BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD.
OF 2007 AGAINST C.D.NO.10 OF 2000 DISTRICT CONSUMER FORUM SRIKAKULAM
Between
1. The General Manager
District Co-operative Central Bank Ltd.,
G.T.Road, Srikakulam
2. The Branch Manager,
Co-operative Central Bank
Palasa, Srikakulam District
Appellants/opposite parties no.1 and 2
A N D
- Koyyi Phalguna Rao S/o Rama Rao
Cultivation Loddabhadra Village
Palasa Mandal, Srikakulam District - Koyyi Narayanamma W/o Rama Rao, Cultivation
Loddabhadra Village, Palasa Mandal
Srikakulam District - Vankala Rajanna W/o Seemayya,
Cultivation, Loddabhadra Village
Palasa Mandal, Srikakulam District - Kota Venkata Rao S/o Jagganna
Cultivation, Loddabhadra Village
Palasa Mandal, Srikakulam District - Sanapala Polayya S/o Thavudu
Cultivation, Jagannadhapuram Village
Palasa Mandal, Srikakulam District - Kaviti Chalapathirao S/o Simhadri,
Cultivation, Jagannadhapuram Village
Palasa Mandal, Srikakulam District - Gorle Chakrapani S/o Sanyasi
Cultivation, Kottavuru, Palasa Mandal
Srikakulam District - Bammidi Bhaskara Rao S/o Venkayya,
Cultivation, Kottavuru, Palasa Mandal
Srikakulam District
Respondents/complainants
- The Secretary
Primary Agriculture Co-operative Society
Palasa, Srikakulam District
Respondent/opposite party no.3
Counsel for the appellants Sri Koka Raghava Rao
Counsel for the respondents No.2 to 8 Sri Aravala Rama Rao
F.A.No.1092 OF 2007 AGAINST C.D.NO.11 OF 2000
1. The General Manager
District Co-operative Central Bank Ltd.,
G.T.Road, Srikakulam
2. The Branch Manager,
Co-operative Central Bank
Palasa, Srikakulam District
Appellants/opposite parties no.1 and 2
A N D
- Bakala Jagga Rao S/o Narayana
Cultivation, Nemali Village, Palasa Mandal
Srikakulam District - Balaka Vajjamma W/o Narayana,
Cultivation, Nemali Village, Palasa Mandal
Srikakulam District - Balaka Prasada Rao S/o Jaggarao,
Cultivation, Nemali Village, Palasa Mandal
Srikakulam District - Chinthada Lokhanandham S/o Appanna
Cultivation, Sunnada Village, Palasa Mandal
Srikakulam District - Chinthada Vasudeva Rao S/o Lakhanadham
Cultivation, Sunnada Village, Palasa Mandal
Srikakulam District - Kinthali Sarada W/o Sivayya
Cultivation, Kosangipuram Village
Palasa Mandal, Srikakulam District - Kinthali Chittamma W/o Appalanaidu
Cultiviation, Kosangipuram Village,
Palasa Mandal, Srikakulam District - Kinthali Sivayya S/o Appalanaidu
Cultivation, Kosangipuram Village
Palasa Mandal, Srikakulam District - Dikkala Balakrishna S/o Ramayya,
Cultivation, Jaya Ramachandrapuram Village
Palasa Mandal, Srikakulam District
10. Sorra Kedramma W/o Gangayya
Cultivation, Kobbarivuru Village
Palasa Mandal Srikakulam District
Respondents/complainants
11. The Secretary
Primary Agricultural Co.op Society
Palasa, Srikakulam
Respondent/opposite party no.3
Counsel for the appellants Sri Koka Raghava Rao
Counsel for the respondents No.1, 3 to 6
8 and 9 Sri Aravala Rama Rao
F.A.No.1093 OF 2007 AGAINST C.D.NO.12 OF 2000
1. The General Manager
District Co-operative Central Bank Ltd.,
G.T.Road, Srikakulam
2. The Branch Manager,
Co-operative Central Bank
Palasa, Srikakulam District
Appellants/opposite parties no.1 and 2
A N D
- Teppala Krishnamma S/o Appanna
Cultivation, Kaijola Village, Palasa
Mandal, Srikakulam District - Battini Chinna Rao S/o Narasayya,
Cultivation, Kaijola Village, Palasa
Mandal, Srikakulam District - Battini Bharati W/o Appalaswamy
Cultivation, Kaijola Village, Palasa Mandal
Srikakulam District - Bongi Kamesu S/o Chinnavadu
Cultivation, Jayaramachandrapuram Village
Palasa Mandal, Srikakulam District - Nitcherla Janakee Rao S/o Jangalu,
Cultivation, Palasa Village & Mandal
