PRESENT: Sh.Rajesh Garg, Adv. for Complainant.

           Sh.Hitesh Sood, Adv. for OPs No.1 to 3.

           OPs No.4 & 5 ex-parte.

PER ASHOK RAJ BHANDARI, MEMBER

        Concisely put, the Complainants became member of the Nectar Co-op. House Building Society Ltd., formed by OPs No. 2 & 3, who were responsible for collecting money, raise construction and to do all other works relating thereto, being Secretary and vice President of the said Society. The Complainants paid the requisite membership fee of Rs.10,500/- vide Receipt No. 097 and further, paid Rs.1.00 lacs for which no receipt was issued. Thereafter, they paid regular amounts from time to time to the OP Society and in all, paid a total sum of Rs.6,10,500/- for the flat till date. During all this while, OP No.2 had been telling that land had been purchased by the Society and Bhumi Poojan would be held in Dec. 2006. But, when no Bhumi Poojan was held, the Complainants asked him to show the papers regarding the purchase of the land, which he failed to show and he was also unable to specify any date/month for starting the construction. Smelling fishy about the claims of the Society, the Complainants vide letter dated 28.3.2007, while opting out from the same, sought refund of their amount, which the OP No. 2 had been putting off on one pretext or the other. When all the frantic efforts made by the Complainants did not bear any fruitful results, a legal notice was also sent to the OPs on 16/08/2008 and 23/08/2008, but to no avail. Hence, this complaint, alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice. In the end, the Complainant has prayed for the following reliefs for compensation etc., payable by the OPs to the Complainants:-

a)  Rs.6,10,500/- paid to the OPs from time to time.

b)  Interest @ 18% p.a. from the dates of payment till the date of realization.

c)  Rs.5.00 lacs towards compensation and mental agony to the Complainants and father of Sh. Malwinder Singh Battu, who is of the age of 71 years approx and also a heart patient.

    d)    Rs.5,000/- towards litigation expenses.

2]      Notice of the complaint was sent to OPs seeking their version of the case. 

3]      OPs in the joint written statement/reply, admitted that the Complainants had deposited the amount of Rs.10,500/- and become the members. It was denied that any cash was ever paid. It was pleaded that the complaint was liable to be dismissed, as the Registrar Coop. Societies had taken cognizance and had appointed a Liquidator vide order dated 23.4.07, who further dissolved the Society and had taken all the affairs of the Society in his hand and would himself settle the assets and liabilities of the members of the Society. It was submitted that the Society does not possess any capital of its own. All activities i.e. purchasing of land and construction of flats were to be done with the assistance of the members only. Out of 269 members, Only 57 members had given full payments, while rest of the 212 members did not pay the full amount despite repeated requests. The society did reach an agreement to sell for purchase of 22 acres of land and fixed the date of execution as 30.9.2006. An advance sum of Rs.2,78,34,000/- was paid to the Sellers in the shape of Cheques and cash as on 30.9.2006 by the Society and the final sale deed was to be executed later on payment of the balance amount, but it was only due to non-payment of requisite amounts by the aforesaid 212 members, that the Society could not execute the sale deed.  The defaulters are the members and not the Society. All other material contentions of the Complainant were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint with exemplary costs.

4]      Parties led evidence in support of his contentions.

5]      We have carefully gone through the entire case thoroughly, including the complaint and the relevant documents tendered by the complainant / OPs. We also heard the arguments put forth by the learned counsels for the Complainant and OPs. As a result of the detailed analysis of the entire case, the following points/issues have clearly emerged and certain conclusions/arrived at, accordingly:-

i]  The basic facts of the case in respect of the Complainant having become member of the Nectar Co-op. House Building Society Ltd. as formed by OP No. 2 & 3 being Secretary and Vice President of the said Society and responsible for collecting money, raising construction and to do all other related work and that the Complainants paid the requisite membership fee of Rs.10,500/- vide Receipt No. 097 with further payments of Rs.1.00 lac vide Receipt No. 1405, dated 8.6.2006; Rs.2.00 lacs vide Receipt No. 1517, dated 28.07.2006; Rs.1.00 lac vide Receipt No. 1610, dated 07.09.2006 and Rs.1.00 lac vie Receipt No. 1620, dated 9.9.2006, towards the cost of flat, have all been admitted. The share certificate dated 01.12.2006 issued by the Society to the Complainants is at Ann.C-10. One of the allegations of the Complainants against the OPs is that whereas he had paid a sum of Rs.1.00 lac to the OPs, in cash, immediately, after paying the sum of Rs.10,500/- as membership fee/initial deposit, but no receipt was issued to them in acknowledgement of having received the said amount. Therefore, as per the Complainants, they had paid a total sum of Rs.6,10,500/- upto 9.9.2006. Whereas as per the OPs, the amount paid by the Complainant was Rs.5,10,500/-. Therefore, there is also a dispute of Rs.1.00 lac as to whether the said amount was received by the OPs from the Complainant or not.  

