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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.K. Jain, Presiding Member
K.B. Magadum —Petitioner
versus
Baleshshivappasasalatti
and Ors. —Respondents
Revision Petition No.3261 of 2018
(Against the Order dated 20/09/2018 in Appeal No. 1194/2017 of the State Commission Karnataka)
Decided on 22.2.2019
For the Petitioner:Mr. Rajesh Mahale and Mr. Krutin R. Joshi, Advocates
For the Respondent No.1:Mr. H. Chandra Sekhar and Ms. Rekha Chandra Sekhar, Advocates
For the Respondent No.2: NEMO
IMPORTANT POINT
In case of FDs with society, society should be impleaded, though it can be served through its Chairman/Secretary etc. No personal liability can arise, if there is no personal allegation of fraud.
Headnote:Consumer Protection Act, 1986—Section 21(b)—Banking-non-refund of maturity amount after maturity-society not impleaded-ordinarily Ex-Secretary or the Ex-President or office bearers of any Cooperative Credit Society will not fall within the category of service providers—But, in some cases, individuals may indulge in unfair trade practice under the clock of the Society—In the instant case, there is no personal allegation of fraud-deposit was not given directly to any person-complaint against the petitioner is person is not maintainable. Complaint dismissed.
Held: the Ex-Secretary or the Ex-President or office bearers of any cooperative credit society has exploited the corporate character of the cooperative society for purpose of committing illegality or defrauding other, then the Courts would ignore the corporate character of the Cooperative Credit Society and will look into their reality behind the corporate veil.
Reference answered as follows—
(a) Ordinarily Ex-Secretary or the Ex-President or other office bearers of any Cooperative Credit Society shall not fall within the category of service providers in respect of any dealing of the depositors with such society.
(b) However, if it is established that the Ex-Secretary or the Ex-President or office bearers of any Cooperative Credit Society has indulged in misfeasance/fraudulent activity with view to defraud depositors under the cloak of the cooperative credit society, such person shall fall within the category of service providers and shall be liable to compensate the consumers for deficiency in service.
Result: Revision allowed.
V.K. Jain, Presiding Member—The complainant/respondent no.1 instituted several complaints before the concerned District Forum impleading the petitioner and respondents no.2 & 3 as the OPs in the complaint. Cause title of the Consumer Complaints instituted by respondent no.1/complainant reads as under:
1. Shri Balesh Shivappa Sasalatti Age: 62 years, Occ: Retd/R/o House No.1737, Sector No.8, Anjenaya Nagar, Belagavi. ...Complainant.
And:
2. Shri K.B. Magadum, Age: 58 Years, Occ: Agriculture And the Chairman Belgaum Liberal Credit Souhard Co-operative Society Limited, Kapeleshwar Road Belagavi.
3. Shri Ramesh Magadum Age: 52 Years, Occ: Secretary, Belgaum Liberal Credit Souhard Co-operative Society Limited, Kapeleshwar Road Belagavi.
4. Shri Raju Hosmani Age: 30 years, Occ: General Manager, Belgaum Liberal Credit Souhard Co-operative Society Limited, Kapeleshwar Road Belagavi. ....Opponents.
2. Petitioner no.2 & 3 did not reply to the Consumer Complaint and did not appear before the District Form. The case of the petitioner is that he was not served with the notice of the Consumer Complaint and that is why he had not put an appearance before the District Forum. Vide order dated 18.08.2016, the District Forum directed as under:
“XXXX The complaints are partly allowed.
The O.Ps. represented by the Chairman, Secretary and General Manager are hereby directed and liable to pay to the complainant/s as ordered below;
Sl. No.
Complaint No.
F.D.R./ A/c. No.
Date of deposit
Amount deposited
Date of maturity
Matured Amount
1
2
3
4
5
6
7
1
120/2016
04042
30/3/2013
3 lakhs
30/3/2014
3.42 lakhs
2
121/2016
02083
1/8/2011
5 lakhs
31/12/2013
5.70 lakhs
3
122/2016
04044
8/5/2013
1 lakh
8/5/2014
1.14 lakhs
4
124/2016
02727
6/6/2012
1.40 lakhs
31/12/2013
1,59,600
5
125/2016
01575
6/6/2012
2 lakhs
31/12/2013
2.28 lakhs
6
126/2016
01415
17/9/2012
35,000
31/12/2013
39,900
7
127/2016
01137
9/6/2012
2 lakhs
31/12/2013
2.28 lakhs
The matured F.D.R/s. amount as mentioned in column No.7 carries future interest at the rate of 8% P.A. from the dates mentioned in column No.6 respectively till realization of the entire F.D.Rs. amount.
Further, in Compt.No.123/2016, the O.Ps. represented by the Chairman, Secretary and General Manager jointly and severally are hereby directed and liable to pay the deposited amount of Rs.3 lakhs in respect of FDR No.000186 and A/c No.555, with rate of interest @14% P.A. from 11/10/2012 upto 11/10/2013 with future interest 8% P.A. from 12/10/2013 till realization of the entire FDR amount.
Further, the O.Ps. represented by the Chairman, Secretary and General Manager jointly and severally are hereby directed and liable to pay Rs.3,000/-, to the complainant towards costs of the proceedings in each complaint.
The order shall be complied within 30 days from the date of the order.
If the order is not complied within stipulated period, O.Ps. are hereby directed to pay a sum of Rs.50/- per day to the complainant from the date of disobedience of order, till the order is complied.
The original order shall be kept in complaint No.120/2016 and the true copy in other clubbed cases.
(Order dictated, corrected and then pronounced in the open Forum on: 18th day of August 2016)”
3. Being aggrieved from the order passed by the District Forum, the petitioner approached the concerned State Commission by way of an appeal. The said appeal having been dismissed by the State Commission vide impugned order dated 20.09.2018, the petitioner is before this Commission.
4. It is an admitted position that the deposits were made by the complainant with the society which was duly registered under Karnataka Souhard Sahakari Act. The society being a legal entity in itself, the complaint
