DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION FAZILKA.
Complaint No. : RBT/CC/1/23-CC/57/2023
Date of Institution : 16.02.2023
Date of Decision : 01.10.2024
Pala Singh aged about 64 years S/o Harnam Singh R/o Village Malakjada, Tehsil Jalalabad, District Fazilka, Pin-152024.
………..Complainant
Versus
1. Housefed Ferozepur, through its District Manager, Street No.2, Near Usha Mata Mandir, Jai Maa Nagar, Near General Bus Stand, Ferozepur Cantt, Pin-152001.
2. The Ghubaya, CHBS, Office at Near Bus Stand, Fazilka, Tehsil and District Fazilka, Pin-152123, through its Secretary.
….......Opposite Parties
Complaint under section 35 of Consumer Protection Act, 2019.
Quorum: Sh.Vishal Arora, President.
Sh.Raghbir Singh Sukhija, Member.
Smt.Tajinder Kaur, Member.
Present: Sh.Krishan Sehgal, counsel for Complainant.
Sh.Chamkaur Singh, Representative of Opposite Parties.
ORDER
(Vishal Arora, President):
The complainant has filed the present complaint U/s 35 of the Consumer Protection Act, 2019 against opposite parties for seeking directions to be given to opposite parties to receive the loan amount i.e. Rs.1,97,984/- alongwith two times interest to the same amount from the complainant as per instructions of Registrar and release the land of the complainant from mortgage by issuing 'NO DUE CERTIFICATE' to the complainant besides Rs.25,000/- as compensation for harassment, mental agony on account of deficiency in service and unfair trade practice along with Rs.10,000/- as litigation expenses.
Briefly stated, the case of complainant is that he obtained a loan of Rs.1,97,984/- in the year 1999 from opposite parties for construction of house after pledging/mortgaging the land with opposite parties. He repaid only one installment to opposite parties. It has been pleaded that at the time of advancement of the loan, the complainant pledged his land in favour of opposite parties. Due to unavoidable circumstances, he was unable to repay the loan amount, but now, he is ready to pay the loan amount to opposite parties as per instructions issued by the Registrar Cooperative Societies, Punjab, Chandigarh. The Registrar Co-operative Society, Punjab, Chandigarh has issued instructions to opposite parties for recovery of loan from their members. In this regard, a notification No.RSS/RIN-CA-2/27/Lok Adalat/804 dated 15.12.2008 has been issued. In this notification, the Registrar has issued guidelines for recovery of loan from the members of Housefed and directed opposite parties to recover loan as per notification. The complainant many times requested opposite parties to receive the balance amount as per instruction of Registrar and issue him 'NO DUE CERTIFICATE', but they did not consider his requests and prolonged the matter on one pretext or the other. The complainant also gave an application to opposite party No.2 that his land be released after receiving the balance amount as per letter mentioned above. This act and conduct of opposite parties amounts to deficiency in service and unfair trade practice. Hence, this complaint.
3. Upon notice, opposite parties appeared through their authorized representative and contested the complaint by filing their joint written version and raised preliminary objections interalia to the effect that the dispute is between a member of Co-operative Society i.e. complainant with the co-operative society i.e. opposite party No.2 regarding the business/affairs of the Society. As per provisions of Section 55 of The Punjab Cooperative Societies Act, 1961 which is complete Code in itself, the matter is to be decided by the Arbitrator to be appointed by the Registrar Cooperative Societies, Punjab, Chandigarh who has delegated said power to the Assistant Registrar, Cooperative Societies, Punjab, Chandigarh, whose decision is final, subject to Appeal/Revision, if any and U/s 82 of the said 'Act', the jurisdiction of the Civil Court has been excluded. As such, this complaint is not maintainable and this Commission has no jurisdiction to entertain, try and decide the complaint as it is the sole domain of the Courts under Punjab Cooperative Societies Act, 1961 to decide such type of disputes. The provisions of Section 55 and 82 of the Act are reproduced below for the kind perusal of this Commission:-
"Section-55
55. Disputes which may be referred to arbitration.
1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a Cooperative Society arises
(a) among members, past members and persons claiming through members, past members and deceased members; or
b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the Society or liquidator, past or present; or
c) between the society or its Committee and past committee, any officer, agent or employee, or any past officer, part agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the Society; or
between the society and any other Cooperative Society, between a society and liquidator and another society or between the liquidator of one society and the liquidator of another society,
Such disputes shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
(2) For the purpose of sub section (1):- the following be deemed to be disputes touching the constitution, management or the business of cooperative Society, namely:-
a) a claim by the Society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased members, whether such debt or demand be admitted or not;
b) a claim by a society against the principal debtor where the Society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default or the principal debtor, whether such debt or demand is admitted or not;
c) any dispute arising in connection with the election of any Officer of the Society.
