State Bank employees had floated a cooperative society called Sarb Bank Employees and OUSET & C Society Ltd. Amarjeet Singh, an assistant manager at the bank’s Ludhiana branch, was the chairman of the society, while another employee, Anil Pahwa, was its general secretary.
Two customers, Baldip Singh and Virain Sandhu, filed a consumer complaint against the society and its office bearers, Singh and Pahwa. They claimed that the two had persuaded them to place deposits in the society which would be risk-free, yet pay a higher interest of 16% per annum. Accordingly, Baldip deposited Rs 3 lakh in FDR while Sandhu deposited Rs 6.14 lakh.
Initially, they received interest on their deposit, but after a while, they no longer received interest. On inquiry, Singh informed them that the interest would be remitted after certain borrowers cleared their dues. Later, Baldip and Sandhu learnt from the newspapers that there was some bungling in the cooperative society. They demanded repayment of their fixed deposits. When repeated attempts to get their money back failed, they filed individual consumer complaints before the district forum.
The complaint was contested by the society and its office bearers. After the hearing, the district forum ordered the society to refund the deposits along with interest at the agreed rate of 16% per annum and costs of Rs 5,000. This amount was to be paid within three months and in case of default, it was ordered that the amount could be recovered from Singh and Pahwa who were jointly held liable.
The society and officers appealed against this order to the Chandigarh state commission, which upheld the order and dismissed the appeal. Pahwa then approached the national commission through a revision petition.
They tried to escape their liability by raising various technical defences. They claimed that the individual office bearers could not be personally held liable for the dues of the People must use their judgment without getting carried away by what others say, regardless of the position they hold, particularly when there is a conflict of interest or a motive of personal gain.
Jehangir B Gai (The author is a consumer activist and has won the Govt of India’s National Youth Award for Consumer Protection)