Srikakulam District - Dasari Vasudevarao S/o Boddu
Cultivation, Palasa Village & Mandal
Srikakulam District - Ippili Malleswararao S/o Appanna
Cultivation, Palasa Village & Mandal
Srikakulam District - Bammidi Jagannaikulu S/o Abbai
Kottavuru Village, Palasa Mandal
Srikakulam District - Gorle Janardhana S/o Sanyasi
Cultivation Kottavuru Village
Palasa Mandal, Srikakulam District
Respondents/complainants
10. The Secretary
Primary Agricultural Co-operative Society
Palasa, Srikakulam District
Respondent/opposite party no.3
Counsel for the appellants Sri Koka Raghava Rao
Counsel for the respondents 1 to 7 & 9 Sri Aravala Rama Rao
F.A.No.1094 OF 2007 AGAINST C.D.NO.13 OF 2000
1. The General Manager
District Co-operative Central Bank Ltd.,
G.T.Road, Srikakulam
2. The Branch Manager,
Co-operative Central Bank
Palasa, Srikakulam District
Appellants/opposite parties no.1 and 2
A N D
- Dumpala Vara Prasada Rao S/o Jagannadharao
Cultivation, Kosangipuram Village, Palasa Mandal
Srikakulam District - Jammana Thrinadhu S/o Ramayya
Cultivation, Loddabhadra Village
Palasa Mandal, Srikakulam District - Adabala Baburao S/o Rama Rao
Cultivation, Loddabhadra Village
Palasa Mandal, Srikakulam District - Jalasuthram Suryanarayana S/o Ramana
Cultivation, Jagannadhapuram Village
Palasa Mandal, Srikakulam District - Hanumanthu Lakshminarayana S/o Karayya
Cultivation, Jagannadhapuram Village
Palasa Mandal, Srikakulam District - Ratti Balaram S/o Krishnamurthy
Cultivation, Palasa Mandal
Srikakulam District - Teppala Thatharao S/o Dandasi
Cultivation, Chinna Leelavathi Village
Palasa Mandal, Srikakulam District - Ronanki Ramanarao S/o Dandasi
Cultivation, Kasibugga Village
Palasa Mandal, Srikakulam District
Respondents/complainants - The Secretary
Primary Agricultural Cooperative Society
Palasa, Srikakulam.
Respondent/opposite party no.3
Counsel for the appellants Sri Koka Raghava Rao
Counsel for the respondents 1 to 4 & 9
6 to 8 Sri Aravala Rama Rao
QUORUM: SRI SYED ABDHULLAH, HON’BLE MEMBER
&
SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER
WEDNESDAY THE TWELFTH DAY OF MAY
TWO THOUSAND TEN
Oral Order ( As per R.Lakshminarsimha Rao, Member)
***
The opposite parties no.1 and 2 are the appellants in all the four appeals. As the facts and circumstances which are the genesis of the appeals are similar and identical in all aspects, we propose to dispose of the appeals by the common order.
F.A.No.1091 of 2007 is taken as the lead case.
The facts of the case as narrated by the complainants are that the opposite parties no.2 and 3 had sanctioned crop loan varying from Rs.3,000/- to Rs.10,000/- to the complainants under their respective loan account numbers and collected crop insurance premium ranging from Rs.30/- to Rs.100/- proportionate to the loan amount sanctioned to the complainants no.1 to 9. The insurance coverage was provided for the risk on the crops for drought and floods. The State government of A.P. declared Loddabhadra Village, Palasa Mandal Srikakulam District as drought effected area on 27.11.1997. The General Insurance Corporation assessed the loss of the crop at 78.47% and released the amount to the opposite parties to be paid to the insured. The General Insurance Corporation paid the sum assured of Rs.1,18,101.35 to 29 loanees and Rs.90,243.81 to the other 25 loanees who are the residents of Palasa Mandal. The complainants got issued notice dated 4.8.1999 with a request to pay the sum assured. There was no reply from the opposite parties. Hence, the complainants approached the District Forum by filing the complaint.
The opposite party no.3 remained exparte. The opposite parties no.1 and 2 had resisted the claim.
