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

DATED 13^th DAY OF DECEMBER 2023

ORDER

SMT. K. ANITA SHIVAKUMAR, MEMBER

Complaint filed U/S 35 of Consumer Protection Act 2019, seeking direction to OPs to refund the deposited amount of Rs.23,90,900/- (Rs.2,52,700/-, Rs.2,18,200/-, Rs.6,00,000/-, Rs.6,00,000/- and Rs.7,20,000/-) with interest at the rate of 9.5% p.a. from the date of maturity till refund, to pay compensation of Rs.5,00,000/- for loss, harassment and mental agony, to pay cost of proceedings of Rs.50,000/- and such other reliefs.

2. Brief facts of this case are as follows:-

Complainant’s husband was working as a manager of H.S.B.C Bank, died in the year 2019. After his demise, complainant’s got an amount from her husband’s employer and her husband also saved an amount for his daughter’s education. Complainant being widow could not do anything except investing the amount to earn interest in the costliest education system. When she was in search of financial institution which gives attractive interest, so that the earnings will help her daughter education and her livelihood. She further stated that OPs published their private advertisement for attracting people who are interest in investment in other financial co-operative society, OP No.1 is secretary, OP No.2 is President and OP No.3 is Vice President of Bangalore House Building Co-operative Society. Believing the assurances given by OPs, and about other prompt and timely services, complainant invested her hard earned money for period of 36 months.

3. Complainant further stated that she has invested Rs.23,90,900/- with OPs society for 36 months. After the maturity of above mentioned fixed deposits, complainant was not willing to renew the FDs, OPs insist her to renew for period of another 36 months or 12 months. Complainant has transferred the amount to OPs through Cheque’s/RTGS. OPs have issued FD certificates for 5 investments. Accordingly complainant renewed 2 FDs out of 5 for 12 months. Complainant further stated that the agreed payments by OPs had to make a monthly interest payments to the complainant as she invested the said amount for her livelihood. But OPs agreed to pay the interest along with maturity amount. Since, the complainant had no other source of income for her livelihood, she started requesting OPs for return the FD amount with agreed interest. Despite repeated requests, OPs did not bother to respond complainant inevitably insisted the OPs to pay the interest amount. When there was no response to her requests. She constrained to seek the refund of amount invested, especially even she lost faith in their business, even though OPs did not bother to refund the deposits. Therefore complainant complained to the Deputy Registrar of Co-operative Society, Bangalore.

4. It is pertinent to note that OPs being Co-operative Society cannot, evade their responsibility casually by dragging the requests of the investors and with malafide intention. Complainant alleges the act of OPs, monetary loss and hardship, harassment by not refunding her investment money with agreed rate of interest. Hence complainant approached this commission seeking directions to OPs mentioned supra.

5. Notice issued to OPs No.1to3 which were duly served on them, OP No.1&2 appeared through their counsels and filed their statement of objections. Counsel for OPs submits that OP No.3 is not alive. Therefore counsel for OPs directed to file death certificate of OP No.3. But counsel for complainant filed a memo for deletion of name of Vice President who represented OP No.3. Hence, considering the memo, name of the Vice President represented on behalf of OP No.3 is deleted. Since it is the society, the complaint if proceeded against the present/Vice President who is exercising duty with the designation at OP No.3 society.

6. In the version filed by OP No.1&2, OPs denied the allegations made by complainant in the complaint. But admitted that the complainant has deposited the money in 5 FDs for the period of 36 months at 9.5% p.a. interest on each. OPs also admitted that after pressure from the OPs, complainant renewed her FDs for the period of 12 months in 2 FDs out of 5. OPs in its version stated that complainant was not willing to renew the FDs.

7. OPs further stated in its version that, the board of directors were elected according to Section 39 AA of the Co-operative Society Act and rules. The Bye-laws remained by the society is approved by department of Co-operative society and the elected board of directors work according to Co-operative Act rules. The society will accept the deposits only from member of the society and lend loans only for housing purpose of its members. OPs further stated that, with regard to the complainant’s FD, the amount of interest by Co-operative Bank was credited to the account maintained by OP society.  So, whatever the deposits being made was deposited in the said account at Co-operative Bank. It was the practice of society that they used to need certain amount in SB account and the remaining was credited in FDs as stated above. Whenever any members of society approach for borrowing loan for any housing activities, society used to either withdraw the amount or arrange by withdrawing from FDs or by taking FDs or from the amount in SB account and used to lend the loan for the intending borrowers. OP further submitted that the society had requested the complainant to renew the same after the FDs got matured. With all this, OPs prayed this commission to dismiss the complainant in the interest of justice.

