Complaint filed on 07.01.2009

and Decided on 04.03.2009

BEFORE THE UDUPI DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

AT UDUPI (KARNATAKA)

PRESENT: 1. Sri P.C.Gopal, President,
2. Smt. Mumtaz Begum, Member,
3. Sri Bekal Lakshmana Nayak, Member.

Consumer Complaint No.04/2009

Order dated : 04.03.2009

Between:

Divya K.,
Aged about 33 years,
W/o G.Kumaraswamy,
D/o Bhaskar Rao K.,
Residing at 301, Vinayaka Apartments,
Bhagavathi Nagara, Kodialguttu West,
Post Kodialbail, Mangalore – 3,

(Sri P.N.G.Rao, , Advocate for the Complainant)

………Complainant

- Versus –

1. The Manaing Director,
M/s ManipalFinance Corporation Ltd.,
Regd. Office: Manipal House,
Tile Factory Road, Manipal.

2. T.Narayana M.Pai,
S/o T.M.A. pai,
Managing Director.

3. Raghavendra Nayak,
Aged about 37 years,
Director,

4. Chandappa R.Sherigar,
Director,
No. 2, 3 and 4 are working at
M/s Manipal Finance Corporation Ltd.,
Regd. Office: Manipal House,
Tile Factory Road, Manipal.

….. Opposite Parties

SRI. P.C.GOPAL, PRESIDENT.

1. The Complainant filed this complaint U/s 12 of Consumer Protection Act, 1986 alleging deficiency in service by Opposite Party in not repaying the amounts of Shreyus Redeemable, Subordinated Debts – Series III as shown below on date of redemption:

Contd……2

Sl.
No.
Name of the Depositor
Shreyus Certificate No./Folio No. &
Date / Face Value
Period and Rate of Interest
Date of Redemption
1
Miss Divya K.

036604/002379

8.3.2002 /10,000

5 years &

10%

08.03.2007

and prayed for direction to Opposite Party to pay the principal amount alongwith interest amount, compensation plus cost of the proceedings, etc.
2. The Complainant submits she has invested money under Shreyus Redeemable, Subordinated Debts – Series III with the Opposite Party Company and the details which are furnished in the above table. Since Opposite Parties had failed to pay the amount on the due date, the complainant got issued a lawyer’s notice dated 03.10.2008, calling upon the Opposite Party to pay the principal amount alongwith interest at 18% per annum. The Opposite Parties did not heed to request nor reply the notice and the oral requests/personal contacts and the Complainant failed to get back the money. Hence this complaint praying for the above reliefs.
3. On admission of the complaint, a notices were served on the Opposite Parties. The Opposite Party Corporation filed a reply to the notice on the letter head of the Opposite Party purported to be signed by “Officer” without filing the authority delegating the powers, name of the Officer. The Opposite Party submitted in the said letter that the relation between the Opposite Party and Complainant is borrower and lender. Since the Shreyus Certificates are Sub-Ordinates Debts are debts Bonds/Promissory Notes and the complaint cannot be termed as “Consumer Dispute”.
4. The Opposite Party further stated that a company petition bearing 89/2005 before the High Court of Karnataka under Section 391 of Companies Act, 1956 alongwith a scheme of settlement and compromise overwhelmingly approved by the statutory majority of the Opposite Party’s creditors and the same is pending before the High Court for final disposal.

5. The Opposite Party filed a ruling reported in ILR 2006 KAR 3570 Manipal Sowbhagya Nidhi Ltd. V/s G.N.Rama Rao and prayed for keeping the complaint
in abeyance till the company petition U/s 391 of Companies Act is disposed by the Hon’ble High Court of Karnataka.

6. The Complainant has filed 3 documents and the sworn affidavit. The Complainant documents are marked as Exs.C-1 to Exs.C-3. We heard the complainant. The points arise out of this complaint are :

Contd……3

(1) Whether the complaint is a ‘consumer dispute’?
(2) Whether this Forum has jurisdiction to hear the complaint in view of
the petition pending before the Hon’ble High Court of Karnataka U/s
391 of Companies Act?
(3) Whether there is deficiency in service on the part of the Opposite
Parties?
(4) Whether the Complainant is entitled for reliefs?
(5) What Order?

REASONS

Point No.1:
7. The Opposite Party Corporation contended that the relation between Opposite Party and Complainant is that of borrower and lender. Hence this is not a consumer dispute. On a reference to section 2(1)(e) the consumer dispute means a dispute where the person against whom a complaint has been made, denies or disputes the allegation contained in the complaint. Accordingly the complainant has a dispute against Opposite Party and made a complaint alleging non payment of maturity value after maturity which the Opposite Party denies, disputes the allegations. Therefore, it is a consumer dispute. Hence, the point No.1 is answered in Affirmative.




Point No.2:
8. The Opposite Party’s contention is that since a petition bearing 89/2005 U/s 391 of Companies Act is pending before the Hon’ble High Court of Karnataka, this Forum does not have jurisdiction to try this complaint. The Opposite Party did not produce any material evidence or sworn affidavit to this effect but abstained to be present in the proceedings. Moreover, there is no stay granted by the Hon’ble High Court in favour of the Opposite Party. In view of no evidence and no stay order produced by the Opposite Party the contention of the
Opposite Party cannot be taken for granted. In addition to this, section 3 of C.P.Act 1986 gives the complainant an additional remedy not in derogation of the provisions of any other law. Therefore, the contention of Opposite Party overruled. Accordingly the point No.2 is answered in affirmative.

Point No.3:
9. The complainant has produced Original Shreyus Certificate issued by the Opposite Party Corporation, wherein the face value of the Certificate is mentioned in the above table, which is marked as Exs.C-1. Ex.C-2 is the legal

Contd…….4

notice dated 3.10.2008 and Ex.C-3 is the postal acknowledgement. The Opposite Parties remained absent through out the proceedings and did not file affidavit or any document to support their claim including the Officer, who filed the reply to the notice. The Opposite parties have not produced any documents to show that any amount either the principal or the interest is paid to the complainant in respect of the aforesaid Shreyus Redeemable, Subordinated Debts – Series III. The Opposite Parties have failed to pay the principal amount with interest of the Shreyus Redeemable, Subordinated Debts – Series III even after the due date, it certainly amounts to deficiency in service. Hence, we answer the point No.3 in the Affirmative.

Point No.4 & 5:
10. In view of the answering Point Nos.1 to 3 in the Affirmative, we hold that the complainant is entitled to get the reliefs. Hence, we answer point No.4 in Affirmative and pass the following:

ORDER

The complaint is allowed. The Opposite Parties are directed jointly and severally to pay to the Complainant a sum of Rs.10,000/- towards the principal amount of Shreyus Redeemable, Subordinated Debts – Series III alongwith interest @ 10% per annum from 08.03.2002 to 08.03.2007 and further interest @12% per annum from 09.03.2007, till payment on principal amount. The Opposite Parties are also directed to pay Rs.1,000/- towards cost of this complaint. Opposite Parties shall comply with the aforesaid order within one month from the date of receipt of this order.
(Order dictated to the Stenographer, after the same is typed, corrected and pronounced in the open court on this the 04th day of March 2009)

(P.C.GOPAL)

PRESIDENT

(MUMTAZ BEGUM) (BEKAL LAKSHMANA NAYAK)
MEMBER MEMBER

1. Mr.M.Nithyananda Prabhu,
S/o M.Padmanabha Prabhu,
Aged about 61 years,
2. Smt.Jayanthi Prabhu,
W/o M.Nithyananda Prabhu,
Aged about …. Years,
Both are residing at “Shree Ganesh”,
D.No.3-23-2994,
Kadri Temple Road,
Mangalore. …. COMPLAINANTS
(Advocate for the Complainant: Smt.Manjula.N.A)
VERSUS

Manipal Finance Corporation Ltd.,
Registered Office: Manipal House,
Manipal-576 119. …. OPPOSITE PARTY

Opposite Party: Appeared in person.

