DISTRICT CONSUMER DISPUTES REDRESSAL FORUM;BHADRAK

………………….

C.D.Case No.68 of 2014

Sri Saroj Ranjan Mohanty,aged about 55 years

Secretary, Bhadrak Urban Co-operative Bank Ltd.,

At/PO/PS/Dist: Bhadrak

                                                            ………………………Complainant

                      (Vrs.)

The Branch Manager,

Bhadrak Balasore Central Co-operative Bank Ltd.,

Bhadrak Branch,

At/PO/Dist:Bhadrak

                                                             ………………………Opp.Parties

Order No.16 dt.20.05.2015:

            Complainant who happens to be the Secretary of Bhadrak Urban Co-operative Bank Ltd., has filed this case alleging deficiency in Banking service against the O.P.

            The case of the Complainant is that his Bank is registered under Co-operative Societies Act and also an affiliated Society of O.P.-Bank. The Complainant’s Bank for the interest and benefit of Bank as well as its customers deposited in total Rs.6,10,362/- as fixed deposits on different dates  as per the details given below:

Schedule F.Ds/Term Deposits

On the date of maturity, the Bank staff of Complainant proceeded to O.P.-Bank and approached for withdrawal of F.D. maturity amount but the O.P.  took some time for verification of the  record and advised to the staff of Complainant to come in another date. Thereafter, so many times the Complainant deputed their staff  for withdrawal of F.D. amounts, the O.P. returned them saying that he has not verified the records. Lastly, the Complainant in his letter No.395 dt.15.07.2013 requested the O.P. mentioning all the F.D.A/c. numbers for withdrawal. Complainant sent reminder letter No.397 dt.23.07.2013 requesting the same thing to O.P. but the O.P. in his letter No.2175 dt.24.07.2013 intimated the Complainant that the Bank shall not allow him to withdraw the matured Term Deposits unless loan outstanding is repaid and the matured value of Term Deposits would be set off under the provisions of Section 36 of Odisha Cooperative Societies Act,1962.  On several occasions the staff of Complainant asked the O.P. for payment of F.D/Term Deposit amounts but the O.P. Bank did not pay any heed to it as a result of which the Complainant could not pay the dues of depositors in time and suffered financial and mental agony. As such, the Complainant filed this case  on 06.09.2014 praying for a direction to O.P.to release the maturity value of Rs.9,13,806/- with  prevailing rate of interest along with compensation of Rs.1,00,000/- towards  mental agony, harassment, loss and damages caused by O.P. 

            O.P. filed written version challenging maintainability of the case under C.P.Act in view of Sec.68 of Odisha Co-operative Societies Act,1962 which provides that any dispute touching to the business of a Society needs to be adjudicated in the Court of Registrar. Further, the Urban Co-operative Urban Bank being a registered Society vide Registration No.05/BL/1945, will certainly fall within the  purview of the Registrar and accordingly the Registrar has appointed one Sri Niranjan Majhi, Inspector of Co-operative Societies vide order No.4044 dt.08.09.2009 to discharge the duties of the Secretary of Bhadrak Co-operative Urban Bank Ltd. who has joined in duty to function as Secretary. So the present Complainant as Secretary has no legal locus standi to file the case. O.P. admitted about the number of fixed deposit/reinvestment deposit account and the amount of face value. O.P. admits to have communicated the Complainant disallowing the withdrawal of maturity value of F.Ds/Reinvestment Deposits unless the Complainant pays the loan dues to the O.P-Bank and to set off the amount of maturity value to the cash credit account of the Complainant Bank which has become out of order and NPA as per provisions of Sec.36 of Odisha Co-operative Societies Act,1962. As an affiliated Co-Operative Society, the Complainant had availed a cash credit limit of Rs.15,00,000/- from the O.P on lending purpose which has  become out of order and the Bank has been treating the said account as Non-performing Assets(NPA) under the provisions of prudential norms prescribed by Reserve Bank of India. Now the Complainant has a dues to pay a sum of Rs.29,46,770/- to the Bank as on 31.10.2014. As per direction issued by Reserve Bank of India u/s.35A of the Banking Regulation Act,1949 the Complainant-Bank can refund the deposit of its customer to the tune of maximum of Rs.1000/- in every account provided that wherever such depositor is having liability to the Bank in any manner i.e. either as borrower or as surety, the amount of deposit may be adjusted first to the relevant borrower account. Such direction of RBI makes it clear that the O.P.is at liberty to set off the maturity value of F.D./R.D. account to the cash credit account of the Complainant. Further, no creation of charge or lien is necessary to adjust the deposits by the O.P. as the liberty is provided under Section 36 of OCS Act,1962 wherein restrict is imposed on the O.P. to adjust the capital(shares of members and reserve fund) towards debt dues. Hence, refusal for the withdrawal of matured value of FD/RID by the O.P. is just and proper.

We have heard  the Ld.Counsel appearing on both sides and perused the documents available on record. Before adverting to the merit of the case, at the first instance maintainability of the present dispute has be decided. Admittedly, the Complainant in the capacity of Secretary, Bhadrak Co-operative Urban Bank has filed this case alleging non-release of the maturity value under certain Fixed Deposits by the O.P. It  is no doubt true that Bhadrak Urban Co-operative Bank is a registered Co-operative Society and its Registration No. is 05/BL/1945. Section 2(1)(d) of the C.P.Act provides that  consumer means any person who buys any goods for  a consideration or hires or avails of any services for a consideration. Further, Section 2(1)(m) of the C.P.Act  makes it clear that           “person" includes:-

(i)         a firm whether registered or not;

(ii)        a Hindu undivided family;

(iii)       a co-operative society;

(iv)      every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not;

