CC Filed on 22.09.2009<br /> Disposed on 11.03.2010<br /> <br /> BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, KOLAR.<br /> <br /> Dated: 11th day of March 2010<br /> <br /> PRESENT:<br /> Sri. G.V.HEGDE, President.<br /> <br /> Sri. T.NAGARAJA, Member.<br /> Smt. K.G.SHANTALA, Member.<br /> ---<br /> <br /> Consumer Complaint No. 133/2009<br /> <br /> Between:<br /> <br /> <br /> Smt. L. Vidyavathi,<br /> W/o. M. Sadashiva Rao,<br /> Aged about 45 years,<br /> No. 879, Annaillam,<br /> Next to Adhi Shakthi Mariyamma Temple,<br /> 4th Block, Robertsonpet,<br /> K.G.F – 563 122.<br /> Kolar District.<br /> <br /> (By Advocate Sri. H. Pavana Chandra Shetty) <br /> <br /> V/S<br /> <br /> 1. The BEML Employees Credit<br /> Co-operative Society Limited,<br /> Est. ARK/B/Reg/3187/dt. 1976-77,<br /> Maharaj Road, Robertsonpet,<br /> K.G.F – 563 122, Kolar District.<br /> Rep. by its Secretary.<br /> <br /> <br /> 2. The BEML Employees Credit<br /> Co-operative Society Limited,<br /> Est. ARK/B/Reg/3187/dt. 1976-77,<br /> Maharaj Road, Robertsonpet,<br /> K.G.F – 563 122, Kolar District.<br /> Rep. by its President. <br /> <br /> <br /> <br /> <br /> <br /> <br /> ….Complainant<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> ….Opposite Parties<br /> <br /> <br /> ORDERS<br /> <br /> This is a complaint filed under section 12 of the Consumer Protection Act, 1986 praying for a direction against the opposite parties to refund the deposit/s with interest at 21% p.a. and to pay compensation of Rs.1,00,000/- towards mental agony with costs, etc., <br /> <br /> 2. The material facts of the case may be stated as follows:<br /> That the OP-the BEML Employees Credit Co-operative Society Limited, K.G.F represented by its Secretary and President, is a society registered under the Karnataka Co-operative Societies Act 1959 and the complainant is a member/associate member of the said society. <br /> <br /> The complainant deposited certain amount/s as detailed below<br /> <br /> SL.<br /> No. Receipt <br /> No. Date of <br /> Deposit Date of Maturity Deposit<br /> Amount Received Amount Balance Amount Rate of interest<br /> 7629 08.03.2000 08.03.2002 80,000 Nil 80,000 18%<br /> 8160 04.05.2000 04.05.2002 1,00,000 Nil 1,00,000 18%<br /> 6796<br /> 7051 05.01.2000<br /> 17.01.2000 05.01.2002<br /> 17.01.2002 63,000<br /> 32,000 Nil <br /> Nil 63,000<br /> 32,000 18%<br /> 18%<br /> 4017<br /> 4699 10.09.1999<br /> 02.11.1999 10.09.2001<br /> 02.11.2001 32,000<br /> 30,000 Nil<br /> Nil 32,000<br /> 30,000 18%<br /> 18%<br /> 1973 08.04.1999 08.04.2001 55,000 Nil 55,000 18%<br /> 108 9818 11.07.2000 10.07.2001 48,000 Nil 48,000 18%<br /> 254 2145 05.02.2001 04.02.2002 1,30,000 Nil 1,30,000 16%<br /> 454 3190 04.05.2001 03.05.2002 1,00,000 Nil 1,00,000 16%<br /> 1817 4028 09.02.2004 08.02.2006 80,000 Nil 80,000 10%<br /> 1988 7432 24.08.2004 23.08.2006 2,80,000 Nil 2,80,000 10%<br /> Total 10,30,000 <br /> <br /> That the OP has issued deposit receipts in respect of last five deposits stated above and executed agreement in respect of other deposits. It is found that the deposit receipts prescribe 12/24 months for maturity of deposits. The other deposits where agreements are executed, were initially for two years and which could be extended from time to time and by consent the rate of interest could be varied. <br /> <br /> It is alleged that till the end of August 2008 the interest was paid monthly as agreed but in September 2008 the OP reduced the rate of interest to 6% p.a. and has been paying the monthly interest at the reduced rate and that the OP did not repay the principal amount after maturity as agreed. Therefore the complainant has filed the present complaint on 22.09.2009. <br /> <br /> 3. The OP appeared and filed version. There is no specific averment either admitting or denying the receipt of deposits alleged in the complaint. However during argument the receipt of said deposits is not disputed. It is contended that for unforeseen events the financial status of the OP had deteriorated and therefore a meeting of depositors and members were called for and the circumstances were explained to them and it was agreed and resolved in the said meeting to pay the interest at reduced rate of 6% p.a. on the deposits from September 2008. The following are the grounds stated for the deterioration of financial status of OP.