ORDER DELIVERED BY SMT. ASHA SHETTY, PRESIDENT

1. The brief facts of the complaint are as follows:

The Complainants contended that the Opposite Party is a Private Limited Company, transacting non-banking financial business having registered office at Manipal and branch office at Hampankatta, Mangalore. The Complainants claims to have deposited certain sum of money with the Opposite Party under “Shreyus Certificate” before the branch office at Mangalore. The details of which are furnished in the schedule

The Complainants contends that, on the date of redemption of the aforesaid amounts, they have approached the Opposite Party to withdraw the amount. The Opposite Party promised to pay the amounts but did not pay the amount till today. Whenever the Complainant approached the Opposite Party, the Opposite Party has simply postponing the payment on false reasons. Despite the said assurances the Opposite Party has failed to pay the deposits with interest, amounts to deficiency in service and the Complainant finally demanded the amount by issuing lawyer’s notice dated 13.12.2008 to the Opposite Party. The same was received by him but not paid the amount. Hence, the above complaint filed under Section 12 of the Consumers Protection Act, 1986 (herein after referred to as “The Act”) seeking direction from this Hon’ble Forum to the Opposite Party to pay the Redeemable, subordinated debts amount of Rs.22,000/- along with interest at the rate of 20% p.a. from the date of deposit till the date of payment, plus compensation and costs of the proceedings.

2. Version notice served to the Opposite Party by RPAD and Opposite Party sent version through post and submitted as follows:
The Shreyus Certificates are not Deposit Certificates, they are simply Subordinate Debt Bonds/Promissory Notes. The issuer of debt bonds is a borrower and the holder of the debt bond is a lender. The dispute cannot be termed as a consumer dispute. And further contended that they have moved Company Petition under Section 391 of the Companies Act is pending before the High Court of Karnataka, for final disposal. Therefore, Opposite Party prayed to keep in abeyance of the further proceedings till the disposal of the above Company Petition and prayed for dismissal of the complaint.
3. On the basis of pleadings, the points that arise for our consideration are as follows:
(i)Whether the Complainants are consumers?

(ii)Whether the Complainants prove that the Opposite Party has committed deficiency in service?

(iii)If so, whether the complainants are entitled for the reliefs claimed?

(iv)What order?



4. In support of the complaint, the Complainant – Mr.M.Nithyananda Prabhu (CW1) filed affidavit reiterating what has been stated in the complaint and got marked Ex C1 to C6. The Opposite Party has not filed their counter affidavit. We have heard and perused the pleadings, documents and evidence placed on record by the respective parties and answer the points are as follows:
Point No.(i): Affirmative
Point No.(ii) to (iv): As per the final order.

REASONS

5. POINT NO.(i):
In the instant case, that the Shreyus Certificate produced by the Complainants revealed that deposits were made in the name of the Complainant No.1 and 2 with the Opposite Party Company as evidenced from the Shreyus Certificates produced by the Complainants (i.e. Ex C1 to C4).
Financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act. It is a settled law that when a company/firm transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm, hires the service of that Company/firm, which has accepted the deposits. We have, therefore, no hesitation to hold that service undertaken to be rendered by the Opposite Party is a service within the meaning of the Act and the Complainants are consumers and this Forum has jurisdiction to entertain the complaint. Point No.(i) held in favour of the Complainants.

Points (ii) to (iv):-
The Opposite Party Company has contended that, they have moved the petition under Section 391 of the Companies Act before the High Court of Karnataka, which is pending before the High Court. But it is not the case of the Opposite Party Company that notice of such proceedings before the High Court is served on the Complainant or that the Complainant is party to the proceedings pending before the High Court. Under such circumstances, we are of the view that pendency if any of Company Petition before the High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act until and unless there is a specific order to that effect. When the Opposite Party Company has failed to repay the amount under the Shreyus Certificates on the date of maturity or within a reasonable time thereafter amounts to deficiency in service. Even if the Opposite Party has filed a company petition before the High Court and even if a Company Petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the High Court. Under such circumstances, we overrule the objections raised by the Opposite Party to that effect.
The Ex.C1 to C4 produced by the Complainant in the case go show that the amount has matured for repayment on the date mentioned therein, which date has already expired. The Opposite Party Company has admitted the deposit and their failure to repay the same on the date of maturity or within a reasonable time thereafter is a deficiency in service. Therefore, we hold that, the Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainants the matured amount of Rs.22,000/- under the four Shreyus Certificates No.005710, 005711, 005708 and 005709 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment.
In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded and Rs.1,000/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

6. In the result, we pass the following:

ORDER

The Complaint is allowed. The Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainants matured amount of Rs.22,000/- under the four Shreyus Certificates No.005710, 005711, 005708 and 005709 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment and Rs.1,000/- as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.
The F.D.R., if any, deposited by the Complainant be returned fourth with by substituting the certified.

Marceline Pinto

aged about 58 years,

W/o Gilbert L.Pinto,

B.C.Road, Bantakal Post,

Shirva Village, Udupi Taluk.



……….. Complainant

Versus



The Managing Director,

M/s Manipal Finance Corporation Ltd.,

Registred Office, Manipal House,

Manipal, Udupi Taluk - 576 104.

………….. Opposite Party


1. Complainant has filed this complaint against the Opposite Party alleging deficiency in service in the matter of non-payment of redemption value of Shreyus Redeemable Subordinated Debts – Series III with the Opposite Party – NBFC. According to the Complainant, he has deposited money with the Opposite Party.

Contd………2

After the due date of redemption of Shreyus Certificates, Opposite Party company failed to repay the proceeds of the aforementioned certificates with interest on the due date of redemption. Hence the Complainant got issued notice dated 24.01.2009 through his counsel calling upon the Opposite Party to pay the redemption value and further interest at 10.50% per annum from the date of redemption. But the Opposite Party has not complied with the demand made in the said notice. Hence the Complainant has approached this Forum for issue of direction to the Opposite Party to make payment of principal amount of Shreyus Certificates with interest at 10.50% per annum from the date of deposit, till payment plus cost of the litigation and damages for mental agony, etc.



3. After receipt of the notice of the complaint, the Opposite Party filed version through post contending that the Shreyus Certificates mentioned in the complaint is not deposit certificate, but it is simply Sub-Ordinated Debt Bonds/Promissory Notes.



4. The Opposite Party has submitted that since a company petition No.89/2005 U/s 391 of the Companies Act is pending before the High Court of Karnataka for final sanction of the scheme of compromise and arrangement to pay all investors their money in a phased manner, this Forum has no jurisdiction to entertain the complaint, only the Civil Court has the jurisdiction. The Opposite Party further submitted that they have received a letter from the RBI wherein it is clear that no sub-ordinate debts can be redeemed or paid up till all the creditors are paid. Hence the complaint is not maintainable and prayed for the dismissal of the complaint.



5. The complainant in support of his complaint has filed affidavit swearing to the facts stated in the complaint and also produced 10 documents which are marked as Exs.C-1 to Exs.C-6. The Opposite Party has not produced any document. We heard the argument of complainant.



6. Now the points that arise for our consideration are:

1) Whether this Forum has no jurisdiction to entertain the complaint?

2) Whether the Opposite Party has committed deficiency in service by

refusing to repay the redemption value of the Shreyus Redeemable

Subordinate Debts – Series III after redemption?

3) For what relief the complainant is entitled?

4) What Order?

Contd…….3

REASONS

Point No.1:

7. We have carefully gone through the material placed on record by the parties to the dispute. The Opposite Party has contended that this Forum has no jurisdiction to entertain the complaint and only the Civil Court is competent to entertain the complaint against the Opposite Party in respect of their claim. The Opposite Party is a Non Banking Financial Company dealing with the accepting deposits, issuing debentures, lending loans, etc. and return the money on maturity. U/s 3 of the Consumer Protection Act, this Forum has jurisdiction to entertain the complaint and the power is vested in addition to and not in derogation of the provisions of any other law for the time being in force and the claim of the Complainant are within the pecuniary jurisdiction of this Forum. There is no bar for this Forum to adjudicate the complaint unless the Hon'ble High Court has approved the scheme submitted by the Opposite Party. Hence, we answer the point No.1 in the Negative.





Point No.2:

8. Exs.C-1 to Exs.C-4 are the Notary copies of Shreyus Redeemable Subordinate Debts – Series III standing in the name of the Complainant and the dates of redemption are on 16.09.2006. The Complainant obtained Shreyus Redeemable Subordinate Debts as mentioned in the above table. The investment made by the Complainant under Shreyus Redeemable Subordinate Debts are simply denied by the Opposite Party without filing any affidavit nor produced any document to show that they have paid the redemption value after date of redemption. Ex.C-5 is the legal notice dated 24.01.2009 for having issued to Opposite Party and Ex.C-6 is the postal acknowledgement. By perusing Exs.C-1 to Exs.C-4, it is clear that the Complainant has invested under Shreyus Redeemable Subordinate Debts – Series III and the Opposite Party has not paid the same when the complainant has demanded the redemption value after the date of redemption. Under the circumstances, failure to pay the redemption value of Shreyus Redeemable Subordinate Debts to the complainant amounts to deficiency in service on the part of the Opposite Party. Hence, we answer point No.2 in the Affirmative.