Thus, the Complainant being a Co-operative Society, the present case is maintainable before this Forum under the provisions of C.P.Act. Further, it has been contended by the O.P. that u/s.68 of Odisha Co-operative Societies Act, this Forum has no jurisdiction to entertain the matter and also the present Secretary has no locus standi to file the case before this Forum. Sec.68 of Odisha Co-operative Societies Act,1962  provides that any dispute touching to the business of a Society needs to be adjudicated in the Court of Registrar of Co-operative Societies. This issue is well settled by a number of judgments of the Hon’ble National Commission as also of the Hon’ble Supreme Court including in Secy., Thirumurugan Coop. Agricultural Credit Society Vs. M. Lalitha – (2004) 1 SCC 305  that the provisions of the Consumer Protection Act is in addition to and not in derogation of any other provisions of any other law for the time being in force. In other words, Section 3 of the C.P.Act provides an addition platform to a consumer for seeking relief. As such, this Forum has jurisdiction to entertain the present dispute. The next question that the Complainant has no legal locus standing to file the case  in view of Order No.4044 dt.08.09.2009 of the Registrar Co-operative Society appointing one Sri Niranjan Majhi, Inspector of Co-Operative Societies to discharge the duties of the Secretary of Bhadrak Co-operative Urban Bank Ltd. , here we may say that  Sri Saroj Ranjan Mohanty  has filed affidavit before the Ld.SDJM,Bhadrak in I.C.C.No.68 of 2014 on 13.02.2015 against accused Nilamani Tripathy under Section 138 of N.I.Act  that he is the Secretary of Bhadrak Co-Op.Urban Bank Limited and representing for the Complainant-Bank. It is also revealed from letter No.2725 dt.30.10.2012 of O.P that 3 cheques were sent to Complainant for collection which the Complainant with his seal and signature as Secretary in his letter No.270, No.271 and 272 dt.2.11.2012 returned to O.P. due to insufficiency of funds in the account of the parties concerned. If at all Sri Niranjan Majhi, Inspector of Co-Operative Societies was discharging the duties of the Secretary of Bhadrak Co-operative Urban Bank Ltd. since 09.09.2009, it is really astonishing how the present Complainant Saroj Ranjan Mohanty received the instruments and returned the same to O.P. under his seal and signature on 2.11.2012. Further, as per amendment to Section 33 of O.C.S. Act,1962 made in the year 1991 , the power of appointment of employees of Society  has been conferred to  Committee of Management of different Societies. But the O.P.-Bank has suppressed this fact to the Forum.  As per Resolution dt.13.11.2008(Annexure-1) the Complainant Saroj Ranjan Mohanty  has been posted by the Management of Co-operative Urban Bank,Bhadrak as Secretary and that is why the O.P.-Bank had sent the cheques for clearance non 30.10.2012 which he returned under his seal and signature and not Sri Niranjan Majhi, Inspector of Co-Operative Societies appointed by the Registrar Co-operative Society.   As such, we are convinced that the present Complainant Saroj Ranjan Mohanty has locus standi to file the present case against the O.P.

            The next question is whether there has been any deficiency in service on the part of O.P. in releasing the maturity value to Complainant. Admittedly, the O.P. has disallowed the withdrawal of maturity value of Fixed Deposits/Reinvestment Deposits and directed the Complainant to repay the loan dues and in default set off the amount maturity value to the Cash Credit account of the Complainant which has become out of order and NPA as per provisions of Section 36 of Odisha Co-operative Societies Act,1992. Although O.P. has stated that the Complainant has availed a cash credit limit of Rs.15,00,000/- on lending purpose and become out of order but no documents to that effect has been filed by the O.P. to substantiate their claim. Further, it is the case of O.P that  as per direction issued by R.B.I. under Section 35A of the Banking Regulation Act, the Complainant can refund the deposit of its customer to the tune of maximum of Rs.1000/- in every account provided that wherever such depositor is having liability to the Bank in any manner. Such direction of RBI makes it clear that the O.P is at liberty to set off the maturity value of F.D./R.D. account to the cash credit account of the Complainant. Here we may say that the said direction was issued to Complainant in the interest of depositors and that direction was not meant for O.P.-Bank. It is not the case of O.P that they have kept the Fixed Deposits as lien against the cash credit facility. It is the specific case of Complainant that O.P.-Bank had no lien over the F.Ds so as to attach or set off the maturity value towards loan dues. Further, Section 36 of OCS Act,1962  provides that  no financing Bank to which a Society is affiliated shall have a charge upon any sum invested in the Financing Bank as reserve fund by the Society, if the Bank is not the sole creditor of the Society or be entitled to set off any such sum credited or payable to the Society towards any debt due from such society.   So as per Section 36 of OCS Act,1962, the O.P. cannot set off the F.D. maturity amount of Complainant towards loan dues. Apart from the above, there is no document from the side of O.P. to show that as per banking provision, cash credit can be treated as N.P.A. whereas the O.P. has treated the cash credit of Complainant as N.P.A. in his letter No.2175 dt.24.07.2013.  Thus, the action of O.P.-Bank seems to be arbitrary which amounts to deficiency in service. The highhandedness of O.P.-Bank has put the Complainant into irreparable loss. The customers of Complainant-Bank suffered a lot and they Complainant-Bank could not allow their customer to withdraw Rs.1000/- as per direction of R.B.I. vide letter dt.19.03.2008. Non-release of F.Ds value after maturity amounts to deficiency in service on the part of O.P. Accordingly, it is ordered:

                                                         O R D E R

            In the result, complaint is allowed on contest against the O.P.. The O.P. is directed to release Rs.9,13,806/- of the Complainant towards F.Ds maturity value along with interest as admissible  within a period of 30 days of receipt of this order. The O.P. is further directed to pay litigation cost of Rs.2,000/- to the Complainant within the aforesaid period of 30 days.