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Judgment
THE petitioner in these three revision petitions is the same, viz., the Gujarat State Co-operative Housing Finance Corporation Ltd. (hereafter, the GHFC) and the main issues are similar, though the respondents are different. Hence we deal with these petitions by a common order. Incidentally, the initial name of this body seems to have been Gujarat State Co-operative Housing Finance Society Ltd. the stage at which it became a Corporation is not clarified.
THE petition challenges the order dated 17.11.2003 of the Gujarat State Consumer Disputes Redressal Commission (hereafter, the State Commission) in first appeal no. 288 of 2003. By this order, the State Commission upheld the order dated 28.04.2003 of the District Consumer Disputes Redressal Forum, Banaskantha (hereafter, the District Forum) in consumer complaint no. 171 of 2002. THE District Forum had allowed the complaint of the original complainant (respondent before us; hereafter referred to as the complainant)) by the said order and directed the GHFC refund to the complainant the share money of Rs. 12,000/- deposited by it with the GHFC and also pay costs of Rs. 2,500/-. The facts (common to all the three petitions before us) are that the GHFC is a State-level body established by the Government of Gujarat (GoG) under the Gujarat State Co-operative Societies Act, 1961 (hereafter, the GSCS Act). During the relevant period, the GHFC was engaged in extending credit to the primary co-operative housing societies operating in the State for construction of residential houses for their respective members. Based on its equity capital (the principal contributor to which was probably the GoG, though this has not been clarified at any stage in these petitions) and specific guarantees of the GoG, GHFC raised, from time to time, loans on concessional terms from the Life Insurance Corporation of India Ltd. (LIC). The borrowed funds were then on-lent to the primary co-operative housing societies in the State, subject to the terms of the LICs sanction and orders of the GoG. For this purpose, each applicant co-operative housing society had to, inter alia, acquire shares of the GHFC in stipulated proportion to the loan availed of.
In this case, the complainant society, which acquired shares worth Rs. 12,000/-, repaid the entire loan in time and sought refund of the said amount. This was not released by the GHFC. As a result, the complainant filed the consumer complaint in question, which led to the proceedings culminating in this revision petition.
IT appears from the documents filed by the GHFC in this case that it received a loan of Rs. 9 crore from the LIC in 1981. The GoG, subject to the GHFC complying with several conditions, guaranteed the servicing of the loan. This amount was on-lent by the GHFC to primary co-operative housing societies, some of which turned defaulters. The GHFC has also filed before us copies of letter dated 10.09.2001 written by the then Chairperson of the GHFC to the Registrar of Co-operative Societies (RCS), GoG as well as that dated 24.07.2001, written by its Branch Superintendent to the Chairman/Secretary of the complainant society. Both these letters confirm that some of the borrower primary co-operative societies had defaulted on the GHFC loan repayment; its new lending business had consequently stopped or dwindled considerably; and hence it was unable to refund the share money to even those primary societies which had duly repaid the loans. This was primarily because the LIC and/or the GoG apparently mandated the GHFC, as a loan conditionality, to refund the share capital money to the societies which had fully paid up their loans only by way of transfer of the share capital/certificates to new applicant primary housing societies, i.e., without reducing its total paid - up share capital below a stipulated limit. Effectively, therefore, on account of its overall financial mismanagement, the GHFC ended up punishing those of its borrower primary co-operative housing societies which fully paid up the loan, for the default of others. There is no document on record to show that if the GoG (or, the LIC or, for that matter the GHFC itself) took any action to ensure rectification of this anomalous position on a sustainable basis, though the Chairpersons letter noted above made a specific request to the RCS to move the GoG for special financial accommodation of Rs. 5 crore (by way of permission to reduce the paid-up share capital) to settle the pending cases of refund of share capital contributed by primary societies like the complainant. They thus left the GHFC as well as the borrower primary societies with good debt service record to their own devices. In this case, the facts are similar to those in R.P No. 1445, except that the complainant society had invested Rs. 22,500/- in the shares of the GHFC. By its order dated 26.04.2002, the District Forum, Banaskantha directed the GHFC to refund the said amount to the complainant society along with interest @ 12% per annum from the date of the complaint and also pay costs of Rs. 1,200/-. By a detailed and well-reasoned order dated 19.02.2004, the State Commission modified the order of the District Forum only to the extent of allowing interest @ 9% instead of 12% per annum.