Point No.3 & 4:

9. In view of the Negative answer to point No.1 and Affirmative answer to point No.2, the Complainant is entitled to get back the deposited amount in

Contd……4

Shreyus Redeemable Subordinate Debts alongwith 10.5% per annum interest from 16.09.2001, till the date of payment. Hence, we answer the point No.3 in the Affirmative.



10. In the result, we pass the following order:

O R D E R

The complaint is allowed. The Opposite Party is directed to pay to the complainant Rs.38,000/- (being the deposited amount under four Shreyus Redeemable Subordinate Debts- Series III) along with interest at 10.50% per annum from 16.09.2001, till the date of payment plus Rs.1,000/- towards the cost of proceedings. The Opposite Party is further directed to pay the aforesaid ordered amount to the complainant within a month from the date of receipt of this order.

Smt.Latha M.Bangera,

W/o Madhu Bangera,

residing at “Om Kripa House”,

P.O.Amanottu, Padumarnadu – 574 213,

Mangalore Taluk and D.K. District.


……….. Complainant

Versus



M/s Manipal Finance Corporation Ltd.,

Regd. Office: Manipal House,

Manipal - 576 104.

Rep. by its Managing Director.

………….. Opposite Party


1. Complainant has filed this complaint against the Opposite Party alleging deficiency in service in the matter of non-payment of maturity value of Shreyus Certificates with the Opposite Party – NBFC. According to the Complainant, he has deposited money with the Opposite Party.



After the date of maturity of Shreyus Certificates, Opposite Party company failed to repay the proceeds of the aforementioned certificates with interest on the date of maturity. Hence the Complainant got issued notice dated 30.03.2009 through his counsel calling upon the Opposite Party to pay the maturity value and further interest at 18% per annum from the date of maturity, till payment. But the Opposite Party has not complied with the demand made in the said notice. Hence

Contd………2

the Complainant has approached this Forum for issue of direction to the Opposite Party to make payment of maturity value of the Shreyus Certificates with further interest at 18% per annum from the date of maturity, till payment and Rs.3,500/- as compensation for mental agony/stress and lost opportunities for want of money plus cost of the litigation, etc.



2. On admission of the complaint, a notice was served on the Opposite Party. The Opposite Party filed a reply to the notice on the letter head of the Opposite Party purported to be signed by “Officer” without filing the authority delegating the powers, name of the Officer and denied that the investment covered is deposit. The Opposite Party submitted in the said letter that the relation between the Opposite Party and Complainant is borrower and lender. Since the Shreyus Certificates are Promissory Notes as defined under Negotiable Instruments Act, the complaint cannot be termed as “Consumer Dispute”.



3. The Opposite Party further stated that a company petition bearing 89/2005 before the High Court of Karnataka under Section 391 of Companies Act, 1956 alongwith a scheme of settlement and compromise overwhelmingly approved by the statutory majority of the Opposite Party’s creditors and the same is pending before the High Court for final disposal. Hence prayed to dismiss the complaint.





4. The Complainant has filed 4 documents which are marked as Ex.C-1 to Ex.C-4. Complainant filed his sworn affidavit reiterating the facts stated in the complaint. We heard the complainant. The points arise out of this complaint are :

(1) Whether the complaint is a ‘consumer dispute’?

(2) Whether this Forum has jurisdiction to hear the complaint in view of

the petition pending before the Hon’ble High Court of Karnataka U/s

391 of Companies Act?

(3) Whether there is deficiency in service on the part of the Opposite

Party?

(4) Whether the Complainant is entitled for compensation?

(5) What Order?

REASONS

Point No.1:

5. The Opposite Party contended that the relation between Opposite Party and Complainants is that of borrower and lender. Hence this is not a consumer dispute. On a reference to section 2(1)(e) the consumer dispute means a dispute where the person against whom a complaint has been made, denies or disputes

Contd……….3

the allegation contained in the complaint. Accordingly the complainant has a dispute against Opposite Party and made a complaint alleging non payment of maturity value after maturity which the Opposite Party denies, disputes the allegations. Therefore, it is a consumer dispute. Hence, the point No.1 is answered in Affirmative.



Point No.2:

6. The Opposite Party’s contention is that since a petition bearing 89/2005 U/s 391 of Companies Act is pending before the Hon’ble High Court of Karnataka, this Forum does not have jurisdiction to try this complaint. The Opposite Party did not produce any material evidence or sworn affidavit to this effect but abstained to present in the proceedings. Moreover, there is no stay granted by the Hon’ble High Court in favour of the Opposite Party. In view of no evidence and no stay order produced by the Opposite Party the contention of the Opposite Party cannot be taken for granted. In addition to this section 3 of C.P.Act 1986 gives the complainant an additional remedy not in derogation of the provisions of any other law. Therefore, the contention of Opposite Party overruled. Accordingly the point No.2 answered affirmative.



Point No.3:

7. The complainant has produced two Original Shreyus Certificates issued by the Opposite Party, wherein the maturity value of the Certificates is mentioned in the above table, which are marked as Exs.C-1 and Exs.C-2. Ex.C-3 is the legal notice dated 30.03.2009 and Ex.C-4 is the postal acknowledgement. The Opposite Party remained absent through out the proceedings and did not file affidavit or any documents to support their claim including the Officer, who filed the reply to the notice. The Opposite party has not produced any documents to show that any amount either the principal or the interest is paid to the complainant in respect of the aforesaid Shreyus Certificates. The Opposite Party has failed to pay the maturity value of the Shreyus Certificates even after the date of maturity, it certainly amounts to deficiency of service. Hence, we answer the point No.3 in the Affirmative.



Point No.4 & 5:

8. In view of the answering Point Nos.1 to 3 in the Affirmative, we hold that the complainant is entitled to get the reliefs as prayed. Hence, we answer point No.4 in Affirmative and pass the following:

Contd…….4

ORDER

The complaint is allowed. The Opposite Party is directed to pay to the Complainant a sum of Rs.8,235/- with interest @12% per annum from 01.10.2006, till payment and Rs.40,250/- with interest @12% per annum from 08.03.2007, till payment. Opposite Party is also directed to pay Rs.2,000/- towards cost of this complaint. The Opposite Party is further directed to pay to the Complainant the aforesaid ordered amount within one month from the date of receipt of this order.

Miss Maneesha,

minor, represented by her natural

guardian and mother,

Baby Shedthi,

W/o Ashok Shetty,

residing at ‘Vijaya Mahal’,

Near Sri Mahalingeshwara

Mahaganapathi Temple, Padubidri,

Udupi Taluk.






………… Complainant

vs



1. The Managing Director,

M/s Manipal Finance Corporation Ltd.,



2. Sri T.Narayana Pai,

Managing Director,



3. Sri Raghavendra Nayak,



4. Sri Chandappa R.Sherigar,

No.2 and 3 are the Directors,

and all are working at

M/s Manipal Finance Corporation Ltd.,

Regd. Office, Manipal House, tile Factory Road,

Manipal,

Udupi District 576 104.



…….. Opposite Parties





1. The Opposite Party No.1 is a company (registered under the Companies Act 1956), situated at Manipal House, Tile Factory Road, running a business of

Contd……..2

offering interest in fixed deposits and lending money. Opposite Party No.2 is a Managing Director of the 1st Opposite Party Company and Opposite Party No.3 and 4 are the Directors of the 1st Opposite Party Company.



2. The Complainant has deposited a sum of Rs.50,000/- on 01.06.2002 with the Opposite Party No.1 situated at Manipal and for the said acceptance of the deposit, the Opposite Party No.1 has acknowledged and issued a certificate No.040870 for a period of 5 years, which cannotes as “Shreyus Certificate” in favour of the Complainant and undertaking to repay the said amount with interest at the rate of 10% per annum yearly compounded on the date of maturity. The said certificate is matured on 1.6.2007. At the time of accepting the deposit, the Opposite Parties have promised to repay the principal amount with interest on the due date, but the Opposite Parties have failed to repay the maturity value of the deposit amount on the due date i.e. 1.6.2007 inspite of the repeated oral requests/personal contacts of the Complainant.