(3) If any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, management or the business of a cooperative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court:-
Section 82. Bar of Jurisdiction of Court
1) Save as provided in this Act, no civil or revenue Court shall have any jurisdiction in respect of-
(a) the registration of a cooperative society or its bye-laws or of an amendment of a bye-law;
(b) the removal of a committee; FIRST APPEAL No.325 OF 2014 11
(c) any dispute required under Section 55 to be referred to the Registrar and
(d) any matter concerning the winding up and the dissolution of a Cooperative Society.
(2) While a cooperative society is being would up, no suit or other legal proceedings relating to the business of such Society shall be proceeded with or instituted against the liquidator as such or against the Society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose.
(3) Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any court on any ground whatsoever.
In view of these sections, the matter can be taken up before Appropriate Authorities under The Punjab Cooperative Societies Act and not before the Learned District Commission. As such, the complaint is liable to be dismissed.
4. It has been further pleaded by the opposite parties that the complainant has relied upon notification No.RSS/RIN-CA-2/27/Lok Adalat/804, dated 15.12.2008 issued by the Registrar, Cooperative Society, Punjab and further sought a direction against opposite parties to receive the balance amount i.e. Rs.6,00,000/- as per instructions of Registrar and issue 'No objection Certificate' and also to pay Rs.25,000/- as compensation for mental agony, harassment alongwith Rs.10,000/- as litigation expenses for deficiency in service and unfair trade practice adopted by them. This letter carries no legal value and it is not applicable to the facts and circumstances of this case. The Learned Registrar, Cooperative Societies, Punjab, Chandigarh has withdrawn this letter vide notification bearing No.42, dated 31.01.2020. Opposite parties are entitled to recover Rs.10,04,606/- due against the complainant up to May 2023.
5. It has been averred by the opposite parties in the written version that the complainant does not fall within the definition of 'Consumer' as defined under the 'Act' and is not a 'consumer' of opposite parties. He obtained a loan of Rs.1,98,000/- in parts as per his convenience and requirements as detailed in the loan ledger and became a willful defaulter. He intentionally did not repay the loan amount as he has already transferred the land that was pledged with opposite parties. He never requested opposite parties to receive the balance amount and issue 'No Due Certificate'. Opposite parties are bound to issue 'No Due Certificate' if the complainant pays the whole loan amount due against him. Opposite parties are entitled to receive the entire loan amount due against the complainant i.e. Rs.10,04,606/- up to May 2023. If, the complainant pays the loan amount due against him, they have no objection to issue him 'No Due Certificate'. After denying all other averments of the complainant, opposite parties have reiterated their version as taken in the preliminary objections as detailed above and prayed for dismissal of the present complaint.
6. The complainant alongwith the present complaint has placed on record his affidavit (Ex.C1), Copies of Jamabandi for the year 2002-2003 (Ex.C2), notification and guidelines for recovery of loan from the members (Ex.C3), application dated 22.02.2022 (Ex.C4) and notice of recovery (Ex.C5). Per Contra authorized representative of opposite parties alongwith written statement has placed on record his affidavit (Ex.OP3), copies of letter of Registrar, Co-operative Societies, Punjab, Chandigarh (Ex.OP1) and Demand Register, Housefed, Ferozepur (Ex.OP2).
7. We have heard the learned counsel for the parties and have also carefully gone through the record. The learned counsel for complainant and opposite parties have argued on the same lines as per their respective pleadings and careful consideration has been given to the submissions made by learned counsel for the parties.
8. The grievance of the complainant is that he obtained a loan of Rs.1,97,984/- in the year 1999 from opposite parties for construction of house after pledging/mortgaging the land with opposite parties. He repaid one installment only to opposite parties. The Registrar Cooperative Society Punjab, Chandigarh had issued instructions to opposite parties for recovery of loan from their members and in this regard a notification No.RSS/RIN-CA-2/27/LokAdalat/804 dated 15.12.2008 (Ex.C3) has been issued. The complainant many times requested opposite parties to receive the balance amount as per instructions of Registrar and issue him 'No Due Certificate', but they did not consider his requests and they prolonged the matter on one pretext or the other. The complainant moved an application to opposite parties for receiving the balance amount and issue 'No Due Certificate', but all in vain.
