State Consumer Disputes Redressal Commission
Noorahmed Momin vs Arvindmainuddin S/O. Ibrahim Mujawar on 21 April, 2022
1
Appeal Nos.764/2014 to 773/2014
Date of Filing : 16.06.2014
Date of Disposal :21.04.2022
BEFORE THE KARNATAKA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BENGALURU (PRINCIPAL BENCH)
DATED:21.04.2022
PRESENT
Mr.K.B SANGANNANAVAR : JUDICIAL MEMBER
Mrs. DIVYASHREE M : LADY MEMBER Appeal Nos.764/2014, 765/2014, 766/2014, 767/2014, 768/2014, 769/2014, 770/2014, 771/2014, 772/2014 & 773/2014.
APPEAL NO.764/2014 Noorahmed Momin, APPELLANT Ex-Chairman,
Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Mainuddin S/o Ibrahim Mujawar, R/o Maldaar Galli, Gokak, Belgaum District.
(Advocate - K.H Peerzade)
2) The General Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
2Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 APPEAL NO.765/2014 Noorahmed Momin, APPELLANT Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Amirhamja S/o Ibrahim Mujawar, R/o Maldaar Galli, Gokak, Belgaum District.
(Advocate - K.H Peerzade)
2) The General Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.766/2014 Noorahmed Momin, APPELLANT Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Altafhusen S/o Nyamatulla Malladi, R/o Maldaar Galli, Gokak, Belgaum District.
3Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 (Advocate - K.H Peerzade)
2) The General Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.767/2014 Noorahmed Momin, APPELLANT Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Yasmeen W/o Altaf Malladi, R/o Maldaar Galli, Gokak, Belgaum District.
(Advocate - K.H Peerzade)
2) The General Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.768/2014 1)Noorahmed Momin, APPELLANTS Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
2) The Vice-Chairman, 4 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Kumar Afrozbano D/o Kwajashamashuddin Makanadar, R/o Gajabarwadi Road, Hukkeri, (Advocate - Sri.S.P Ramesha)
2) The Secretary / Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.769/2014 1)Noorahmed Momin, APPELLANTS Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
2) The Vice-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s 5 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 RESPONDENTS 1) Haseenabanu, W/o Kwajashamashuddin Makanadar, R/o Gajabarwadi Road, Hukkeri, (Advocate - Sri.S.P Ramesha)
2) The Secretary / Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.770/2014 1)Noorahmed Momin, APPELLANTS Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
2) The Vice-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Imamhussai Mohammadgons Pyati, R/o Bazar Karanji, Hukkeri.
(Advocate - Sri.S.P Ramesha)
2) The Secretary / Manager, Shaye Nyamat Urban Co-operative 6 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.771/2014 1)Noorahmed Momin, APPELLANTS Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
2) The Vice-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Nazibulla (Gouspak) S/o Kwajashamashuddin Makanadar, R/o Gajabarwadi Road, Hukkeri.
(Advocate - Sri.S.P Ramesha)
2) The Secretary / Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.772/2014 1)Noorahmed Momin, APPELLANTS Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, 7 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 Belgaum.
2) The Vice-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s RESPONDENTS 1) Kwajashamashuddin Makanadar, R/o Gajabarwadi Road, Hukkeri, Belgaum.
(Advocate - Sri.S.P Ramesha)
2) The Secretary / Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
APPEAL NO.773/2014 1)Noorahmed Momin, APPELLANTS Ex-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
2) The Vice-Chairman, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
(Advocate - Sri.Kumar A Patil) V/s 8 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 RESPONDENTS 1) Kumari Hamareen Imamhussain Pyati, Since minor, R/by Guardian Smt.Gulashanbi Mohammadgons Pyati, R/o Bazar Karanji, Hukkeri, Belgaum.
(Advocate - Sri.S.P Ramesha)
2) The Secretary / Manager, Shaye Nyamat Urban Co-operative Society Ltd., Hukkeri District, Belgaum.
COMMON ORDER Mr.K.B SANGANNANAVAR, JUDICIAL MEMBER These appeals are filed U/s.27-A of C.P Act, 1986 being aggrieved by the order dated 30th May 2014 passed by District Consumer Disputes Redressal Forum, Belgaum in E.P No.12/2012, 13/2012, 14/2012, 15/2012 arising out of Criminal complaint Nos.116/2013, 117/2013, 118/2013, 119/2013, 120/2013 & 121/2013 respectively.