3. The Complainant further submits that she has approached personally to the Branch office and also Head Office at Manipal of the Opposite Party No.1 requesting for repayment of the maturity value of the deposit, but the Opposite Parties have assured the Complainant, that they will repay the deposit amount within a short span of time. The Complainant has on numerous occasions approached the Opposite Party company to get back the deposit amount on account of the urgent need of fund for education of her minor daughter. On account of the financial difficulties of the Opposite Party No.1 has assured that they will repay the deposit amount.



4. Aggrieved by the inaction on the part of the Opposite Party No.1 company, the Complainant got issued a legal notice dated 20.02.2009 calling upon the Opposite Party to repay the maturity value of the deposit amount fell due on 01.06.2007 with interest thereon at the rate 10% per annum yearly compounded with RPAD. Notice sent through RPAD are served on the Opposite Parties No.2 to 4 and till date the Opposite Parties have not been bothered to reply the said notice nor make any payment by the Opposite Parties. The Opposite Parties have acquiesced the contents of the said notice and are estopped from raising any contentions contrary to it.

Contd……..3

5. All the efforts of the Complainant of recovering the deposit amount failed due to the reluctance and negligence of the Opposite Parties. Further the attitude of the Opposite Parties clearly establish their irresponsibility and negligence in repaying the deposit amount. There has been default and deficiency in service of the Opposite Parties contemplated under section 2(1)(g) of the Consumer Protection Act, 1986 on account of the non payment of the deposit amount and the Complainant is a ‘consumer’ as defined u/s 2(1)(d)(ii) of the C.P. Act by virtue of the certificated issued, due to which the Complainant has suffered financial loss, mental agony and untold harassment for which the Opposite Parties are entirely responsible and liable to compensate. The act of Opposite Parties are irregular, unjust and illegal innature. Hence, this complaint.



3. After admission notices of the complaint issued to Opposite Parties. Notice of Opposite Parties No.3 & 4 returned with postal endorsement “not claimed”, therefore notices held sufficient and placed exparte. Opposite Parties No.1 & 2 filed version through post contending contending that the Shreyus Certificates mentioned in the complaint is not deposit certificate, but it is simply Sub-Ordinated Debt Bonds/Promissory Notes.



4. The Opposite Parties have submitted that since a company petition No.89/2005 U/s 391 of the Companies Act is pending before the High Court of Karnataka for final sanction of the scheme of compromise and arrangement to pay all investors their money in a phased manner, this Forum has no jurisdiction to entertain the complaint, only the Civil Court has the jurisdiction. The Opposite Party further submitted that they have received a letter from the RBI wherein it is clear that no sub-ordinate debts can be redeemed or paid up till all the creditors are paid. Hence the complaint is not maintainable and prayed for the dismissal of the complaint.



5. The complainant in support of his complaint has filed affidavit swearing to the facts stated in the complaint and also produced 3 documents which are marked as Exs.C-1 to Exs.C-3. The Opposite Parties have not produced any document. We heard the argument of complainant.

Contd……4



6. Now the points that arise for our consideration are:

1) Whether this Forum has no jurisdiction to entertain the complaint?

2) Whether the Opposite Parties have committed deficiency in service by

refusing to repay the redemption value of the Shreyus Redeemable

Subordinate Debts – Series III after redemption?

3) For what relief the complainant is entitled?

4) What Order?

REASONS

Point No.1:

7. We have carefully gone through the material placed on record by the parties to the dispute. The Opposite Party has contended that this Forum has no jurisdiction to entertain the complaint and only the Civil Court is competent to entertain the complaint against the Opposite Party in respect of their claim. The Opposite Party is a Non Banking Financial Company dealing with the accepting deposits, issuing debentures, lending loans, etc. and return the money on maturity. U/s 3 of the Consumer Protection Act, this Forum has jurisdiction to entertain the complaint and the power is vested in addition to and not in derogation of the provisions of any other law for the time being in force and the claim of the Complainant are within the pecuniary jurisdiction of this Forum. There is no bar for this Forum to adjudicate the complaint unless the Hon'ble High Court has approved the scheme submitted by the Opposite Party. Hence, we answer the point No.1 in the Negative.





Point No.2:

8. Ex.C-1 is the original Shreyus Redeemable Subordinate Debts – Series III, folio No.000942 dated 23.05.2002, standing in the name of the Complainant and the dates of redemption are on 01.06.2007. The investment made by the Complainant under Shreyus Redeemable Subordinate Debts are simply denied by the Opposite Party without filing any affidavit nor produced any document to show that they have paid the redemption value after date of redemption. Ex.C-2 is the legal notice dated 20.02.2009 for having issued to Opposite Parties and Ex.C-3 is the postal acknowledgement. By perusing Exs.C-1 to Exs.C-3, it is clear that the Complainant has invested under Shreyus Redeemable Subordinate Debts – Series III and the Opposite Parties have not paid the same when the complainant

Contd…….5

has demanded the redemption value after the date of redemption. Under the circumstances, failure to pay the redemption value of Shreyus Redeemable Subordinate Debts to the complainant amounts to deficiency in service on the part of the Opposite Parties. Hence, we answer point No.2 in the Affirmative.



Point No.3 & 4:

9. In view of the Negative answer to point No.1 and Affirmative answer to point No.2, the Complainant is entitled to get back the deposited amount in Shreyus Redeemable Subordinate Debts alongwith 12% per annum interest from 23.05.2002, till the date of payment. Hence, we answer the point No.3 in the Affirmative.



10. In the result, we pass the following order:

O R D E R

The complaint is allowed. Opposite Parties No.1 4 are jointly and severally directed to pay to the Complainant Rs.50,000/- with interest @ 10% per annum from 23.05.2002, till realization. Further the Opposite Parties are directed to pay to the Complainant Rs.2,000/- as cost of the proceedings. Opposite Parties shall comply with the aforesaid order within one month from the date of receipt of this order.

Mrs.Pushpavathi,

W/o. B.Gopal,

Kaveri Nilaya, Krishna Nagar

Chikkamudnoor Village,

Puttur Taluk, D.K. …. COMPLAINANT



VERSUS



Manipal Finance Corporation Ltd.,

Regd. Office: Manipal House,

Manipal.

Represented by Chairman,

Sri T.Narayana Pai. …. OPPOSITE PARTY



1. The brief facts of the complaint are as follows:



The Complainant contended that the Opposite Party is a Private Limited Company, transacting non-banking financial business having registered office at Manipal and branch office at Puttur Taluk of D.K. District. The Complainant claims to have deposited certain sum of money with the Opposite Party under “Shreyus Certificate” before the branch office at Shimoga. The details of which are furnished in the schedule here below:-





Sl. No.


Folio No.


Amount Deposited


Date of Deposit


No. of debts


Rate of Interest




Maturity

Date


Maturity Value

1


011991


34,000


1.7.2001


34


11 %


1.7.2006


57,290

2


012299


34,000


23.11/2001


34


10.50%


23.11.2006


55,998



The Complainant contends that on the date of maturity, she approached the Opposite Party to pay the amount due under the certificates but the Opposite Party sought some time to pay the same stating that they are in financial difficulty and will make arrangement to repay the deposits. The Complainant further submitted that, she has been continuously demanding the repayment of the above deposits from the Opposite Party from the date of maturity, but the Opposite Party failed to pay the same amounts to deficiency and hence the complaint under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction to the Opposite Party to pay Rs.57,290/- with interest at 11% p.a. from 1.7.2006 till payment and Rs.55,998/- with interest at 10.5% p.a. from 23.11.2006 till payment and Rs.20,000/- as compensation and cost of the proceedings.



2. Version notice served to the Opposite Party and Opposite Party sent version through post and submitted as follows:

The Shreyus Certificates are not Deposit Certificates, they are simply Subordinate Debt Bonds/Promissory Notes. The issuer of debt bonds is a borrower and the holder of the debt bond is a lender. The dispute cannot be termed as a consumer dispute. And further contended that they have moved Company Petition under Section 391 of the Companies Act is pending before the High Court of Karnataka, for final disposal. Therefore, Opposite Party prayed to keep in abeyance of the further proceedings till the disposal of the above Company Petition and relied a citation, ILR 2006 KAR 3570 Manipal Sowabhagya Nidhi vs. G.N.Rama Rao and others and prayed for dismissal of the complaint.