<br /> <br /> i) Heavy amount was taken as loan from DCC Bank, and reciprocally heavy amount was kept in deposit with the said Bank. As there was a ‘run-on-the’ said bank, the bank exercised general lien, without prior intimation, and closed the loan account pre-closing the deposits which was unexpected and unforeseen.<br /> <br /> ii) State Government took policy decision popularly known as HRMS-where under salary of State Government employees were not permitted to be deduced except for the Governmental loans. The salary deduction of instalments of the loan given by this society was abruptly stopped.<br /> <br /> iii) Many of the borrowers among State Government have either gone on transfer or dead or terminated from service. Their loans have been doubtful debts and this being a private loan, it does not find a place in ‘last pay certificate’.<br /> <br /> iv) Earlier the salary of staff of Education Department was disbursed by BEO and later the same was changed to clusters and now again the system is reverted to BEO. This change over has caused lot of problem in regular recovery of loans.<br /> <br /> v) The society gave loans to State Government employees of Kolar District earlier but now with the formation of Chickaballapur District, the entire administration has split and the borrowers from Chickaballapur District are dodging and are not paying the instalment regularly.<br /> <br /> vi) The management of BEML, K.G.F permitted Bharat Earth Movers Employees Association (BEMEA) the official Union, to given loans to employees and the deduction for such BEMEA loans is given preference than the loan of this society. <br /> <br /> <br /> The OP has further contended that it has been making all hectic efforts to come out of the crises and has been repaying the deposits to depositors in installments and this scheme was approved and accepted by the members. Further it is contended that many of the depositors have rushed to this Forum, though they knew the above facts and circumstances. Hence it is contended that there was no deficiency in service and OP stated that it is ready to repay the deposits to the depositors in easy installments. <br /> <br /> 4. The complainant filed affidavit in support of the allegations made in the complaint. The OP filed the version at belated stage, therefore further time was not granted to file its affidavit thinking that it would be repetition of the contentions taken in the version. <br /> <br /> 5. Heard the Learned Counsel for the parties and perused the records. <br /> <br /> 6. The following points arise for our consideration:<br /> Point No. 1: Whether there is deficiency in service by OP?<br /> Point No. 2: What should be the rate of interest on the deposits?<br /> Point No.3: To what order?<br /> <br /> 7. After considering the rival contentions and the records our findings on the above points are as follows:<br /> Point No.1: The OP stated so many grounds for contending for which reasons it is facing financial crisis. Even if the said grounds are true, the non-payment of deposits soon after its maturity still amounts to deficiency in service. The unforeseen events leading to financial crisis may be a ground for reducing the rate of interest for the period subsequent to maturity of deposits, but it cannot be a ground to hold that there was no deficiency in service. Hence point No.1 is held in affirmative.<br /> <br /> Point No.2: During the arguments it is admitted that interest has been paid on monthly basis to all depositors at the agreed rate till the maturity of deposit and even for certain subsequent period at the agreed rate and thereafter it has been reduced from time to time and finally in August 2008 it was decided to reduce the interest to 6% p.a. and at that reduced rate, interest is being paid from September 2008 till date. <br /> <br /> In the present case, the agreed rate of interest was at 18%/16%/10% p.a. depending on the date of deposits and the period of deposits were 12/24 months from the date of deposits. In August 2008 the agreed period of deposit