8. At this stage, the case is set down to adduce evidence of both parties, accordingly GPA holder of complainant who is has filed affidavit evidence, reiterated as stated in the complainant. In support of the affidavit evidence, GPA holder of complainant has filed 11 documents which are marked as Ex.P.1 to Ex.P.11. President of Housing Building Co-operative Society has filed evidence on behalf of OP No.1&2 along with 20 documents which are marked as Ex.R.1 to Ex.R.20. Heard arguments of both counsel and perused the documents on record.

9. On the basis of above pleadings for our consideration are as follows:-

i) Whether the complainant proves the deficiency of service on the part of OPs?

ii) Whether complainant is entitled for the relief?

iii) What order?

10.  Our answers to the above points are as follows:-

Point No.1:- Affirmative.

Point No.2:- Partly affirmative.

Point No.3:- As per the final order.

REASONS

11. Point No.1&2:- These points are inter-connected to each other and for the sake of convenience, to avoid repetition of facts, these points are taken up together for common discussion.

12. After perusing the documents placed before this commission, it is not disputed that the complainant has deposited around Rs.23,90,000/- in 5 different FDs, for that OP has agreed to pay interest for the period of 3 years. Believing the assurances given by OPs, complainant deposited the above said amount for 3 years of Rs.2,52,700/-, Rs.2,18,200/- , Rs.6,00,000/-, Rs.6,00,000/- and Rs.7,20,000/- @ 9.5% p.a. on each FDs. OP society has issued fixed deposit receipts in favor of complainant which are produced in Doc.No.1 to 5. At the time of obtaining the deposits from complainant, OPs assured to pay interest at the agreed rate of interest to be paid quarterly or monthly. As complainant stated in his complaint, OPs neither pay interest quarterly or monthly as agreed upon nor refunded the deposited amount with accrued interest on the request of complainant. Complainant deposited the said amount with the intention to make use of saved amount for her livelihood and child’s education. The above said 5 FDs are matured on 21.08.2021, 20.02.2022, 22.04.2022, 02.05.2022 and 01.06.2022. After the maturity of respective FDs, complainant requested OPs to refund the deposited amount with accrued interest for the period of 36 months. In stead OPs pressurized complainant to renew the same further. However complainant renewed 2 FDs out of 5 for the period of 12 months at the rate of 7% & 6% p.a. respectively. Complainant approached OPs and sought the amount deposited back with accrued interest. OPs not bothered to refund the amount deposited to the complainant. Complainant requested OPs at least to pay monthly interest which will help him for her livelihood, but OPs did not refund. Complainant submitted a letter to OP for refund, which is at Ex.P.6 dated 03.07.2023. When the OPs has not refunded the amount, complainant lost faith on their business and complained to Deputy Registrar and Registrar of Co-operative Society, Bangalore. On the basis of the request submitted by complainant and GPA holder to the Joint Registrar of Co-operative Society and to Additional Registrar of Co-operative Society. Subsequently Additional Registrar of Co-operative Society has written letter Joint Registrar on 18.05.2022 about the grievance raised by complainant and GPA holder and directed him to take necessary action against Bangalore House Building and Co-operative Society. In turn Joint Registrar written letter to Deputy Registrar of Co-operative Society on 17.06.2022 stating that, to investigate about the activities of the OP and submit the report to Joint Registrar with regard to the complainant’s deposited money. On 20.08.2022 Joint Registrar has written letter to President of OP company, directed to refund the money deposited by complainant at the earliest. Additional Registrar has written letter to Joint Registrar on 07.02.2023 on the basis of the representation of complainant’s son submitted on 19.01.2023. The above said correspondence within the Co-operative Department are marked as Ex.P.7 to Ex.P.10 respectively. Even after several communication and directions from the Department of Co-operative Society, did not bother to refund the same to the depositor complainant, it shows the attitude of OPs and caused deficiency of service. Even the Deputy Registrar of Co-operative Society were called for enquiry with regard to the activities and functioning of OPs society on 28.06.2022 which is at Ex.R.8.