3. On the basis of pleadings, the points that arise for our consideration are as follows:

(i) Whether this Forum has jurisdiction to entertain the complaint?



(ii) Whether the Complainant is a consumer and the complaint is barred by limitation?



(iii) Whether the Complainant proved that the Opposite Party has committed deficiency in service?



(iv) If so, whether the complainant is entitled for the reliefs claimed?



(v) What order?







4. In support of the complaint, the Complainant – Mrs. Pushpavathi (CW1) filed affidavit reiterating what has been stated in the complaint and produced Ex C1 to C3 were marked for the Complainant. The Opposite Party has not filed their counter affidavit. We have heard and perused the pleadings, documents and evidence placed on record and answer the points are as follows:

Point No.(i) to (iii): Affirmative.

Point No.(iv) & (v): As per the final order.

REASONS

5. POINTS NO.(i) to (v):

Earlier this Hon’ble Forum was pleased to dismiss the above complaint as per the order dated 13.2.2009. As against the said order, the Complainant has preferred an appeal in Appeal No.912/2009 before the Hon’ble State Commission. The said appeal was allowed and the matter is remitted to dispose of the matter afresh after due notice to the parties.

After the remand, fresh notice was issued to both the parties. The Complainant led additional evidence and the Opposite Party not filed any evidence. The evidence led/produced available in the file are considered for disposal of the complaint.

Since the issue No.(i) was already decided in Appeal No.912/2009 by the Hon’ble State Commission, the question of discussing the point No.(i) does not arise and the point No.(i) held in favour of the Complainant.

Financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act. It is a settled law that when a company/firm transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm, hires the service of that Company/firm, which has accepted the deposits. We have, therefore hold that service undertaken to be rendered by the Opposite Party is a service within the meaning of the Act and the Complainant is consumer.

As far as limitation is concerned, sub Section (2) of Section 24A of the Consumer Protection Act states that not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period. Now it is a well-established proposition that when the person who received the fixed deposit has failed to repay the deposit on the date of maturity, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit. The Opposite Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum. The Complainants’ right is denied for the first time in the version. Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant. Hence, the point No.(ii) is held in favour of the Complainant.



The Opposite Party Company has contended that, they have moved the petition under Section 391 of the Companies Act before the High Court of Karnataka, which is pending before the High Court. But it is not the case of the Opposite Party Company that notice of such proceedings before the High Court is served on the Complainant or that the Complainant is party to the proceedings pending before the High Court. Under such circumstances, we are of the view that pendency if any of Company Petition before the High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act until and unless there is a specific order to that effect.


When the Opposite Party Company has failed to repay the amount under the Shreyus Certificates on the date of maturity or within a reasonable time thereafter amounts to deficiency in service. Even if the Opposite Party has filed a company petition before the High Court and even if a Company Petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the High Court. Under such circumstances, we overrule the objections raised by the Opposite Party to that effect.

The Ex.C1 and C2 produced by the Complainant in the case goes to show that the amount has matured for repayment on the date mentioned therein, which date has been already expired. The Opposite Party Company has admitted the deposit and their failure to repay the same on the date of maturity or within a reasonable time thereafter is a deficiency in service. Therefore, we hold that, the Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.011991 & 012299 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment.

In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded and since it is a second round litigation Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.





6. In the result, we pass the following:

ORDER



The Complaint is allowed. The Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.011991 & 012299 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment. And further Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

B.Gopal,

S/o Late B.Ithappa,

Kaveri Nilaya, Krishna Nagar

Chikkamudnoor Village,

Puttur Taluk, D.K. …. COMPLAINANT



VERSUS



Manipal Finance Corporation Ltd.,

Regd. Office: Manipal House,

Manipal.

Represented by Chairman,

Sri T.Narayana Pai. …. OPPOSITE PARTY



1. The brief facts of the complaint are as follows:



The Complainant contended that the Opposite Party is a Private Limited Company, transacting non-banking financial business having registered office at Manipal and branch office at Puttur Taluk of D.K. District. The Complainant claims to have deposited certain sum of money with the Opposite Party under “Shreyus Certificate” before the branch office at Shimoga. The details of which are furnished in the schedule here below:-



Sl. No.




Folio No.


Amount Deposited


Date of Deposit


No. of debts


Rate of Interest




Maturity

Date


Maturity Value

1


012300


34,000


23.11.2001


34


10.5%


23.11.2006


55,998

2


011989


34,000


1.7.2001


34


11%


1.7.2006


57,290



The Complainant contends that on the date of maturity, he approached the Opposite Party to pay the amount due under the certificates but the Opposite Party sought some time to pay the same stating that they are in financial difficulty and will make arrangement to repay the deposits. The Complainant further submitted that, he has been continuously demanding the repayment of the above deposits from the Opposite Party from the date of maturity, but the Opposite Party failed to pay the same amounts to deficiency and hence the complaint under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction to the Opposite Party to pay Rs.55,998/- with interest at 10.5% p.a. from 23.11.2006 till payment and Rs.57,290/- with interest at 11% p.a. from 1.7.2006 till payment and Rs.20,000/- as compensation and cost of the proceedings.



2. Version notice served to the Opposite Party and Opposite Party sent version through post and submitted as follows:

The Shreyus Certificates are not Deposit Certificates, they are simply Subordinate Debt Bonds/Promissory Notes. The issuer of debt bonds is a borrower and the holder of the debt bond is a lender. The dispute cannot be termed as a consumer dispute. And further contended that they have moved Company Petition under Section 391 of the Companies Act is pending before the High Court of Karnataka, for final disposal. Therefore, Opposite Party prayed to keep in abeyance of the further proceedings till the disposal of the above Company Petition and relied a citation, ILR 2006 KAR 3570 Manipal Sowabhagya Nidhi vs. G.N.Rama Rao and others and prayed for dismissal of the complaint.



3. On the basis of pleadings, the points that arise for our consideration are as follows:

(i) Whether this Forum has jurisdiction to entertain the complaint?



(ii) Whether the Complainant is a consumer and the complaint is barred by limitation?



(iii) Whether the Complainant proved that the Opposite Party has committed deficiency in service?



(iv) If so, whether the complainant is entitled for the reliefs claimed?



(v) What order?



4. In support of the complaint, the Complainant – Mr. B.Gopala (CW1) filed affidavit reiterating what has been stated in the complaint and produced Ex C1 to C3 were marked for the Complainant. The Opposite Party has not filed their counter affidavit. We have heard and perused the pleadings, documents and evidence placed on record and answer the points are as follows:

Point No.(i) to (iii): Affirmative.

Point No.(iv) & (v): As per the final order.

REASONS

5. POINTS NO.(i) to (v):

Earlier this Hon’ble Forum was pleased to dismiss the above complaint as per the order dated 13.2.2009. As against the said order, the Complainant has preferred an appeal in Appeal No.914/2009 before the Hon’ble State Commission. The said appeal was allowed and the matter is remitted to dispose of the matter afresh after due notice to the parties.

After the remand, fresh notice was issued to both the parties. The Complainant led additional evidence and the Opposite Party not filed any evidence. The evidence led/produced available in the file are considered for disposal of the complaint.

Since the issue No.(i) was already decided in Appeal No.914/2009 by the Hon’ble State Commission, the question of discussing the point No.(i) does not arise and the point No.(i) held in favour of the Complainant.

Financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act. It is a settled law that when a company/firm transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm, hires the service of that Company/firm, which has accepted the deposits. We have, therefore hold that service undertaken to be rendered by the Opposite Party is a service within the meaning of the Act and the Complainant is consumer.

As far as limitation is concerned, sub Section (2) of Section 24A of the Consumer Protection Act states that not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period. Now it is a well-established proposition that when the person who received the fixed deposit has failed to repay the deposit on the date of maturity, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit.


The Opposite Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum. The Complainants’ right is denied for the first time in the version. Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant. Hence, the point No.(ii) is held in favour of the Complainant.



The Opposite Party Company has contended that, they have moved the petition under Section 391 of the Companies Act before the High Court of Karnataka, which is pending before the High Court. But it is not the case of the Opposite Party Company that notice of such proceedings before the High Court is served on the Complainant or that the Complainant is party to the proceedings pending before the High Court. Under such circumstances, we are of the view that pendency if any of Company Petition before the High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act until and unless there is a specific order to that effect.


