DISTRICT FORUM :: KADAPA Y.S.R DISTRICT

PRESENT SRI P.V. NAGESWARA RAO, M.A., LL.M., PRESIDENT

                                                                SMT. K. SIREESHA, B.L., MEMBER.

Wednesday, 11^th January 2012

CONSUMER COMPLAINT No.  69/ 2011

M.V. Ramana, S/o Yerikalaiah, aged 61 years,

Hindu, R/a D.No. 9/34A/4, Mangali Street, Mannur Village,

Rajampet Mandal, YSR Kadapa District                                   ….. Complainant.

Vs.

1)  The Rajampeta Co-operative Building Society Ltd.,

     Rep. by its President, No. N935, Rajampet town & Mandal,

     YSR District.

2)  The A.P. Cooperative Housing Societies Federation Ltd.,

     Rep. by its Managing Director,

     Baghlingampalli,  Hyderabad.                                              …..  Respondents.

This complaint coming on this day for final hearing on 6-1-2012 in the presence of Sri G. Trivikram Singh, Advocate for complainant and Sri V Eswar Reddy, Advocate for R2 and R1 called absent and set exparte and upon perusing the material papers on record, the Forum made the following:-

O R D E R

(Per P.V. Nageswara Rao, President),

1.                Complaint filed under section 12 of the Consumer Protection Act 1986.

2.                The brief facts of the complaint are as follows:-  The complainant was a retired employee in Agricultural Market Yard, Rajampet.   He availed a housing loan of Rs. 75,000/- from R1 in 2000 sanctioned by R2 with interest fixed at 12.5% p.a. and the loan had to be discharged within 9 years.  The R1 took the title deeds of the property towards security from the complainant.  The Respondents paid the loan amount in three installments by deducting Rs. 3,800/- towards insurance amount which would be refunded at the time of final payment.  The loan account No. 504 was allotted by R1.  The complainant paid the entire loan amount together with interest to R1 and approached the R1 on 24-8-2009 and paid                 Rs. 7,200/- and Rs. 3,800/- was adjusted to the loan account (towards insurance amount).  The President of R1 namely S. Ramesh Babu received the said amount and issued final payment receipt bearing No. 17443, dt. 24-8-2009 for the amount of Rs. 3,800/- by making an endorsement that “Loan cleared”.  After clearing the loan the R1 informed the complainant that it would be forwarded to the R2, who would issue a clearance certificate and deliver the original registered document dt. 2-1-1999,  after getting approval from R2.  The complainant waited for one month to get the loan clearance certificate and also original document but it was not returned and there was no response.   Even after payment of the entire loan amount the Respondents failed to issue loan clearance certificate and return the original registered document which would amount to deficiency in service.  So the Respondents were liable to pay compensation for mental agony and issue loan clearance certificate and return the original document.  Thus the complaint was filed for a direction to the Respondents to issue loan clearance certificate and deliver the original registered document dt. 2-1-1999 and pay Rs. 20,000/- towards compensation for mental agony and Rs. 1,000/- towards costs. 

3.                The R2 filed a counter that the A.P. Cooperative Housing Societies Federation Ltd., Hyderabad was called as “A.P. House Fed”.  The R2 was a state level cooperative society controlled by Commissioner of Cooperation and Registrar of Cooperative Societies, Govt. of Andhra Pradesh, Hyderabad.  It would borrow loans from L.I.C of India on interest on creation of a floating charge on all assets of the A.P. House Fed.  It would lend loan for construction of houses to Cooperative Housing Societies. 