13. It is pertinent to note that OP has stated in its version that the amount of interest accrued by the deposit was credited to the account maintained by OP Society. The outstanding amount if struck at Sri. Gururaghavendra Co-operative Bank, without service of accrued interest or payment of interest part to OP society. The huge amount is with Sri. Gururaghavendra Co-operative Bank Limited, OP has difficulty to either refund the deposited amount to the complainant or the interest accrued. Even in version, OP itself stated that has insisted the complainant to renew the FDs mainly on the ground that the huge amount is struck with Sri. Gururaghavendra Co-operative Bank, was unable to refund the deposited amount with interest to the depositors. The W.P 7350/2020 is pending before the Hon’ble High Court of Karnataka against Sri. Gururaghavendra Co-operative Bank Limited. OP undertake to return the money, once it is released by Sri. Gururaghavendra Co-operative Bank Limited. In our considered view, Sri. Gururaghavendra Co-operative Bank and complainant has no privity of contract and complainant had no transaction with Sri. Gururaghavendra Co-operative Bank Limited. Hence, lies on OP’s to refund the amount collected from complainant. OP cannot shift the liability on the other bank, which has no relation with complainant. That is internal understanding between OP society with other bank.

14. Upon going through the pleadings, OP itself stated that the interest amount is deposited in the account maintained by the complainant at OPs society, it shows that OP has not paid any interest to complainant since from the inception. OP has not produced any cogent evidence to prove monthly/quarterly interest paid to complainant regularly. Hence in our considered view the interest part is accrued in the complainants account maintained at OPs society. Therefore OPs failed to prove the interest has been paid to the complainant and are liable to refund not only deposited amount for the period of 36 months in the first phase and the accrued interest at the agreed rate of interest.

15. Further complainant has extended 2 FDs for the period of 12 months as the OP itself admitted that when the society was unable to refund the deposited amount to the complainant, OP society itself insisted and forced complainant to extend the FDs period. Accordingly complainant extended only 2 FDs with no other options. Other 3 FD’s which are for the sum of Rs.6,00,000/-, Rs.6,00,000/- and Rs.7,20,000/- matured on 22.04.2022, 02.05.2022 and 01.06.2022 respectively. OPs did not refund these 3 as well. According to the deposited amount and the amount accrued from the rate of interest agreed by OP, the amount is liable to the complainant is as below:-

 Further complainant extended 2 FDs for the period of 36 months and 12 months.

16. Hence the complaint taken by OP and the liability shifting to another bank is unjust and unfair from the part of OP society. Hence the above said total amount of sum of Rs.6,44,659/- which are actual renewed and matured amount and the agreed to the account of complainant maintained in the OP society and Rs.7,71,000/-. Rs.7,71,000/-  and Rs.9,25,200/- which were not renewed, together it became Rs.31,11,859/-. Hence OPs are liable to refund Rs.31,11,859/-/- to complainant as matured amount. Since, OP society has caused mental agony to complainant by deficiency of service and unfair trade practice OPs are liable to compensate the complainant by paying Rs.1,00,000/- and litigation cost for Rs.10,000/-. On the above reasons we answer Point No.1&2 as accordingly.

17. Point No.3:- In view of the discussion referred above, we proceed to pass the following:-

                                   ORDER

1. Complaint filed by the complainant U/S 35 of Consumer Protection Act, is hereby allowed in part.
2. OPs No.1 to 3  are jointly and severally liable to refund Rs.31,11,859/-/- to the complainant with interest at the rate of 8% p.a. from respective matured dates till this order.
3. OPs are directed to pay Rs.1,00,000/- towards compensation for the hardship, inconvenience and mental agony caused by them and Rs.10,000/- towards cost of litigation within 30 days from the date of order, failing which OPs are liable to pay interest on Award amount at the rate of 10% p.a. from the date of order till realization.

4. Furnish the copies to both the parties, without cost.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 13^th day of DECEMBER, 2023)

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

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