State Consumer Disputes Redressal Commission
Smt. A. Latha, W/O. Sri Chandrashekar, ... vs 1. Smt. Swaroopa, W/O. Sri. B.Babu, Aged ... on 4 April, 2017
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana First Appeal No. FA/778/2013 (Arisen out of Order Dated 19/06/2013 in Case No. CC/892/2010 of District Hyderabad-II) 1. Smt. A. Latha, W/o. Sri Chandrashekar, Aged 45 Years, Occ: Housewife, R/o. H.No.18-1-317/A/63, Shivaji Nagar, Uppuguda, Hyderabad-500 053. ...........Appellant(s) Versus 1. 1. Smt. Swaroopa, W/o. Sri. B.Babu, Aged 48 Years, Occ: Household, R/o. 18-3-401/104, Bhatji Nagar, Kandikal Gate, Uppuguda, Hyderabad. 2. 2. M/s. Sri Sai Krupa Finance, Rep. by its Managing Director, Smt. K.Yashoda, W/o. Sri. Venkanna, Aged 41 Years, Occ: Chit Funds Finance Business, R/o. H.No.18-1-297/137/A, Shivaji Nagar, Uppuguda, Hyderabad-500 053. 3. 3. 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. 4. 4. 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/64, Shivaji Nagar, Uppuguda, Hyderabad-500053. ...........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. 778 OF 2013 AGAINST C.C.NO.892 OF 2010 DISTRICT CONSUMER FORUM HYDERABAD-II Between 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 Appellant/opposite party no.4 A N D Smt Swaroopa W/o B.Babu Aged 48 years, Occ: Household R/o 18-3-401/104, Bhatiji Nagar Kandikal Gat, Uppugida, Hyderabad Respondent/complainant 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 Respondents/Opp.Parties No.1 to 3 Counsel for the Appellant M/s Vamaraju Srikrishnudu Counsel for the Respondent No.1 M/s .Gourisankara Rao Counsel for the Respondent No.2 to 4 Served F.A.No. 1306 OF 2013 AGAINST C.C.NO.892 OF 2010 Between 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 Appellant/opposite parties no.2 & 3 A N D Smt Swaroopa W/o B.Babu Aged 48 years, Occ: Household R/o 18-3-401/104, Bhatiji Nagar Kandikal Gat, Uppugida, Hyderabad Respondent/complainant 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.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/Opp.Parties No.1 and 4 Counsel for the Appellants M/s K.Ravinder Reddi Counsel for the Respondent No.1 M/s Gourisankara Rao Counsel for the Respondent No. 3 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) *** F.A.No.778 of 2013 is filed by the opposite party no.4 and F.A.No.1306 of 2013 is filed by the opposite parties no.2 and 3. They are directed against the order dated 19.06.2013 passed by the District Consumer Forum-II, Hyderabad in C.C.No.892 of 2010, whereby and wherein the complaint filed by the complainant came to be allowed and the opposite parties are directed to pay Rs.4,00,000/- with interest @ 9% per annum from the date of issue of cheques dated 29.05.2009 till the date of realization together with compensation for Rs.5,000/- and costs of Rs.1,000/-.
2. Since both these appeals are against the very same order both appeals are dispose of by this common order :
3. The case of the complainant in brief, is that Opposite Parties 2 to 4 are the partners of Opposite Party No. 1 Finance company. The complainant has deposited two FDRs for Rs.1,00,000/- and Rs.3,00,000/- on 06.10.2007 and 10.08.2007 respectively wherein it was agreed to pay the amount with interest for a period of one year. After the maturity date the opposite parties have issued two cheques, one for a sum of Rs.1,00,000/- and another for a sum of Rs.3,00,000/- on 29.05.2009 towards part payment but when presented the same in the Bank they were returned unpaid for want of sufficient funds. Thereupon he issued legal notice on 28.04.2010 but the opposite parties did not pay the amount. Therefore he filed the complaint for refund of the amount covered under the FDRs with interest together with compensation and costs.
4. Opposite party no.1 did not make its appearance despite publication.
5. Opposite Parties no.2 and 3 resisted the case. They alleged that they are not aware of any issuance of cheques for Rs.1,00,000/- and Rs.3,00,000/- and the same were returned for want of sufficient funds. The alleged cheques were forged and fabricated for the purpose of the case. The opposite parties also not aware of issuance of legal notice. The complainant was a stranger to the opposite parties no.2 and 3 and they are not under any legal obligation for the amount claimed by the complainant. The complainant was not a consumer. They were not liable to render any service to him. There was no privity of contract between the complainant and the opposite parties no.2 and 3. These opposite parties are not concerned with the affairs of the opposite party no.1. The complainant in collusion with Smt K.Yashoda brought into existence the cheques with an intention to harass these opposite parties. Therefore, they prayed for dismissal of the complaint.