9. On the other hand, opposite parties admitted that the complainant obtained a loan of Rs.1,98,000/- in parts as per his convenience & requirements and thereafter became a willful defaulter and the notification mentioned in the complaint has no legal bearing on the merits of this case. The complainant never approached opposite parties for payment of the outstanding balance amount for getting 'No Due Certificate'. If the complainant pays the entire loan amount due against him amounting to Rs.10,04,606/- upto May 2023 to opposite parties, then 'No Due Certificate' would be issued to him.
10. From the perusal of this notification (Ex.C3), it is clear that there is specific arrangement for the settlement of loan of housefed with regard to its tenure and opposite parties cannot deny the fact that this notification is applicable and binding on Housefed. The act of opposite parties in not settling the account of the complainant as per notification dated 15.12.2008 amounts to deficiency in service.
It is relevant to mention here that Registrar, Co-operative Societies, Punjab, Chandigarh had issued the instructions to opposite parties for recovery of the loan from the members as per notification dated 15.12.2008. The cases for settlement of loan account were to be decided as per said notification in the Lok Adalat held on 20.12.2008 and 21.12.2008 in view of the aforesaid notification dated 15.12.2008. The opposite parties have not produced on record any evidence to prove that any letter was sent to the complainant to settle his loan account as per notification dated 15.12.2008. Meaning thereby, the case of the complainant was not considered for settlement of his loan account in the Lok Adalat. As per said notification, no interest was to be charged more than principal amount while settling the loan cases where the tenure of the loan was for a period of 10 years and where the tenure of loan was more than 10 years, in those cases, the interest was not to be recovered more than double of the loan amount. Although, the said provision was removed subsequently vide letter dated 30.01.2020 but the fact remains that the said provision was removed after passing of 12 years. The provisions of said notification were applicable at the relevant point of time when the Lok Adalat was held and loan account of the complainant was not settled in the Lok Adalat held in view of said notification, which is a clear cut case of 'deficiency in service' on the part of opposite parties.
In view of the facts and circumstances as mentioned above, it is apparent that the loan account of the complainant was not considered by the opposite parties in view of the guidelines issued by the Registrar, Co-operative Societies, Punjab vide notification dated 15.12.2008. The opposite parties were required to issue separate notice to the complainant for consideration of his case in the Lok Adalat held on 20.12.2008 and 21.12.2008 in view of the aforesaid notification but it was not done. So, the 'deficiency in service' on the part of opposite parties is duly proved on record.
11. The plea of opposite parties to the effect that “The District Commission has no jurisdiction to entertain and decide the present complaint and as per provisions of Sections 55 and 82 of the Punjab Co-operative Societies Act, 1961, the dispute between the complainant (member) and society is to be decided by the Arbitrator and complainant is not 'consumer' of opposite parties”, is not tenable as these issues are no more res integra. Same issue was involved in the case of The Secretary, Thirumurugan Co operative Agricultural Credit Society v. M Lalitha (Dead) through LRs, I (2004) CPJ 1(SC), wherein the Hon’ble Supreme Court of India has held that the disputes between a cooperative housing society and its Member regarding ‘deficiency in service’ can be resolved under the Consumer Protection Act. The relevant portion of said judgment as mentioned in Para-17 is reproduced as under:-
“17. The decision in Dhulabhai case (supra) also does not help the Appellant. The present case is not one where the question to be considered is as to the exclusion of jurisdiction of civil court in view of the provisions of Section 90 read with Section 156 of the Act. Provisions of 1986 Act, as already made clear above, apply in addition to the other provisions available under other enactments. It follows that the remedies available under the 1986 Act for redressal of disputes are in addition to the available remedies under the Act. Under the 1986 Act we have to consider as regards the additional jurisdiction conferred on the forums and not their exclusion. In Dhulabhai case consideration was whether the jurisdiction of the civil court was excluded. Propositions (1) and (2) indicate that where the statute gives a finality to the orders of the special tribunals the jurisdiction of civil courts must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Further, where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. The remedies that are available to an aggrieved party under the 1986 Act are wider. For instance in addition to granting a specific relief the forums under the 1986 Act have jurisdiction to award compensation for the mental agony, suffering, etc., which possibly could not be given under the Act in relation to dispute under Section 90 of the Act. Merely because the rights and liabilities are created between the members and the management of the society under the Act and forums are provided, it cannot take away or exclude the jurisdiction conferred on the forums under the 1986 Act expressly and intentionally to serve a definite cause in terms of the objects and reasons of the Act, reference to which is already made above...”