4.                The complainant was a member of Rajampet Cooperative Building Society Ltd., which was also a cooperative Society, registered under A.P.C.S Act and would function under the administrative control of Commissioner for Cooperation and Registrar of Cooperative Societies, Govt. of A.P. Hyderabad.  Persons who had a common objective of constructing houses on their own plots would organize themselves into a Cooperative Housing Society registered by District Cooperative Registrar as per the provisions of Cooperative Societies Act.  The society would function as per the bylaws approved under the provisions Cooperative Societies Act.   The Rajampet Cooperative House Building Society Ltd., Rajampet was also a cooperative Society organized by the persons having common interest and objective of constructing houses on their own plots and got it registered as per provisions of cooperative societies Act.  The members of the society would constitute a general body of which a complainant was a member.  The general body would elect the Managing Committee by way of elections conducted by the Commissioner for Cooperation and Registrar of Cooperative Societies, Govt. of A.P. Hyderabad or any person authorized  by him.  The Managing committee would carryout the functions and activities of the society on behalf of the General Body.  The Managing Committee would convene a General Body meeting atlest twice in a Cooperative year and in the said meeting the Managing committee would appraise the actions discharged by it on behalf of General Body and would obtain its approval.  Members of the Society would pay 1% of interest towards margin to their society i.e. like obtained loan sanctions and repayment of loan installments collected from the members and transmitting the same to the financing agencies. 

5.                As per the resolution of the society and on application made by the R1, the A.P. House Fed sanctioned Rs. 75,000/- loan on 16-12-2000 to the society intended to the complainant on condition that the loan should be repaid in nine years in equal installments of Rs. 8,335/- once in a year and interest @ 14% p.a. payable half yearly and penal interest should be charged @ 2.5% p.a. in addition to the normal lending rate of interest or as fixed by the A.P. House Fed from time to time on all over dues or belated payments.  The complainant having agreed to the conditions executed an agreement with his society i.e. R1 on 27-12-2000 for assigning his property under equitable mortgage by deposit of title deeds in favour of the A.P. House Fed and also to abide by the terms and conditions stipulated in the Assignment Deed. Accordingly, the society executed a registered Agreement Deed No. 2783/2000, dt. 27-12-2000  in favour of A.P. House Fed. 

6.                It was not correct that the complainant repaid the entire loan amount together with interest.  The dues against the complainant’s loan, after reconciliation was Rs. 53,599/-  as on 01-10-2011 as per ledger extract i.e. principle amount – Rs. 41,274/-, interest – Rs. 11,099/-, penal interest –       Rs.797/-, LIC – Rs. 429/-. The A.P. House Fed was issuing demand notice to the complainant’s society every half year indicating the dues against all members including the complainant. 

7.                It was correct that the Respondents deducted Rs. 3,800/- towards share capital would be adjusted to the final payment of dues.  The complainant stated that he paid the total loan amount together with interests to R1 with an intention to clear his loan on 21-8-2009.  It was further stated that the President of R1 received the loan amount and issued final payment receipt bearing No. 17443, dt. 24-8-2000 for  an amount of Rs. 3,800/- by making endorsement that the “Loan cleared”.  But the loan collections were transmitted to the A.P. House Fed.  It was unbelievable that the A.P. House Fed failed to return the original document and loan clearance certificate.  The loan collection from the complainant by R1 and transmitted to R2 was

8.                The A.P. House Fed lent a loan to R1 borrowing the same from LIC of India after the society assigning the property of the complainant with the A.P. House Fed as per terms of the agreement executed by the complainant with the society.   The property of the loanee was security for the loan sanctioned to the society and the A.P. House Fed had to recover the due amount and repaid to the LIC of India.  If the society management was certain that the complainant had repaid the entire loan together with interest, it was the responsibility of the society management to see that the original documents were released from the A.P. House Fed duly paying the outstanding due amount.  The complainant had to take up the issue with his management committee of the society which he elected for discharging activities of the society on his behalf and for which he was paying 1% interest towards margin for redressal of his grievance.  If the society management failed to respond the grievance the complainant would bring it to the notice of the District Registrar and the District Cooperative Officer, Kadapa.  It was not correct that the A.P. House Fed failed to return the original document inspite of repayment of the entire due amount.  The A.P. House Fed sanctioned the loan to the society but not to the complainant.  The complainant was a member of R1 but not R2.  There was no direct nexus between the complainant and R2 as per agreement reached between the complainant and the society.  The property of the complainant was assigned to R2 and unless the society would discharge liability the assignment could not be released.  The complainant appeared to have repaid the due amount to the society.   But the society failed to transmit the repayment to R2.  Thus there was no deficiency of service on the part of the complainant.  Thus the complaint may be dismissed with costs. 

