Per Sri A. Hazarath Rao, President:-

        The complainant filed this complaint U/S 12 of Consumer Protection Act, 1986 seeking a direction to the opposite parties to return the documents of title kept with the 1^st opposite party; Rs.10,000/- as compensation besides costs.

2.     In brief the averments of the complaint are these:

        The complainant is a member of M/s The Guntur Co-operative Building Society Limited, Guntur.  The complainant obtained a loan of Rs.75,000/- from the 1^st opposite party by mortgaging his registered documents of his property through LA.No.104/97/GTR/dated 7-4-98.   The said loan has to be discharged eleven yearly installments and the last installment being Rs.6,819/-.   The complainant discharged entire loan amount to the 1^st opposite party by 28-04-10.  The opposite parties failed to return the documents of title to the complainant inspite of discharge of loan and oral demands and registered notice dated 17-03-12.   Non return of documents by the opposite parties to the complainant inspite of discharge of loan amounted to deficiency of service.  The said attitude of the opposite parties caused agony to the complainant.   The complaint therefore be allowed.

3.  The contention of the 1^st opposite party in brief is hereunder:   

        The complaint is not maintainable as this Forum has no jurisdiction.   As per agreement the 1^st opposite party shall receive payments from the borrowers and keep 1% interest margin for its maintenance and forward the remaining amount to the 2^nd opposite party. The complainant being a member made an application for sanction of house loan and 2^nd opposite party sanctioned loan of Rs.75,000/-.  The complainant executed an agreement in favour of the society to assign the property under equitable mortgage by depositing title deeds in favour of the 2^nd opposite party.  The Ex-Business Manager, Ex-President, Ex-Managing Committee of the 1^st opposite party misappropriated about Rs.20,00,000/- of society funds and caused loss to the society.  The Divisional Co-operative Officer cum Deputy Registrar, Guntur ordered statutory inspection u/s 52 of A.P. Co-operative Societies Act, 1964 and the inspecting authority submitted his report stating that Ex-Management and Ex-Business Manager of the 1^st opposite party misappropriated huge funds.                        A  case is pending hearing u/s 60 of A.P. Co-operative Societies Act.   Meanwhile the Ex-President and another of the 1^st opposite party filed WP.No.10614/07 and got an interim injunction order from proceeding with the inspection report.   Hence, surcharge proceedings are pending with the said authority.  Under those circumstances, the 1^st opposite party is in helpless condition in returning the documents to the complainant.   The complainant failed to avail the alternative remedy available u/s 61 of A.P. Co-operative Societies Act for his grievance and straight away approached the Consumer Forum.   The complaint is barred u/s 61 & 62 of the A.P. Co-operative Societies Act.  The                    1^st opposite party plays a nominal role, just make resolutions on the application of its members; forward them to the 2^nd opposite party for sanction of loan by collecting meager amount of 1% as margin for maintenance.  It is the duty of the 2^nd opposite party to release documents to the complainant if paid the entire loan amount.   The complaint therefore may be dismissed.

4.      The contention of the 2^nd opposite party in brief is hereunder:    

The complainant is not a member of the A.P. Co-operative Housing Societies Federation Limited, Hyderabad.  The complainant on the other hand is a member of the 1^st opposite party.   The 2^nd opposite party sanctioned a loan in bulk to the 1^st opposite party on its application for disbursement of its members. From out of the loan amount released to it the 1^st opposite party disbursed loan of Rs.75,000/- to the complainant.   The 1^st opposite party gave security of its members i.e., complainant’s property as per registered assignment deed.   Security will be released only after completion of entire loan.  The mortgage deed is in between the complainant and the 1^st opposite party.  As per the registered assignment deed the complainant is not a party to the proceedings.  Hence there is no privity of contract between the complainant and the 2^nd opposite party.   The 2^nd opposite party is lending loans to Co-operative Housing Societies after borrowing from LIC on interest. The 2^nd opposite party released loan only to the 1^st opposite party by way of security of complainant’s house property documents.   The complainant can demand the 1^st opposite party only for release of his documents.  The complainant did not make any allegation against the 2^nd opposite party.  The  1^st opposite party acted as an agent between its members and the 2^nd opposite party.   The complaint is bad for non joinder of the person who issued receipts.  The complainant is due in a sum of Rs.1,83,522.16ps as per its accounts books.  The 2^nd opposite party gave a suitable reply on 21-04-12 to the notice issued by it.   The 2^nd opposite party has to recover the loan and repay it to LIC.  Unless the 2^nd opposite party received the entire loan amount together with interest from the complainant it cannot release the documents.  The complaint therefore be dismissed.

