Per K.V.Krishna Murthy:   

            A complaint filed on 14-06-2102 before the District Forum Dharawad in C.C. No. 210/2012 came to be transferred by the Karnataka State Consumer Disputes Redressal Forum, Bangalore vide Order No. ಕರಾಆ:ಆಡಳಿತ:76:2014, ದಿನಾಂಕ: 30.07.2014 to this Forum from District Forum Dharawad.  The records of the case received in this Forum on 14-08-2014 and re-numbered on the file of this Forum as aforementioned.

            2.  The order sheet dated: 19-7-2012 before the District Forum Dharawad discloses that claim against OP No.1 not pressing the complaint against OP No.1.  The endorsement in subsequent order sheet contains the same endorsement as ‘not pressed’.  In this view of abandonment of the claim, this Forum considers the claim as against Op No.2 only.

3.  After the transfer of the case to this Forum, we have marked the documents filed for the complainant as Ex.A1 to Ex.A37 and those filed on behalf of the OP No.1 have been marked as Ex.B1 to Ex.B.28 for our convenience. 

4.  Alleging deficiency in service in refusal for payment of the outstanding in Erosion A/c No.4434 referred to in pass-book in Ex.A4, the complainant the complainant sought for following directions; 

1.  To pay Rs.1,89,000/- along with interest at the rate of 18% p.a. from the date of deposit till realization.

1. To pay Rs.15,000/- as compensation for the loss and harassment and agony caused;

1. To pay the cost of the proceedings.

            5.  The claim is disputed by the Liquidator in the written version.

6.  The main contention advanced by the counsel for the liquidator of the Bank before this Forum is that the complainant has no
locus-standi to file the complaint because the Bank is not in existence.  The very fact that the official liquidator is contesting the case discloses that the process of winding-up has not been completed.  The Bank has not been dissolved.  Certificate of Registration of Bank has not been cancelled.  Hence the contention is rejected out-right.

            7.  One Anju Sanjay Mishra, was borrower of the Bank under loan A/c No. HL/147/20 issued on 31.7.2006 and he is defaulter in repayment of his loan account and treated as N.P.A. w.e.f. 30.10.2002.  The principal amount due was Rs.934623/- and N.P.A. since 30.10.2002.

            8.   On 03-2-2004, Reserve Bank of India has issued certain directions u/sec. 35A of the Banking Regulation Act, 1949 (AACS) on account of finance mis-management of the affairs of Maratha
Co-Operative Bank Ltd., Hubli vide Ex.B.18 and Ex.B.19.

            9.  Guidelines of setting off deposits under N.P.A. of Urban Co-Operative Banks has been issued by Government of Karnataka as per Ex.B.5 provided a scheme for setting off deposits against the NPA of Banks, which are under the directions of Reserve Bank of India.  Condition No. 4 & 9 reads as follows;

”4. If the deposit amount exceeds the amount of NPA, the
       balance of deposit after adjustment should not be released
       to the deposits.

5.   xxxxxxxx

6.   xxxxxxxxx

7.   xxxxxxxxx

8.  xxxxxxxxxx

9. If after the adjustment, there remains any balance
       outstanding on the NPA account, the security provided to
       the loan account should not be released.

II. For setting off deposits which are more than Rs. one lakh

f.  In the above case the percentage of erosion in deposits as
      assessed by the bank should not be less than 12% i.e. for
      deposit of Rs.100/- only Rs.88 will be eligible for set-off.

g. xxxxx

h.  xxxxx

i.  The amount of erosion should be credited in to a separate
      General ledger Account under the name and style ERODED
      VALUE OF DEPOSITS.

j.  xxxxxxx

k. xxxxxxx

l.  xxxxxxx

m.  If after the adjustment, there remains any balance outstanding on the
       NPA account, the security provided to the loan account should not be
      released.  The security shall be retained by the bank till the NPA is
      repaid.

n. xxxxxx

o. xxxxxx

p. Bank should not be required to make any payment to the
     depositor in pursuance of the adjustment.

10.  The complainant herein has deposited Rs.9,44,631/- in a Fixed Deposit of the Bank. 

11.  Joint application was filed as per Ex.B.1 by the complainant (depositor) and Anju Sanjay Mishra (Borrower) authorizing the bank to
set-off the deposits towards the above mentioned borrowed accounts of the borrower.

12.  Acting on the said application, an indemnity bond was executed on 20-07-2006 vide Ex.B.2, which discloses that the Bank has agreed to
set-off the deposited amount of the depositor amounting to Rs.9,44,631/- with the loan account of the borrower. 

13.  On account of this adjustment, the depositor has consented to setting-off of his deposits with the loan account of the indemnifier to the extent of Rs.9,44,500/-, The impaired amount of Rs.1,89,000/- impounded by the Bank on the date of set-off will be credited to a separate suspense account under the name and style Erosion Account maintained with the Bank.

14.  The pass-book, Ex.A.4 furnished by the complainant pertains to the said erosion account, which discloses that Rs.1,89,000/- has been credited to the said account on 18-9-2006.  Non-payment of this amount by the opposite parties, according to the complainant is the deficiency in service.  The dispute therefore confines to this amount of Rs.1,89,000/-, which remain unpaid since 18-9-2006 to the knowledge of the complainant.