2. The brief facts of the case are:
Shaye Nyamat Urban Co-operative Society Ltd., is duly registered financial institution having its own bye-laws is governed 9 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 by the Rules and Regulations which have been approved by the Competent Authority. This is registered with Karnataka State Souharda Federation Co-operative Ltd., Bangalore. The Appellant herein was previous Chairman of the financial institution. The Managing Director of Karnataka State Souharda Federation Co- operative Ltd., Bangalore has removed him from the post of Chair Person of the financial institution with effect from 29 th September 2009 and he is having no powers to take any decision in the financial affairs of financial institution. Mr.Appasaheb Desai, has been appointed as Administrator to manage the day to day affairs of the institution. The Respondent in the respective Appeals raised Consumer Complaint No.275/2011, 276/2011, 277/2011, 278/2011, 646/2009, 654/2009, 650/2009, 648/2009, 647/2009 & 649/2009 respectively before the Forum below seeking refund of fixed deposit amount kept in the financial institution during the time mentioned in the complaints, by then appellant was not the Chairman of OP institution, since not appeared in the proceedings, were decided ex-parte on 31.03.2010, 18.10.2011 respectively and after obtaining award respective complainants/respondents filed Execution Petitions for recovery of award amount U/s.27 of C.P Act, 1986 wherein the Forum below passed impugned order on 30 th May 2014, is assailed in these appeals contending, the Forum below has lost sight of the fact that Appellant being Ex-Chairman of the financial institution was possessing no power or right to take any decision in respect of financial affairs of the institution, yet the forum below passed order on 30th May 2014, convicting Appellant Mr.Noorahmed Umarali Momin U/s.255(2) of Cr PC for the offence 10 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 punishable U/s.27 of C.P Act 1986 and he is sentenced to suffer simple imprisonment for a period of one year and to pay a fine of Rs.2,000/- and in default of payment of fine, to undergo further S.I for a period of one month and Forum below passed similar such order in all the connected cases convicting Appellant herein for the offence punishable U/s.27 of C.P Act, 1986, which according to Appellant is totally erroneous is liable to be set aside.
3. The Commission heard learned counsel for the Appellant in all the appeals. We examined the impugned orders passed by the Forum below. Now we have to examine whether impugned order passed by Forum below in E.P No.12/2012, 13/2012, 14/2012, 15/2012, Criminal complaint Nos.116/2013, 117/2013, 118/2013, 119/2013, 120/2013 & 121/2013 respectively dated 30th May 2014 as against Appellant herein concerned could be interfered by this Commission for the grounds of the Appeals.
4. If we examine the impugned order passed in E.P proceedings, could see Accused No.1 is arrayed as the General Manager, Noorahmed Umarali Momin, Ex-Chairman, Shaye Nyamat Urban Co-op. Credit Society Ltd., Hukkeri, Belgaum District, while Accused No.2 as the Chairman, Shaya Nyamat Urban Co-operative Credit Socity Ltd., Hukkeri, Belgaum District. In so for as order passed by the Forum below in connected Consumer Complaints are concerned, liability is fastened on the General Manager and the Chairman and not against the Appellant herein. Merely because the JDrs/OP in the respective cases did not disclose the name of CEO, 11 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 who has to act and work as per the directions of the board, Appellant being the Ex Chairman cannot be convicted for the offence punishable U/s.27 of C.P Act, 1986, for simple reason as the complainants never alleged in their complaints as to their commission of fraud or mismanagement of the society during their tenure and their swindling fund of the society. The forum below make mention of certain facts being noticed from the proceedings of the cases, thousands of depositors have filed complaints U/s.12 of C.P Act and have obtained orders against the societies or Co- operative institutions or the Chairman or Secretaries or Directors as the case may be and in most of the cases, the orders have not been complied with resulting thereby more than 900 petitions filed U/s.27 of C.P Act, 1986 against more than 100 Credit Societies/Co- operatives/banks and the amount ordered to be paid is several crores of rupees. In such circumstances as the Hon'ble High Court in Shantiniketan Housing Case held 'if leniency is shown and minimum or nominal fine or imprisonment is imposed, then certainly all the persons against whom orders have been passed, may ready to pay nominal fine and ultimately, the depositors will be the sufferers. It also may be noted that in case of economic offence, no leniency should be shown. Further, if leniency is shown and nominal fine or imprisonment is imposed, certainly it will encourage the persons against whom orders have been passed or may be passed, to disobey the same and to dupe the depositors'.
