NATIONAL CONSUMER DISPUTES REDRESSAL
COMMISSION
REVISION PETITION NO.2949-2970 OF 2003
(From the order dated 2.9.2003 in
Appeal No.901-922/97 of the State Commission, Karnataka)
Malaprabha Co.op
Sugar Factory Ltd.
Through its Managing Director,
M.K. Hubli
Belgaum-Taluk/District
Petitioner
Versus
1. Sri Manik
R/o Machhe,
Taluk- Belgaum,
2. Sri Mahadevappa
R/o Garg, Taluk
& Distt. Bharwar
3. Sri Narasinha Bindurao Nadagoudar
R/o Kulkarni Galli,
Dist.
4. Sri Irayya,
R/o Degalolli,
Taluk Ballihongal
Dist.
5. Sri Gurusiddappa Rudrappa Deshanoor,
R/o Halagimaradi,
Taluk & Dist.
6. Smt. Sulakshna,
R/o Khanpur,
Taluk Khanapur,
Dist.
7. Sri Ningappa,
R/o Kakkeri,
Taluk Khanpur,
Distt.
8. Sri Ramaning
R/o Kakkeri,
Taluk Khanapur,
Dist.
9. Sri Basalingayya Basayya Turamari,
R/o Degalolli,
Taluk Khanapur,
Dist.
10. Sri Ramaning
R/o Halagimardi,
Taluk & Dist.
11. Sri Doddaphadeppa,
R/o Turamuri,
Taluk Bailhongal,
Dist.
12. Sri Sateri Nanappa Patil
since deceased
by LR Sri Viswas Sateri Patil
13. Sr. Jayavantha
R/o Gundapi,
Taluk Khanpur,
Dist.
14. Sri Ningappa
R/o Gundapi,
Taluk Khanpur,
Dist.
15. Sri Mappa Ningappa Halagekar,
R/o Gundapi,
Taluk Khanpur,
Dist.
16. Smt. Meri Kaitan
Fernandes,
R/o Khanpur,
Taluk Khanpur,
Dist.
17. Sri Rudrappa,
R/o Kulamanati,
Taluk : Bailhongal,
Dist.
18. Sri Hanamanthappa,
R/o Bachanakeri,
Taluk Bailhongal
Dist.
19. Sri Adavaya,
R/o Degalolli,
Taluk Bailhongal,
Dist.
20. Smt. Basavennewa,
R/o Kadrolli,
Taluk Bailhongal
Dist.
21. Sri Ashok,
R/o Tigadolli,
Taluk Bailhongal,
Dist.
22. Sri Balasaheb,
R/o Piranwadi,
Taluk & Dist.
BEFORE :
HONBLE
MR.JUSTICE M.B. SHAH, PRESIDENT
MRS.
RAJYALAKSHMI RAO, MEMBER
For the Petitioner : Mr.
Rajiv Talwar, Advocate
For the Respondent : Mrs. Kiran Suri, Advocate
Dated :
MRS.
RAJYALAKSHMI RAO, MEMBER
The present Revision Petition is filed by Malaprabha Co-operative Sugar Factory Ltd., opposite party,
against the order dated 2.9.2003 passed by the Karnataka State Commission in
Appeal Nos.901 to 922 of 1997 arising out of the order dated 28.10.1997 in
Complaint No.3/97 filed by some of the sugar grower, who are members of the
opposite party in the District Forum, Belgaum,
whereby the complaint was allowed. In the appeal filed by the Petitioner, the
State Commission confirmed the order except to the extent of reducing the rate
of interest from 18% to 12%.
Facts of the case are
:
The Complainants/Respondents are
members of the Petitioner Malaprabha Cooperative
Sugar factory. The Petitioner society was formed with the sole object of
facilitating the Respondent sugarcane growers by utilizing the sugarcane grown,
for which entrance fee and membership fee have been received in the form of
share amount. As per the terms and
conditions of the society, Petitioner-society has to accept all the sugarcane
grown on the lands of complainants with a ceiling of land admeasuring 25 acres
whatever may be the total yield.
It is stated by the Learned Counsel
for the Respondent that sugarcane being perishable, it is to
be crushed before expiry of 10-11 months of its plantation. Since sugarcane stock deteriorates after the
aforesaid period, it results in loss of sugarcane yield and loss in weightage of sugarcane commences.
The Complainants allege that the
Petitioner has failed in its duty to provide expert service in planning,
organizing and regulating the cultivation of sugarcane by the producer members
taking into account their crushing capacity during the relevant year. Taking into consideration of the sugarcane
crop situation, Petitioner Society has taken a decision to lift at least 40
tons per share but did not procure and lift the same for crushing from producer
Complainant members. This minimum self
imposed obligation could not be fulfilled by the Petitioner Society because of
excessive production of sugarcane and Petitioner Society failed in regulating
and assigning acreage of sugarcane growing area to each of the producer members
as per bye-law No.7 read with 31. Had
they adhered to these byelaws and properly managed by correct planning and
timely operations, it would not have led to excessive production and hence it
is deficiency of service by the Petitioner society.