6. Opposite party no.4 also resisted the case. She alleged that opposite partyno.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. She was a silent partner. She did not commit any deficiency in service, and therefore prayed for dismissal of the complaint.
7. The complainant filed her affidavit evidence and got Exs. A1 to A10 marked, while the opposite parties no.2 to 4 filed their respective evidence affidavits and got Ex. B1 marked.
8. The Dist. Forum after considering the evidence placed on record opined that Exs.A5 and A6 prove that the complainant deposited a sum of Rs.4 lakhs with the opposite parties and that as per Ex.A10 all the opposite parties no.1 to 4 are partners in the firm and accordingly allowed the complaint directing the opposite parties no.1 to 4 to pay Rs.4,00,000/- with interest @ 9% per annum together with compensation of Rs.5,00,000/- and costs of Rs.1,000/-
9. Aggrieved by the said decision, the opposite party no.4 preferred appeal F.A.No.778 of 2013 contending that the Dist. Forum did not appreciate the facts in correct perspective. The opposite party no.4 was only an investor and she has not participated in the day to day activities of opposite partyno.1 that all the records, registers, books, bills, ledgers, etc., are at her residence and the opposite party no.4 had no control over the same. Several properties were attached by the policy/government under the provisions of AP Protection of Depositors of Financial Establishment Act, 1999 and the said proceedings were pending before the Metropolitan Sessions Judge. The said Yashoda was not added as party. There is no evidence on record to establish that the opposite party no.4 was responsible for payment of the alleged amount to the complainant. The complainant is not a consumer as defined under the CP Act. The complainant originally made the claim only against opposite party no.1 and subsequently impleaded the opposite party no.4 as a party to the complaint. Hence, prayed to allow the appeal by dismissing the complaint.
10. Aggrieved by the said decision the opposite parties no.2 and 3 filed F.A.No.1306 of 2013 contending that the Dist. Forum did not appreciate the facts in correct perspective. They contended that the complainant did not place any material before the Forum to show that there was deficiency of service on the part of the opposite parties no.2 and 3 and that the District Forum ought to have dismissed the complaint in the absence of any material before the Consumer Forum. Hence, prayed to allow the appeal by dismissing the complaint.
11. The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
12. 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 the complainant had deposited Rs.4 lakhs on 06.10.2007 and 10.08.2007 under FDRS Exs.A5 and A6. The opposite parties were liable to pay Rs. 4 lakhs with interest on maturity date. It was covered by 2 FDRs. When the complainant demanded the amount the opposite parties , have issued part payment under Ex. A1 copies of two cheques for Rs.3,00,000/- and Rs.1,00,000/- Seal of finance company was appended where under Smt Yashoda and opposite party no.2 signed.
13. The defence of the appellants/opposite parties no.2 to 4 are that they were no way concerned for payment of 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.
14. Evidently, the complainant filed Certified copy of Registration of Partnership Firm, Sai Krupa Chit Funds, Ex.A10 which 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 Ex. A10 does show 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 shows their names.
15. The counsel for the appellants/opposite parties vehemently argued basing on the grounds of appeals that the complainant is not a consumer as defined under Section 2 (1) (d) (ii) of the Consumer protection Act. The complainant has deposited money in the firm. The firm and its partners failed to repay the amounts deposited on maturity when demanded by the complainant. The very purpose of deposit is for repayment of money with interest. If that is so, it is a clear case of deficiency in service because the firm and its partners have failed to provide the service as they promised. Therefore, we are of the view that the complainant is a consumer and entitled to maintain complaint under the Act.
16. The opposite party no.4 pleaded in the grounds of appeal that the payments were received by one K.Yashoda who had all the records, registers, bills, ledgers etc. From the proceedings and evidence adduced before the District Forum, it is seen that all the receipts in respect of the amounts deposited by the complainant are issued by the Managing Partner of the Firm. The Managing Partner' of the firm has not adduced any evidence to show that the opposite party no.4 has not received any amount. If that is so, the contention of opposite partyno.4 that the amount was paid to the said Yashoda will not come in the way of the right of the complainant to ask for recovery of the money from the firm and its partners. This Commission observes that case of the complainant is not that she bought any goods for consideration. Her specific case is that she availed services from the opposite parties by depositing the amounts for interest.