ii] Apart from above, another major dispute between the parties has been that whereas the Complainants say that after making payments to the tune of Rs.6,10,500/-, the OPs did not take any steps for the purchase of land or fixing any tentative date of starting the construction work and also that they did not provide any date for giving possession of the flat, The only thing which he got after paying such a huge amount was the share certificate dated 1.12.2006 in his name. The Complainants call this as deficiency in service and also indulgence in unfair trade practice on the part of OPs.

iii] As per the Complainants since there was no progress in respect of the registration of land meant for construction of flats and smelling something fishy about the claims of the Society, they wrote to the Society on 28.3.2007, opting out from the housing scheme and requested for the refund of their amount. Despite their efforts to get the refund of the amount, the OPs have not made any payment to them. Eventually, the Complainants also served a legal notice on the OPs on 16.8.2008 and 23.8.2008, but the OPs did not give any reply to the legal notice.

iv] The OPs in their joint written statement/ reply while admitting the basic facts of the case have denied that the Complainants had ever made any cash payment of Rs.1.00 lac to them. They further say that the Society has already been taken over by the Registrar, Cooperative Societies, Punjab, by dissolving the same and appointing a Liquidator vide order dated 23.4.2007. As such, all the affairs of the Society are now in the hands of the Liquidator, who alone has to settle the assets liability and all other claims of the members of the Society, as the Society itself does not possess any capital of its own. In respect of the purchase of land and undertaking the construction work of the flats. The OPs say that the Cooperative Society is a joint venture of the members and out of 269 members only 57 had given full payment, while the remaining 212 did not pay the full amount, despite repeated requests, with the result that although the Society did reach an agreement to sell for the purchase of 22 Acres of land by paying an advance amount of Rs.2,78,34,000/-, yet the final sale deed could not be executed, because of the non-payment of the balance amount by the members. All other allegations of the Complainants have been denied with a request to dismiss the complaint with costs.

v]  That OPs have primarily taken two objections while submitting their reply/ written statement. The preliminary objection taken by the OPs is that the Society is governed by its byelaws and falls under the Punjab Cooperative Societies Act, 1961. As per the said Act, only a Registrar or Arbitrator has the jurisdiction to entertain the suit or dispute arising between the members of the Society. Therefore, the present complaint is liable to be dismissed, because the jurisdiction of the Forum is barred under the said Act.

vi] In relation to the above stated objection of the OPs, the Hon’ble Supreme Court of India in its judgment reported as 2001-2002 CTJ 477 (CP) settled the law by holding that Section 93 of the Delhi Cooperative Societies Act, barred only the Civil Court or other Tribunals, but not the Consumer Forums. The consumers have additional remedy available to them for deficiency in service. The contentious question in the said case was as to whether u/s 93 of the Cooperative Societies Act, in the matters relating to the Society activities, it is the Registrar, who can decide such matters or that the same can be adjudicated by the Consumer Court.

vii] Moreover, Section 3 of the Consumer Protection Act, 1986, also provides as under:-

“3. Act not in derogation of any other law. – The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

     Section 3 of the Act is worded in the widest terms and leaves no one in doubt that the provisions of the Act shall be in addition to and not in derogation of any other law for the time being in force. The mere fact that some other remedy has been provided, to an aggrieved under some other law, would not oust the jurisdiction of the Consumer Fora in view of Section 3 of the Act. The Hon’ble Supreme Court of India in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha (Dead) through LR and Ors., I (2004) CPJ 1 (SC) has held that the remedy under the Act has been provided in addition to other remedies provided under other Acts unless there is clear bar to jurisdiction. It was further held that merely because the rights and liabilities are created between the Members and the Management of the Society, under the Act, it cannot take away or exclude the jurisdiction conferred on the Forums under the Act expressly and intentionally.

Viii] The same view as held by Hon’ble Chhatishgarh State Commission, Raipur in the case of Lakshi Chauhan and Others Versus Durg Jila Griha Nirman Sahakari Samiti Maryadit & Anr., IV (2004) CPJ 477, stating that Section 82 of the Societies Act may operate as a bar against the jurisdiction of Civil and Revenue Courts, but it does not bar the jurisdiction of Consumer Forum. The Hon’ble State Commission referred to the authority of Chuval Consumer Protection Society and Anr. V/s Anand Corporation and Others, 2003(1) CPR 602 in support of its view.