It was contended on behalf of the opposite party no.1 that the first opposite party had not received any proposal from the second and third opposite parties to forward them to the General Insurance Corporation Hyderabad. The usual practice is that the third opposite party will collect @ 1% from the loanees and remit the amount with the second opposite party along with the proposals for forwarding the same to the opposite party no.1 who in turn will send the proposal to the General Insurance Corporation of India. The complainants had sent registered legal notice on 4.9.1999 which was received by the opposite party no.1 on 12.9.1999. The notice was sent long after the due date for repayment of loan i.., 15.3.1998. As such no action could be taken due to delayed information from the complainant. The complaint is not maintainable as it is not filed by each loanee. The opposite partyno.1 is not a necessary party to the proceedings. No cause of action arose for the complainants to file the complaint against the opposite party no.1.
The opposite party no.2 contended that they had not received any proposal from the third opposite party. The insurance premium was paid by the complainant to the opposite partyno.3 whose duty it was to forward the same to the second opposite party. Thus the opposite party no.3 is not responsible to pay any amount to the complainants. The amounts which were paid by the complainants were later refunded by transfer to the share capital account as per the request of the opposite party no.3. The complaint is not maintainable. The opposite partyno.1 is not a necessary party to the proceedings. No cause of action arose for the complainants to file the complaint against the opposite party no.1.
The complainant no.2 has filed his affidavit in support of the claim of the complainants. On behalf of the complainants Exs.A1 to A6.
On behalf of the opposite parties no.1 and 2, D.Venkataramayya, the General Manager and the Branch Manager, Hanumanthu Rama Rao have filed their respective affidavits but no documents.
The report dated 12.10.1999 submitted by the AGM to the opposite party no.1 was marked as Ex.C1. The letter dated 3.11.1998 submitted by the DGM to the opposite party no.2 is exhibited Ex.C2. The true copy of memo dated 16.2.2000 issued by the opposite party no.1 is marked as Ex.C3.
The District Forum has allowed the complaint against the opposite parties no.1 to 3 by awarding adjustment of 78% of the loan amount along with interest @ 12% per annum thereon besides granting Rs.2,700/- towards compensation and Rs.1,000/- towards costs.
Feeling aggrieved by the order of the District Forum, the opposite parties no.1 nad 2 have filed the appeal contending that the complainants had no dealing with the opposite parties no.1 and 2. The complaint was lacking in material particulars relating to the date of sanction of crop loan, receipt of the loan amount by the complainant and particulars of the payment of premium as also the particulars of the party who had received the premium. There was no material to show that during the relevant year the crop loss estimated at 78.47%. Ex.A1 containing 10 receipts is only a Xerox copy and there is no proof of its genuineness. The admissibility of the documents filed by the complainant is not established. The claim is not maintainable under the provisions of Sec.12 of the C.P.Act. The amount of Rs.2,400/- granted towards compensation is baseless. There was no service established to be rendered by the opposite parties no.1 and 2 to the complainant. The complaint is not maintainable for misjoinder of the opposite party no.1 and non-joinder of the General Insurance Corporation. The marking of documents Exs.A1 to A6 and C1 to C3 on the basis of the affidavits of the complainants no.1 and 2 is erroneous. The complainants no.1 and 2 were not made available for cross examination despite the request of the Advocate for the opposite parties no.1 and 2.
The points for consideration are:
1) Whether the complainants are consumers within the meaning of Sec.2(1)(d) of C.P.Act?
2) Whether there was any deficiency in service on the part of the opposite parties?
3) Whether the complaint is bad for non-joinder of the General Insurance Corporation?
4) To what relief?
POINT NO.1 The opposite parties no.1 and 2 for the first time have raised the objection as to the maintainability of the complaint at the stage of the appeal which in fact cannot be entertained in the absence of any such objection thereto made in the complaint before the Dsitrict forum. The complainants no.1 to 9 are the members of opposite party no.3 society which in turn is the member of the opposite party no.2 bank and opposite partyno.2 is the branch office of the opposite party no.1. The opposite parties no.1 to 3 have charged the complainant for the service rendered such as lending of the loan, collection of insurance premium etc. As such the complainants are the consumers of the opposite parties no.1 to 3 as defined in Sec.2(1)(d) R/w Sec.2(1)(o) of the C.P.Act.
