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

 

Friday, 23^rd July 2010

 

 

S. Raghunathaiah, Father of Late Sreenivasulu,  

age 78 years, H.No. 3/151 A, S.V. Nagar, Rajampet,

Kadapa District.                                                                         ….. Complainant.

 

Vs.

1)   President Rajampet, Coop. Housing Building Society,

2)   Regional Manager, Coop – Housing Federation, Kadapa.

3)   Managing Director, A.P. Coop – Housing Federation,

4)   Divisional Coop-Officer, Deputy Registrar of Coop-Societies,

      Rajampet.                                                                            ..….. Respondents.  

  

This complaint coming on this day for final hearing on 14-7-2010 in the presence of Sri V. Devarajulu, Advocate for complainant and Sri S. Krishna Kumar, Advocate for R1 and Sri M. Suresh Kumar, Advocate for R2 & R3 and R4 called absent and set exparte and upon perusing the material papers on record, the Forum made the following:-

 

 

 

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

 

2.                The brief facts of the complaint is as follows:- One late S. Srinivasulu [son of the complainant] is the member of Rajampet Coop-House Building Society, Rajampet    He borrowed a loan of Rs. 75,000/- in 1995 for construction of house repayable in 20 years with interest @ 13.8% and penal interest @ 2.5%. The member mortgaged the house bearing No. 3/151-A, S.V. Nagar, Rajampet to the society and the documents also were taken by the society i.e. R1 and lodged with R2.   The R2 is the financing agency to its member societies i.e. R1 inturn R1 sanctioned loan to its members. After getting property mortgaged along with the documents. Now the documents are mortgaged at A.P. House Fed, Hyderabad i.e. R2. the petitioners son late S. Sreenivasulu not only cleared the loan but the society collected excess amount of Rs. 32,215/- through threats frightening the member at the risk of attaching the movables and immovable property, if the loan is not cleared. The respondents collected the interest and penal interest on the principal amount and collected and LIC premiums, whenever, the respondents demanded.  The complainant was served with notices under section 71 of APCS Act 77//964 by the recovery officer, Regional Manager House Fed i.e. R3. Through the member was not a defaulter.   The respondents collected excess amount of Rs. 32,215/- though the loan was cleared.   The respondents refused to return the documents saying that the amounts paid by late S. Srinivasulu was not passed on to the account of the member maintained by the A.P. House Fed, Hyderabad separately. 

3.              Thus there are two loan accounts of the same member, one with Rajampet HBS i.e. R1 and the same account with A.P. House Fed i.e. R2.   When the member paid loan installments to the Rajampet HBS i.e. R1 after getting the amount and pass on the same amount to the Cooperative House Fed i.e. R2, which inturn credit the loan account of the complainant. It is not the fault of the member if the Rajampet HBS failed to pass on the collected amounts to R2. The complainant approached the Cooperative House Fed, Hyderabad i.e. R3 replied that the documents shall not returned unless the amounts pending as per their accounts are cleared, and vexed with the attitude of Cooperative House Fed, Hyderabad i.e. R3, the complainant suffering from chronic incurable disease in order to seek remedy, approached A.P. Loka Ayukta, Hyderabad in October 2006, praying for order directing cooperative House Fed, Hyderabad i.e. R3 to return the documents pleaded at the time of borrowing since the loan is clear off.   The A.P. Loka Ayukta has taken complaint as No. 1053/2006 directed the cooperative House Fed, Hyderabad i.e. R3 to submit its report on the complaint.  The R3 has reported to A.P. Loka Ayuktha and submitted his counter on 18-11-2006. As per counter only Rs. 75,300/- was passed on to the A.P. House Fed and the member has no nexus with House Fed and any action may be taken against society i.e. R1 but not against R3. 

