Punjab

Rupnagar

CC/15/32

Kuldeep Singh - Complainant(s)

Versus

Cooperative Agriculture Society & Others - Opp.Party(s)

Sh. Kuldeep Singh Rana, Adv

06 Aug 2015

ORDER

ORDER

                                      MRS. NEENA SANDHU, PRESIDENT

                   Sh. Kuldeep Singh has filed this complaint, under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as the O.Ps.) praying for issuance of the following directions to them:-

i)       To release the amount of Rs.54,750/- along with interest at the rate as mentioned in the FDR, from the date of maturity till realization,

 

 ii)     To pay a sum of Rs.1,00,000/- as compensation for  harassment caused to him,

 

iii)     To pay Rs.55,000/- towards treatment costs and litigation expenses.

 

 

2.                In brief, the case of the complainant is that the he is having an FDR No.0000038 of Rs.54,750/-, which was issued on 21.08.2012 by  the Dalla Multipurpose Cooperative Agriculture Society Limited situated at Village Dalla, Tehsil Chamkaur Sahib, District Ropar, on payment of the cash amount by him, and was due for payment on  20.08.2013. The said Society is working under the supervision of the O.P. No. 1, who is the final authority to supervise its day to day functioning and also that of its all employees. The committee of the said Society also works under the supervision of the O.P. No. 1. At the time of issuance of the said FDR the

O.Ps. No.  2 & 3 had disclosed to him that interest would be paid at the rate mentioned in the said FDR.  He is in the need of money and is totally dependent upon the amount lying pending in his account of said FDR. For withdrawal of the said amount, he had visited the O.Ps. so many times, but they had put off the matter on one pretext or the other and till date, have not paid the amount due under the said FDR. His father had also given written applications to the O.P. No. 1 on 20.08.2013 & 10.11.2014 on his behalf regarding non-payment of the amount of the said FDR, but the O.P. No.1 has failed to take any action against the O.Ps. No. 2 & 3. The said act of the O.Ps. amounts to negligence & deficiency in service, due to which he has suffered mental agony, physical harassment & financial loss and is under treatment for the depression suffered by him and has spent a heavy amount for his treatment. Hence, this complaint.

 

3.                On being put to notice, the O.P. No.3 filed written version in the form of affidavit of Sh. Ranjodh Singh, Secretary, taking preliminary objections; that the complaint is not maintainable in this forum and is liable to be dismissed; that there is no deficiency in service on the part of the answering O.P.; that the complaint is bad for mis-joinder and non-joinder of necessary party, because as per the receipt produced by the complainant, the amount is alleged to have been received by Sh. Jaspal Singh, Secretary, but the said Secretary has not been arrayed as a party and the complaint is liable to be dismissed on this score alone; that the Deputy Registrar exercises the supervisory jurisdiction and keeps administrative control over all the Societies in the District and in addition to that, discharges quasi-judicial functions, thus, he is not personally liable for the defaults committed by the Society; that the Society being a ‘Body Corporate” as defined under Section 30 of the Punjab Co-operative Societies Act, 1961, can be sued in its name, but in the present case, it has not been sued in its name; rather Secretary and President have been sued by names, therefore, the complaint in itself is not maintainable and is liable to be dismissed on this score alone.

 