5. Let us come to the case on hand, Appellant herein was removed from Chairmanship of OP by Managing Director, Karnataka 12 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 State Souhard Federation Co-operative Ltd., Bangalore with effect from 29th September 2009 vide order No.SMS/BGM- 251/PROPERTY-3/2009, which was not at all considered by Forum below. The Forum below has failed to ascertain, whether Appellant Noorahmed and the Board of directors who were in-charge of financial institution were looking after the affairs of society, handed over the entire charge, including assets of the society to the Administrator and also to ascertain whether they mismanaged the financial institution at the relevant time to remove corporate veil in order to fix the liability against such ex directors and chairman as the case may be. The Forum below has also to ascertain whether allegations of mismanagement and swindling fund of Co-operative Credit Society Ltd., by such Ex-Chairman and board of Directors at the relevant time and time to time till appointment of Administrator by Managing Director of the Federation in order to fix the liability and take severe steps to recover the fund of the society and has to ascertain whether Dhrs/complainants in the respective cases alleged against Appellant herein as to his role in mismanagement to swindling the fund/money or assets of the credit society. These aspects are vital before taking coercive steps in particular to act upon penal provisions.
6. In this case we could see one Mr.Appa Saheb Desai, Secretary, Sri Basaveshwara Urban Credit Co-operative Society Ltd., Sankeshwara, Belagavi District was appointed as Administrator of Shyae Nyamat Urban Co-operative Society Ltd., Hukkeri, Belgaum District under order No.SMS/BGM-251/PROPERTY-3/2009, dated 13 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 29.09.2009. No materials placed as to how this Administrator, subsequent to his appointment as a Administrator of the Credit Co- operative Society has dealt the members of the society in the matter of satisfying awards obtained by them and we could not see his arrayed in the respective execution proceedings. It is not that he has to examine such things only in these cases but in all the cases filed against the society by other depositors. In such view of the matter, we observe herein that in these proceedings forum below has to examine whether Appellant herein had indulged in mismanagement of the society by his fraudulent activities, with a view to defraud the complainant in the respective cases under the cover of Co-operative Credit Society. It is needless to say the OP Society being Jdrs are bound to satisfy the respective Dhrs in these cases, who are now in- charge either as CEO, Manager, Chairman or Secretary or Administrator or Liquidator or with any nomenclature, since the society cannot be absolved by convicting Ex-Chairman, who has been shown removed from society with effect from 29 th September 2009, much before raising Consumer complaints and passing awards and filing EP proceedings thereon.
7. Learned counsel for the Appellant placed a reliance reported in (2017) 1 ConLT 102 of Hon'ble National Consumer Disputes Redressal Commission in Amarjit Singh Vs Gagandeep Singh, decided on 19.12.2016 wherein para 19 (a) held 'Ordinarily Ex- Secretary or the Ex-President or other office bearers of any Cooperative Credit Society shall not fall within the category of service providers in respect of any dealing of the depositors with such 14 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 society'. In (2017) 4 ConLT 521 : (2017) 3 CPJ 645 of the Hon'ble National Consumer Disputes Redresal Commission in V.C Sindhwani Vs. PNB Employee Co-operative (S.E.) Thrift & Credit Society Ltd., in para 9 on facts it was held, 'as there is no evidence of the petitioner having personally defrauded the complainant in any manner. There is no allegation that the money collected from the complainant was not deposited by the petitioner in the account of the society'. Thus, keeping in mind the aforesaid principles laid down by the Hon'ble NCDRC, even in these cases such fact could have been ascertained by Forum below before making conviction against Appellant herein in the respective cases sentencing him to suffer a prison term. In this regard, a question may come to our mind, whether he was alone responsible for mismanagement of the society or swindling money by his fraudulent activity in the matter the FDRs amount of these complainants, since we could not find such materials on record to connect such allegations against this Appellant is concerned.
8. In view of the above discussions and arriving to such conclusion, we are of the view that the impugned order passed by forum below requires to be reconsidered by Forum below.
9. Accordingly Commission proceed to allow the Appeal Nos.764/2014, 765/2014, 766/2014, 767/2014, 768/2014, 769/2014, 770/2014, 771/2014, 772/2014 & 773/2014 passed in E.P No.12/2012, 13/2012, 14/2012, 15/2012, Criminal complaint Nos.116/2013, 117/2013, 118/2013, 119/2013, 120/2013 & 15 Appeal Nos.764/2014 to 773/2014 Date of Filing : 16.06.2014 Date of Disposal :21.04.2022 121/2013 respectively. Consequently set aside the impugned order dated 30.05.2014, with a direction to the Commission below to reconsider and re examine the application filed U/s.27 of C.P Act, 1986 by the respective Dhrs from all angle, affording opportunity to both parties. It is needless to say to expedite the recovery proceedings to satisfy the DHrs either from General Manager or from Chairman or Secretary or Administrator or Liquidator or with any nomenclature managing affairs of the Shaye Nyamat Urban Co- operative Credit Society, Hukkeri.
10. The officer is directed to remit back the records if any and transfer the money deposited if any to the forum below for needful.
11. Keep the original of this Order in Appeal No.764/2014 and copy thereof in other connected appeals.
JUDICIAL MEMBER MEMBER vln*