5.  Exs.A-1 to A-61 and Exs.B-1 to B-6 on behalf of complainant and 2^nd opposite party were marked respectively.

6.   Now the points that arose for consideration in this complaint are:

        1. Whether the complainant is a consumer?

2. Whether this Forum has got jurisdiction to entertain the                               complaint?

3. Whether the opposite parties committed deficiency of                          service?

        4. Whether the complainant is entitled to compensation?

        5. To what relief?

7.   POINTS 1&2:-   The complainant taking loan of Rs.75,000/- under an equitable mortgage by depositing title deeds from the                   1^st opposite party is not in dispute.     In Secretary vs. Thiru Murugan Co-operative Agricultural Credit Society vs. M. Lalitha (dead) through LRs and others  2004 (1) CPJ (1) SC 

        “In Dhulabhai case consideration was whether the jurisdiction of the Civil Court was excluded.   Propositions (1) and (2) indicate that where the statute gives a finality to the orders of the special tribunals the jurisdiction of Civil Courts must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Further, where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court.   The remedies that are available to an aggrieved party under the 1986 Act are wider. For instance in addition to granting a specific relief the Forums under the 1986 Act have jurisdiction to award compensation for the mental agony, suffering, etc., which possibly could not be given under the Act in relation to dispute under Section 90 of the Act.   Merely because the rights and liabilities are created between the members and the management of the society under the Act and Forums are provided, it cannot take away or exclude the jurisdiction conferred on the Forums under the 1986 Act expressly and intentionally to serve a definite cause in terms of the objects and reasons of the Act reference to which is already made above when the decision of Dhulabhai’s case was rendered the provisions similar to 1986 Act providing additional remedies to parties were neither available nor considered.   If the argument of the learned counsel for the appellant is accepted it leads to taking away the additional remedies and Forums expressly provided under the 1986 Act, which is not acceptable”.

        Taking a clue from the above decision rendered by the Supreme Court we hold that this Forum has jurisdiction to entertain the complaint.  

8. POINT No.3:-   The 2^nd opposite party through the 1^st opposite party sanctioned loan of Rs.75,000/- to the complainant on 07-04-98 and the said loan amount has to be discharged in eleven yearly installments, the last installment being Rs.6,819/- towards principal and the said loan carried interest at 14.5% p.a. with half yearly rests and also carried penal interest of 2½ on delayed payments (Ex.A-1).  Ex.A-1 further revealed that the complainant deposited sale deeds dated 4514 of 97 dated 02-07-97; 5301 of 97 dated 28-07-97. 

9.     The complainant paid Rs.1,57,032/- to the 1^st opposite party vide Exs.A-4 to A-57. Prior to filing this case, the complainant got issued a registered notice to both the opposite parties showing the details of payments made by him in discharge of loan.  Inspite of that the 1^st opposite party for the reasons best known to it neither denied the payments nor contended that the complainant still has to pay any amount to it.  It has therefore to be inferred that the payments evidenced by Exs.A-4 to A-57 was in discharge of entire loan amount.  

10.   The contention of the 2^nd opposite party is that there was no privity of contract between it and the complainant.   The 2^nd opposite party is in possession of the documents of title belonging to the complainant with it.  Therefore it has to be inferred that the                         1^st opposite party deposited title deeds of the complainant with the  2^nd opposite party.   When 2^nd opposite party got deposited title deeds of the complainant through the 1^st opposite party it stepped into the shoes of the 1^st opposite party in our considered opinion.  Under those circumstances, the contention of the 2^nd opposite party that it has no privity of contract is devoid of merit.  

