BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT MANGALORE

Dated this the 30^th July 2010

COMPLAINT NO.113/2010

(Admitted on 27.3.2010)

                                                  PRESENT:   

                            1. Smt. Asha Shetty, President.                                                                                                                                                                                                                                                                                                           

                                  2.  Smt. Lavanya M. Rai, Member.

BETWEEN:

B.S.Divyashree, Minor,

Represented by Father Guardian,

B.Sathyashankara Bhat,

Aged about 56 years,

R at Nadubail House,

Edamangala Village,

Sullia Taluk, Panja.                                     …….. COMPLAINANT

(Advocate for the Complainant: Sri.D.Sanjay)      

          VERSUS

The Chairman,

Maha Rashtra Apex Corp. Ltd.,

Syndicate House,

Manipal.

By T.Sudhakar Pai.                                ……. OPPOSITE PARTY

(Advocate for Opposite Party: Sri Shashiraj Rao Kavoor)

          ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:

1.       The facts of the complaint in brief are as follows:

This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Party claiming certain reliefs.

The Complainant submits that, the Opposite Party has been running a financial institution having its head office at Manipal and had a branch office at Puttur.  The Complainant invested the money in fixed deposits at Puttur Branch as under:-

It is stated that, the Opposite Party has applied for a scheme in High Court of Karnataka as per Company Petition No.37/2003.  After hearing the objection, the High Court allowed the scheme as per order dated 08.10.2004.  As per the scheme, the bond holders get interest till 31.03.2002 and the entire repayment will be complete in five years starting from 15.12.2004.  As per the scheme, the Opposite Party should repay the entire amount as under:-

The Opposite Party has paid 35% of the deposits to the Complainant till 15.6.2005.  It is stated that, the Opposite Party should have paid the entire amount to the Complainant on or before 15.6.2009.  But the Opposite Party has paid only the above said amount and rest of the amount not paid by the Opposite Party till this date.  Thereafter the Complainant issued a registered notice dated 30.11.2009, despite of that not paid the amount.  Hence it is stated that, the service rendered by the Opposite Party amounts to deficiency and unfair trade practice.  Therefore, the above complaint is filed by the Complainant before this Forum under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Party to pay Rs.7,410/- with interest at 12% p.a. from 15.6.2005 till payment and also claimed Rs.30,000/- as compensation and costs of the proceedings.

2.       Version notice served to the Opposite Party by RPAD. Opposite Party appeared through their counsel filed version and contended that there is no deficiency and stated that the Complainant had deposited a sum of Rs.9,000/- vide receipt No.03/DC/R089.  It is submitted that, in the year 2002, the Company had reached a position wherein it could not meet the redemption pressure from creditors of the company due to non-recovery of debts.  Thereafter, the Opposite Party had moved the High Court of Karnataka in Company Petition No.1108/2002 with a scheme of arrangement with creditors of the company.  Later a revised scheme was filed in CP No.37/2003 where the Company had proposed to pay the creditors in 5 year installments i.e., 1^st year 15%, 2^nd year 20%, 3^rd year 25%, 4^th year 20% and 5^th year 20% of the principal amount from the effective date.  It is stated that, the Opposite Party has paid a sum of Rs.5,400/- i.e., 60% of the deposit under certificate No.03/DC/R089 to the Complainant.  The aforesaid payments were made by the Opposite Party in confirmation of the aforesaid scheme as sanctioned by the High Court of Karnataka.  However, the 4^th and 5^th installment could not be paid as there were no funds readily available.  It is further stated that, the Opposite Party was constrained to file an application before the Hon’ble High Court of Karnataka seeking its permission to sell shares of KURL ON Limited.  Process of selling the shares as per the direction of the High Court is in progress and contended that there is no deficiency and prayed for dismissal of the complaint.

3.       In view of the above said facts, the points now that arise for our consideration in this case are as under:

1. Whether the Complainant proves that the Opposite Party has committed deficiency in service?

2. If so, whether the Complainant is entitled for the reliefs claimed?

3. What order?

4.         In support of the complaint, B.S.Divyashree (CW1) represented by father/guardian Sri.B.Sathyashankara Bhat filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on her.   Ex C1 to C4 were marked for the Complainant as listed in the annexure.   One Mr.C.P.Dinesh, (RW-1) Authorized Officer of the Opposite Party filed counter affidavit and answered the interrogatories served on him.  Ex R1 to R3 were produced for the Opposite Party as listed in the annexure.   Opposite Party produced notes of arguments.

          We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before the Hon'ble Forum and answer the points are as follows:                         

                                Point No.(i): Affirmative

                                 Point No.(ii) & (iii): As per the final order.

REASONS

5.      POINTS NO. (i)  to (iii):

The facts which are not in dispute is that, the Complainant deposited a sum of Rs.9,000/- under the Receipt No.03/DC/R089 on 16.8.2001 and the Opposite Party acknowledged the above said amount and issued a Dhanalaxmi Cash Certificate as per Ex.C1 to the Complainant agreeing to pay Rs.11,399/- on 16.9.2003.   It is also admitted before this Forum that, the Opposite Party Company has applied for scheme in Company Petition No.37/2003 on the file of the Hon’ble High Court of Karnataka, the said scheme was allowed as per order 1^st year 15%, 2^nd year 20%, 3^rd year 25%, 4^th year 20% and 5^th year 20% of the principal amount from the effective date.

