State Consumer Disputes Redressal Commission
B. Swaroopa, W/O. B.Babu, Aged About 48 ... vs 1. M/S. Sri Sai Krupa Finance, Rep. By Its ... on 4 April, 2017
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana First Appeal No. FA/692/2013 (Arisen out of Order Dated 22/02/2013 in Case No. CC/934/2010 of District Hyderabad-III) 1. B. Swaroopa, W/o. B.Babu, aged about 48 Years, Occ: House Wife, R/o. H.No.18-3-401/10/A, Bhatji Nagar, Kandikal Gate, Uppuguda, Hyderabad. ...........Appellant(s) Versus 1. 1. M/s. Sri Sai Krupa Finance, rep. by its Managing Partner, Smt. K. Yashoda, W/o. Venkanna, aged about 41 Years, Occ: Chit Fund Finance, Business, R/o. H.No.18-1-297/137/A, Shivajinagar, Uppuguda, 2. 2.Smt. Mangamma, W/o. Late Balachander, Hindu, Female Aged about 48 Years, Occ:Partner of Sri Sai Krupa Finace, R/o. H.No. 18-1-317/A/64, Shivajinagar, Uppuguda, Hyderabad-500 053. 3. 3. Smt. Laxmamma, W/o. Bikhasapathi, Hindu, female, aged about 42 Years, Occ: Partner of Sri Sai Krupa Finance, R/o. H.No.18-1-297/136/A/B, Shivajinagar, Uppuguda, Hyderabad-500 053. 4. 4. Smt. A. Latha W/o. Chandra Sekhar, Hindu, Female, Aged about 41 Years, Occ: Partner of Sri Sai Krupa Finance, R/o. H.No.18-1-297/136/A/B, Shivajinagar, Uppuguda, Hyderabad-500 053. ...........Respondent(s) BEFORE: HON'BLE MR. JUSTICE B. N. RAO NALLA PRESIDENT HON'BLE MR. Sri. PATIL VITHAL RAO JUDICIAL MEMBER For the Appellant: For the Respondent: Dated : 04 Apr 2017 Final Order / Judgement BEFORE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD F.A.No. 692 OF 2013 AGAINST C.C.NO.934 OF 2010 DISTRICT CONSUMER FORUM HYDERABAD-III Between Smt Swaroopa W/o B.Babu Aged 48 years, Occ: Household R/o 18-3-401/104, Bhatiji Nagar Kandikal Gat, Uppugida, Hyderabad Appellant/complainant A N D M/s Sri Sai Krupa Finance, Rep. by its Managing Director Smt K.Yashoda W/o Venkanna Aged 41 years, Occ: Chit Funds Finance Business, R/o H.No.18-1-317/A/63, Shiviji Nagar Uppuguda, Hyderabad - 500 053 Smt A.Mangamma W/o late Balachander Aged 48 years, Occ: partner of Sri Sai Krupa Finance, R/o H.No.18-1-317/A/64 Shivaji Nagar, Uppuguda, Hyderabad-500 053 Smt K.Laxmamma W/o Bikshapathi Aged 43 years, Occ: Partner of Sri Sai Krupa Finance R/o H.No.18-1-297/136/A/B/, Shivaji Nagar, Uppuguda, Hyderabad-500 053 Smt A.Latha W/o Chandrashekar Aged 45 years, Occ: Housewife R/o H.No.18-1-317/A/63, Shiviji Nagar Uppuguda, Hyderabad - 500 053 Respondents/opposite parties Counsel for the Appellant M/s Gourisankara Rao Counsel for the Respondent No.2 & 3 M/s K.Ravinder Reddi Counsel for the Respondent No.4 M/s Vamaraju Srikrishnudu QUORUM : HON'BLE SRI JUSTICE B.N.RAO, PRESIDENT & SRI PATIL VITHAL RAO, MEMBER
TUESDAY THE FOURTH DAY OF APRIL TWO THOUSAND SEVENTEEN Oral Order : (per Hon'ble Sri Justice B.N.Rao Nalla, Hon'ble President) *** Being dissatisfied with the order of the District Forum dated 22.02.2013 in C.C.No.934 of 2013 the complainant filed this appeal.