WITH this petition, the GHFC has filed a copy of the loan agreement with the LIC. This shows that the latter sanctioned another loan of Rs. 10 crore in April 1994 as a special case despite the performance of GHFC during 1992-93 being far from satisfactory on various counts such as recovery of dues from primary societies, resumption of loaning activities, reduction in the cash credit balance with the Co-operative Bank, etc. Here too the facts are similar. The complainant society contributed the sum of Rs. 47,000/- to the paid-up capital of the GHFC. The District Forum, Valsad - Dang ordered refund of the said amount along with interest @ 9% per annum from 15.04.1999 till the date of payment and payment of costs of Rs. 750/- to the complainant society. The State Commission dismissed the appeal of GHFC by the impugned order of 22.06.2005. Some other facts may be noted. Each of these revision petitions was filed by the GHFC after delay, the longest being of 128 days in R.P. no. 1445. By its order dated 20.09.2004, this Commission rejected the application for condonation of delay in this case and consequently dismissed the revision petition at the admission stage. The GHFC challenged this order before the Apex Court in an SLP. Setting aside the said order, the Court directed the Commission, by its order of 13.04.2006, to hear the matter on merits.
MR. R. M. Vithlani, learned counsel has represented the GHFC in all the three cases. The complainant societies in R.P. nos. 1445 and 1487 have remained unrepresented before us, despite notice while there has been appearance of counsel, Ms Mukti Choudhry on behalf of the complainant society in R.P. no. 2425. Though served notice, respondent no. 2, i.e., GoG through its RCS, has also chosen to remain unrepresented. Counsel, MR. S.P. Mittal, has represented respondent no. 3, the LIC. We have heard them all. MR. Mittal has not made any specific submission.
THE grounds of these revision petitions are the same as those urged before the State Commission in the appeals of the GHFC, namely, (i) the lack of jurisdiction in these cases of the Consumer Fora set up under the Consumer Protection Act, 1986 (hereafter, the Act) in view of the specific provisions of section 96 of the GSCS Act, (ii) delays by the complainant societies beyond the period of limitation stipulated in the Act and (iii) the bona fides of the GHFC in that it was prepared to refund the share capital deposits of the complainant societies but was unable to do so for want of permission of the GoG and the LIC. In its order in the appeal corresponding to R.P. no. 1487, the State Commission has dealt with each of these grounds comprehensively and convincingly.
Thus, the State Commission has rightly held that the ouster of jurisdiction stipulated in section 96 of the GSCS Act relates only to a Civil and/or Revenue Court and not to any Consumer Fora set up under the Act. Under section 3 of the Act, the latter, in any case, have jurisdiction, which is in addition to and not in derogation of the provisions of any other law in force.
SIMILARLY, on the issues of limitation of 2 years under section 24A of the Act in respect of the complaints filed by the primary co-operative housing societies in question and the GHFC pursuing the matter of refund of share capital moneys with the GoG/LIC, the State Commission has rightly held that continuation of the cause of action in favour of the complainant societies was on account of the admitted action of the GHFC in terms of seeking permission of the GoG, LIC, etc., for the refund of the share capital to the complainant societies, which went on for long beyond the period of limitation. We also find that the GHFC has not produced the copies of the loan agreements with any of these societies to show that it had stipulated and apprised the societies of the situation that the refund of their share capital money was contingent entirely on the permission of the GoG and/or LIC. The original GoG Resolution of 20.03.1981 extending guarantee cover to the GHFCs borrowings from the LIC clearly stipulated an interest rate of 9% per annum to be charged by the GHFC from its borrowers (primary co-operative housing societies) as against the interest @ 8.5% to be paid by it to the LIC. This 9% rate of interest could also be enhanced with prior concurrence of the LIC. Thus there was clearly a margin of at least 50 basis points, constituting a source of considerable income to the GHFC, and also profits, provided of course it managed its affairs well. Had it done so, it should have been possible for the GHFC to refund the share capital contributions to the borrowing societies without necessarily reducing its paidup capital below the limit(s) stipulated from time to time. In our view, therefore, mismanagement of its finances, as pointed out by the LIC, was the main ground for the GHFCs inability to refund these moneys. Further, the GHFC has not produced any document dating back to any time before the filing of these complaints by these societies to the effect that the GoG was even considering some financial assistance to the GHFC for this specific purpose. The GoG has conveniently chosen not to appear before us and clarify its stand on this issue even at this late stage. Therefore, GHFC merely producing copies of subsequent letters addressed to these societies to advise them that it was in the process of seeking GoGs permission to refund their share capital is no real settlement of the complainants just claims. In conclusion, therefore, we see no ground to interfere with the orders of the State Commission and accordingly dismiss these revision petitions. The parties are left to bear their own costs in these proceedings.