On merits, it is stated that the brief matrix of the facts of the present case is that the Dalla Multipurpose Co-op Agri. Service Society Limited (hereinafter referred to as ‘the Society’) has been formed by the residents of the few villages for the purpose of carrying out various welfare activities, which includes disbursement of loan to its members. Any person can become a member of the Society by purchasing one share of Rs.500/- or more and avail the facilities. Presently, the Society is having 900 members and share capital of around 18 lac. The liability of the members is limited to five times of the share capital, they have subscribed and the said fact has been incorporated in the byelaws of the Society. However, due to the financial irregularities committed by Sh. Jaspal Singh, the then Secretary along with ex-President and members of the Society, in which the Branch Manager of the Ropar Central Cooperative Bank was also involved, there has been embezzlement of an amount of Rs.1,08,25,693/- approx. Due to the aforesaid embezzlement, the Society went into losses and till the closing of the financial year 01.04.2013 to 31.03.2014, the Society was in losses to the tune of Rs.19,81,034/-. The matter has already been reported to the police by Sh. Ajaib Singh, Inspector, Co-operative Society and an FIR No.78 dated 03.05.2014 under Section 409 IPC has been registered at PS Chamkaur Sahib against said Jaspal Singh, the Secretary of the Society and Sh. Surinder Pal Singh, Branch Manager the Ropar Central Cooperative Bank Ltd., Bela and Gurcharan Singh son of Chuhar Singh, committee member of the O.P. society and all the above said persons are facing the trial. The properties of all the guilty persons have been attached and are now pending for auction, after which losses suffered by the Society would be made good. Even otherwise, it is submitted here that President is also a member of the Society in the same manner, as the complainant himself. The present President has been elected only on 14.06.2014, therefore, in any way, he would not be liable for any defaults committed by earlier Managing Committee. The complaint could be filed against the Society and recovery of the dues could only be made from the assets of the Society and after exhausting the assets, by fixing the liability of all 900 members equally. The Deputy Registrar is exercising the supervisory jurisdiction and keeps administrative control over all the Societies in the District and in addition to that, discharges quasi-judicial functions. This does not mean that he is personally liable for the defaults committed by the Society. It is further stated that the Deputy Registrar is not liable to pay the amounts personally and he was not even required to be impleaded as a party, much less a necessary party. Further from the perusal of attachment orders, it is clear that the Deputy Registrar is exercising the quasi-judicial powers under the Punjab C-operative Societies Act, 1961, and has passed orders of attachment of land of various guilty persons. The Secretary of the Society is a paid employee and has been engaged by the Society to carry out the collective decisions made by the members, therefore, he could not be made personally liable to pay the defaulted amount. Moreover, as stated above, during the time of embezzlement, Sh. Jaspal Singh was the Secretary and his property has already been attached and the appeal filed against the order of attachment has also been dismissed by the Deputy Registrar vide order dated 08.09.2014. So far as the President is concerned, he has also been impleaded by name in the present complaint and while adjudicating the complaint, President along with others has been made jointly & severally liable to pay the awarded amount. It is relevant to mention here that the President is one of the members of the Society and has been elected by the majority of the members of the Society. He is rendering his services without any consideration. His liability would be same as that of the other members of the Society. It has been held by various courts that creditors of the Co-operative Society has no right to proceed against the Chairman of the Society personally, as he is only a member. The loans due from the Society cannot be recovered from its members, as firstly the properties of the Society are liable to be attached and even then, if some balance is left, the same can be recovered from its members to the extent of five times of their share capital. The Co-operative Society registered under the Act is a corporation. It has a legal personality and has to be a sued in its corporate name only. It is an elementary proposition of jurisprudence that the legal personality of a corporation is different from the personality of the individual members, who constitute the corporation.

 

The issuance of the FDR in question to the complainant is admitted, but it is stated that as per the said FDR, an amount of Rs.54750/- was due as on 20.08.2013. It is further stated that no assurance was given by the answering O.P. to the complainant as alleged by him; rather the amount was received by Sh. Jaspal Singh, the then Secretary of the Society, who has made embezzlement. The answering O.P. is not personally liable to make the payment of the disputed amount. Rest of the allegations made in the complaint have also been denied and a prayer has been made for dismissal of the same with cost.

 

4.                None having appeared on behalf of the O.Ps. No.1 & 2, inspite of issuance of notice of the complaint, they were proceeded against ex-parte vide order dated 05.05.2015.

5.                On being called upon to do so, the learned counsel for the complainant tendered affidavit of the complainant, Ex. CW1/A, photocopies of documents Ex.C1 to Ex.C8 and closed the evidence. On the other hand, the learned counsel for the O.P. No. 3 tendered affidavit of Sh. Ranjodh Singh, Secretary of the Dalla Multipurpose Cooperative Agriculture Service Society Ex.OP-1, photocopies of documents Ex.OP-2 to Ex.OP-8 and closed the evidence.