Secondly, as per the bye-laws of the
society, although the society was liable to lift sugarcane and crush the same upto 40 tons per share held by all the producer members,
sugarcane of 180 members could not be lifted/crushed to the extent of their
entitlement for the season 1995-1996.
Out of the said 180 members, (Exhibit P-2), 158 members whose sugarcane
was not lifted, were paid full sugarcane price at Rs.820/- per ton. The compensation price given to the 158
members was taken from the collection of those members whose sugarcane was
crushed more than the above fixed limit.
Out of this list of 180 members, 22 members have been left out and they
have filed these complaints in the District Forum, who are presently
Respondents here.
Thirdly, it is pointed out by the
Respondents that the Petitioner crushed the sugarcane of influential members in
excess of the above limit of 40 tons per shareholder and thus denying crushing
of sugarcane to some who are not so influential members.
Fourthly, aggrieved
Respondents were compensated without intimating to them by the Petitioner, a
paltry amount of Rs.1800/- which was credited directly to their bank accounts
by cheque. It
is submitted by the Learned Counsel for the Respondents that the said amount
was accepted by the Respondents under the impression that this unexpected
payment of Rs.1800/- was credited in their account for some dividend or
interest. They were looking forward for
the actual compensation but when the same was not paid, then
the Respondents filed the complaints before the District Forum.
Fifthly, it is contended that the
Respondents waited for lifting of sugarcane grown in their land till date of
the closure of the factory, i.e. 20.7.1996 and by that time it was too late for
them to raise the next crop in their land.
Taking into account that the yield per acre even in the subsequent year,
i.e. 1996-97 would have been 40 tons per acre; they should be compensated at
that rate.
Keeping the
aforesaid submissions, Respondents claimed compensation of Rs.1,34,400/- alongwith interest at
the rate of 18% p.a. from 23.3.1996, in the District Forum.
District Forum partly allowed the
complaint. It held that the Co-operative
sugar factory was under an obligation to accept at least 40 tons of sugarcane
per member. In each of the 22 cases, the
District Forum calculated the shortfall in lifting of the cane produced, and
awarded varying amounts of compensation.
It also directed the Petitioner to pay interest at the rate of 18% p.a. alongwith some nominal compensation for mental agony at the
rate of Rs.500/- for every Rs.10,000/- (or part
thereof as compensation).
In the Appeal filed by the Petitioner
society, the State Commission partly allowed the appeal by modifying the order
only to the extent of reducing the rate of interest from 18% p.a. to 12% p.a.
Aggrieved by the same, the present
Revision Petition is filed by the Cooperative Society.
Learned Counsel for the Petitioner
society submits that the Petitioner has acted in accordance with its aims and
objectives as contained in its byelaws.
The issues which were raised and decided in favour
of the respondents in the order of the State Commission, as perceived by the
Petitioner are that :
(a)
The Petitioner failed to plan to control excess production
of sugarcane by the members,
(b)
failed to purchase sugarcane from the members in a fair
manner without favouring influential members, and
(c)
Petitioner failed to cut, remove and carry out the sugarcane
from all members and fairly to remunerate those members whose sugarcane produce
could not be lifted. These are
considered to be deficiency in rendering service to the respondents.
Learned
Counsel for the Petitioner argued that the excess yield of sugarcane was beyond
the crushing capacity of the Petitioner as in that particular year, there has
been an unprecedented production in the history of sugarcane production. Petitioner cannot be held liable for any
deficiency in service for not controlling the bumper crop in an area of about
53,200 acres cultivated by 17,000 producer members as that was not expected or
anticipated.
It is
further stated that the Petitioner provides general guidance about the new
variety and technology for upgrading and for better yield of sugarcane. It does not control, monitor or supervise the
production of sugarcane of each of the individual producer members. It is reiterated that the production crop for
the year was 9,63,270 MTs (21,280 hectares) and the
operational period of crushing capacity was increased from 189 days to 221 days
and the yield stated by the Respondents to be 40 tons per acre is wrong,
misconceived and exaggerated. If at all
it should have been 40 tons per hectare instead of 40 tons per acre which is a
more realistic yield figure. Learned
Counsel for the Petitioner relied on the facts and figures of his statement as
given below :
(i) Total area
within operation of Petitioners - 53,200
acres
(ii) Total area of
sugarcane as agreed to be
sold by Agreement to Petitioners - 43,785
acres
(iii) Yield - 22 MT/acre
(iv) Total production under Agreement - 9,63,270 MTs.
(v) Total capacity
(@ 3500 MT/D) - 6,61,500 MTs.
for 189 seasonal days.
(vi) Deficit [(iv) (v) ] - 3,01,770 MTs.
(vii) Actual Output (after operating - 8,21,153 MTs.
(viii) Still Deficit - 1,42,117 MTs.
