Judgment:
A. Venkatarami Reddy, President:
1. The complainant in Consumer Dispute Case No. 397/ 91 before the District Forum, West Godavari, Eluru is the appellant herein in this appeal. In the complaint it was stated that the complainant is a Private Medical Practitioner at Eluru. The first opposite party is the Branch Manager, M/s Tapoban Housing Finance Limited. The second opposite party is the president M/s Tapoban Housing Finance Limited. The third opposite party is the Chairman, The National Housing Bank, Bombay. The first opposite party is the Branch Manager of the second opposite party. The second opposite party is a financial Institution registered under the Companies Act which provides loans for constructing and repairing houses. The complainant applied to the first opposite-party for a loan to make alterations to his house and deposited a sum of Rs. 21,600/- on 24.6.91. The Complainant also handed over the title deeds for scrutiny and for granting of loan for making alterations to his house. But the opposite party has cheated over depositors-including the complainant and no loan was granted to the complainant. The third party i.e. the Chairman, National Housing Bank, gave public notice in Deccan Chronicle prohibiting the opposite parties 1 and 2 from accepting deposits. Since no loan was granted and the amount of Rs. 21,600/-was not refunded, the complainant claimed refund of sum of Rs. 21,600/- with interest at 18% p.a. from 26.4.91 to 25.11.91 and Rs. 200/- towards costs.
2. The complainant did not press his case against the first opposite party. The second opposite party remained ex-parte. The third opposite party filed a counter and contended that the opposite party No. 2 is a Housing Financial Company and is required to comply with the Housing Finance Companies Directions, 1989 issued by the third opposite party to regulate the acceptance of deposits by housing finance companies. During the course of investigation it came to light that the second opposite party violated the directions and therefore notification was issued on 19.9.1991 prohibiting the second opposite party from accepting any deposits. It was stated that the first and second opposite parties are not in the list of approved Housing Finance Companies published by the third opposite party and the deposits accepted by the companies are governed by the terms and conditions of contract between the company and the depositors. The third opposite party is not a guarantor for the repayment. The National Housing Bank notified on 19.9.91 prohibiting from accepting deposits by the opposite parties 1 and 2. It also intimatedto the enquire is made earlier. It also sent replies to the enquiries made by G. V. Kamalakara Rao and P. V. Raja Rao with regard to opposite parties 1 and 2 and intimated them that the third opposite party had no dealings with opposite parties 1 and 2, and is not a guarantor.
3. On the basis of the aforesaid pleadings, the District Forum held that the third opposite party has nothing to do with the amount deposited by the Complainant with the first opposite party and it is not a guarantor for repayment of the deposit made by the complainant to the first opposite party. It accordingly directed the second party to refund the amount of deposit with interest and costs and dismissed the complaint against the third opposite party i.e. the Chairman, National Housing Bank.
4. Aggrieved by that portion of the order dismissing the complaint against the third opposite party, the complainant preferred the above appeal.
5. It is submitted by the party-in-person that having regard to the provisions of Sections 30 to 34 of the National Housing Bank Act has supervision and control over the Housing Finance Companies both with regard to the acceptance of the deposits and functions, also directed inspection. It is therefore submitted that had the National Housing Bank performed its functions and effectively supervised, the second opposite party would not have been able to deceive the public by accepting deposits and cheating the public. Since the Bank failed to perform the supervisory functions vested in the bank, the bank is also liable for refund of the deposit amount made by the complainant to the second opposite party.
6. We are not inclined to agree. The third opposite party no doubt has powers of supervision. In exercise of that powers, the Housing Finance Companies (NHB) Directions 1989were issued which were being amended from time to time giving certain directions to the Finance Companies with regard to the acceptance of deposits refund of deposits and their borrowing capacity. When it was brought to the notice of the National Housing Bank, during the course of inspection to check accounts, that the second opposite party has not complied with the directions mentioned above, it immediately prohibited the company from accepting the deposits. It also froze the deposits of the second opposite party except for repayment of the same to the depositors. It also published the housing finance companies that were recognized on 23.10.90 and informed not to deposit with unrecognized Housing Financial Institutions and requested the public before depositing amounts to verify whether the Housing Finance Companies have been implementing the directions issued by the Housing Finance Companies (NHB) Directions, 1989. It also sent replies to the persons who enquired in 1990 itself, that the third opposite party has nothing to do with the deposits accepted by the opposite parties 1 and 2 and that they are not guarantors. Under these circumstances, it cannot be said that after coming to know of the activities of opposite parties 1 and 2 the National Housing Bank kept quiet without taking any action. Moreover, there is no contract entered into by the complainant with the third opposite party for rendering any service for consideration or guaranteed repayment of the deposit made by the complainant. The complainant has not hired the services of the third opposite party for any consideration, which has been paid or promised or partly promised. Hence it cannot be said that the third opposite party has undertaken to render any service to the complainant and accepted consideration. Thus, we are satisfied that the very complaint itself is not maintainable.
7. As mentioned earlier that the bank has taken prompt action on coming to know that the opposite parties 1 and 2 are carrying on the activities in violation of the Housing Finance Companies (NHB) Directions, 1989. Even if there is any violation of the statutory duty cast on the part of the third opposite party, it cannot be adjudicated under the provisions of the Consumer Protection Act, 1986.
8. For all the aforesaid reasons, the appeal is dismissed. There shall be no order as to costs.