 

6.                We have heard the learned counsel for the complainant and the contesting O.P. No. 3 and gone through the record of the file carefully.

 

7.                 At the outset, the learned counsel for the O.P. No.3 raised objection that the present complaint is bad for non-joinder of necessary party because Sh. Jaspal Singh, the then Secretary of the O.P. Society, who had issued the FDR in question, has not been impleaded as O.P. in the array of the O.Ps. by the complainant. To this effect, the learned counsel for the complainant submitted that the complainant had deposited the amount with the Society, and not with Jaspal Singh. Said Jaspal Singh, being Secretary of the said Society, had issued the said FDR, under his signatures, on behalf of the said Society. The said Society has not paid the maturity amount of the FDR in question till yet, therefore, he has rightly filed the complaint against the Society, which has been sued through its Secretary/President and said Jaspal Singh cannot be said to be liable for the same in his personal capacity, as such, he was not a necessary party.

 

                     From the FDR, Ex. C1, it is crystal clear that the complainant had deposited the amount with the Dalla Multipurpose Cooperative Agriculture Services Society Ltd. and it was issued by said Sh. Jaspal Singh, being Secretary of the said Society. Therefore, we do not find any force in the objection raised by the learned counsel for the O.P. No.3 that said Jaspal Singh was a necessary party to be impleaded as the O.P. and accordingly, reject the same.

 

8.                 The learned counsel for the O.P. No.3 further raised objection that the Deputy Registrar, who has been impleaded as the O.P. No.1 in the array of the O.Ps. is not liable for any default committed by any member of the Society, because the Deputy Registrar exercises the supervisory jurisdiction over all the societies in the District and discharges quasi judicial functions and has administrative control over the Society. Even the Hon’ble National Commission in the case of ‘Registrar Co-operative Societies and another vs. Tamil Nadu Consumer Protection Council’ 2007 (1) CPC 698, has categorically held that the Registrar is discharging his statutory duty, which may be either administrative, supervisory or quasi judicial. The special officer is appointed for administration of the society because of supersession and for the past deeds of the society, he cannot be held liable. Therefore, they would not be personally liable for the acts or mis-deeds of the cooperative Societies or holders of office of Cooperative Society. Hence, the findings recorded by the State Commission that the Registrar and the Special Officer are personally liable for the refund of the deposits to the complainant cannot be justified. Therefore, in the present case, also there is no question of hiring or availing of service or facility of the Deputy Registrar and the complaint filed against the Deputy Registrar is liable to be dismissed.

 

                    In view of the law laid down by the Hon’ble National Commission in the case of ‘Registrar Co-operative Societies and another vs. Tamil Nadu Consumer Protection Council’ (supra), we are of the considered view that the complaint filed against the Deputy Registrar i.e. O.P. No.1 is liable to be dismissed.

 

9.                 The learned counsel for the OP No.3 further raised objection that even the Secretary or the President of the O.P. society are not liable to pay the FDR’s amount to the complainant, in their individual capacity because the complainant had deposited the amount in the shape of FDR with the Society and the maturity amount, has to be paid by the Society only. In rebuttal, the learned counsel for the complainant submitted that the complainant has not sued the President or Secretary in their personal capacity; rather the Society has been sued through them because the Society being a juristic person can only be sued by its representatives i.e. President/Secretary.

          From the array of the O.Ps. as mentioned in the complaint, it is evident that the complainant has filed the instant complaint against the Dalla Multipurpose Co-op. Agri. Service Society Ltd., through its President, & Secretary i.e. O.Ps. No. 2 & 3, thus, it cannot be said that the President and the Secretary have been sued in their individual capacity. Since the President & Secretary are nominated out of the members of the Society and the Society, being a juristic person, can only be sued by its representatives i.e. President/Secretary, thus, this objection raised by the learned counsel for the O.P. is found to be misconceived.

