The Managing Director, Dharmapuri District Co-operative Milk Producers’ Union Ltd. Vs. the Special Officer/Joint Registrar, Dharmapuri District Central Co-operative Bank Limited and Others - Court Judgment

This complaint coming on before us for hearing finally on 26.04.2011, upon perusing the material documents, and upon hearing the counsels for both the parties, and having stood over till this day for consideration, this Commission made the following order.

A.K.ANNAMALAI, PRESIDING MEMBER JUDICIAL

1. The complaint filed under Section 12 of the Consumer Protection Act- 1986

Complaint praying for the relief against the opposite parties to pay a sum of Rs.30,55,364.38 for the deficiency of service on the part of the opposite parties and for costs.

2. The details of complaint in brief as follows : The complainant union is a registered society under the Tamil Nadu Co-operative Societies Acts having its head office at Krishnagiri for the purpose of upliftment of economic status of the members of the Milk Producers of Co-operative Societies in rural area and functioning from the year 1982 with operational area of Dharmapuri and Krishnagiri Districts. For the purpose of business transaction two savings bank account No.2333/6 and CC 0063 M were opened with Dharmapuri District Central Co-operative Bank at Krishnagiri where the complainants head office is situated and another savings bank account No.10914 was opened in DCC Bank of Hosur. The head office for the District Central Co-operative Bank is at Dharmapuri. In the milk sales, more sales is done only in Hosur town. The complainant frequently and suddenly needs money as it has to make milk procurement payments to the milk producers every week.

3. Hence the complainant Union gave standing order to the 3rd opposite party with a request to transfer the accumulated funds to their SB account No.10914 at Hosur Branch after retaining minimum balance of Rs.500/- to the Savings Bank Account No.2333/6 with the Krishnagiri Branch in the 4th opposite party by first day of every week on Monday through Mail transfer under intimation to the complainant as per the letter dated 19.5.97. While doing so certain funds in 8 items from 2.4.97 to 29.11.99 for the priod from 1997-98, 1999-2000 for Rs.67,50,000/- was left out for transfer by the 3rd opposite party, while checking reconciliation for annual audit it was found out. Hence the complainant demanded the bank to pay the principal amount with 18% interest in letter dated 19.5.01. During those periods in order to pay the balance milk bill payment due to various co-operative societies the complainant by mortgage milk by products obtained cash credit at the rate of 18% and paid the dues to those societies. If the 3rd opposite party duly corrected the left out amount of Rs.67,50,000/- the complainants savings bank account with the 4th opposite party during the course of funds transfer the complainant could not have obtained cash credit with 18% interest. As per the letter dated 23.5.01, 3rd opposite party stated he was not responsible for the mistake crept in the funds transfer. Further the opposite parties have stated that they are not in a position to give any interests for the amount. In spite of various letters addressed to the opposite parties they have not yielded for the request of the complainant to pay interest at the rate of 18%. But on pointing out the defect the opposite parties have given credit of the amount of Rs.67,50,000/- for the period from 1997-1998, 2000-2001 and Rs.12,00,000/- for 4.6.01 in all Rs.79,50,000/- was credited with SB account No.2333/6 by the 4th opposite party on 25.6.01 and 23.9.01 and the interest at the rate of 18% of Rs.30,55,364.38 was not given credit. Hence the complainant has come forward with this complaint praying for a sum of Rs.30,55,364.38 for the deficiency of service on the part of the opposite parties and for costs.