2. The case of the complainant in brief is that the complainant joined as a member in the chit conducted by the opposite party no.1 represented by its Managing Director Smt K.Yashoda. The chit amount was for a sum of Rs.2,00,000/- for period of 25 months and the complainant paid 21 months from August 2007 to April 2009. The complainant alleges that as the opposite parties failed to pay the prize amount, she got issued legal notice to the opposite parties demanding them to pay Rs.1,68,000/- being the total sum paid by her towards the chit along with interest @ 12% per annum from the date of commencement of the chit. A reply notice was given by the opposite party no.4 disassociating herself from the chit transaction and there has been no reply from the opposite parties No.1 to 3. Hence the complainant filed this complaint praying to direct the opposite parties for payment of Rs.1,68,000/- with interest @ 12% for one year with chit commission of Rs.64,094/- amounting to total sum of Rs.2,52,254/- together with costs.
3. The opposite parties no.2 and 3 resisted the case denying that they were partners in the firm. They contended that they were unaware of any payment made by the complainant or of any transaction entered into by her with the opposite party no.1. There is no privity of contract between the complainant and the opposite parties no.2 and 3 and that there was no deficiency of service committed by them. Hence, prayed for dismissal of the complaint.
4. Opposite party no.4 also resisted the case. She alleged that opposite party no.1 firm started by Smt K.Yashoda at her residence and all the registers, books, bills ledgers etc., were maintained by the said Smt K.Yashoda and her associates. The opposite party no.4 was induced by the said Yashoda to invest her hard earned amounts in the said firm and taken in the said firm as investor only by promising to pay interests on her investments and opposite partyno.4 has not participated in any of the day to day activities of the said firm at any point of time and she was made only as sleeping partner in the said firm. The said Yashoda was absconding and her immovable properties are seized and attached by the police under the provisions of AP Protection of Depositors of Financial Establishments Act, 1999 and the said proceedings are pending before the Hon'ble Metropolitan Sessions Judge, CCS, DP, Hyderabad and the sale proceeds realized by them will be distributed among the depositors of opposite party no.1. The complainant is at liberty to take appropriate action against opposite partyno.1 or the said Yashoda who is said to have been issued the alleged receipts and cheques but the complainant cannot seek any relief against the opposite party no.4. The entries in the passbook cannot be taken into consideration under any circumstances as there was a scope of fabrication of entries in the passbook. She was a silent partner. She did not commit any deficiency in service, and therefore prayed for dismissal of the complaint.
5. The complainant filed her affidavit evidence and got Exs. A1 to A5 marked, while the opposite parties no.2 to 4 filed their respective evidence affidavits but no documents have been filed. During the pendency of the appeal the complainant filed the petition FAIA No.1318 of 2013 and prayed to receive the certified copy of registration of partnership firm as additional evidence and mark the same in the complaint. The said petition was allowed by this Commission on 13.08.2013 and the certified copy of registration of partnership firm was marked Ex.A6.
6. The Dist. Forum after considering the evidence placed on record opined that there is deficiency of service on the part of the opposite party no.1 only and allowed the complaint against it directing it to pay Rs.1,68,000/- together with compensation of Rs.50,000/- and costs of Rs.2,000/-. While the complaint was dismissed against the opposite parties no.2 to 4 as there was no proof on record to show that there exists any partnership deed to establish that the opposite parties no.2 to 4 are partners in the opposite party no.1 firm or that they have any privity of contract with the complainant.
7. Aggrieved by the said decision the complainant filed this appeal contending that the Dist. Forum did not appreciate the facts in correct perspective. She contended that she got issued legal notice to all the partner and demanded the claim amount and the opposite party no.4 issued reply admitting that she was a sleeping partner. If really the opposite parties no.2 and 3 are not the partners they ought to have issued reply denying the same and wherein the opposite party gave reply stating that she was not the partner. The complainant in CC No.892 of 2010 on the file of District Forum -II Hyderabad wherein she filed the certificate of registration of the firm and marked as Ex.A10 but she was unable to file the same in C.C.No.934 of 2010. Now in the appeal the complainant filed the same. The District Forum ought to have granted interest @ 12% on the principal amount but it granted compensation of Rs.50,000/-.
8. The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
9. The complainant has filed a complaint against the opposite parties on the ground that the opposite party no.1 is the firm and the opposite parties no.2 to 4 are the partners of the firm wherein they failed to pay the amount fo the chit to the complainant. Ex.A1 passbook wherein there was entries of payment of the installment amounts from August 2007 to April 2009 for a period of 21 months. Ex.A5 are the bunch of receipts reveals that the complainant has paid various amounts starting from 23.08.2007 till 23.04.2009. These receipts have been signed as "paid" on the reverse of each receipt and shows that the opposite party no.1 was running a chit fund and enrolled the complainant as a member and she has regularly paid her monthly chit upto 21 months. From the above documents it has been proved that the complainant was a subscriber of the chit and before the complainant was declared the prized subscriber, the chit was wound up and the chit fund company was closed. Non-payment of the prize amount constitutes deficiency of service.