POINT NO.2 The complainants no.1 to 9 are the members of the opposite party no.3 society. The opposite partyno.1 had sanctioned loan to the complainants to be disbursed through the opposite party no.3. From the loan amounts sanctioned and paid to the complainants, the opposite partyno.3 deducted a sum of Rs.100/-, Rs.75/-, Rs.71/-, Rs.60/-, Rs.55/-, Rs.37/- and Rs.30/- @ 1% of the loan amounts towards the crop insurance premium to be remitted to the General Insurance Corporation of India Ltd., Hyderabad. The insurance premium was collected on 2.9.1997 while disbursing the loan amount by the opposite party no.3 to the complainants. The case of the complainants is that their village was covered by the notification issued by the State Government of A.P. on 2 7.11.1997 declaring it as drought effected area. The bunch of receipts 10 in number issued by the opposite party no.3 in favour of complainants no.1 o 9 establish the collection of premium by the opposite party no.3. The notification published in the Gazettee on 27.11.1997 indicates that the District Collector Srikakulam had notified 79 villages in Palasa Mandal as effected by the drought. The village Loddabhadra in Palasa Mandal is mentioned at Sl.No.13 of page 7 of the Gazette. Therefore, there cannot be any dispute insofar as the collection of insurance premium by the opposite partyno.3 and drought prevailing during the relevant period in Loddabhadra village. Consequently, the fact of loss of crop as contended by the complainants is held proved in the light of the notification issued by the District Collector, Srikakulam and publishing in Gazette concerned.
Admittedly, the opposite party no.3 had collected the amount towards the insurance premium from the complainants. The opposite parties no.1 and 2 have contended that they did not receive the premium collected by the opposite party no.3. As such, an attempt is made to disown the liability of the consequences of the act of the opposite party no.3 which was done under employment and as agent of the opposite parties no.1 and 2. The opposite parties no.1 and 2 being the principal of the opposite party no.3 cannot shirk the burden on to the opposite party no.3 to face the consequences of non-remittance of the insurance premium to the General Insurance Corporation of India. The collecting of premia from the complainants and keeping it with the opposite party no.3 by frustrating the very purpose of the collection of the amount leading to rejection of the same by the General Insurance Corporation of India constitutes deficiency in service on the part of the opposite parties no.1 to 3.
The learned counsel for the opposite parties no.1 and 2 has contended that the complaint is lacking material particulars in regard to the date of sanction of the loan and payment of the insurance premium etc. The District forum has summoned the documents, Exs.C1 to C3, the AGM of the Dist. Cooperative Central Bank Limited, Srikakulam, has submitted his report Ex.C1 to the opposite party no.1 stating that the third opposite party failed to submit two comprehensive crop insurance proposals in time to the opposite party no.2 for the purpose of obtaining the insurance policy. The two proposals at a later point of time was submitted to the opposite party no.2 and in turn the opposite party no.2 recommended on 7.7.1998 to the General Insurance Corporation of India with a request to treat the matter as a special case. In the third paragraph of the report it is mentioned as follows:
The Palasa Branch disbursed 43 loans under Khariff 96-97 to the 8PACS in their jurisdiction to a tune of Rs.52,94,050/-. Out of 43 proposals two comprehensive crop insurance proposals of Palasa PACS failed to submit to the C.O. within the time limit to furnish the same to GIC of India along with requisite crop insurance premium amount. The Branch Manager and the Accountant failed to locate the missing till the officials visited and warned for the lapses. The General Manager, DCC Bank in his memo dated 4.7.1998 fixed the responsibility to Sri N.kameswara Rao, Manager I/C of Palasa Branch for the lapse.
The AGM in his report has stated that the General Insurance Corporation of India expressed its inability to consider the two proposals submitted on 7.7.1998 in view of the closure of stipulated cut off date for accepting the premium for the khariff season was 30.11.1997. In the light of the report submitted by the AGM to the opposite party no.1, the contention that the complaint sans loan amount particulars and premium payment details is devoid of any force.
It is contended on behalf of the opposite parties no.1 and 2 that there was no material to show that during the relevant period that crop loss was estimated at 78.47%. We find an answer to this query in the audit report wherein a specific mentioned has been made in the 11th paragraph at page no.2 which reads as under:
I submit that on 2.7.1997 and amount of Rs.1,51,100/- has been disbursed to 22 members of the society as S.T.Loans. The Secretary collected 1% from the loanees towards crop insurance and the Secretary remitted the same the amount of rs.1,501/- in the CCB branch Palasa towards crop insurance but the bank authorities failed to send the crop insurance amount of Rs.1,501/- to the central office. As a result all 22 members denied the benefit of getting 78% crop insurance sanctioned during the year 1996-97. This is highly irregular on the part of the Bank Management and action is to be taken against the responsible(list of loanees is enclosed herewith for favour of information and kind perusal).