ix]  Another objection taken by the OPs in the present case, has been that since the Registrar, Cooperative Societies, Punjab has already appointed a Liquidator for clearing the assets and liabilities, including debits and credits of the Society, therefore, the office bearers of the Society, especially, the Secretary (OP No.2) and vice-President (OP No.3) of the Cooperative Society are personally not responsible for any financial dealings in relation to the said Society. It is only the Liquidator and Liquidator alone, who can settle the claims of the Complainants, if any. Further, the Liquidator so appointed in question has been asked to work under the overall supervision and control of the Registrar, Cooperative Societies, Punjab. In respect to this objection, there is an authority State Cooperative Spinning Mills Federation V/s Shakti Traders Cotton and Oil Merchants and Others, 2007 (1) RCR (Civil) 825. In that case, the Civil Court had exercised jurisdiction of executing the decree in a case in which the Society had gone into liquidation and the matter was squarely covered u/s 82 of the Punjab Cooperative Societies Act, 1961, which clearly bars the jurisdiction of Civil and Revenue Courts. In the present case, it is the Consumer Fora which is neither the Civil Court, nor the Revenue Court and is quite distinct from the said Courts. In view of this, the aforesaid authority cannot be applied in the present case.

6]      Apart from the other authorities and the detailed discussions above, it is also a fact that a Cooperative Society can easily be floated and get registered by a group of persons, who can collect as much money from the members and depositors as possible, which may later on be misappropriated, squandered or embezzled by them and thereafter, the Society is handed over to the Registrar Cooperative Societies for liquidation. In this manner, the office bearers of the Society can siphon off the entire amount and then say that they would not be liable to pay back the same, because it would then be the responsibility of the Liquidator to find out if the Society has any property left and if so, what amount is to be distributed among creditors and depositors. This trend on the part of some unscrupulous persons may cause great financial loss to the innocent and gullible consumers, who have no speedy remedy to retrieve the amount deposited by them.  We are, therefore, of the opinion that even if the Society has gone into liquidation, it is the duty of the persons holding responsible positions in the Society and who collected the money from the depositors to pay back the same to them. In the present case, the money was advanced by the Complainants on the pursuasion of OP No. 2 and 3, who had also issued receipts in acknowledgement of having received the various amounts from the Complainants from time to time. It would, therefore, be their responsibility to compensate the depositors for the loss caused to them. We are, therefore, of the firm view that even if the Society has gone into liquidation, OP No. 2 and 3 cannot wash their hands off and evade their liability to pay back the amount to the Complainants.

7]      It is also observed that the role of the official liquidator i.e. OP No. 5 is also not above board. It is a fact that the Society went into liquidation as per the orders of the Registrar, Cooperative Societies, Punjab, long back, but even after a lapse of considerable period of time during which the said Cooperative Society has remained under liquidation, nothing substantial appears to have been done by the Liquidator to pay back the amount to the creditors/depositors. The Liquidator has not placed on file any document to suggest if some steps were taken by him in this regard. As such there is gross deficiency of service on his part also. Therefore, it is clear that even the higher authority i.e. the office of the Registrar, Cooperative Societies, Punjab, are not monitoring the proceedings of the Liquidator to expedite the task assigned to him, which is not in the interest of creditors/depositors.   

8]      In view of the above detailed discussions and analysis of the case, we are of the considered opinion that the present complaint has a lot of merit, substance and weight and, therefore, must succeed and the same is accordingly, allowed. Since the Complainant has produced adequate documentary evidence for making payment to the OPs to the extent of Rs.5,10,500/- and not Rs.6,10,500/-, they are entitled to receive only that much amount. The contention of the Complainants that they had paid Rs.1.00 lacs in cash to the OPs, for which no receipt was issued to them, is not supported by any evidence or document. Therefore, this contention of the Complainants is just not tenable.

9]      In view of the above, we pass the following order:-

(i)    The OPs are directed to pay, jointly and severally, the amount of Rs.5,10,500/- along with interest @9% p.a. as calculated from the respective dates of payment made by the Complainants to the OPs, till the date the amount is paid in full to the Complainants.

(ii) The OPs shall also pay to the Complainants a sum of Rs.5,000/- towards costs of litigation.

10]     It is, however, made clear that in the first instance, OP No. 5 shall make the above stated payments to the Complainants, within a period of 03 months from today and only if the full amount is not paid or no amount is paid by OP No. 5 to the Complainants, by OP No. 5 due to any reason, technical legal or any other whatsoever, then the remaining amount or the entire amount, as the case may be, shall be paid, jointly and severally, by the OP NO. 2 & 3, to the Complainants, within a period of one month from the expiry of the period of 03 months from today. 

11]     In case the aforesaid order is not complied with in the given period of 03/04 months, as the case may be, the OPs shall, jointly and severally, pay the said amount of Rs.5,10,500/- along with interest @18% p.a. calculated from the respective dates of deposit by the Complainants with OPs, till the date of realization, as also the litigation cost of Rs.5,000/-.

12]              Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.