10. Before the District Forum the complainant has not filed the Certificate of Registration of Firm and hence the District Forum observed that in the absence of any evidence placed on ordered that the opposite parties no.2 to 4 are partners, the complaint was dismissed against the opposite parties no.2 to 4. The complainant, now in appeal, filed petition FAIA 1318 of 2013 praying the Commission to receive the Certified copy of Certificate of Registration of Firm and the same was allowed on 13.09.2013 and marked as.Ex.A6. The opposite parties no.2 to 4 made objection to allow the petition.
11. The defence of the appellants/opposite parties no.2 to 4 are that they were no way concerned for payment of chit amount and that there is no evidence or any other material on record in favour of the complainant and against the opposite parties no.2 to 4
12. Evidently, Ex.A6, Certified copy of Registration of Partnership Firm, Sai Krupa Chit Funds shows that the Firm is a registered one. It shows the date of registration as 20.10.1985 and duration of firm " at Will" and the names of the opposite parties no.2 to 4 were mentioned in the certificate. On perusal of the same it appears that they were the partners of the Sai Krupa Finance. The opposite parties no.2 to 4 could not give any plausible explanation as to why their names were in Registration of Firm Certificate when they were not partners or when they have no concern with the said finance company. They could not file any documents concerning the said firm to show that they were never partners nor transacted on its behalf. Therefore, it cannot be said that they have nothing to do with the said finance company, more so, when the very Registration Certificate show their names.
13. The complainant contended in the grounds of appeal that the District Forum ought to have granted interest on the principal amount due instead of awarding compensation of Rs.50,000/-.
14. There is no provision in the Consumer Protection Act empowering the District Forum or the State Commission or for that purpose the National Commission to award interest unless there is such term of contract between the parties. However, the Supreme Court has taken a view in case after case and the first such case being Sovintrog (India) Ltd. Vs State Bank of India, new Delhi (1999) 6 SCC 406 that though provisions of Consumer Protection Act do not provide for payment of interest still the interest is awardable only in those cases where there is a term of agreement between the parties or where there are equitable grounds, good conscience and justice. This view was taken in view of the provisions of Section 34 of the Civil Procedure Code empowering the Civil Court to award interest in the money suits.
15. Though it is specifically mentioned in Section 34 that the interest if at all should be awarded at the rates at which the moneys are lent and borrowed from the nationalized banks. Again the Supreme Court has taken a view in Lucknow Development authority Vs. M.K. Gupta, 1994 (1) SCC 243 that whenever the Consumer Fora comes to the conclusion that the interest is awardable on equitable grounds it should be awarded at reasonable rate which means neither too high nor too low.
16. However, in view of the peculiar facts of this case, we deem that interest awarded was not awardable and instead lumpsum compensation in terms of Section 14(1)(d) of the Consumer Protection Act has awarded. What is relevant is whether the service provider is guilty for deficiency in service and, if so, whether the consumer is entitled, on the equitable grounds, to interest and if so at what rate. Otherwise in terms of Section 14(1)(d) of the Consumer Protection Act, a consumer is entitled to an amount as compensation which means a lumpsum amount and not interest. In our view lumpsum compensation of Rs. 50,000/- as awarded by the District Forum shall meet the ends of justice.
17. Hence, having considered the entire evidence placed on record, we are of the opinion that the appeal has to be allowed by modifying the order of the District Forum by fixing the liability on the opposite parties no.2 to 4 also.
In the result the appeal is allowed modifying the order of the District Forum in C.C.No.934 of 2010 dated 22.02.2013 directing the opposite parties no.1 to 4, jointly and severally, to pay Rs.1,68,000/- to the complainant together with compensation of Rs.50,000/- and costs of Rs.2,000/-. However, in the circumstances of the case each party to bear its own costs in the appeal. Time for compliance four weeks.
PRESIDENT MEMBER Dated: 04.04.2017 Appendix of Evidence Witnesses examined NIL Exhibits Marked For complainant Ex.A6 Certified copy of Certificate of Registration of Firm For opposite parties NIL PRESIDENT MEMBER Dated: 04.04.2017 [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER