State Consumer Disputes Redressal Commission
The Branch Manager, Shriram Chits Pvt. ... vs Sankati Venugopal Rao ... on 27 September, 2012
BEFORE THE A BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD F.A.No.160/2011 against C.C.No.36/2009, District Forum, Guntur. Between: 1.The Branch Manager, Shriram Chits Pvt. Ltd., Opp. Taluka Office, Arundalpet, Guntur. 2. The Divisional Manager, Shriram Chits Pvt. Ltd., Opp. Krishna Picture Palace, Kothapet, Guntur. 3. The Asst. General Manager, Shriram Chits Pvt. Ltd., Zonal Office , 4th lane, Arundalpet, Guntur. 4. The Executive Director, Shriram Chits Pvt. Ltd., Zonal Office , 4th Lane, Arundalpet, Guntur. 5. Y.S.Chakravarthy, Board of Director, Shriram Chits (P) Ltd., Administrative Office : 3-6-478, III Floor, Anand Estate, Liberty Road, Opp. Indian Bank, Himayathnagar, Hyderabad. 6. Managing Director, Shriram Investments Ltd., Angappa Street, Chennai 600 001. Appellants/ Opp.parties 1 to 6 And Sankati Venugopal Rao, S/o.Venkateswarlu, GPA Holder of Smt.Dr.R.Geethakumari, W/o.RGV Krihsnamurthy, R/o.Srinagar, Guntur. Respondent/ Complainant Counsel for the Appellants : M/s. KRR.Associates Mr.K. Rajeswara Rao Counsel for the respondent : M/s. P.Ravi Shanker QUORUM: THE HONBLE JUSTICE SRI D.APPA RAO, PRESIDENT, AND SRI S.BHUJANGA RAO, HONBLE MEMBER.
THURSDAY, THE TWENTY SEVENTH DAY OF SEPTEMBER, TWO THOUSAND TWELVE.
Oral order (Per Sri S.Bhujanga Rao, Honble Member).
This appeal is directed against the order dt.18.8.2010 of the District Forum, Guntur in C.C.No.36/2009, which is filed by the respondent/complainant seeking direction to the opposite parties to pay maturity amount of Rs.3,98,460/- along with interest at 24% from the date of maturity and to pay Rs.95,000/- towards compensation and to pay Rs.5000/- towards costs, to the complainant.
The brief case of the complainant is that basing on the publication and brochures published by the opposite parties, the complainant accepted to deposit Rs.3 lakhs with opposite party no.1 branch.
The branch manager of opposite party no.1 branch handed over 10 non convertible debentures of Rs.1000/- each STRAIGHT BOND as a special scheme . The date of investment is 18.12.2004 and the date of redemption is 18.12.2007 for a period of 36 months and the redemption value is Rs.39,846/- for each debenture certificate in total Rs.3,98,460/- for 10 debenture certificates. Opposite partyno.1 received the said debenture certificates and sent them to the head office and assured the complainant to get the amount within a short time and asked the complainant to come within a week . But opposite party no.1 did not return the amount as promised and dodging the matter on one pretext or the other.
The complainant came to know through opposite party no.1 that the then Branch Manger Mr. N.C.Ramakrishna cheated the customers by collecting the amounts from them and issued fake debentures in their favour and further informed that he was directed by the head office to collect the debentures issued during the period of Mr. N.C.Ramakrishna and he was not authorized to pay the amounts. As the matured amount was not paid , the complainant got issued legal notice dt.10.11.2008 to the opposite party . The opposite parties, after receiving the notice, gave a reply with false allegations. Due to the attitude and behavior of the opp.parties, the complainant suffered mentally and financially and the act of the opposite parties amounts to deficiency in service .Hence the complaint.
The opposite party no.1 filed its written version and the same was adopted by site parties 2 to 6. The opposite parties contended that the District Forum has no jurisdiction to entertain the case as the complainant cannot be described as a consumer and there is no consumer dispute and there is no deficiency in service on the part of the opposite parties. The Debenture certificates issued by the then Manager N.C.Rama Krishna of opposite party no.1 branch are fake and forged documents and that the same were not issued either by Sriram Investment Company Ltd or Sriram Transport Finance Co.Ltd. or Sriram City Union Finance Ltd.
The opposite party no.1 lodged a complaint with the SHO , Arundalpet P.S. Guntur on 11.7.2008 against the said Rama Krishna for committing offences of cheating and forgery and the same was registered as a case in Crime No.188/2008 of Arundalpet L & O P.S U/s.420,468 and 419 IPC and after due investigation the police filed charge sheet against the said N.C.Rama Krihsna and the same is pending trial.
The debenture certificates referred to in the complaint said to have been issued by the said Rama Krishna were not at all issued by the opposite party company .
That Dr.R.Geetha Kumari , W/o. R.V.G.Krishna Murthy also might have joined hands with N.C.Rama Krishna and both of them might have colluded together and got in existence the above referred debentures, as if.they are issued by the group of companies in the name of Dr.R.Geetha Kumari. Infact no temporary receipts were issued in favour of the complainant or in favour of Dr.R.Geetha Kumari . The complainant has no locus standi to file the present complaint . The complaint is bad for mis joinder of parties. The opposite parties are no way concerned with the said debentures of R.Geetha Kumari and have need not pay any amount, much less the amount claimed in the complaint. The power of attorney holder i.e. the complainant did not file any petition seeking permission to represent the said Dr.R.Geetha Kumari. Hence the complaint is liable to be dismissed with costs.
During the course of enquiry , the complainant filed evidence affidavit in proof of his case and got marked Exs.A1 to A8. The opposite party no.1 has also filed affidavit and the same was adopted by other opposite parties and then got marked Exs.B1 and B2.
On consideration of the material on record, the District Forum allowed the complaint, in part, directing the opposite parties to pay an amount of Rs.3,98,460/- to the complainant being the redemption value of debentures with interest at 9% p.a. from 19.12.07 till the date of realization, to pay Rs.10,000/-
towards compensation and to pay Rs.1000/-
towards costs.
Aggrieved by the said order, the opposite parties preferred the above appeal contending that the order of the District Forum is contrary to law and facts and is arbitrary, unreasonable and not passed on proper appreciation of facts of the case. The District Forum did not appreciate the contents and objections taken by the opposite parties in their written version and thereby passed an erroneous order fastening the liability to the opposite parties. The District Forum would have rejected the complaint for lack of jurisdiction as the Civil Court is the competent Forum for proper adjudication of the case leading evidence at length. That the District Forum failed to appreciate the facts that immediately after coming to their knowledge regarding the fraud played by its ex-branch manager, they have got registered a case vide crime no.188/2008 . The District Forum ought to have seen that the alleged debentures produced by the complainant are fake and not genuine and that during the course of investigation of the case in the Criminal case, the accused have admitted the commission of offence. That the District Forum failed to appreciate the fact that when the very issuance of the alleged debentures are proved to be fake by the Forensic Science Laboratory, passing an order basing on those fake and forged debenture certificates is without applying judicious mind. That the District Forum ought to have held that there is no deficiency in service on the part of the appellants/opposite parties and there is no relation between the company and the complainant for the alleged allegations . The Forum should have dismissed the complaint, atleast, on the ground that the complaint is not filed by the actual aggrieved party i.e. Smt. Geetha Rani .
We heard both parties.
The point for consideration is whether the order of the District Forum is liable to be set aside? If so, on what grounds?
The case of the complainant is that Dr.R.Geetha Kumari purchased 10 debenture certificates, which have maturity value of Rs.39,846/-
each for Rs.3 lakhs. from the opposite party group of companies, under Exs.A1 to A3, through opp.party no.1 branch at Guntur and surrendered the said debentures, after maturity, for payment of redemption amount but the opp.parties have not paid the redemption amount on the ground that the then Branch Manager of opp.party by name N.C.Rama Krishna issued fake debentures.
The case of the opp.parties is that the debenture certificates surrendered by Dr.R.Geetha Kumari are not the original certificates and that they are issued by the then Branch Manager of opp.party no.1 NC.Rama Krishna and they are fake debenture certificates and that the said Rama Krishna fabricated and got printed the false debenture certificates, in the name of opposite parties group of companies and that they have given a police report against the said Rama Krishna and the police concerned investigated the case and filed charge sheet against him and opp.parties are not liable to pay any redemption value of the said debenture certificates that are surrendered by Geetha Kumari.
The opp.parties are not disputing the fact that Smt. Dr.R.Geetha Kumari paid Rs.3 lakhs to Mr.N.C.Rama Krihsna, the then Manger of the opposite party no.1 branch of M/s. Sriram Chits Pvt.Ltd. and the said Manager issued Exs.A1 to A3, ten debenture certificates duly signed as a Manager of opposite party no.1 branch . It is the case of the complainant that Smt. Dr. Geetha Kumari. invested in the above debentures, attracted by colourful advertisement and brochures published by the opposite party and vide publicity given by the company to invest in their bonds/deposits /chits etc. Having purchased the said bonds and when maturity period is over, the bonds were handed over to the Manager of opposite party no.1, which is the one of the branches of M/s. Srirama Chits , for payment of maturity amount.
It is well known legal position that the company is vicariously liable for all the acts and deeds done by its employees during the course of business. It is for the company and its officials to check day to day affairs to ensure that no fraudulent transactions are done by the employees concerned. In this case when a person sitting in the branch of the company that too as Manager and issuing certificates on behalf of company after receiving the amounts, an ordinary person or a customer, cannot doubt the veracity or the certificate issued by the branch and its employees as they are doing so in their routine course of business. Therefore, as stated above, the company cannot shift the responsibility or avoid payment by saying that the mischief is done by its employees. The company is not liable to pay the amount. Therefore, for all the acts and deeds done by its employees, the company alone is responsible and it should reasonably compensate all its customers for the misdeeds done by its employees and it cannot escape its vicarious liability to compensate the customers/ public who invests in the companies believing in the colourful and attractive advertisements issued by the companies.
Further, if there is any fraud committed by the employees of the company, it is purely an internal matter between the company and its employees and it is for them to launch necessary prosecution against such of those employees. When bonds are issued genuine by the Branch Office and by the employees of the company, the General Public or customers who invest in such bonds or debentures, will not be knowing whether the bond or certificate issued by the Branch is fake/duplicate/forged. Therefore customers/general public are not responsible for such irregularities committed by the employees of the company in question.
Therefore the company cannot shirk their responsibility of paying the amount to the innocent customer under the guise of unacceptable theory that their employees issued duplicate certificates without the knowledge of the company.
Therefore the company and the opp.parties representing the company cannot take shelter by simply saying that criminal complaint is made against the then Branch Manger and other employees and cannot contend that the company is not liable to pay the amount. Further, there is no iota of evidence to show that the complainant is having any knowledge about the fake certificates issued by the branch manager of the company. It cam to light, only when the complainant submitted for redemption of the bonds the company could detect that the bonds issued by the then branch manager of Sriram Chits Pvt. Ltd., Arundalpeta fake and forged. Therefore the appellants/opp.parties cannot contend that the company is not liable to pay the amounts as the certificates are forged and issued by the then Branch Manager without their knowledge.
In view of the above discussion, the contentions of the appellants/opp.parties raised in the appeal grounds and the written argument filed on their behalf, are not tenable , as such, we are not inclined to accept the decision. The decision in Jai Chand Dewangan VS. Life Insurance Corporation (III 2007 CPJ
37) Associated Road Carriers Ltd. Vs. Kamalander Kashyap and others (1(2008) CPJ 404(NC)), and in Bright Transport Co. Vs. Sangli Sahakari Bank Ltd (2012 (2) CPR 433 (NC) ) are not applicable to the facts of the present case , as the facts of the cited cases are clearly distinguishable from the facts of the present case.
Having regard to the facts and circumstances discussed above, we are of the view that the complaint is maintainable under the provisions of C.P. Act and that there is deficiency in service on the part of the appellants/opposite parties. We do not find any grounds to interfere with the order of the District Forum. Hence the appeal fails.
In the result the appeal is dismissed confirming the order of the District Forum, but in the circumstances of the case there shall be no order as to costs.
PRESIDENT MEMBER PM* DT.
27.9.2012