When the Opposite Party Company has failed to repay the amount under the Shreyus Certificates on the date of maturity or within a reasonable time thereafter amounts to deficiency in service. Even if the Opposite Party has filed a company petition before the High Court and even if a Company Petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the High Court. Under such circumstances, we overrule the objections raised by the Opposite Party to that effect.

The Ex.C1 and C2 produced by the Complainant in the case goes to show that the amount has matured for repayment on the date mentioned therein, which date has been already expired. The Opposite Party Company has admitted the deposit and their failure to repay the same on the date of maturity or within a reasonable time thereafter is a deficiency in service. Therefore, we hold that, the Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.012300 & 011989 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment.

In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded and since it is a second round litigation Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.



6. In the result, we pass the following:

ORDER



The Complaint is allowed. The Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.012300 & 011989 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment. And further Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

Mrs.Pushpavathi,

W/o. B.Gopal,

Kaveri Nilaya, Krishna Nagar

Chikkamudnoor Village,

Puttur Taluk, D.K. …. COMPLAINANT




VERSUS



Manipal Finance Corporation Ltd.,

Regd. Office: Manipal House,

Manipal.

Represented by Chairman,

Sri T.Narayana Pai. …. OPPOSITE PARTY






The Complainant contended that the Opposite Party is a Private Limited Company, transacting non-banking financial business having registered office at Manipal and branch office at Puttur Taluk of D.K. District. The Complainant claims to have deposited certain sum of money with the Opposite Party under “Shreyus Certificate” before the branch office at Shimoga. The details of which are furnished in the schedule here below:-





Sl. No.


Folio No.


Amount Deposited


Date of Deposit


No. of debts


Rate of Interest




Maturity

Date


Maturity Value

1


011991


34,000


1.7.2001


34


11 %


1.7.2006


57,290

2


012299


34,000


23.11/2001


34


10.50%


23.11.2006


55,998



The Complainant contends that on the date of maturity, she approached the Opposite Party to pay the amount due under the certificates but the Opposite Party sought some time to pay the same stating that they are in financial difficulty and will make arrangement to repay the deposits. The Complainant further submitted that, she has been continuously demanding the repayment of the above deposits from the Opposite Party from the date of maturity, but the Opposite Party failed to pay the same amounts to deficiency and hence the complaint under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction to the Opposite Party to pay Rs.57,290/- with interest at 11% p.a. from 1.7.2006 till payment and Rs.55,998/- with interest at 10.5% p.a. from 23.11.2006 till payment and Rs.20,000/- as compensation and cost of the proceedings.



2. Version notice served to the Opposite Party and Opposite Party sent version through post and submitted as follows:

The Shreyus Certificates are not Deposit Certificates, they are simply Subordinate Debt Bonds/Promissory Notes. The issuer of debt bonds is a borrower and the holder of the debt bond is a lender. The dispute cannot be termed as a consumer dispute. And further contended that they have moved Company Petition under Section 391 of the Companies Act is pending before the High Court of Karnataka, for final disposal. Therefore, Opposite Party prayed to keep in abeyance of the further proceedings till the disposal of the above Company Petition and relied a citation, ILR 2006 KAR 3570 Manipal Sowabhagya Nidhi vs. G.N.Rama Rao and others and prayed for dismissal of the complaint.



3. On the basis of pleadings, the points that arise for our consideration are as follows:

(i) Whether this Forum has jurisdiction to entertain the complaint?



(ii) Whether the Complainant is a consumer and the complaint is barred by limitation?



(iii) Whether the Complainant proved that the Opposite Party has committed deficiency in service?



(iv) If so, whether the complainant is entitled for the reliefs claimed?



(v) What order?







4. In support of the complaint, the Complainant – Mrs. Pushpavathi (CW1) filed affidavit reiterating what has been stated in the complaint and produced Ex C1 to C3 were marked for the Complainant. The Opposite Party has not filed their counter affidavit. We have heard and perused the pleadings, documents and evidence placed on record and answer the points are as follows:

Point No.(i) to (iii): Affirmative.

Point No.(iv) & (v): As per the final order.

REASONS

5. POINTS NO.(i) to (v):

Earlier this Hon’ble Forum was pleased to dismiss the above complaint as per the order dated 13.2.2009. As against the said order, the Complainant has preferred an appeal in Appeal No.912/2009 before the Hon’ble State Commission. The said appeal was allowed and the matter is remitted to dispose of the matter afresh after due notice to the parties.

After the remand, fresh notice was issued to both the parties. The Complainant led additional evidence and the Opposite Party not filed any evidence. The evidence led/produced available in the file are considered for disposal of the complaint.

Since the issue No.(i) was already decided in Appeal No.912/2009 by the Hon’ble State Commission, the question of discussing the point No.(i) does not arise and the point No.(i) held in favour of the Complainant.

Financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act. It is a settled law that when a company/firm transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm, hires the service of that Company/firm, which has accepted the deposits. We have, therefore hold that service undertaken to be rendered by the Opposite Party is a service within the meaning of the Act and the Complainant is consumer.

As far as limitation is concerned, sub Section (2) of Section 24A of the Consumer Protection Act states that not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period. Now it is a well-established proposition that when the person who received the fixed deposit has failed to repay the deposit on the date of maturity, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit.


The Opposite Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum. The Complainants’ right is denied for the first time in the version. Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant. Hence, the point No.(ii) is held in favour of the Complainant.



The Opposite Party Company has contended that, they have moved the petition under Section 391 of the Companies Act before the High Court of Karnataka, which is pending before the High Court. But it is not the case of the Opposite Party Company that notice of such proceedings before the High Court is served on the Complainant or that the Complainant is party to the proceedings pending before the High Court.


Under such circumstances, we are of the view that pendency if any of Company Petition before the High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act until and unless there is a specific order to that effect. When the Opposite Party Company has failed to repay the amount under the Shreyus Certificates on the date of maturity or within a reasonable time thereafter amounts to deficiency in service.


Even if the Opposite Party has filed a company petition before the High Court and even if a Company Petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the High Court. Under such circumstances, we overrule the objections raised by the Opposite Party to that effect.

The Ex.C1 and C2 produced by the Complainant in the case goes to show that the amount has matured for repayment on the date mentioned therein, which date has been already expired. The Opposite Party Company has admitted the deposit and their failure to repay the same on the date of maturity or within a reasonable time thereafter is a deficiency in service. Therefore, we hold that, the Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.011991 & 012299 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment.

In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded and since it is a second round litigation Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

B.Gopal,

S/o Late B.Ithappa,

Kaveri Nilaya, Krishna Nagar

Chikkamudnoor Village,

Puttur Taluk, D.K. …. COMPLAINANT




VERSUS



Manipal Finance Corporation Ltd.,

Regd. Office: Manipal House,

Manipal.

Represented by Chairman,

Sri T.Narayana Pai. …. OPPOSITE PARTY






The Complainant contended that the Opposite Party is a Private Limited Company, transacting non-banking financial business having registered office at Manipal and branch office at Puttur Taluk of D.K. District. The Complainant claims to have deposited certain sum of money with the Opposite Party under “Shreyus Certificate” before the branch office at Shimoga. The details of which are furnished in the schedule here below:-



Sl. No.




Folio No.


Amount Deposited


Date of Deposit


No. of debts


Rate of Interest




Maturity

Date


Maturity Value

1


012300


34,000


23.11.2001


34


10.5%


23.11.2006


55,998

2


011989


34,000


1.7.2001


34


11%


1.7.2006


57,290



The Complainant contends that on the date of maturity, he approached the Opposite Party to pay the amount due under the certificates but the Opposite Party sought some time to pay the same stating that they are in financial difficulty and will make arrangement to repay the deposits.


The Complainant further submitted that, he has been continuously demanding the repayment of the above deposits from the Opposite Party from the date of maturity, but the Opposite Party failed to pay the same amounts to deficiency and hence the complaint under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction to the Opposite Party to pay Rs.55,998/- with interest at 10.5% p.a. from 23.11.2006 till payment and Rs.57,290/- with interest at 11% p.a. from 1.7.2006 till payment and Rs.20,000/- as compensation and cost of the proceedings.