It is contended
that it was duty of Respondent members to bring up their sugarcane to a pooling
place, which is also envisaged under Clause 5 of the byelaws. This information is published by the
Petitioner in daily newspaper dated 3.7.1996 whereby all the producer members
were requested to bring their products before 9.7.1996 to the pooling place
which some members did not adhere to for reasons best known to them.
It is submitted that as per Annexure
P-3 the details showing the sugarcane crushed from 1993-1998 and Annexure P-4
showing the details of the total quantity of sugarcane purchased during the
1995-1996 season of about 8,21,153 MTs.,
and a mere 2,756.37 MTs. was procured from the
non-members which comes to just 0.335%, which is negligible and cannot be
considered as deficiency of service or unfair trade practice as projected by
the respondents.
It is further
submitted that under Clause 5 of Petitioners bye-laws, it is an obligation on
the members/producer to get and bring their produce and they have given a card
namely Sugarcane Cutters Information Card.
The Respondents did not act in terms of the notification given on
3.7.1996 to send their produce to the pooling place before 9.7.1996 since
Respondents themselves did not bring the produce within time before 9.7.1996.
Due to non-availability of the sugarcane produced by the producing members, it
was open to the Petitioner society to take extra from some members produce to
purchase the sugarcane from non-members.
It is submitted that there is no deficiency in service. As far as taking of non-members produce for
crushing, in this given situation is very negligible as it amounts to
0.335%.
Findings:
Heard both the
parties and perused the record carefully.
As per our order dated
During the course of arguments it has transpired that
respondents numbering 22 were offered ex-gratia
compensation of Rs.1800/- each by the Petitioner/Society whereas other 158
members were paid compensation @Rs.820/- per acre. In that connection para
No.8 of the counter affidavit filed on behalf of respondent is material. Shri Talwar states that some time may be allowed to explain what
is stated in this para 8. Two weeks time is allowed to do the needful.
One of the submissions advanced by Shri
Talwar is that individual notices were sent to the
respondents for making available the sugarcane at the places mentioned in
notices, but the respondents failed to comply with the notices. Only copy of one such notice is placed on the
file. Petitioner will disclose on
affidavit if such notices were sent by Registered Post (s) to the remaining
respondents. Copies of notices, if
issued, be also filed alongwith affidavit.
The Petitioner
society, however, failed to comply with our above direction and did not file
any affidavit regarding their notices sent by registered post to the
respondents for bringing their produce to the pooling centre and the copies of
alleged notices were not filed.
Firstly, we have to
accept that there was no reason to discriminate the complainants from other
members of the society who had grown the sugarcane. Admittedly, except Complainants, Petitioner
had paid compensation @ Rs.820/- per acre to the other members of the society
without any justifiable ground. This
would mean that not only Petitioner accepts its deficiency but at the same time
justifies the order passed by the District Forum.
Further, the
Petitioner society in compliance of our order dated 19.10.2006 failed to
produce evidence of the notices sent to the Respondents by them which only
proves that notices were never sent. In
view of non-submission of the affidavit by the Petitioner, we agree with the
contention of the Respondents that certain members have been favoured by crushing extra cane from certain favoured members and also an opportunity to non-members was
given even though Petitioner claim it to be a negligible percentage such as
0.335%.
Hence, it is
apparent that the notices sent by the Petitioner were not received by the
respondents and there is no reason to disbelieve the case of the respondents
that they were put to undue disadvantage as they would have definitely brought
the sugarcane produce to the pooling centre within the time given by the
petitioner had they received notices.
The next submission of the respondents is that
the payment of Rs.1800/- as compensation, as decided by the Petitioner, by
passing a resolution, cannot be accepted as a fair or reasonable compensation
considering the loss suffered by them.
It is the responsibility of the Petitioner society to help the members
owning lands wherein they have grown sugarcane. On account of the default on
the part of the Petitioner the sugarcane grown by the Complainants (members)
could not be utilized for the purpose of manufacturing sugar, and the sugarcane
being perishable commodity, deteriorated and the members suffered immense
loss. That being so, we agree with the
findings of the District Forum and the State Commission that there was
deficiency in service by the Petitioner due to which the respondents have
suffered. Failure on the part of
Petitioner to plan and regulate production by assigning acreage for sowing
sugarcane also amounts to deficiency in service.
Further, when
admittedly, the actual members of the Petitioner were awaiting their turn to
send the sugarcane to the common pool for collection, there is no reason for
the Petitioner to hurry and give this facility to non-members and also to give
extra advantage to certain members and this contention is not sufficiently
explained by the Petitioner society.
In view of the
aforesaid discussion, we find there is no merit in this Revision Petition. We agree with the view taken by the District
Forum and the State Commission as they relied on the evidence and decided after
appreciating the facts and there is no reason for us to interfere with the well
reasoned order of the same in our revisional
jurisdiction. Accordingly, Revision
Petition is dismissed with a further costs of Rs.5,000/- to be paid by the
Petitioner society to each of the Respondents.
The order is to be complied with within four weeks from the date of
receipt of this order.
J.
(M.B. SHAH)
PRESIDENT
(RAJYALAKSHMI RAO)
MEMBER
P