15.  Section 24 (A) of the Consumer Protection Act – 1986 reads thus;

(1)  The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period of specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may, that he had sufficient cause for not filing the complaint within such period:

            16.  The complaint filed on 14-06-2012 is hopelessly barred as the complaint has not been filed before a District Forum within the prescribed limitation period because the deficiency in service by not making the payment has commended since 18-09-2006.

            17.  Section – 22 of the Banking Regulation Act – 1949 empowers the Reserve Bank of India to cancel a license granted to a banking company.  In exercise of this power so vested, the Reserve Bank of India issued letter dated: 23-1-2008, as per Ex.B.10.  The last paragraph of the said letter reads as under;

“12. Having regard to all these facts, the Reserve Bank of India is satisfied that allowing the bank to carry on banking business any further would be detrimental to the interests of the present and future depositors.  Hence, the licence granted to the bank to conduct banking business deserves to be cancelled.  Accordingly, the licence dated Janury 08, 1988 granted to The Maratha Co-Operative Bank Ltd., Hubli, Karnataka to conduct banking business in India under Section 22 of the Act is hereby cancelled.  This order makes it obligatory on the part of the bank to stop conducting ‘banking business’ within the meaning of Section 5(b) of the Act, including acceptance and repayment of deposits, with immediate effect.”

            In view of this direction, repayment was not permissible to the complainant.  Hence allegation of deficiency in service not proved.

            18.   Section – 50 of the Banking Regulation Act – 1949 bars certain claims for compensation, which reads as under;

“50. Certain claims for compensation barred. – No per shall have any right, whether in contract or otherwise, to any compensation for any loss incurred by reason of the operation of any of the provisions [contained in Sections 10, 12-A, 16, 35-A, 35-B, [36, 43-A and 45] or by reason of the compliance by a banking company with any order or direction given to it under this Act.”

            19.  In view of clear statutory mandate, the present claim of the complainant for compensation is not maintainable by virtue of Section 3 of the Consumer Protection Act – 1986.

20.  Section 118 (2) of Karnataka Co-Operative Societies Act – 1959 states –

“While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with, or instituted against, the Liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose.”

The complainant has not obtained leave of the Registrar in instituting the present legal proceedings and therefore not maintainable.

21.  It is pertinent to note that Section – 127 of the Karnataka Co-Operative Societies Act – 1959 states thus;

“127. Indemnity: No suit, prosecution or other legal proceedings shall lie against the Registrar or any person subordinate to him or acting on his authority [or the [Director of Co-Operative Audit] or any other person subordinate to him acting on his authority] [or against the new committee of the co-operative society or the Administrator or the Special Officer appointed under section 30 or Section 30A] in respect of anything in good faith done or purporting to have been done under this Act.”

22.  In the instant case, the official liquidator was appointed under the orders of the Registrar of Co-Operative Societies, dated: 02-2-2008 as per Ex.B12.  Therefore, the Liquidator acting on the authority of the Registrar could not be found fault with in not making the payment of money to the complainant for any reason.  Moreover, the Bank could not conduct the banking business and therefore returning of the deposit amount was impermissible as per directions from the Reserve Bank of India.  Hence, no deficiency in service cannot be attributed the Liquidator.  

23.  In the case of – Registrar of Co-Operative Societies & Anr., V/s Tamil Nadu Consumer Protection Council, Tricy & Ors., - II (2007) CPJ 175 (NC), the National Commission observed as under ;

“The only question which requires consideration in these Revision Petitions is whether the Registrar of the Co-Operative Societies and the Special Officer, appointed under Section 88 of the Co-Operative Societies Act, after suppression of Management Board of the Society, Tiruchirapalli Consumer Co-Operative Wholesale Ltd., Trichy, would be jointly and severally liable for non-refund of deposits by the Society?

2.  In our view, the Registrar of the Co-operative Societies and the Special Officer are discharging their duties under statutory provisions unconnected with any contract of accepting deposit from the complainants by the Cooperative Society.  They cannot be held personally liable for non-refund of deposits by the Cooperative Society on the ground that the society was suffering from financial crunch or for various other reasons including mal-administration of the society.  The Registrar of the Cooperative Societies under the Tamil Nadu Cooperative Societies Act is not providing any service or facility as contemplated under the Consumer Protection Act, but exercising statutory, administrative, supervisory control and is discharging quasi-judicial functions as provided in the said Act.”

24.  The exposition of law stated above are squarely applicable to the facts of this case and therefore we hold that the Liquidator of the Bank is not providing any service or facility as contemplated u/sec. 2(1)(o) of the Consumer Protection Act – 1986 and therefore could not be held liable for deficiency in service.

25.  From the above analysis of the facts of the case, it is undoubtedly clear that the complainant has made a frivolous/vexatious claim against the Official Liquidator and Bank in liquidation knowing that the bank is liquidation winding-up process with full knowledge of the guidelines in Ex.B.5 and therefore we impose cost of Rs.5,000/- to the complainant to be paid to the Official Liquidator of the Bank within three months u/sec. 26 of the C.P.Act – 1986.

26.  For the reasons give above, the complaint stands dismissed with a direction to the complainant to pay Rs.5,000/- (Rupees three thousand only) to the Liquidator, within three months.

// ANNEXURE //

List of Documents Exhibited for the Complainant / Respondent.

Documents filed by the Complainant:

Witnesses examined for the Complainant / Respondent.