Ahore Co -Op Marketing Society Ltd vs PRAVEEN KUMAR

THE aforesaid five appeals have been filed by the appellants under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as 1986 Act) against the orders dated 10.12.2003 passed by the learned District Forum, Jalore whereby the complaints of the complainant -respondents were partly allowed. These are being disposed of by this common judgment, as the subject matter and issues involved therein are common. Facts of Appeal No. 175/04 - Manager, Ahore Co -op. Mkg. Society Ltd. v. Paraveen Kumar

THE brief facts giving rise to this appeal are that the appellant is a society registered under the Co -operative Societies Act, 1968 (hereinafter referred to as the Society). By its letter dated 30.9.1998, the Society invited investments to deposit money with it, with a promise to return the deposited amount with interest @ 18% p.a. Relying on this representation, the respondent deposited a sum of Rs. 50,000/ - with the Society on 18.3.1999 and Rs. 15,000/ - on 26.4.1999 and the appellant issued printed and numbered receipts of the amounts received to the respondent. After some time the appellant did not send any statement of account to the respondent and as such the respondent requested the appellant on 24.1.2000 to make repayment of the amount deposited by him, together with interest. The payment was, however, not made in spite of repeated reminders by the respondent to the appellant and its superior authorities. The respondent, therefore, filed complaint in the Forum below claiming refund of the amount deposited by him, together with interest and damages on account of mental agony and cost of litigation. The appellant submitted a reply to the complaint stating that the complainant cannot be termed as consumer as he had deposited the amount with the Society against the rules. According to the reply, the complainant -respondent had deposited the amount in the Society and that amount was received by its Cashier -cum -Accounts Clerk Shri Khim Singh against the rules and without the permission of the higher authorities for which the Society is not responsible. The Society had lodged an F.I.R. with the police against its employee Khim Singh for committing criminal misappropriation of large amount of money. The Society replied that it is not in a position to say whether or not repayment of the deposit had been made to the respondent because the relevant record has been seized by the police. Later, at the instance of Jan Abhav Abhiyog Nirakaran Society, Jalore, statement of account was sent to the respondent. The Society has submitted that the respondent might be entitled to receive the amount deposited by him but no interest is payable to him. The Society also alleged that the learned District Forum has no jurisdiction to decide the claim raised by the respondent.

AFTER hearing both the parties and receiving their evidence, the learned District Forum partly allowed the complaint and directed the appellant to make repayments of the principal amount of Rs. 65,000/ - to the respondent together with interest from the date of deposit to the date of presentation of complaint before the Forum below @ 12% p.a., and thereafter damages @ 9% p.a. and Rs. 500/ - as cost of litigation. Aggrieved by the said order dated 10.12.2003 passed by the learned District Forum, this appeal has been filed by the appellant.

WE have heard the arguments and submissions made by the learned Counsel for both the parties and have perused the impugned order passed by the learned District Forum and have considered the materials on record. The impugned order has been assailed by the learned Counsel for the appellant on two grounds. Firstly, that a Forum under the Consumer Protection Act has no jurisdiction over the subject -matter of the complaint because under the provisions of the Societies Act, any dispute touching the constitution, management or the business of a Society arising among members is to be referred to the Registrar for Arbitration. And, secondly, the Society is not liable for the fraud committed by its employee.

AS against this, the learned Counsel for the respondent has urged that the provisions of the Co -operative Societies Act do not apply to the present case as the respondent was not a member of the Society. He has also contended that the commission of fraud by an employee of the Society is the internal matter of the Society with which the consumer is hardly concerned.

WE have given our anxious consideration to the matters in controversy. Section 75 of the Rajasthan Cooperative Societies Act, 1965 provides that the dispute among the members of the Society touching the constitution, management or the business of a Cooperative Society shall be referred to the Registrar for decision. Thus, in order to oust the jurisdiction of the Consumer Forum, it is essential that there should be such a dispute which requires to be referred for settlement under Section 75 of the Rajasthan Co -operative Societies Act. The question whether a complaint could be filed by a consumer in the Consumer Forum was considered by the Honble National Commission in Smt. Kalawati & Ors. v. United Vaish Co -operative Thrift and Credit Society Ltd., I (2002) CPJ 71 (NC). In that case, the provisions of Delhi Co -operative Societies Act, which are similar to the provisions of the Rajasthan Co -operative Societies Act, were considered by the Honble National Commission. The Honble National Commission, relying on the case of Neela Vasant Raje v. Amogh Industries & Anr., III (1993) CPJ 261 (NC), held that where a company or a firm invites deposits from the public for the purpose of using money for its business on promise of giving attractive rates of interest with security of investment and prompt repayment of the principal after the stipulated term the transaction of such a nature would clearly make the depositor a consumer under CPA. It was held that a co -operative society under the Societies Act is akin to a company under the Companies Act, 1956. Thus, it was held that the complainant was certainly a consumer and he could maintain his complaint in the District Forum.