4. Opposite parties 1 to 4 filed their common written version in which the allegations of the complainant are denied further it is stated that the complainant can claim his epicacitious remedy before the Registrar under the Tamilnadu Co-operative Societies Act and not before the Consumer Forum and the Societies are bound by special act which over rides any other law and under Sect.90(1)(d) of the Tamilnadu Co-operative Societies Act it specify and govern any dispute that arise between members of the society to be agitated before the Registrar who only as the jurisdiction to deal with any dispute. There is no deficiency in the course of any transactions between the parties and the transactions were all as a result of the agreed terms and conditions between the parties. By the conduct of the complainant they had estopped find him any instructions being strictly followed by the opposite parties. The acts or omissions between the two quacy commercial institutions not to be as service which is out of purview of the Forum. Complainant cannot be construed as a consumer. The claim is time barred and the complaint is filed only for purported loss relating only 8 deals for the period from 2.2.97 to 29.11.99 was only revealed in reconciliation of audit dated 19.5.01 and hence barred by limitation and not maintainable. It is the practice of the complainant chosen to collect the advise slips for the transfer of funds to other banks themselves through their own staff in order to avoid delay for the purpose of speedy credit of the amounts to the intended bank which amounts to waiver of any such instructions the complainant is estopped from raising any objections. Out of 115 transactions only 8 transactions were delayed that do not caused any deficiency by opposite parties. The complainant is not allowed to maintain two SB accounts under the rules and maintaining of two accounts is a violation of rules one had done wrong cannot claim relief on the basis of wrong act. The complainant failed and neglected to check the accounts then and there as it is expected of them. The interest claimed and sought to be recovered are not maintainable and devoid of merits. The remainder letters and other proceeds cannot help the complainant to escape from the negligence and folly committed by the complainant who had not immediately taken steps to credit the amounts by submitting the advices in time to intended banks. This was deliberately suppressed by the complainant. After several years the belated bringing of notice of the non credit in time were immediately rectified and the complainant was also informed vide letter dated 31.1.02 and no interest will be paid at the rate of 18% for the same. Hence there is no merits in the complaint which is to be dismissed.

5. Both sides have filed their proof affidavits and documents and on the side of the complainant documents filed are marked as Exhibit A1 to A26 and no documents are filed on the side of the opposite parties.

6. On the basis of both sides materials the following points are raised for decision:-

1) Whether the Consumer Forum has no jurisdiction to entertain the complaint ?

2) Whether the complaint is time barred ?

3) Whether there are deficiency in service on the part of the opposite parties as alleged by the complainant for failure of non transfer of funds as per standing instructions given by the complainant ?

4) What relief ?

7. Points 1 and 2 : In this enquiry the complainant claimed compensation for the alleged deficiency of service by the opposite parties for failure to transfer of fund to the extent of Rs.6,75,000/- then and there to the intended banks for the purpose of business transaction by the complainant and when it was found out the complainant claimed 18% interest for the same from the date of claim i.e on 19.5.2001. The opposite parties have contended that the complainant being the District Co-opertive Milk Producers Union as society and the opposite parties also being Co-operative Society Bank Limited having head office and branch offices under the control of Co-operative Societies Act bound by the concerned Government Department under the Societies Act. While considering this aspect even though both parties are under the control of Registrar under the Tamilnadu Co-operative Societies Act having one Apex body and bound by the special act which over rides any other law, as far as the nature of the case is concerned since the complainant as a customer of the bank entertained transactions with the opposite parties as a bank in nature coming under banking regulations acts and rules and thereby the complainant cannot be barred from the Consumer Protection Act 1986 as a Consumer and this view was elicited in 2004 (2) Law Weekly 41 in the case of Secretary, Thirumurugan Co-operative Agricultural Credit Society Vs. M.Lalitha (deceased) through legal heirs and in view of the same we feel the complainant is not barred by jurisdiction before this Forum. Regarding question of limitation is concerned it is the case of the complainant that as per the standing instructions given to the 3rd opposite party to transfer the accumulated funds in the SB Account No.10914 with 3rd opposite party to the Krishnagiri Branch by every Monday i.e. to transfer the accumulated funds in Account No.10914 (Hosur Branch) after retaining minimum balance of Rs.500/- to their SB Account No.2333/6 with the Krishnagiri branch i.e 4th opposite party by first day of every week as per the letter dated 19.5.97 and in the course of such transactions for the period from 1997-98 to 1999-2000 as per the details in the complaint relating to 8 items in serial No.1 to 8 for the period from 2.4.97 to 29.11.1999 as per the details of IBR number and the amount mentioned in all to the total for Rs.67,50,000/- was found not transferred to the intended branches as per the standing instructions as per Exhibit A1. This lapses was found out while doing reconciliation for annual audit, and accordingly through the letter Exhibit A4, dated 19.5.2001. It is clear that only as contended by the opposite parties due to the audit objection alone the complainant have come forward to claim the interest the lapse of non transfer of funds and it is also contended out of 115 transactions during those periods only this 8 transactions were omitted to be transferred then and there for which the complainant ought to have watched the same then and there as the transactions were all carried by the staff of the complainant by collecting advise credit vouchers from the concerned to intended branches for the speedy transactions of money and this point cannot be controverted by the complainant.

8. Regarding the question of limitation is concerned as per the complainant they have found out the omission during the annual bank reconciliation and audit and as per the letter addressed to the opposite parties claiming interest through the letter dated 19.5.01 according to the Exhibit A4 and hence we can construe the date of knowledge of the case for cause of action started from 19.5.01. Even otherwise if it is taken consideration of the opposite parties refusal for non giving intent as claim in their letter dated 23.5.01 the cause of action must be from 23.5.2001 and thereby the complainant ought to have been filed within two years i.e. on or before 23.5.03. But the complaint was filed only on 20.8.04 for the first time and subsequently represented after complying the queries raised by the office including the question of limitation on 30.11.04. In the returned complaint it was stated on 25.8.03 only the 1st opposite party refused the claim till 1.1.2004. Hence the claim was within time. This averment was based on the various letter sent by the complainant to the opposite parties claiming the amount with interest at the rate of 18% with reminders through various letters as per Exhibit A5, A7, to A10, A12 to A15, A18 to A22 etc., and thereby those letters by way of correspondence cannot be helpful to allow the period for to run the limitation and this was pointed out in the reported case of M/s.Indu Video Film Pvt. Limited Vs. Punjab National Bank and Others, of National Commission and Supreme Court on consumer cases volume 1986-1994 page 405 by stating mere correspondences and letters will not give fresh cause of action. Hence in this case the complainant has not filed any steps under Sec.24 (A) to condone the delay for entertaining the belated complaint and thereby in view of the above detailed facts we consider that the complaint is time barred one.

9. Points No.3 : It is represented by the opposite parties that the complainant had violated the conditions of the contractual obligations by not claiming the privilege of standing instructions then and there and by deputing their own men to collect the advise invoices from the main bank to be handed over to the intended banks for speedy transactions of money then and there and thereby they have estopped from the claim of benefits and as almost all the transactions were complied with out of 115 only 8 transactions were omitted to be given credit and they were also immediately rectified by giving credit on 25.6.01 and 23.8.01 and thereby there was no deficiency of service. The complainant also admitted that those amounts were given credit as stated above. Only thing the complainant claim is interest at the rate of 18% for the period from 19.5.01 as per the various letters and for which the opposite parties have given reply by stating their inability to comply to their request through the reply Exhibit A13 , A16 and Exhibit A23 in which categorically stated that they are in the position to give the interest at the rate of 18%. The complainant also failed to prove because of that lapse of 8 omitted transactions they have incurred loss by obtaining credit facilities with 18% interest and even though it was alleged for incurred expenses by distributing to the creditors from which date those amounts were borrowed and were paid to the milk suppliers through the society and thereby they have incurred loss because of the omitted transfer of funds by the opposite parties. Further as it was pointed out that the opposite parties and the complainant being co-operative entities they are having remedy before the Registrar of Co-operative Societies under the Co-operative Societies Act to refer their dispute as between members and in those circumstances this Commission feels in this regard also the complainant failed to establish that there was deficiency of service by the opposite parties since the complainant themselves were not aware of the same till the audit inspection was made out to find out the same only on 19.5.2001.

10. Point No.4 : In view of the findings of the above details in points 1 to 3 against the complainant, They cannot get any relief as per the complaint and the complaint deserves to be dismissed.

11. In the result the complaint is dismissed and there will be no order as to costs.