SAMPURAN SINGH DEOL vs MANAGER, THE DORAHA PRIMARY CO-OPERATIVE AGRICULTURAL DEVELOPMENT BANK LTD.

SAMPURAN Singh Deol, the complainant challenges in this appeal order of District Forum, Ludhiana dated October 4, 1996 whereby his complaint filed under the provisions of the Consumer Protection Act was dismissed.

THE relevant facts for determination of dispute raised in this appeal are broadly admitted and are thus briefly stated. Sampuran Singh Deol is a Member of Cooperative Society, opposite party No. 2, Doraha Primary Cooperative Agricultural Development Bank Ltd., Doraha. As Member, he approached the Cooperative Society for financial help for the purpose of plantation of Poplar trees in his agricultural land measuring about 5 hectares. THE Cooperative Society decided to finance the loan to the tune of Rs. 2,65,000/- for plantation of 2500 Poplar trees. THE amount was to be financed in instalments at different stages. Five such instalments of different amount were released. Fifth instalment was released on December 26,1991. THEreafter, the Society did not release the subsequent instalments of the loan. THE complainant suffered loss as on account of non-availability of funds, he could not properly look after the Poplar trees. He had to raise Rs. 30,000/- from the local money-lender on December 1,1992 for maintenance of the trees @ 24% p.a. interest. He was also forced by the opposite party to return the amount of loan already borrowed. THE complainant was compelled to sell 400 immature trees at the throw away price of Rs. 1,40,000/-. In all, he suffered loss to the tune of Rs. 2,60,000/- that he claimed the same in the complaint moved before the District Forum. THE Society contested the complaint inter alia on the ground of lack of jurisdiction with the District Forum to entertain the complaint in view of the provisions of Section 55 of the Punjab Cooperative Societies Act, 1961. THE primary objection prevailed with the District Forum that the complaint was dismissed. The District Forum relied upon the decision of Madhya Pradesh State Commission in Dalip Singh and Others v. Prabhandhak Sahakari Bhumi Vikas Bank Maryadit Jhabua and Another, I (1996) CON.LT 191 which decision is further based upon the decision of the Supreme Court in The Chairman, Thiruvalluvar Transport Corporation v. The Consumer Protection Council, I (1995) CPJ 3 (SC). The case of Dalip Singh briefly was that he was Member of the Cooperative Society and had purchased a tractor with the financial assistance provided by the Society. The tractor met with an accident causing death of one Madiya whose legal heirs moved Motor Accident Claims Tribunal for compensation. The complainant, Dalip Singh and others were held liable to pay compensation on account of negligence of the Cooperative Society in not getting the policy of insurance renewed. Thus in the complaint filed under the Consumer Protection Act, Dalip Singh and others claimed damages from the Cooperative Society. It was held that such a complaint was not maintainable and the State Commission dismissed the appeal. The decision was based on the earlier decision of the Supreme Court in The Chairman. Thiruvalluvar Transport Corporation''s case. That was a case where one K. Kumar suffered injuries in a motor vehicle accident being a passenger of the omnibus and the Consumer Protection Council on behalf of his legal representatives lodged the complaint before the National Commission under the Consumer Protection Act. The claim was contested on the ground that jurisdiction lay with the Motor Accident Claims Tribunal to grant compensation and not with the for a. The National Commission had allowed the complaint. The Supreme Court revesed the decision.

The complainant, Sampuran Singh who argued his case in person raised an argument that the dispute of this kind is not covered by Section 55 of the Punjab Cooperative Societies Act and the District Forum was having jurisdiction to decide the complaint as allegations of deficiency in rendering service were alleged. When part of the loan had been released, non release of the remaining part would amount to deficiency in rendering service. This contention is devoid of merit. Section 55 of the Punjab Cooperative Societies Act reads as under : "Section-55 : 55. Disputes which may be referred to arbitration-(1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a cooperative society arises- (a) among members, past members and persons claiming through members, past members and deceased members; or (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society or liquidator, past or present; or (c) between the society or its committee and past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society; (d) between the society and any other cooperative society between a society and liquidator of another society or between the liquidator of one society and the liquidator of another society; such disputes shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. (2) For the purposes of Sub-section (1), the following be deemed to be disputes touching the constitution, management or the business of co-operative society, namely - (a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member whether such debt or demand be admitted or not; (b) a claim by a society against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not; (c) any dispute arising in connection with the election of any officer of the society. (3) If any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, management or the business of a cooperative society, the decision thereon of the Registrar shall be final and shall not be called in question in any Court."

If such a dispute as referred to in Section 55 is raised before the Registrar, Cooperative Societies, the same is to be decided by the registrar himself or by any person who has been vested by the Government with such powers or it could be referred to an Arbitrator as contemplated under Section 56 of the Punjab Cooperative Societies Act. Section 82 of the aforesaid Act provides a bar that no Civil or Revenue Court would have jurisdiction to challenge such orders. The Supreme Court after making reference to several previous decisions on this subject laid-down that remedy under the Consumer Protection Act is in addition to other remedies available. These observations were made viz-a-viz provisions of Section 34 of the Arbitration Act and Section 9 of the Code of Civil Procedure. It would be useful to reproduce the decision from para 16 of the judgment in M/s. Fair Air Engineers Pvt. Ltd. & Anr : v. N.K. Modi, II (1996) CPC, 304 : "It would, therefore, be clear that the Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Actor the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer an automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceeding pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and. circumstances of a particular case, come to the conclusion that the appropriate forums for adjudication of the disputes would be otherwise those given in the Act."

IT may be observed that when, particularly, reference to Section 34 of the Arbitration Act was made, it was observed that the same did not confer automatic right or create an automatic embargo on the exercise of power by the judicial authority under the Act. Thus, in the present case, it is to be seen as to whether such an embargo exists in the provisions of the Punjab Cooperative Societies Act as referred to above. There is no manner of doubt left after making reference to Sections 55, 56 and 82 of the Punjab Cooperative Societies Act that for the matters covered under the Act, the adjudication is to be by reference of the dispute to the Arbitrator under the Act and such a decision cannot be challenged in any suit in a Civil Court or proceedings. IT was also held by the Supreme Court in Sanam Verma v. Union of India, AIR 1985, Supreme Court 194, that FORA established under the Act has the trappings of a Civil Court and is judicial authority. The claim of a Member of Cooperative Society for the remaining amount of the loan sanctioned would obviously relate to the business of the Cooperative Society for which a specific remedy is available under the Cooperative Societies Act, further creating embargo for the other Courts to challenge the same. The FORA established under the Consumer Protection Act thus could not entertain the complaint. The decision of the District Forum in dismissing the complaint is correct and is affirmed while dismissing the appeal with no order as to costs. The complainant would be at liberty to seek remedy elsewhere. Appeal dismissed.