IN the present case, it is not in dispute that the respondent was not a member of the Society. As such, the dispute raised by the respondent cannot be said to have arisen between a member of the Society on the one hand and the Society on the other hand. In this view of the matter, the provisions of Section 75 of the Rajasthan Co -operative Societies Act do not at all apply to the facts of the present case. The services rendered by the Society are commercial in nature and a contractual liability arises on the basis of which the respondent being a consumer is entitled to file a complaint before the Consumer Forum for redressal of his grievances.

IN the above circumstances, we hold that Section 75 of the Rajasthan Co -operative Societies Act does not bar the jurisdiction of the District Forum assuming jurisdiction in the matter and that the respondent, in the facts and circumstances of the present case, is held to be a consumer availing of services as defined in the CPA. Before dealing with the second contention canvassed by the learned Counsel for the appellant, it would be useful to notice the settled legal principles which govern the vicarious liability of an employer for the loss caused to a consumer through the misdemeanour or negligence of an employee. It is well settled that a master is liable for his servants fraud perpetrated in the course of masters business, whether the fraud was for the masters benefit or not, if it was committed by the servant in the course of his employment. There is no difference in the liability of a master for wrong whether for fraud or any other wrong committed by a servant in the course of his employment. This principle has been illustrated by the decision of Their Lordships of Privy Council in United Africa Company Ltd. v. Saka Owoade, 1955 AC 130. This principle has been reaffirmed by Their Lordships of the Supreme Court in State Bank of India v. Smt. Shyama Devi, AIR 1978 SC 1263.

VIEWED in the light of this legal position, in the present case, it is clear that the amounts in question were handed over by the respondent to the Cashier -cum -Accounts Clerk of the Society in the course of Societys business. It was the duty of the Cashier to receive money on behalf of the Society. In other words, the said Cashier accepted the money acting as an agent of the Society. The Cashier in turn gave a receipt to the respondent for the amount received on behalf of the society. The receipts are printed receipts, are in the name of the issuing Society, are serially numbered and are signed by the Cashier of the Society. Therefore, as far as the depositor is concerned, he has clearly made the transaction with the Bank. As such, it can safely be said that the Cashier of the Society received the amounts from the respondent in the course of Societys business.

THIS conclusion is further fortified by the fact that the appellant had issued statement of account to the respondent on the printed letter -head of the Society and under the seal of the Society. Later, at the instance of the Settlement and Vigilance Committee, Jalore, the Assistant Registrar, Co -operative Societies, Jalore, who is superior authority of the appellant, had sent photo copies of the Deposit Account of the respondent maintained in the Society which clearly show that the amounts were deposited by the respondent and the entries of the same were made in the Ledger Book maintained by the appellant. The appellant has also admitted in the written reply of the complaint in the Forum below that the deposits made by the respondent in the Society were accepted by the Cashier. The Society, has, however, added that this has been done without the permission of the Society. It is pertinent to point out that in the F.I.R. lodged by the appellant against its employee, it has been stated that their employee had committed criminal misappropriation in his capacity as public servant. These facts go to prove that the respondent had made the deposits with the employee of the bank in the course of his employment with the Society and the society has not disputed this position. In this view of the matter, the appellant is under an obligation to make 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 Society to carry out its obligations to repay the principal and/or interest constitutes, in our considered opinion, deficiency in service. The fraud, if any, committed by the employee of the Society is the internal matter of the Society and the respondent is hardly concerned with it, particularly when the alleged fraud is many times more than the deposits made by the respondent and relates to other matters also, including sale of urea, printing of registers, etc.

IN our considered opinion, the learned District Forum has examined the matters in detail with reference to the materials on record and its findings are based on correct appreciation of entire matters. In the above circumstances, the discretion exercised by the learned District Forum, Jalore cannot be said to be capricious, perverse or arbitrary and does not call for any interference by us. This appeal, therefore, deserves to be dismissed. Appeal No. 176/04 Manager, Ahore Co -op. Marketing Society Ltd. v. Smt. Neelu Kumari. Appeal No. 177/04 Manager, Ahore Co -op. Marketing Society Ltd. v. Tarun Kumar. Appeal No. 178/04 Manager, Ahore Co -op. Marketing Society Ltd. v. Smt. Leela Devi. Appeal No. 179/04 Manager, Ahore Co -op. Marketing Society Ltd. v. Jaswant Mal. Since the Appeal No. 175/2004 above which is going to be dismissed and the other four appeals cited above involves the same question of law and fact, they are also to be dismissed in terms of the decision of Appeal No. 175/2004. Accordingly, all the five appeals aforesaid are hereby dismissed. There shall be no order as to costs. Appeals dismissed.