with a direction to return the complaint with documents to invoke the Provisions of Karnataka Protection of Interest of Depositors in Financial establishment act 2004.

20. Aggrieved by the said order the complainant has preferred the appeal before the Hon’ble state Commission in A.No.909/2022. The Hon’ble State Commission has remanded the matter and allowed the appeal with a direction to adjudicate the matter on merits by giving top priority to the complainant.  The Hon’ble state Commission while disposing of the said appeal had made an observation;

As per sec 100 of the C.P. Act 2019 which clearly says that the C.P.Act 2019 is not in derogation of any other law for the time being in force basing on the said complaint filed by the complainant are well within the provisions of C.P.Act 2019 and the complaint is much maintainable before this commission.

21. In view of the above observation made by the Hon’ble State Commission it is clear that the complaint filed by the complainant is maintainable and hence the question of maintainability raised by the OP1 cannot be accepted. Except the maintainability of the complaint the OP1 has not at all denied the entire transaction took place before the complainant and OP1. Hence we feel since the opposite party did not repay the deposit and the share amount, the act of the opposite party no.1 to 16 amounts to deficiency of service. 

22. The complainant claimed a sum of Rs.3,25,800/- with interest at the rate of 18% p.a. The complainant had deposited in the form of FD Rs.2,90,000/- and it is stated in the receipts produced by the complainant. It appears that the opposite party has offered to pay double of the amount deposited in 66 months.  The complainant calculated the same and according to him, it comes a total sum of Rs.3,25,800/-.  We feel the complainant is entitled for the same.  Further, the complainant claims the rate of interest at 18% p.a., and the rate of interest claimed by the complainant is highly an exorbitant one and we feel the interest at the rate of 9% p.a., would suffice in the case.  Therefore, the complainant is entitle for refund of Rs.3,25,800/- with interest at the rate of 9% p.a. from the date of complaint till realization.  Further, the complainant has claimed a sum of Rs.1,00,000/- towards hardship and mental agony undergone.  Even though it was assured by the opposite party that the amount deposited would be doubled and paid after 66 months, the same has not been refunded by the opposite party no.1.  Thereby, we feel the complainant had suffered mental agony and hardship.  Hence, the complainant is entitle for a sum of Rs.50,000/- towards mental agony.  Further, the opposite party made the complainant to approach this commission and issued legal notice to the opposite parties through an advocate.  Hence, the complainant is entitle for litigation cost for a sum of Rs.10,000/-.  Accordingly, we answer point No.1 in affirmative and point No.2 partly in affirmative.

23. Point No.3:- In view the discussion referred above the complaint is liable to allowed in part and hence we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. Ops are directed to pay Rs.3,25,800/- with interest at 9% p.a., from the date of complaint till realization to the complainant.
3. Ops are further directed to pay compensation of Rs.50,000/- along with litigation expenses of Rs.10,000/- to the complainant.
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.3,25,800/- till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 18^TH day of AUGUST 2023)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1;

NIL