had already expired. The payment of interest subsequent to the period of deposit is not governed by any contractual term between parties, therefore we can fix the reasonable rate of interest. It is told that the Banks are giving interest nearly at 7% p.a. on deposits for one or two years in 2008 and subsequently. <br /> <br /> It is admitted that the OP-society was reducing the rate of interest from time to time depending on the market condition after holding a special general body meeting. Further it is admitted that the complainant and other depositors received the interest at such rate as fixed by OP-Society from time to time. It is also admitted that during all the period the offer of interest by this Society was higher than the interest offered by Banks. Therefore we can hold that the depositors had consented for the reduced rate of interest from time to time and they were receiving the interest accrued due every month. <br /> <br /> Considering the financial crisis of the OP and other facts and circumstances of the case, we think the OP may be ordered to pay interest at the rate of 7% p.a. from September 2008 till the date of payment but not at the rate of 6% p.a. as paid by OP. As interest is being awarded a separate compensation for mental agony need not be granted in the present case. No such strong case is made out for awarding compensation for mental agony apart from awarding interest. <br /> <br /> The Learned Counsel for complainant relied upon the following decisions to contend that interest at 18% p.a. may be awarded in this case. <br /> a) S.C. & N.C. C.L.A (1996-2005) page 753 between M/s. Spring Meadows Hospital and another V/s. Harjol Ahluwalia through K.S. Ahluwalia and another of S.C.<br /> b) S.C. & N.C. C.L.A (1996-2005) page 578 between Vishnu Kumar Bhargav V/s. The Chairman LDA and another of N.C.<br /> c) S.C. & N.C. C.L.A (1996-2005) page 443 between Pushpa Builders Flat Buyers Association V/s. Pushpa Builders Limited of N.C.<br /> d) S.C. & N.C. C.L.A (1996-2005) page 5 between Haryana Urban Development Authority V/s. Meenakshi Goyal. <br /> e) S.C. & N.C. C.L.A (1996-2005) page 398 between Sri. Venkateshwara Tractors & Farm Equipment Limited. V/s. N. Somanath Gowda and another of N.C. <br /> f) Original Petition No.98/94 between M/s. Shri. Lakshmi Cotton Traders Limited V/s. Central Warehousing Corporation and others of S.C. decided on 21.06.1996.<br /> <br /> We perused the above decisions. The first four decisions relate to real estate business, where plot or flat is not allotted even after the receipt of full or substantial amount. The escalation in real estate price and cost of construction and the conduct of defaulting party were taken into consideration and the interest was allowed at 18% p.a. while ordering the return of deposit. The fifth case related to unlawful withholding of entire price of tractor because of some dispute between manufacturer and dealer and non-supply of tractor to the customer who had paid the entire price. In such case, the price of tractor was ordered to be refunded with interest at 18% p.a. The last case related to a Fire Insurance Claim in which it was held that the refusal to settle the claim was wholly untenable and therefore interest at the rate of 18% p.a. was awarded on the claim amount. <br /> <br /> We think these decisions are based on the facts and circumstances of those cases and they cannot be taken as precedents to award interest at 18% p.a. We think the award of interest at the rate stated by us appears to be just and reasonable. Hence point No.2 is held accordingly.<br /> <br /> Point No. 3: Hence we pass the following:<br /> <br /> O R D E R<br /> <br /> The complaint is allowed with costs of Rs.1,000/-. The OP-Society shall repay Rs.10,30,000/- (rupees ten lakh and thirty thousand only) deposits to complainant with interest at 7% p.a. from September 2008 till the date of payment less the interest already paid. The amount due under the award shall be paid within 6 weeks from the date of order. <br /> <br /> Dictated to the Stenographer, corrected and pronounced in open Forum this the 11th day of March 2010.<br /> <br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> <br /> <br />