9.                Notice of R1 was not served and so the notice was served by paper publication and hence, R1 was called absent and set exparte on 21-12-2011.

10.              On the basis of the above pleadings the following points are settled for determination. 

i.                   Whether there is any negligence and deficiency of service on the part of the respondents?

ii.                 Whether the complainant is entitled to the relief’s as prayed for?

iii.              To what relief?

11.              On behalf of the complainant Ex. A1 & A2 were marked and on behalf of the Respondents Ex. B1 to B6 were marked.   No written arguments were filed by both parties.

12.              Point Nos. 1 & 2.  The Complainant as a member of R1 i.e. Rajampet Cooperative Building Society Ltd.,  Rajampet availed a house loan of                        Rs. 75,000/- for construction of his house sanctioned by R2 i.e. A.P. Cooperative Housing Societies Federation Ltd., Hyderabad, which was called “A.P. House Fed”.  It was not a dispute regarding membership of the Complainant in R1 society.  Persons who had common aim and object of constructing houses on their own plots would organize in to a Cooperative house building society for the construction of houses and got it registered under the provisions of A.P. Cooperative Societies Act and as such the R1 society was one among them.  On the application made by R1, the R2 sanctioned a loan of Rs. 75,000/- to R1 on               16-12-2000 intended for the construction of house by the Complainant on condition that the loan should be repaid in 9 annual equal installments @           Rs. 8,335/- P.A and interest @ 14% P.A. payable half yearly and penal interest should be charged at 2.5% P.A  in addition to the normal lending rate of interest or as fixed by the A.P. House Fed from time to time on all over dues or belated payments.   The R2 filed Ex. B1 a Photostat copy of proceedings of R2, dt.                16-12-2000 sanctioning loan under LIGH scheme to the Rajampet Cooperative House Building Society Ltd., Rajampet (R1) for the sake of the Complainant of                      Rs. 75,000/- payable in 9 yearly equal installments @ Rs. 8,335/- and interest @ 14% P.A payable half yearly and penal interest @ 2.5% P.A. in case of delayed payments, which was in addition to the normal lending rate of interest.  The complainant also filed the same proceeding with Annexure under Ex. A1.  Ex. B2 was Photostat copy of  annexure to Ex. B1.  Similarly Ex. A1 included the proceedings and the Annexure.  The R2 filed Ex. B3 a Photostat copy of Member Agreement Deed dt. 23-12-2000 executed in between the Complainant and the R1 in which both signed along with surety.  After availing the loan the complainant executed a memorandum of deposit of title deeds as security for his loan.  The Photostat copy of memorandum was Ex. B4, dt. 23-12-1000.   Ex. B5 was Photostat copy of Registered Assignment deed, dt. 27-12-2000 executed by R1 in favour of R2 for the loan availed by the Complainant.  Ex. B6 a Photostat copy of loan account extract maintained by R2 with regard to loan account of R1 pertaining to the loan of the Complainant as on 01-10-2011.  As per Ex. B6 the outstanding due amount as on 01-10-2011 was Rs. 53,599/- i.e. Rs. 41,274/- towards principal amount, Rs. 11,099/- towards interest, Rs. 797/- towards penal interest, Rs. 429/- towards LIC.  In Ex. B6 it was shown the total loan amount interest and over due interest, penal interest, LIC and LIC levy totaling                       Rs. 1,79,999 and the amount collected was Rs. 1,26,400/-.  So, the outstanding balance due was Rs. 53,599/-.  Ex. B6 included the Photostat copy of statement of appropriation particulars. 

