TMI Blog2016 (12) TMI 1896X X X X Extracts X X X X X X X X Extracts X X X X ..... y or the Ex-President or office bearers of any Cooperative Credit Society will not fall within the category of service providers in respect of any contract between the consumer and the cooperative society as they have the identity distinct from the duly registered cooperative credit society. However, there can be cases in which certain individuals may indulge in unfair trade practice or defrauding of the gullible depositors under the cloak of cooperative society - it is clear that if the Ex-Secretary or the Ex-President or office bearers of any Cooperative Credit Society have indulged in misfeasance and fraudulent practice to defraud the people in order to get material gains under the garb of corporate veil they shall also be treated as service providers to the depositors / complainants and held personally responsible for the deficiency in service, if any. Reference disposed off. - Revision Petition No. 2512 of 2011 And Revision Petition Nos. 2513 of 2011, 2514 of 2011, 2515 of 2011, 2516 of 2011, 2517 of 2011, 2518 of 2011 - - - Dated:- 19-12-2016 - Hon'ble Mr. Justice Ajit Bharihoke, Presiding Member, Hon'ble Mr. Justice V.K. Jain, Member And Hon'ble Mr. Dr. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to make payment. This led to the complainants approaching the District Forum concerned and filing their respective complaints. 3. The opposite parties on being served with notice of the complaint resisted the respective complaints by filing their written statement. 4. The District Forum on consideration of the pleadings before it directed all the opposite parties including the petitioner Amarjjt Singh to pay to the respective complainants the amount deposited by them with 16% interest p.a. from the date of deposit till the payment. 5. Being aggrieved of the order of the District Forum, the opposite parties preferred appeals. The State Commission UT Chandigarh confirmed the order of the District Forum and dismissed the respective appeals. Aggrieved by the dismissal of appeal, the petitioner Amarjit Singh has filed the above noted revision petitions. 6. It may be noted that similar revision petitions were filed by Anil Pahwa, the Ex Secretary of the above noted cooperative society. The aforesaid revision petitions being RP No. 1579 of 2011 and 1580 of 2011 were dismissed by a two member Bench of this Commission vide order dated 31.05.2011. In the said revision pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent has also relied upon the judgment of the Supreme Court in the matter of Delhi Development Authority Vs. Skipper Construction Co. (P) Ltd. Another (1996) 4 SCC 622. 9. As per the reference order dated 31.05.2013, we are required to answer whether the Ex-Secretary or Ex-President or other office bearers of any Cooperative Credit society falls within the definition of service provider. In order to effectively answer this question, it would be useful to have a look on the definition of term consumer qua hiring or availing of any service as provided under section 2 (1) (d) (ii) of the Consumer Protection Act, 1986 ( in short, the Act) The relevant provision is reproduced as under: (d) consumer means any person who (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question is whether or not the Ex-Secretary or Ex-President or other office bearers of any Cooperative Credit Society would fall within the category of service provider. 14 In order to find answer to the question under reference, it would be useful to have a look on Section 30 of Punjab Cooperative Societies Act, 1961 which reads thus: 30. Co-operative societies to be bodies corporate.- The registration of a co-operative society shall render it a body corporate by the name under which it is registered having perpetual succession and a common seal, and with power to hold property, enter into contract, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it is constituted. 15. It is pertinent to note that we have also taken note of Section 43 of Delhi Cooperative Societies Act, 2003 and Section 36 of Maharashtra Cooperative Societies Act 1960 which are para materia to section 30 of Punjab Cooperative Societies Act. 16. On bare reading of the above, it is clear that a cooperative society on registration is a rendered body corporate, meaning thereby that it acquires an identity distinct from its member s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Consumer Forum by a depositor or a member of the society and a relief can also be granted as against the society. However, so far as members of the managing committee/ directors are concerned, they stand on a different footing and unless the procedure prescribed under the special enactment i.e. Maharashtra Co- operative Societies Act, 1960 is followed and unless the liability is fixed against them, they cannot be held responsible in respect of payment of any dues recoverable from the society. 17. In view of the discussion above, we are of the view that ordinarily Ex-Secretary or the Ex-President or office bearers of any Cooperative Credit Society will not fall within the category of service providers in respect of any contract between the consumer and the cooperative society as they have the identity distinct from the duly registered cooperative credit society. However, there can be cases in which certain individuals may indulge in unfair trade practice or defrauding of the gullible depositors under the cloak of cooperative society. The question is, what would be the liability of the Ex-Secretary or the Ex-President or office bearers of such society in such a case. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vow been briefly reviewed. What general rule, if any, can be laid down? The nearest approximation to generalization which the present state of the authorities would warrant is this: When the conception of corporate entity is employed to defraud creditors, to evade an existing obligation, to circumvent a statute, to achieve or perpetuate monopoly, or to protect knavery or crime, the courts will draw aside the web of entity, will regard the corporate company as an association of live, up-and-doing, men and women shareholders, and will do justice between real persons. In Palmer's Company law, this topic discussed in Part- II of Vol-I. Several situations where the court will disregard the corporate veil are set out. It would be sufficient for our purposes to quote the eighth exception. It runs: The courts have further shown themselves willing to 'lifting the veil' where the device of incorporation is used for some illegal or improper purpose....Where a vendor of land sought to avoid the action for specific performance by transferring the land in breach of contract to a company he had formed for the purpose, the court treated the company as a mere 'sham' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and/or members of his family and that the device of incorporation was really a Ploy adopted for committing illegalities and/or to defraud people. 18. From the above, it is clear that if the Ex-Secretary or the Ex-President or office bearers of any cooperative credit society has exploited the corporate character of the cooperative society for purpose of committing illegality or defrauding other, then the Courts would ignore the corporate character of the Cooperative Credit Society and will look into their reality behind the corporate veil so as to pass appropriate orders to do justice to the parties. Thus, it is clear that if the Ex-Secretary or the Ex-President or office bearers of any Cooperative Credit Society have indulged in misfeasance and fraudulent practice to defraud the people in order to get material gains under the garb of corporate veil they shall also be treated as service providers to the depositors / complainants and held personally responsible for the deficiency in service, if any. This, however, shall be the question of fact to be decided on the basis of evidence. 19. In view of the discussion above, we answer the reference as follows: a. Ordinarily Ex- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