 

4.                The crux of the matter is that the title deeds are under lock and key of the A.P. House Fed and not willing to return the documents unless the amount pending is paid as per their demand either by society or member complainant. When the member society of Cooperative House Fed i.e. R1 has become a defaulter, the financing society has got powers to recover the amount under section 71 or under section 61 (a) (d) nor exercised powers to recover the amount under section 63 (2) or under section 53 of APCS Act 1964.   It was astonished that being a federal society financing agency, became a silent spectator towards illegal action of the member society i.e. R1 instead of the branch of R2 taking coercive, actions by issuing certificates under section 71 of APCS Act against innocent member, subjecting him to mental agony which caused his death in April 2009.   The complainant’s son was subjected to mental tension. In spite of persistant demands, the documents were not returned causing mental agony and deficiency of service. The respondents behaving like illegal money lenders. As per statement of details of principal and interest, penal interest, administrative charges, notices charges, LIC premium total amount of Rs. 1,32,599/- was paid towards loan of late S. Sreenivasulu son of the complainant. As on 8-8-2005 excess amount of Rs. 5,438/- was paid. Again the respondents 1 to 3 forcibly demanded and collected excess amount of Rs. 32,215/-. The complainant complained his woeful sufferings to the divisional cooperative officer a statutory head, an enquiry was ordered under section 51 of APCS Act 7 of 1964 and the enquiry was also conducted, report was also submitted to the D.C.O. Kadapa. After suffering for a long period of 4 years the complainant preferred this complaint before this Hon’ble Forum, praying to return the excess amount paid to the A.P. House Fed i.e. Rs. 32,215/- documents and other reliefs. 

 

5.              R1 and R2 filed a counter separately.   The R2 filed adoption memo on behalf of R3 also. The present complaint is liable to be dismissed or liable to be rejected under order 7 rule 11 (d) of C.P.C the A.P. coop. tribunals is constituted at Hyderabad to resolve the disputes between a cooperative society and its members or any dispute touching the same.    In view of section 76 of APCS Act that the appellate authorities regarding execution of decrees in cooperative societies vide section 70 lies with the A.P. Cooperative Tribunals only. The complainant has to seek remedy before the Cooperative Tribunal at Hyderabad and not before this Hon’ble Forum.   If the complainant intends to question the action of the respondents he has got remedy only by the Cooperative Tribunal, Hyderabad as per Act and not by way of present complaint.   The same view is upheld by the Hon’ble High Court of A.P in its decision in W.P. No. 4883/2004 between Smt. K. Parvathamma of Railway Kodur Vs. The Pragathi Building Cooperative Society Ltd., Railway Kodur and another.  Hence, the complaint is liable to be rejected. 

 

6.              The complainant is not a member of the respondent society and consequently he cannot make any claim either against R1 or against R2 and therefore, the complainant is not a consumer within the definition of Act.   Thus the complaint is liable to be dismissed.   The son of the complainant by name S. Srinivasulu is a member of Rajampet Cooperative house Building Society Ltd., Rajampet.  The allegations that the son of the complainant had availed a loan of Rs. 75,000/- in the year 1995 for construction of house repayable in 20 years with interest @ 13.8% and penal interest @ 2.5% is admitted to be true. The A.P. House Fed lent the loan to the society borrowing the same from LIC of India, Bombay on interest on creation of floating charge on all its assets. Thus the complainant is not a member of the society and not availed any loan from the respondents.   It is also true that at the time of availing loan from the society the said house was mortgaged. It is submitted that the R1 society is a cooperative society registered as per provisions of APCS Act 7 of 1964.   It functions under the administrative control of C.c. & R.C.S A.P. Hyderabad.  The said society was organized by the persons having their own plots with an objective to construct houses and got it registered by the District Cooperative Registrar, Rajampet. The R2 & R3 also called A.P. House Fed is an Apex cooperative society, A.P. Hyderabad. A.P. House fed sanctioned loan of Rs. 75,000/- to Rajampet cooperative Society Ltd., i.e. R1 intended to the son of the complainant Sreenivasulu subject to the condition that the loan shall be repaid in 20 years with principle installment @ Rs. 3,750/- payable annually or once in a year and interest @ 13.8% p.a. payable half yearly and penal interest at 2.5% in addition to the normal lending rate of interest all over due installments i.e. belated payments. The member late Sreenivasulu having agreeived to the above conditions and executed an agreement with R1 society to assign his property with equitable mortgage by depositing of the title deeds in favor of A.P. House Fed and also abide by the terms and conditions stipulated in assignment deeds.   The dues against the loan account of the society with regard to late Sreenivasulu, son of the complainant after reconciliation is Rs. 2, 16,231/- as on 28-2-2010. The A.P. House Fed is issuing demand notices to the R1 society indicating dues against the member including the son of the complainant.  The R1 society has initiated illegal action as per provisions of section 71 of the Act filed application before the Deputy Registrar / Regional Manager, A.P. House Fed, Kadapa for issue of certificate under section 71 of the Act for recovery of Rs. 1,18,392/- due by the son of the complainant S. Sreenivasulu as on 1-4-2006.   After entering the above case the Deputy Registrar / Regional Manager, A.P. House Fed, Kadapa authorized the Asst. Registrar / Recovery officer, A.P House Fed, Kadapa to take necessary action for issue a certificate under section 71 of the Act. 