13.              While so the Complainant filed Ex. A2 a Photostat copy of receipt issued by R1, dt. 24-8-2009 mentioning the loan account No. 504 and ledger No. 6 and page No. 245 for an amount of Rs. 3,800/- by adjusting of share capcital to loan principal amount.  Ex. A2 mentioned “loan cleared” .  Therefore, the complainant discharged the laon as per Ex. A2 dt. 24-8-2009.  As per Ex. B4 the Photostat copy of Memorandum of deposit of title deeds the original sale deed No. 5/99, dt. 2-1-1999 was deposited as security towards loan to R1.  In Ex. B5 the Photostat copy of the Registered Assignment Deed No. 1535/2000, dt.                         27-12-2000 under Sl. No. 5 it was mentioned regarding creation of equitable mortgage in favour of R1 by depositing the title deeds for the loan amount of                 Rs. 75,000/-.  The Ex. B5 was signed by the President incharge and Directors of the R1 society.  When the loan was cleared as mentioned in Ex. A2, the R1 had to refund the share capital but it was not done.   It was the duty of R1 to repay the share capital  and it was also duty of R1 to pay the housing loan to R2 as soon as the complainant discharged the entire housing loan.  The loan was not sanctioned by R2 directly to the complainant.   The R2 sanctioned the loan to R1, who inturn paid to the complainant for the construction of house.  The Registered Assignment Deed, dt. 27-12-2000 was executed in between R1 and R2.  The Agreement Deed was executed in between the complainant and R1, but  not in between the complainant and R2 or R1 and R2.  Therefore, Ex. B4 Memorandum of deposit of title deeds was executed by the complainant in favour of R1, who submitted to R2. There was no direct nexus between the Complainant and R2.  It was in between the Complainant and R1.  The R1 had to return the original registered title deed, dt. 2-1-1999 to the  Complainant after remitting the entire loan amount to R2 paid by the Complainant.  Since R1 failed to remit the entire loan amount collected from the Complainant to R2, the R2 had not released the original title deed of the Complainant.  Thus the deficiency of service was on the part of R1 and not on the part of R2.  Therefore, the R1 is directed to remit the entire loan amount collected from the Complainant to R2 and get back the original registered sale deed of the Complainant, dt. 2-1-1999 and deliver possession to the Complainant and issue clearance certificate and also refund of Rs. 3,800/- towards share capital,                  Rs. 1,000/- towards compensation for mental agony and Rs. 500/- towards costs.  Hence, the points are answered accordingly.

14.              Point No. 3 In the result, the complaint is allowed, directing the R1 to remit the entire loan amount collected from the complainant to R2 and get back the original registered sale deed, dt.2-01-1999 of the complainant and issue clearance certificate and deliver possession to the complainant within 60 days from the date of receipt of the order and also refund of Rs. 3,800/- (Rupees Three Thousand Eight hundred Only) towards share capital, Rs. 1,000/- (Rupees One Thousand Only) towards compensation for mental agony and Rs. 500/- (Rupees Five Hundred Only) towards costs.  The case against R2 is dismissed without costs.            

                   Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open forum, this the 11^th January 2012

MEMBER                                                                                       PRESIDENT

APPENDIX OF EVIDENCE

Witnesses examined.

For Complainant    NIL                                                  For Respondent :     NIL

Exhibits marked for Complainant  : -  

Ex. A1         Procs. No. 192/2000/CDP, dt. 16-12-2000 issued by R2.

Ex. A2         P/c of Receipt No. 17443, dt. 24-8-2009 issued by R1.

Exhibits marked for Respondents: -          

Ex. B1         P/c of Procs. No. 192/2000/CDP, dt. 16-12-2000 issued by R2

Ex. B2         P/c of Annexure L.A.No.192/2000/CDP, dt. 16-12-2000 issued by R2.

Ex. B3         P/c of Member Agreement Deed.

Ex. B4         P/c of Memorandum of Deposit of title Deeds.

Ex. B5         P/c of Assignment deed, dt. 27-7-2000.

Ex. B6         Copy of loan ledger issued by R2.

MEMBER                                                                                           PRESIDENT

Copy to :-

1)     Sri G. Trivikram Singh, Advocate for complainant.

2)     Sri V. Eswar Reddy, Advocate for  R2.

                            3)  The Rajampeta Co-operative Building Society Ltd.,

                                 Rep. by its President, No. N935, Rajampet town & Mandal,

                                 YSR District

         1) Copy was made ready on     :

2) Copy was dispatched on      :

3) Copy of delivered to parties :     

B.V.P.                                               - - -