12. In another case, the Hon’ble Supreme Court in Civil Appeal No. 64 of 2010 (Virender Jain V. Alaknanda Co-op. Group Housing Society Ltd. in and connected matters) had decided vide order dated 13.04.2013 by relying upon the law laid down in the case of M Lalitha (supra) has held in Para-14 as follows:
“14. In our view, there is no merit in the submission of the learned Senior Counsel. In the Complaints filed by them, the Appellants had primarily challenged the action of respondent No.1 to refund the amounts deposited by them and they extinguished their entitlement to get the flats. Therefore, the mere fact that the action taken by Respondent No.1 was approved by the Assistant Registrar, Cooperative Societies and higher authorities, cannot deprive the Appellants of their legitimate right to seek remedy under the Act, which is in addition to the other remedies available to them under the Cooperative Societies Act. Law on this issue must be treated as settled by the judgments of this Court in Thirumurugan Co operative Agricultural Credit Society v. M Lalitha; Kishore Lal v. Chairman, Employees’ State Insurance Corpn. 2007 (4) SCC 579 and National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy 2012 (2) SCC 506.”
13. In one more case of Smt. Kalawati & Ors. Vs. M/s United Vaish Co-operative Thirft and Credit Society Ltd., 2002(1) CLT 101, the Hon'ble National Commission held as under:
“In this view of the matter, it is not necessary to deal with the argument that CPA is a general enactment while the Delhi Co-operative Societies Act, 1972 is a special enactment as it was canvassed before us. This issue on the interpretation of a special or general Act does not arise in the present case. We therefore hold that Section 93 of the Societies Act does not bar the jurisdiction of District Forum assuming jurisdiction in the matter. We are also not in agreement with the view of the State Commission that a member cannot be a consumer vis-a-vis the society of which he is a member. As a member he has certain rights in the society like attending its meeting and right to vote. A member is a separate entity from the Co-operative Society which is just like a shareholder as in the Company registered under the Companies Act, 1986. Here is the society of which the Complainants are member which invites deposits and pays interest and is to refund the amount with interest on maturity. Society provides facilities in connection with financing and is certainly rendering services to its members and here is a member who avails of such services. When there is a fault on the part of the society and itself is not paying the amount on fixed deposit receipts on maturity, there is certainly deficiency in service by the society and a Complaint lies against society by the member as a Complainant.”
14. In the present case also, the Complainant was the Member of OP No.2-Society and had availed the loan facility from it. The Complainant had every right to sue the Society before the District Commission for the ‘deficiency in service’, in view of the law as laid down in the above said judgments.
15. As far as the issue of reference of the dispute to the Arbitrator is concerned, it is relevant to mention that the Larger Bench of the Hon’ble National Commission, vide order dated 13.07.2017, passed in Consumer Complaint No.701 of 2015 titled as Aftab Singh Versus EMAAR MGF Land Limited & Anr. has held that an Arbitration Clause in the afore-stated kind of Agreements between the Complainants and the builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Civil Appeal No.(s) 23512-23513 of 2017 (M/s EMAAR MGF Land Limited & Anr. Vs. Aftab Singh) was filed against the said order of the Hon’ble National Commission and it was also dismissed by the Hon’ble Apex Court, vide order dated 13.02.2018. The Review Petitions (C) Nos.2629-2630 of 2018 were also dismissed by the Hon’ble Apex Court on 10.12.2018. Consequently, the existence of an Arbitration Clause or otherwise is not a bar to resolve this dispute by Consumer Commission. Reliance can be placed on the law laid down by Hon'ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh in case titled as Co-operative House Building Society Limited Vs. Dharampal through L.R's and Anrs bearing FA/797/2019, Decided on 24.01.2024.
16. Thus, keeping in view the facts and circumstances narrated above, the present complaint is partly allowed against opposite parties with Rs.15,000/- as compensation for harassment and mental agony alongwith Rs.5000/- as litigation expenses. Opposite parties are directed to settle the loan case of complainant as per notification dated 15.12.2008 issued by Registrar, Cooperative Societies, Punjab. Opposite parties are further directed that after receipt of balance loan amount as per settlement in view of notification, they will issue 'No Objection Certificate' to the complainant, redeem the land which is under mortgage with them as security of said loan and also return the original document of the property pledged with them, if any.
17. The compliance of this order be made within 45 days from the date of receipt of copy of this order, failing which opposite parties will be liable to pay additional cost of Rs.20,000/- to the complainant. Copy of the order be sent to the parties concerned free of costs and file be indexed and consigned to the record room.
Announced in Open Commission
01-10-2024
(Vishal Arora)
President
(Raghbir Singh Sukhija)
Member
(Tajinder Kaur)
Member