 

7.            Accordingly, the Asst. Registrar / Recovery officer, Kadapa issued a notice to the complainant’s son to appear before him on 19-6-2006. The complainant appeared before the Arbitrator and denied the case.   The Asst. Registrar / Arbitrator, A.P. House Fed, Hyderabad after examining the account pertaining to the loanee, the arbitrator during the examination of the case, found that the R1 society filed application for the demand payable by the son of the complainant shown as per the A.P. House Fed demand, instead of the amounts payable as per the society demand i.e. R1.   As per demand of R1 society the son of the complainant late S. Sreenivasulu is due only Rs. 9031/- as on 1-4-2006 but as per A.P. House Fed demand, the society is due Rs. 1,17,992. This was due to a huge imbalance between the R1 society demand and R3 as on 1-4-2006 in respect of the above loan.  The society i.e., R1 maintains the loan account along with its 1% margin and other charges payable by member as per the regulation of the society. The loan account maintained at A.P. House fed is the loan account of the society, not of the complainant.   As per agreement executed by the complainant’s deceased son the society assigned the property to the A.P. House fed.   By the date of agreement executed by the complainant’s son both the complainant and the society are jointly and severally responsible for repayment of the loan due to A.P. House fed.  Now the complainant could take the stand that he is not responsible if the society fails to transmit the repayment to the A.P. House fed. 

 

8.                  It is also admitted fact that the A.P. Lok Ayktha has taken the complaint No. 1053/2006 directed the cooperative House Fed, Hyderabad to submit its report on the complaint. The Hon’ble A.P. Lok Ayktha after perusing the counter of A.P. House Fed, Hyderabad heard the case on both sides and dismissed the case duly advising the complainant’s son to file appeal against the certificate issued by the arbitrator as per the provisions of the APCS Act before competent forum.   The A.P. House Fed never maintains the loan account of the complainant.   It maintains the loan account of the Rajampet CHBS Ltd., Rajampet, as per contention of the complainant the A.P. House Fed is not willing to return the documents are false and invented for the purpose of this case.   Now also A.P. House Fed is ready to return the documents, if the complainant repays the loan as per the demand of the A.P. House fed as shown as above.   The A.P. House Fed is silent in recovering the due amount from the R1 society is false.   As per request of R2 the District Cooperative officer, Kadapa ordered for an inquiry as contemplated under section 51 of the Act duly appointing the Divisional Cooperative Officer, Rajampet as inquiry officer.   According to his report the son of the complainant is due to Rs. 54,784/- as on 30-11-2007 itself. Further as per instructions of the A.P House Fed in Lr. Rc No. 67/08-B.2, dt. 10-7-2009 another inquiry under section 51 of the act was ordered into the affairs of the society and the same is under process.   The allegation that the son of the complainant paid excess amount of Rs. 5,428/- is false. It is also equally false that the respondents 1 to 3 have collected excess amount of Rs. 32,215/-. It is submitted that a statutory inquiry under section 51 of the act was also conducted by the Divisional Cooperative Officer / Inquiry officer, as ordered by the District Cooperative Officer, kadapa vide proceedings No. 2479/07-D, dt. 19-10-2007.    The observations or essence of the inquiry officer under section 51 of the Act is that Sri S. Sreenivasulu is still due an amount of Rs. 54,784/- as on 30-11-2007 itself. The contention of the complainant that this son paid excess amount is only creation for purpose of the case. So there is no deficiency of service on the part of the respondents and hence, the complaint may be dismissed with costs.     

 

9.                 The R4 called absent and set exparte on 21-4-2010.

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

i.                   Whether the complaint is maintainable or not?

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 to A4 were marked.   No documents were marked and filed on behalf of the respondents. 