11.   Ex.A-1 is proceedings of the Managing Director, A.P.                        Co-operative Housing Societies Federation Limited dated 07-04-98 vide LA.No.104/97/GTR.  Under Ex.A-1 a note was mentioned as detailed infra:

      “Where there is difficulty in remitting the loan installments by the borrowers to the society, the installment can be remitted to the House Fed directly by way of crossed demand draft in favour of House Fed, Hyderabad   under intimation to the society and cash can be remitted in the SBH, Baghlingampalli (House Fed Building)”. 

12.   The 2^nd opposite party did not caution the borrowers that it was not responsible to them if the 1^st opposite party did not remit the amount to it.   In the absence of such specific caution the payments made by the borrowers to the 1^st opposite party can bind the                     2^nd opposite party also.      

13.  The contention of the 1^st opposite party is that Ex-Business Manager, Ex-President and Ex-Managing Committee misappropriated about 20 lakhs of Society Funds (OP1) and caused loss. In   WP.No.14552 of 2005 between M. Seshagiri Rao and the Prl. Secretary to Government, Housing, Municipal Administration and Urban Development Department, Secretariat, Hyderabad and others was finally disposed on 23-09-10 holding

            “From the counter affidavit of the 5^th respondent and as well as the material on record, it is clear that the petitioners have cleared the loan amounts at the society level.   When the petitioners have duly paid the installment amounts which the society, it is for the society to remit those amounts with the 2^nd respondent.   Merely because, the society did not remit the same with the 2^nd respondent, and there is diversification of funds by the society, the petitioners cannot be blamed for non payment of loan amounts.   In the circumstances, I am of the opinion that the petitioners are entitled for release of the documents.   The respondents are, therefore, directed to release the documents to the petitioners, forthwith, if not, already released in pursuance of the interim order of this Court, dated 23-08-06. The respondents are further directed not to insist the petitioners for payment of any further amounts”.    

 14.  As against the above judgment the 2^nd opposite party relied on the order passed in W.A.M.P.1716 of 2011 in W.A. 725 of 2011                    (Ex.B-4) preferred against the judgment in WP.No.14552 of 2005 wherein the division bench of the High Court of Judicature of Andhra Pradesh, Hyderabad on 19-09-2011 stayed the operation of the order in WP.14552 of 2005 (extracted above).   Therefore the order passed in  WP.No.14552/05 cannot operate as precedent in our considered opinion.

15.   The 1^st opposite party did not specifically deny the discharge of loan as already observed.   It is not the contention of the 1^st opposite party that the complainant is still due.   Having paid the amount to the 1^st opposite party in our considered opinion the complainant is entitled for return of documents from the opposite parties.   In our considered opinion that is the only logical conclusion that can be arrived at.   Under those circumstances directing the opposite parties to return the documents to the complainant will meet ends of justice.  We therefore answer this point against the opposite parties.

16.  POINT No.4:-  The complainant claimed Rs.10,000/- as damages towards mental agony.   Considering the circumstances under which the opposite parties could not return documents of title to the complainant we are of the considered view that no compensation need be awarded.   We therefore answer this point against the complainant.

17.  POINT No.5:-  In view of above findings, in the result the complaint is partly allowed as indicated below:

1.  The opposite parties are directed to return the title deeds                   mentioned in Ex.A-1 i.e., 4514/97 dated 02-07-97 and                     5301/97 dated 28-07-97 to the complainant.

2. The opposite parties are directed to pay Rs.1,000/- (Rupees                  one thousand only) to the complainant.

3.  The above order shall be complied within a period of six                      weeks from the date of receipt of the copy of the order.

Typed to my dictation by Junior Stenographer, corrected by me and pronounced in the open Forum dated this the 6th day of November, 2012.

    Sd/-XXX                                        Sd/-XXX                                            Sd/-XXX

    MEMBER                                         MEMBER                                       PRESIDENT

APPENDIX OF EVIDENCE

                                            DOCUMENTS MARKED

For Complainant :

For 2^nd Opposite Party:  

  Sd/-XXX

                                                                                                PRESIDENT