I submit that on 2.8.1997 an amount of Rs.1,54,000/- has been disbursed to 29 membes of the society as S.T. Loans. The Secretary collected 1% from the loanees towards crop insurance and the amount of Rs.1,540/- collected from loanees towards crop insurance did not remit in the CCB Branch Palasa, by the Secretary Insurance did not, but he showed the amount of Rs.1540/- in cash book as remitted without actually remitted in the CCB Branch Palasa. As a result all the 29 members of the society who got loans on 2.8.1997 denied the benefit of getting 78% crop insurance sanctioned during the year 1996-1997. This is a serious irregularity on the part of the former Secretary,N.Chandrasekhar Rao and action is to be taken against him, besides doing justice to the members of the society who denied crop insurance because of bank authorities in 2-7-97 case and the former secretary in second date 2-8-97. A list of 29 loanees is enclosed herewith for favour of information and kind perusal.
The auditor had specifically mentioned in his report the receipt of premium either by the opposite party no.3 or by the opposite party no.2 from the opposite party no.1 and the crop loss at 78% during the year 1996-1997. There is no denial of the fact that the opposite party no.1 to whom the audit report was submitted has not accepted the report.
The learned counsel for the appellants submitted that the Xerox copies of the receipts were marked as Ex.A1 on the basis of the affidavit of the complainants no.1 and 2 and as such the receipts are not admissible in evidence. Interestingly, the objection as to the admissibility of the documents Ex.A1 as also the exhibits marked as Exs.C1 to C3 has been raised for the first time in this appeal. Even as per the procedure contemplated in regard to the marking of the documents, the party complaining must take the objection at the time of marking the documents. The opposite parties no.1 and 2 had at no point of time denied the genuineness of the documents as also they had refrained from raising any objection at the time of marking them as exhibits before the District Forum. The documents have been marked as Exs.A1 to A6 on the basis of the affidavit of the complainants. Section 13(4) (iii) of the C.P. Act empowers the District Forum to receive evidence on affidavits. The procedure of technicalities is dispensed with while the consumer forum trying a dispute before it. The opposite parties no.1 and 2 have not filed any documents nor as aforesaid had taken any objection at the earliest point of time when the documents were marked before the District Forum. The learned counsel for the opposite parties no.1 and 2 cannot question the admissibility of the documents for the first time in the appeal before this commission.
POINT NO.3 The contention of the opposite parties no.1 and 2 that the complaint is bad for misjoinder of the opposite party no.1 as also for non-joinder of the General Insurance Corporation of India holds no water in the light of the documents particularly, the auditor’s report and the letters submitted by DGM to the opposite party no.1. The opposite party no.1 had issued Ex.C3 on 16.2.2000 to N.Kameswara Rao and V.Nagaraju as also D.Krishna Rao seeking explanation why disciplinary action should not be initiated against them for the lapse on their part in submitting the proposals within the stipulated time. The opposite party no.1 is the head office of the opposite party no.2 and the opposite parties no.1 and 2 are at the helm of the affairs of the opposite party no.3. As such the question of misjoinder of opposite partyno.1 to the proceedings does not arise.
Insofar as the non-joinder of the General Insurance Corporation of India is concerned, the General Insurance Corporation had issued, as seen from Ex.C1 report submitted by the AGM to the opposite partyno.1 41 proposals were submitted to the GIC along with a requisite crop premium amount. However two comprehensive insurance proposals had not been submitted which in fact was sent on 7.7.1998 with a request to treat these proposals as a special case. The GIC of India had rejected the proposal as the opposite party no.2 had submitted them after the due date i.e., 30.11.1997. the opposite parties no.1 and 2 have been making attempt to find fault with the General Insurance Corporation of India for the lapse committed by the opposite parties no.2 and 3 in sending the proposals along with the requisite premium within the stipulated date. The GIC has rightly refused to receive the proposals and issued the insurance policies. In the absence of any contract between the GIC and the opposite parties, we are unable to understand how the non-joinder of the GIC is fatal to the case of the complainants. The contention of the learned counsel for the opposite paries no.1 and 2 is devoid of any merits. The appeal, in the circumstances, is liable to be dismissed.
F.A.Nos.1092, 1093 and 1094 of 2007 arise the same facts and circumstances and the discussion hereinabove made would meet the requirement and as such these appeals also liable to be dismissed.
In the result the appeals FA Nos.1091 of 2007, 1092 of 2007, 1093 of 2007 and 1094 of 2007 are dismissed. There shall be no order as to costs. Time for compliance four weeks.
Sd/-
MEMBER
Sd/-
MEMBER
Dt.12.05.2010
KMK*