 

12.              Point No. 1& 2.  It is true that the complainant’s son late S. Sreenivasulu was the member of Rajampeta Cooperative House Building Society, i.e. R1 society borrowed a loan of Rs. 75,000/- in the year 1995 for construction of house repayable in 20 years with interest @ 13.8% and penal interest @ 2.5%.  The Member mortgaged the house No. 3/151A in S.V. Nagar, Rajampet to the society along with documents. The R3 is the A.P. House Fed, Hyderabad is the state society, financing agency to its member societies i.e. R1 after getting the property mortgaged along with the documents.   As per complaint the complainant’s son late S. Sreenivasulu had not only cleared the loan but also the society collected excess amount of Rs. 32,215/- by way of threatening him. But to prove the same the complainant had not filed any receipts obtained by either R1, R2 & R3. The complainant also stated that he had paid interest, penal interest along with LIC premiums. But no receipts were filed to prove the same. Ex. A1 is not issued by either one of the respondents. It will not be taken into consideration.  Ex. A2 is the report of the A.P. Cooperative House Building Society Federation Ltd., Hyderabad to A.P. Loka Ayukta also clearly shows that the complainant’s son late S. Sreenivasulu was due of Rs. 1,18,392/- to R3.   As per A.P. House Fed the amount of Rs. 9,031/- was due to R1 as on 1-4-2006. Further the complainant stated in his complaint that A.P. Loka Ayukta directed him to file the complaint before the Hon’ble Forum. But the complainant failed to file the order of the said A.P. Loka Ayutha. It is not correct that “the case should be filed before the proper forum, means under which Act or Society, the case should be filed there only it should be filed, but not before the Hon’ble Forum”. The process of collection of dues from the members of the R1 society as initiated legal action. As per the provisions of section 71 of the Act filed application before the Dy. Registrar / Regional Manager, A.P. House Fed, Kadapa for issue of certificates under section 71 of Act for recovery of Rs. 1,18,392/- due by the son of the complainant S. Sreenivasulu as on 1-4-2006.   The Dy. Registrar/Regional Manager, A.P. House Fed, Kadapa authorize the Asst. Registrar / Recovery officer, A.P. House Fed to take necessary action for issue of certificates under section 71 of Act. Accordingly, the Asst. Registrar / Recovery officer, Kadapa issued notice to the complainant’s son to appear before him on 19-6-2006.  In this process the son of the complainant appeared before arbitrator and denied the case.   The enquiry officer, Asst. Registrar/Recovery Officer, Kadapa found that the son of the complainant S. Sreenivasulu is due of Rs. 9,031/- as on     1-4-2006 to the R1 and Rs. 1, 17,992/- due to the R3. After that they issued several demand notices on 1-4-2006, 1-10-2006, 1-4-2007, 1-4-2008, 1-10-2008, 1-4-2009 and 1-10-2009 to collect the dues from complainant’s son. The appellate authority regarding execution of decrees in cooperative societies vide section 70 lies with the A.P. Cooperative Tribunals only. The R3 i.e. A.P. House Fed sanctioned and released loan to the R1 i.e. Rajampet Cooperative House Building Society based on the property of the complainant’s son as security and agreement was executed by him with the society.  In the said agreement the complainant also agreed to abide the terms and conditions of the assign deed to be executed by the society in favor of A.P. House Fed i.e. R3. The complainant’s son willfully mortgaged the property to sanction the loan amount. So the complainant’s son himself is responsible to repay the loan amount as per the terms and conditions of respondents 1 to 3. So this complaint is not maintainable before this Hon’ble Forum.    The complainant is not entitled for any relief as prayed for. 

 

13.              Point No. 3  In the result, the complaint is dismissed without costs. 

 

Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open forum, this the 23 July 2010

 

 

 

Witnesses examined.

For Complainant    NIL                                           For Respondent :         NIL

 

Exhibits marked for Complainant : -  

 

Ex. A1         Statement of details of payment of S. Srinivasulu.

Ex. A2         P/c of letter from House Fed to the Registrar, A.P Lok Ayuktha and Upa

Ex. A3         P/c of legal notice from complainant’s advocate to the Joint Director / Managing Director, A.P. Coop. Housing Societies Federation Ltd., Hyderabad.

Ex. A4         P/c of letter from the Commissioner, Cooperation and Registrar of Cooperative Societies, A.P. Hyderabad to complainant’s advocate, dt. 10-11-2009.

 

Exhibits marked for Respondents: -           ----NIL------

 

                             1) Sri V. Devarajulu, Advocate for complainant.

 

2) Copy was dispatched on      :

3) Copy of delivered to parties :