Now the point in dispute before this Forum is that, the Complainant contended that the Opposite Party paid only 60% of the deposit amount to the Complainant till 15.6.2005.  The Opposite Party should have paid entire amount on or before 15.6.2009 and stated that the Complainant not paid the rest of the amount till this date, hence came up with this complaint.

The Opposite Party on the contrary contended that, there is no deficiency, they have paid 60% of the deposit and they could not paid 4^th and 5^th installment, there were no funds, the Opposite Party constrained to file an application before the Hon’ble High Court of Karnataka seeking its permission to sell shares of KURL ON Limited so as to enable it to pay the subsequent installment and file Company Application No.197/2009 and the Hon’ble High Court has permitted the Opposite Party to sell the shares, which is in progress.

No doubt, the Opposite Party admitted that, they could not pay 3^rd, 4^th and 5^th installment to the Complainant.  The Company Application No.197/2009, the certified copy of the order, in the above said application wherein, the application was allowed by the Hon’ble High Court of Karnataka and permitted to issue paper publication, a draft notification was approved and directed the company to obtain a latest valuation report and produced the same in a sealed cover.  The above said order was passed on 14.8.2009, the above complaint came to be filed before this Forum on 23.3.2010 that is almost all after 8 months.   But there is no material produced before this Forum to show the latest position of the order passed by the Hon’ble High Court of Karnataka.  But it is not the case of the Opposite Party Company that notice of such proceedings before the Hon’ble High Court is served on the Complainant or that the Complainant is party to the proceedings before the Hon’ble High Court.  Under that circumstances, we are of the view that, pendency if any company petition before the Hon’ble High Court of Karnataka does not stand in the way of the Complainant filing the complaints under Section 12 of the C.P. Act, until and unless a specific order to that effect.   When the Opposite Party Company has failed to repay the deposit as per scheme fixed by the Hon’ble High Court of Karnataka by way of installments on or before 15.6.2005 or within a reasonable time thereafter.  Even if the Opposite Party has filed a company petition before the Hon’ble High Court and even if a company petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the Hon’ble High Court.  And further as we stated herein above, there is no specific order by the Hon’ble High Court of Karnataka that the amount involved in this complaint is withheld or earlier scheme is modified/altered till receiving the proceeds of the KURL ON shares.  In the absence of any specific order, we are constrained to hold that the Opposite Party i.e. Maharastra Apex Corporation Limited without complying the order passed in Company Petition No.37/2003 on the file of the Hon’ble High Court of Karnataka till this date amounts to deficiency in service. 

In view of the forgoing reasons, we hold that the Opposite Party without paying the 4^th and 5^th installments on or before 15.6.2005 or till this date amounts to deficiency.  Therefore, the Opposite Party i.e. Maharashtra Apex Corporation Limited represented by its Chairman is hereby directed to pay Rs.7,410/- (Rupees Seven thousand four hundred ten only) to the Complainant along with interest at 12% per annum from 15.6.2005 till the date of payment.  And also pay Rs.1,000/- as cost of the litigation expenses.  Payment shall be made within 30 days from the date of this order.

6.       In the result, we pass the following:                                  

ORDER

The complaint is allowed.  The Opposite Party i.e. Maharashtra Apex Corporation Limited represented by its Chairman is hereby directed to pay Rs.7,410/- (Rupees Seven thousand four hundred ten only) to the Complainant along with interest at 12% per annum from 15.6.2005 till the date of payment.  And also pay Rs.1,000/- as cost of the litigation expenses.  Payment shall be made within 30 days from the date of this order.

The F.D.R., if any, deposited by the Complainant be returned fourth with by substituting the certified.

The copy of this order as per the statutory requirements be forwarded to the parties free of charge and therefore the file be consigned to record.

(Page No.1 to 9 dictated to the Stenographer typed by him, revised and pronounced in the open court on this the 30^th day of July 2010.)

PRESIDENT                                                    MEMBER

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 – B.S.Divyashree (minor) represented by father/guardian

           Sri.B.Sathyashankara Bhat – Complainant.

Documents produced on behalf of the Complainant:

Ex C1 – 16.8.2001: Original Fixed Deposit Receipt No.03/DC/R089.

Ex C2 – 27.5.2005: Pamphlet issued by the Opposite Party.

Ex C3 – 30.11.2009: O/c of the regd. Lawyers Notice.

Ex C4 – 3.12.2009: Postal Acknowledgment.

Witnesses examined on behalf of the Opposite Party:

RW-1 : Mr.C.P.Dinesh, Authorized Officer of the Opposite Party.

Documents produced on behalf of the Opposite Party: 

Ex.R1: Copy of Company Application 197/2009.

Ex.R2: Copy of the Company Petition No.37/2003.

Ex.R3: Order passed in CC No.249/2009 by DCRF, Chikmaglur.

Dated:30.7.2010                                                 PRESIDENT