 

10.              Now coming to the merits of the complaint, the learned counsel for the complainant submitted that the FDR (Ex.C1) got matured on 20.8.2013, but till date the maturity amount has not been paid to the complainant by the O.Ps. Therefore, they are deficient in rendering service and be directed to pay the maturity amount alongwith interest, compensation & litigations expenses.

                   In rebuttal, the learned counsel for the OP No.3 submitted that the maturity amount of the FDR in question could not be paid because there has been embezzlement in the society, and properties of the guilty persons have been attached and the matter is still pending for auction of the same. In due course of time, the losses suffered by the Society would be made good and thereafter, the maturity amount would be paid to the complainant.

 

11.              Even if there has been any embezzlement, it is for the Society to look into that matter and the complainant has nothing to do with the same, because it is nowhere the allegation of the contesting O.P. that the complainant was involved in the said embezzlement. Therefore, the Society is liable to pay amount due under the FDR in question. We find support for this view taken from the law laid down in the case of “Bondi Co-op. Agricultural Service Society Ltd., Bondi vs. The State of Punjab & Ors.” 1997(1), All India Land Laws Reporter (P & H) 312, wherein the Hon’ble Punjab & Haryana High Court has held that Passbook clearly shows that member deposited the amount; when he wants to take back the money society cannot take up the plea that cashier had embezzled the amount because the society is responsible for the acts of its employees and that the authorities below rightly concluded that the member was entitled to the refund of the deposited amount.

                   Since it is an admitted fact that the FDR (Ex.C1) was issued by the Dalla Multipurpose Cooperative Agriculture Society Ltd. on 21.8.2012 and the maturity date of the same was 20.8.2013, but till date the maturity amount has not been paid to him, as such, by not paying the amount of the FDR on the due date, to the complainant, the Dalla Multipurpose Co-op. Agri. Service Society Ltd., has committed deficiency in rendering service. We find support for this view taken from the case ‘M/s Sagar Suri Estate and Finance Ltd. Vs. Sh. Prem Lal’ 2001 (2) CPC 396 wherein it has held that where a depositor is deprived of his legal right by a firm or a company illegally from utilizing his deposited amount, such an act, certainly is an act of deficiency in service.

          Perusal of the FDR in question reveals that the amount received from the complainant and the maturity value, have been mentioned as Rs.54750/- i.e. one and the same figure. However, the complainant has prayed for release of the amount of Rs.54750/- alongwith interest at the rate as mentioned in the said FDR from the date of maturity till realization. Since the said FDR had got matured on 20.08.2013, but till date the maturity amount has not been paid to the complainant, therefore, the O.Ps. 2 & 3 is liable to pay the maturity amount of the FDR in question to the complainant i.e. Rs.54750/- alongwith interest at the rate 9-1/2%, as mentioned in the said FDR from the date of maturity i.e. 20.8.2013 till realization. Not only this, the said O.Ps. are also liable to pay compensation to the complainant, on account of financial loss, mental agony & physical harassment suffered by him, alongwith litigation expenses, because he had to unnecessarily approach this Forum to get the relief, to which he was otherwise entitled to.

12.              In view of the above discussion, we dismiss the complaint against the O.P. No.1 and allow the same against the Dalla Multipurpose Cooperative Agriculture Services Society Ltd. and direct the O.Ps. No. 2 & 3, in the following manner:-

i)  To pay the amount of Rs. 54,750/- alongwith interest @ 9-

     1/2% P.A. w.e.f. 20.08.2013 till realization,

 

ii) To pay Rs.10000/- as compensation,

 

iii) To pay Rs.3000/- as litigation costs.

 

                   The O.Ps. No. 2 & 3 are further directed to comply with the order within 30 days from the date of receipt of certified copy of this order.

13.              The certified copies of this order be supplied to the parties forthwith, free of costs, as permissible under the rules and the file be indexed and consigned to Record Room.

ANNOUNCED                                           (NEENA SANDHU)

Dated 06.08.2015                                       PRESIDENT

 

 

                                                (SHAVINDER KAUR)

                                                                     MEMBER.