2. Version notice served to the Opposite Party and Opposite Party sent version through post and submitted as follows:

The Shreyus Certificates are not Deposit Certificates, they are simply Subordinate Debt Bonds/Promissory Notes. The issuer of debt bonds is a borrower and the holder of the debt bond is a lender. The dispute cannot be termed as a consumer dispute. And further contended that they have moved Company Petition under Section 391 of the Companies Act is pending before the High Court of Karnataka, for final disposal. Therefore, Opposite Party prayed to keep in abeyance of the further proceedings till the disposal of the above Company Petition and relied a citation, ILR 2006 KAR 3570 Manipal Sowabhagya Nidhi vs. G.N.Rama Rao and others and prayed for dismissal of the complaint.



3. On the basis of pleadings, the points that arise for our consideration are as follows:

(i) Whether this Forum has jurisdiction to entertain the complaint?



(ii) Whether the Complainant is a consumer and the complaint is barred by limitation?



(iii) Whether the Complainant proved that the Opposite Party has committed deficiency in service?



(iv) If so, whether the complainant is entitled for the reliefs claimed?



(v) What order?



4. In support of the complaint, the Complainant – Mr. B.Gopala (CW1) filed affidavit reiterating what has been stated in the complaint and produced Ex C1 to C3 were marked for the Complainant. The Opposite Party has not filed their counter affidavit. We have heard and perused the pleadings, documents and evidence placed on record and answer the points are as follows:

Point No.(i) to (iii): Affirmative.

Point No.(iv) & (v): As per the final order.

REASONS

5. POINTS NO.(i) to (v):

Earlier this Hon’ble Forum was pleased to dismiss the above complaint as per the order dated 13.2.2009. As against the said order, the Complainant has preferred an appeal in Appeal No.914/2009 before the Hon’ble State Commission. The said appeal was allowed and the matter is remitted to dispose of the matter afresh after due notice to the parties.

After the remand, fresh notice was issued to both the parties. The Complainant led additional evidence and the Opposite Party not filed any evidence. The evidence led/produced available in the file are considered for disposal of the complaint.

Since the issue No.(i) was already decided in Appeal No.914/2009 by the Hon’ble State Commission, the question of discussing the point No.(i) does not arise and the point No.(i) held in favour of the Complainant.

Financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act. It is a settled law that when a company/firm transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm, hires the service of that Company/firm, which has accepted the deposits. We have, therefore hold that service undertaken to be rendered by the Opposite Party is a service within the meaning of the Act and the Complainant is consumer.

As far as limitation is concerned, sub Section (2) of Section 24A of the Consumer Protection Act states that not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period. Now it is a well-established proposition that when the person who received the fixed deposit has failed to repay the deposit on the date of maturity, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit.


The Opposite Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum. The Complainants’ right is denied for the first time in the version. Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant. Hence, the point No.(ii) is held in favour of the Complainant.



The Opposite Party Company has contended that, they have moved the petition under Section 391 of the Companies Act before the High Court of Karnataka, which is pending before the High Court. But it is not the case of the Opposite Party Company that notice of such proceedings before the High Court is served on the Complainant or that the Complainant is party to the proceedings pending before the High Court. Under such circumstances, we are of the view that pendency if any of Company Petition before the High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act until and unless there is a specific order to that effect.


When the Opposite Party Company has failed to repay the amount under the Shreyus Certificates on the date of maturity or within a reasonable time thereafter amounts to deficiency in service. Even if the Opposite Party has filed a company petition before the High Court and even if a Company Petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the High Court. Under such circumstances, we overrule the objections raised by the Opposite Party to that effect.

The Ex.C1 and C2 produced by the Complainant in the case goes to show that the amount has matured for repayment on the date mentioned therein, which date has been already expired. The Opposite Party Company has admitted the deposit and their failure to repay the same on the date of maturity or within a reasonable time thereafter is a deficiency in service. Therefore, we hold that, the Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.012300 & 011989 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment.

In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded and since it is a second round litigation Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

Mrs.Pushpavathi,

W/o. B.Gopal,

Kaveri Nilaya, Krishna Nagar

Chikkamudnoor Village,

Puttur Taluk, D.K. …. COMPLAINANT




VERSUS



Manipal Finance Corporation Ltd.,

Regd. Office: Manipal House,

Manipal.

Represented by Chairman,

Sri T.Narayana Pai. …. OPPOSITE PARTY

Opposite Party: Appeared in person.




The Complainant contended that the Opposite Party is a Private Limited Company, transacting non-banking financial business having registered office at Manipal and branch office at Puttur Taluk of D.K. District. The Complainant claims to have deposited certain sum of money with the Opposite Party under “Shreyus Certificate” before the branch office at Shimoga. The details of which are furnished in the schedule here below:-





Sl. No.


Folio No.


Amount Deposited


Date of Deposit


No. of debts


Rate of Interest




Maturity

Date


Maturity Value

1


011991


34,000


1.7.2001


34


11 %


1.7.2006


57,290

2


012299


34,000


23.11/2001


34


10.50%


23.11.2006


55,998



The Complainant contends that on the date of maturity, she approached the Opposite Party to pay the amount due under the certificates but the Opposite Party sought some time to pay the same stating that they are in financial difficulty and will make arrangement to repay the deposits. The Complainant further submitted that, she has been continuously demanding the repayment of the above deposits from the Opposite Party from the date of maturity, but the Opposite Party failed to pay the same amounts to deficiency and hence the complaint under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction to the Opposite Party to pay Rs.57,290/- with interest at 11% p.a. from 1.7.2006 till payment and Rs.55,998/- with interest at 10.5% p.a. from 23.11.2006 till payment and Rs.20,000/- as compensation and cost of the proceedings.



2. Version notice served to the Opposite Party and Opposite Party sent version through post and submitted as follows:

The Shreyus Certificates are not Deposit Certificates, they are simply Subordinate Debt Bonds/Promissory Notes. The issuer of debt bonds is a borrower and the holder of the debt bond is a lender. The dispute cannot be termed as a consumer dispute. And further contended that they have moved Company Petition under Section 391 of the Companies Act is pending before the High Court of Karnataka, for final disposal. Therefore, Opposite Party prayed to keep in abeyance of the further proceedings till the disposal of the above Company Petition and relied a citation, ILR 2006 KAR 3570 Manipal Sowabhagya Nidhi vs. G.N.Rama Rao and others and prayed for dismissal of the complaint.



3. On the basis of pleadings, the points that arise for our consideration are as follows:

(i) Whether this Forum has jurisdiction to entertain the complaint?



(ii) Whether the Complainant is a consumer and the complaint is barred by limitation?



(iii) Whether the Complainant proved that the Opposite Party has committed deficiency in service?



(iv) If so, whether the complainant is entitled for the reliefs claimed?



(v) What order?







4. In support of the complaint, the Complainant – Mrs. Pushpavathi (CW1) filed affidavit reiterating what has been stated in the complaint and produced Ex C1 to C3 were marked for the Complainant. The Opposite Party has not filed their counter affidavit. We have heard and perused the pleadings, documents and evidence placed on record and answer the points are as follows:

Point No.(i) to (iii): Affirmative.

Point No.(iv) & (v): As per the final order.

REASONS

5. POINTS NO.(i) to (v):

Earlier this Hon’ble Forum was pleased to dismiss the above complaint as per the order dated 13.2.2009. As against the said order, the Complainant has preferred an appeal in Appeal No.912/2009 before the Hon’ble State Commission. The said appeal was allowed and the matter is remitted to dispose of the matter afresh after due notice to the parties.

After the remand, fresh notice was issued to both the parties. The Complainant led additional evidence and the Opposite Party not filed any evidence. The evidence led/produced available in the file are considered for disposal of the complaint.

Since the issue No.(i) was already decided in Appeal No.912/2009 by the Hon’ble State Commission, the question of discussing the point No.(i) does not arise and the point No.(i) held in favour of the Complainant.

Financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act. It is a settled law that when a company/firm transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm, hires the service of that Company/firm, which has accepted the deposits. We have, therefore hold that service undertaken to be rendered by the Opposite Party is a service within the meaning of the Act and the Complainant is consumer.

As far as limitation is concerned, sub Section (2) of Section 24A of the Consumer Protection Act states that not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period. Now it is a well-established proposition that when the person who received the fixed deposit has failed to repay the deposit on the date of maturity, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit.


The Opposite Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum. The Complainants’ right is denied for the first time in the version. Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant. Hence, the point No.(ii) is held in favour of the Complainant.



The Opposite Party Company has contended that, they have moved the petition under Section 391 of the Companies Act before the High Court of Karnataka, which is pending before the High Court. But it is not the case of the Opposite Party Company that notice of such proceedings before the High Court is served on the Complainant or that the Complainant is party to the proceedings pending before the High Court. Under such circumstances, we are of the view that pendency if any of Company Petition before the High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act until and unless there is a specific order to that effect.


When the Opposite Party Company has failed to repay the amount under the Shreyus Certificates on the date of maturity or within a reasonable time thereafter amounts to deficiency in service. Even if the Opposite Party has filed a company petition before the High Court and even if a Company Petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the High Court. Under such circumstances, we overrule the objections raised by the Opposite Party to that effect.

The Ex.C1 and C2 produced by the Complainant in the case goes to show that the amount has matured for repayment on the date mentioned therein, which date has been already expired. The Opposite Party Company has admitted the deposit and their failure to repay the same on the date of maturity or within a reasonable time thereafter is a deficiency in service. Therefore, we hold that, the Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.011991 & 012299 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment.

In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded and since it is a second round litigation Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

B.Gopal,

S/o Late B.Ithappa,

Kaveri Nilaya, Krishna Nagar

Chikkamudnoor Village,

Puttur Taluk, D.K. …. COMPLAINANT



VERSUS



Manipal Finance Corporation Ltd.,

Regd. Office: Manipal House,

Manipal.

Represented by Chairman,

Sri T.Narayana Pai. …. OPPOSITE PARTY


1. The brief facts of the complaint are as follows:



The Complainant contended that the Opposite Party is a Private Limited Company, transacting non-banking financial business having registered office at Manipal and branch office at Puttur Taluk of D.K. District. The Complainant claims to have deposited certain sum of money with the Opposite Party under “Shreyus Certificate” before the branch office at Shimoga. The details of which are furnished in the schedule here below:-



Sl. No.




Folio No.


Amount Deposited


Date of Deposit


No. of debts


Rate of Interest




Maturity

Date


Maturity Value

1


012300


34,000


23.11.2001


34


10.5%


23.11.2006


55,998

2


011989


34,000


1.7.2001


34


11%


1.7.2006


57,290



The Complainant contends that on the date of maturity, he approached the Opposite Party to pay the amount due under the certificates but the Opposite Party sought some time to pay the same stating that they are in financial difficulty and will make arrangement to repay the deposits. The Complainant further submitted that, he has been continuously demanding the repayment of the above deposits from the Opposite Party from the date of maturity, but the Opposite Party failed to pay the same amounts to deficiency and hence the complaint under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction to the Opposite Party to pay Rs.55,998/- with interest at 10.5% p.a. from 23.11.2006 till payment and Rs.57,290/- with interest at 11% p.a. from 1.7.2006 till payment and Rs.20,000/- as compensation and cost of the proceedings.



2. Version notice served to the Opposite Party and Opposite Party sent version through post and submitted as follows:

The Shreyus Certificates are not Deposit Certificates, they are simply Subordinate Debt Bonds/Promissory Notes. The issuer of debt bonds is a borrower and the holder of the debt bond is a lender. The dispute cannot be termed as a consumer dispute. And further contended that they have moved Company Petition under Section 391 of the Companies Act is pending before the High Court of Karnataka, for final disposal. Therefore, Opposite Party prayed to keep in abeyance of the further proceedings till the disposal of the above Company Petition and relied a citation, ILR 2006 KAR 3570 Manipal Sowabhagya Nidhi vs. G.N.Rama Rao and others and prayed for dismissal of the complaint.



3. On the basis of pleadings, the points that arise for our consideration are as follows:

(i) Whether this Forum has jurisdiction to entertain the complaint?



(ii) Whether the Complainant is a consumer and the complaint is barred by limitation?



(iii) Whether the Complainant proved that the Opposite Party has committed deficiency in service?



(iv) If so, whether the complainant is entitled for the reliefs claimed?



(v) What order?



4. In support of the complaint, the Complainant – Mr. B.Gopala (CW1) filed affidavit reiterating what has been stated in the complaint and produced Ex C1 to C3 were marked for the Complainant. The Opposite Party has not filed their counter affidavit. We have heard and perused the pleadings, documents and evidence placed on record and answer the points are as follows:

Point No.(i) to (iii): Affirmative.

Point No.(iv) & (v): As per the final order.

REASONS

5. POINTS NO.(i) to (v):

Earlier this Hon’ble Forum was pleased to dismiss the above complaint as per the order dated 13.2.2009. As against the said order, the Complainant has preferred an appeal in Appeal No.914/2009 before the Hon’ble State Commission. The said appeal was allowed and the matter is remitted to dispose of the matter afresh after due notice to the parties.

After the remand, fresh notice was issued to both the parties. The Complainant led additional evidence and the Opposite Party not filed any evidence. The evidence led/produced available in the file are considered for disposal of the complaint.

Since the issue No.(i) was already decided in Appeal No.914/2009 by the Hon’ble State Commission, the question of discussing the point No.(i) does not arise and the point No.(i) held in favour of the Complainant.

Financial service is one of the services specifically mentioned in Clause (o) of Section 2(1) of the Act. It is a settled law that when a company/firm transacting non-banking financial business accepts deposits from the public, the person who has deposited money with such company/firm, hires the service of that Company/firm, which has accepted the deposits. We have, therefore hold that service undertaken to be rendered by the Opposite Party is a service within the meaning of the Act and the Complainant is consumer.

As far as limitation is concerned, sub Section (2) of Section 24A of the Consumer Protection Act states that not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period. Now it is a well-established proposition that when the person who received the fixed deposit has failed to repay the deposit on the date of maturity, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit.


The Opposite Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum. The Complainants’ right is denied for the first time in the version. Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant. Hence, the point No.(ii) is held in favour of the Complainant.



The Opposite Party Company has contended that, they have moved the petition under Section 391 of the Companies Act before the High Court of Karnataka, which is pending before the High Court. But it is not the case of the Opposite Party Company that notice of such proceedings before the High Court is served on the Complainant or that the Complainant is party to the proceedings pending before the High Court. Under such circumstances, we are of the view that pendency if any of Company Petition before the High Court of Karnataka does not stand in the way of the Complainant filing the complaint under Section 12 of the Consumer Protection Act until and unless there is a specific order to that effect.


When the Opposite Party Company has failed to repay the amount under the Shreyus Certificates on the date of maturity or within a reasonable time thereafter amounts to deficiency in service. Even if the Opposite Party has filed a company petition before the High Court and even if a Company Petition allowed by the High Court, the orders passed by this Forum will be subject to the order passed by the High Court. Under such circumstances, we overrule the objections raised by the Opposite Party to that effect.

The Ex.C1 and C2 produced by the Complainant in the case goes to show that the amount has matured for repayment on the date mentioned therein, which date has been already expired. The Opposite Party Company has admitted the deposit and their failure to repay the same on the date of maturity or within a reasonable time thereafter is a deficiency in service. Therefore, we hold that, the Opposite Party i.e. Manipal Finance Corporation Ltd., is hereby directed to pay to the Complainant the matured amount of Rs.1,13,288/- under the two Shreyus Certificates No.012300 & 011989 along with interest at the rate of 9% per annum respectively from the date of maturity till the date of payment.

In the present case, interest considered by this Forum itself is compensation and therefore, no separate amount for compensation is awarded and since it is a second round litigation Rs.1,500/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

Myself kiran p. gaikwad deposited amount of Rs.25000/- on my name by my father on 16/08/2000 for 60month for which maturity date is 16/08/2005 for maturitry amount of
Rs.48900/-
So what is the Procedure to get the money Back please reply
me on kirangaikwad85@yahoo.co.in / tel no 9820355761

Hello,
I am posting this query on behalf of a group. We have invested in Manipal Sowbhagya Nidhi cash certificates which matured in 2004 - 2005 time & in redeemable debenture certificates. So far we have not got the settlement from Manipal Finance corp. We are not willing to accept the arrangement that the company is offering - fraction of the amount invested to be treated as full & final settlement. I have seen similar postings on this site. I am keen to know if any of the people who took the legal route succeeded in getting the amount back. Any help in this regard would be highly appreciated. I shall share additional information as may be required. Thanks in advance.