17. The question whether a person, depositing amounts for interest, has availed any services was considered by the Hon'ble National Commission in Neela Vasant Raje case supra and answered as follows:
2. The complainant is a middle class woman who had deposited her hard earned savings with the respondent-firm in response to an invitation for deposits issued by the firm promising good rate of interest and prompt repayment of principal and interest with full security for the investment. Even after her two deposits matured for payment, the opposite party did not repay to her the principal and interest and hence the complaint was filed by the revision petitioner before the State Commission, Maharashtra seeking the reliefs by way of compensation inclusive of Principal, interest and damages. The State Commission has taken the view that the opposite party had not undertaken to render any sort of service for consideration to the complainant and the transaction between the parties was only one of depositing money in Fixed Deposits for earning the interest. For coming to the said conclusion, the State-Commission has relied on the dictionary meaning of the expression "financing,, occurring in the definition of the word 'service in Section 2(o) of the Act and held that financing would only mean to provide the capital to a person or an enterprise. In the opinion of the State Commission "merely returning the amount of deposit or payment of interest thereupon the transaction cannot be considered as a contract for hiring of a service,'. It is on the aforementioned ground, that the State Commission has affirmed the order passed by the District Forum holding that it had no jurisdiction to adjudicate upon the complaint filed by the revision petitioner.
3. We are unable to agree with the reasoning and conclusion concurrently recorded by the State Commission and the District Forum. In interpreting a social welfare legislation one should not make a narrow approach but should be guided by the principles of 'benevolent interpretation, which will help to promote and achieve the object and purpose of the Act namely, to protect the interests of consumers and suppress the evil sought to be remedied by the statute namely the unscrupulous exploitation of consumers. The main part of the definition of the expression 'service, is couched in the widest possible language and it expressly covers "service of any description" other than any service rendered 'free of charge, or 'under a contract of personal service,. The mere fact that a particular form of arrangement for provision of a facility does not Call within any of the specified categories enumerated in the inclusive part of the definition is absolutely of no consequence as long as the arrangement entered into between the parties is one of rendering 'service' as that expression is generally understood in common parlance. We are quite clear in our minds that when a company or a firm invites deposits on promise of attractive rates of interest and prompt repayment of principal and interest on the expiry of the stipulated period with full security for the investment in the shape of the assets of the company or firm, it is in essence of an offer by the company of providing to persons interested a safe avenue for investment of their funds with an assurance of prompter payment and lull security of investment. The consideration for the arrangement consists of the fact that the company or firm is enabled to use the funds deposited with it for the purposes of its business. Such a transaction in our opinion is clearly one of providing service for 'consideration, and the depositor is clearly a 'consumer, under the Act. In construing the scope of a social welfare enactment we have to take not of the current state of our society and the ground realities of life confronting the common people. To be offered a safe avenue for investing one's funds with assurance of reasonable return in the shape of interest and sound security for repayment is certainly to be regarded as a "service,, under the contemporary conditions prevailing in our society. It is a well known fact which we cannot loose sight of that it is common practice with many hundreds of thousands of middle class families and retired pensioners to invest their funds in such schemes of deposits launched by companies and firms and it would not be right to take a hypertechnical view regarding such an arrangement and deny relief under the Act to these depositors in the event of the company or firm failing to discharge their obligations in the matter of repayment of the principal and interest on the basis of the arrangement of service entered into between the parties. The default on the part of the company or firm to carry out its obligations to repay the principal and/or interest constitutes, in our opinion 'deficiency, in service so as to warrant the Sling of a complaint before a Consumer Forum seeking relief under the Act.
18. Similar view was taken by the Hon'ble National Commission in Mrs. Anitha Ahuza Vs. Banwari Lal Arora - III (2003) CPJ 137 (NC) which reads as follows:-
This definition is inclusive of services like Banking, Financing etc. In the present case, deposits were being taken and interest was payable in these Deposits. We are unable to accept the plea of the Petitioners that these amounts were taken on 'Loan'. There is no document to substantiate such an arrangement. This definition read in the context of the spirit of the judgment of the Hon'ble Supreme Court in Lucknow Development Authority v. M.K. Gupta (1994 I SCC 243), we are left in no doubt that State Commission was quite correct in holding them to be a consumer and the complaint entertainable by a consumer forum. There is no doubt in our mind that service was being rendered to the complainants by the Petitioner's Partnership Firm. We do not find any complex question of law or fact involved in this case to be relegated to civil court. In any case Hon'ble Supreme Court has held in Dr. J.J. Merchant and Ors. v. Shrinath Chaturvedi (JT 2002 (6) SC) that there is no bar on consumer forum to decide even such type of cases.
19. In the light of aforesaid decisions, it must be held that the complainant had availed the services of the opposite parties, she thus is a consumer within the meaning of Section 2(1)(d) of the Act. She is entitled for the repayment of the amounts with interest as per the FDRs. The dispute was between firm and its partners on one side and depositors on the other. Therefore, each partner and Firm would be jointly and severally liable for all the liabilities of firm.
20. To sum up the Dist. Forum has undoubtedly appreciated the fact that it was a firm and its partners were liable to pay the amount to the complainant. Having considered the entire evidence placed on record, we are of the opinion that the appeal has to be dismissed.
In the result both the appeals are dismissed. However, in the circumstances of the case each party to bear its own costs. Time for compliance four weeks.
PRESIDENT MEMBER Dated: 04.04.2017 [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER