State Consumer Disputes Redressal Commission
Sarika Kumar vs Unitech Ltd. on 4 August, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH. (Exercising the powers of Judicial Magistrate Ist Class conferred under Section 27(2) of the Consumer Protection Act, 1986). Execution Application No.39 of 2017 In Consumer Complaint No.195 of 2015 Date of Institution : 13.02.2017 Date of Decision : 04.08.2017 1. Sarika Kumar wife of Sh. Surinder Kumar; 2. Surinder Kumar S/o Sh. Ram Nath; Both residents of H.No.2081, Phase-7, Mohali. ........Complainants-DHs Versus 1. M/s Unitech Limited, Regd. Office 6, Community Centre, Saket, New Delhi-110017, through its Managing Directors, Ajay Chandra and Sanjay Chandra. 2. Unitech Limited (Uniworld City, Mohali), Marketing Office at SCO 189-90-91, Sector-17, Chan (through its Authorized Officer). ......Respondents-JDs Execution Application under Section 27 of the Consumer Protection Act, 1986. Quorum:- Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President Mrs. Surinder Pal Kaur, Member.
Present:-
For the complainants/DHs : Sh. M.M.Sharma, Auth. Rep. For the respondents-JDs : Ms. Vertika H. Singh, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
This Execution Application has been filed by the complainants/DHs, under Section 27 (1) of the Consumer Protection Act, 1986 (in short, the Act"), against the respondents-JDs for non-
compliance of the order dated 15.11.2016 passed by this Commission in the above mentioned Consumer Complaint.EA No.39 of 2017 2
In CC No.195 of 2015
2. Briefly stated, being allured by the advertisement of the respondents-JDs, the complainants-DHs purchased a residential flat/floor in their names, vide Customer Code:GFM-125 (3 Bedroom) in Executive Floors, Sector 97, Block No.D, Plot No.0055, First Floor, measuring 300 sq.mts. for ₹49,34,870/-, including BSP, EDC and PLC. Allotment letter was issued on 21.07.2011 and the agreement was signed by the parties on 03.10.2011. The complainants paid all the instalments and a total amount of ₹49,96,553/- was paid to the opposite parties-JDs. As per the agreement, the possession of the flat, along with all the facilities, was to be delivered within 24 months of the agreement i.e. on 03.10.2011. However, the possession of the floor was not delivered to them by the respondents/JDs within the stipulated period, which compelled them to file Consumer Complaint bearing No.195 of 2015, in which after service of notice, the respondents/JDs appeared and contested the same by filing reply thereto. The complaint was disposed of in favour of the complainants/DHs, vide order dated 15.11.2016, directing the respondents/JDs:-
i) to refund the amount of ₹49,96,553/-, along with interest at the rate of 12% per annum from the date of payment of different amounts till the date of payment;
ii) to pay ₹4,00,000/-, as compensation for the harassment and mental agony suffered by the complainants; and
iii) to pay Rs.11,000/-, as costs of litigation.
3. However, the respondents/JDs failed to comply with the order passed by this Commission, within the stipulated period, which compelled the complainants/DHs to file the above execution EA No.39 of 2017 3 In CC No.195 of 2015 application under Section 27 of the Act, to award punishment to the respondents/JDs, as per law.
4. This Execution Application came up for hearing on 15.02.2017 and notices were ordered issued to the respondents/JDs for 06.04.2017. On 06.04.2017, the respondents/JDs appeared, through their counsel, Ms. Vertika H. Singh, Advocate, who submitted that Sh. Ajay Chandra and Sh. Sanjay Chandra, OPs/JDs had been arrested and had been in police custody in some Police Station in Delhi. Therefore, their Production Warrants were issued for 09.05.2017. Notices to Police Commissioner of Delhi and Incharge of Economic Offence Wing of Delhi for production of the said persons were also issued for the date fixed. Copy of the order was also ordered to be sent to SSP, Mohali to make an effort to take them into custody and produce them in this Commission on the date fixed. On 09.05.2017, Show Cause Notice under Section 251, read with Section 262 of the Code of Criminal Procedure, 1973, was issued to the respondents/JDs for 31.05.2017, to be served through their counsel Ms. Vertika H. Singh, Advocate. On 31.05.2017, on the request of the learned counsel for the respondents/JDs, one opportunity to show their bonafide was granted, with a direction to bring demand draft of ₹15,00,000/- in the name of the DHs, for handing over the same to the applicants/DHs. The senior Authorized Signatories/Functionaries of the Company were also ordered to be present on the next date i.e. 14.06.2017. On 14.06.2017, the following order was passed:
"Order dated 31.05.2017 has not been complied with by the JDs.EA No.39 of 2017 4
In CC No.195 of 2015 It has been brought to our notice that the land of the Unitech Group-JDs has been acquired by the HUDA and the information to that effect has also been filed in the Civil Writ Petitions No.727, 733, 772, 3324 and 3681 of 2017 in Punjab and Haryana High Court. The amount claimed in this execution application is approximately Rs.1.66 Crore. Number of other execution applications are also pending in this Commission against Unitech-JDs and the amount of compensation involved these execution applications may be more than Rs.150 Crore. In view of this information, we deem it appropriate to issue directions to the Chief Administrator, HUDA, C-3, HUDA Office Complex, Sector-6, Panchkula that an amount upto the extent of Rs.150 Crore be not released till further orders and this amount of Rs.150 Crore or lesser which is to be paid by HUDA stand attached in this execution and other executions pending in this Commission. HUDA Authorities are directed to inform this Commission after attachment of the compensation payable to Unitech to the extent of Rs.150 Crore.
Since the company is playing fraud with the consumers now DHs before this Commission, we direct the respondents/JDs to file list of properties which has/have been acquired by HUDA and other agencies in the entire country, so that appropriate order can be passed. It shall be done in
15 days from today. Affidavit of the authorized person on behalf of the respondents/JDs be filed.
EA No.39 of 2017 5In CC No.195 of 2015 Adjourned to 24.07.2017."
5. A copy of letter has been received from the office of Chief Accounts Officer, for Chief Controller of Finance, HUDA, Panchkula, vide receipt No.2508 dated 01.08.2017, in which it has been mentioned that the property of Unitech Limited has been attached and the amount payable to Unitech Limited has been withheld till further orders. However, the present Execution Application has been filed under Section 27 of the Act and the enforcement of the order passed in the complaint can be done by filing application under Section 25 of the Act.
6. The fact remains that there is no stay order against order dated 15.11.2016 passed by this Commission. At the time of arguments also, learned counsel for the respondents/JDs failed to place on record any order passed by the Appellate Fora, staying execution of the order impugned. Under these circumstances, the order passed by this Commission on 15.11.2016 has become final. It is also proved on record that the respondents/JDs have failed to comply with the directions issued by this Commission. Under above circumstances, the respondents/JDs are liable to suffer punishment and penalty, in terms of Section 27 of the Act, which clearly envisages that in case, a person, against whom an order has been passed, omits to comply with the same, he or she can be punished with imprisonment for a term, which may extend to three years and fine can also be imposed.
7. The fact remains that in the complaint, only the Company i.e. Unitech Limited was a party. Sh. Sanjay Chandra and Sh. Ajay EA No.39 of 2017 6 In CC No.195 of 2015 Chandra, Managing Directors, were not party in the complaint in their personal capacity and, as such, they cannot be punished for non- compliance of the order passed in the complaint. The Executing Court cannot travel beyond the decree or order/award. The decree can only be got executed against the person/company, who was party in the concerned proceedings. In the present case, the Company i.e. Unitech Limited was arrayed as opposite parties in the complaint. Since the opposite parties are a Company i.e. Unitech Limited, as such, the question is whether, a Company can be sentenced or only a fine can be imposed on the company?
8. Under Section 2 (m) of the Act, the "person" has been defined as under:
"person" includes,--
(i) a firm whether registered or not;
(ii) a Hindu undivided family;
(iii) a co-operative society;
(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not;
Section 27 of the Act is reproduced as follows:-
Penalties. -- (1) Where a trader or a person against whom a complaint is made or the complainant fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person or complainant shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousands rupees but which may extend to ten thousand rupees, or with both:
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974), the District Forum or the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the first class for the trial of offences under this Act, and on EA No.39 of 2017 7 In CC No.195 of 2015 such conferment of powers, the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the first class for the purpose of the Code of Criminal Procedure, 1973 (2 of 1974). (3) All offences under this Act may be tried summarily by the District Forum or the State Commission or the National Commission, as the case may be.
From the perusal of Section 27 read with Section 2 (m) (i), it is clear that a Company can be prosecuted and punished for the offence committed under Section 27 of the Act. The sentence of imprisonment, which can be imposed thereunder, cannot be imposed, the respondents/JDs-Company being a juristic person. This Commission would be shirking in its duties of imparting justice by holding that prosecution of a Company is unsustainable, merely on the ground that being a juristic person, it cannot be sent to jail to undergo sentence as under Section 27 of the Act, sentence of imprisonment for a term not less than one month, but which may extend to three years, or with fine which shall not be less than ₹2,000/-, but which may extend to ₹10,000/- or with both, can be imposed. The Companies are indulging in various types of works and have huge sources and finances at their command, which they collect from the innocent consumers and during the course of business activities, they commit breach of the law of the land. Certainly, it would be against the settled principle of justice, if such Companies are allowed to go scot-free. Furthermore, the perusal of definition of 'person' under Section 11 of the Indian Penal Code also covers the 'natural person' and the 'juristic person'. Though not relevant here, Section 2 (m) (i) itself includes the Company in the definition of 'person' and Section 27 also states that a trader or person, EA No.39 of 2017 8 In CC No.195 of 2015 against whom a complaint is made, fails or omits to comply with the order made by the District Forum, State Commission or National Commission, as the case may be, such trader or person shall be punishable with imprisonment for a term specified in the said Section. Certainly, the Company can also be held guilty and sentence can be imposed.
9. The Full Bench of the Hon'ble Delhi High Court in Municipal Corporation of Delhi v. J.B. Bottling Company Private Limited ILR 1975 Delhi 739 held as under:
"(42) It is, therefore, held that a company as defined in Section 17 of the Prevention of Food Adulteration Act, 1954, does not enjoy immunity from prosecution when under the said Act it is alleged to have committed an offence to which the proviso to sub-section (1) of Section 16 is not applicable; and, in case such a company is found guilty of such an offence, it can be punished with fine."
10. Similarly, identical view was taken by the Hon'ble Madras High Court in case Fidelity Industries Ltd. v. State 2006 (1) CTC
374.
11. Furthermore, the Hon'ble Supreme Court in case Standard Chartered Bank & Ors. v. Directorate of Enforcement & Ors. AIR 2006 Supreme Court 1301 has held in Para No.29 as follows:
"29. There does not appear to be any reason to confine the operation of Section 68 of the Act as was done by the High Court. Merely because the expression 'punished' is used, it does not mean that it is confined to a prosecution under Section 56 of the Act, since the element that attracts EA No.39 of 2017 9 In CC No.195 of 2015 the imposition of penalty and the prosecution is the same, namely, the contravention of any of the provisions of the Act. Moreover, there is nothing in the Act which confines the expression 'punished' only to a punishment for a criminal prosecution. An imposition of a penalty can also be a punishment. The second part of the reasoning appears to be self-contradictory. If a person includes a company, there is no reason to confine Section 68 to a prosecution only, because the company as a person is liable to be proceeded against under Section 50 and Section 56 of the Act, though in a criminal prosecution the punishment by way of imprisonment can be imposed only on the officer or officers of the company referred to in Section 68 of the Act. Section 68 only indicates the manner in which a contravention by a company can be dealt with and it does not show that it is confined in its operation only to prosecutions against a company. It is a general provision relating to a contravening company, which is to be proceeded against whether it be under Section 50 or under Section 56 of the Act. The fact that a fine alone can be imposed on a company in a prosecution under Section 56 of the Act, cannot enable us to confine the operation of Section 68 to criminal prosecutions alone under the Act. We see no reason to whittle down the scope of Section 68 of the Act."
In the said decision, the Hon'ble Supreme Court expressly overruled the decision in Assistant Commissioner, Assessment-II, Bangalore & Ors. v. Valliappa Textiles Ltd. and Another ( 2003) (11) SCC 405 and held that there is no immunity to the Companies from prosecution, merely because the prosecution is in respect of an offence, for which the punishment prescribed is imprisonment and fine or fine, or both.
12. In view of the law laid down in the aforesaid cases, the legal position, as stands today, is that the prosecution can be initiated EA No.39 of 2017 10 In CC No.195 of 2015 against a Company and fine can be imposed, even when the imprisonment given is mandatory punishment with fine. Now, the Corporate Sector is indulging in all types of business. Undoubtedly, they rule the world now a days; as a result of which, there is a rise in crime by Corporate Bodies.
13. In view of above discussion as well as the law laid down in the above noted authorities, we are of the view that since the respondents/JDs-Company has failed to comply with the orders, it is liable to be punished with fine only for the disobedience of the order passed by this Commission in the complaint.
14. Accordingly, for wilful disobedience of the order passed by this Commission in Consumer Complaint No.195 of 2015, it is directed as under:
i) Unitech Limited, Regd. Office 6, Community Centre, Saket, New Delhi-110 017, through its Managing Director; and
ii) Unitech Limited (Uniworld City, Mohali), Marketing Office at SCO 189-90-91, Sector-17, Chandigarh, through its Authorized Officer.
(as mentioned in the complaint) are held guilty of the offence punishable under Section 27 of the Consumer Protection Act, 1986 and are directed to pay a fine of ₹10,000/- each.
15. Certificate of recovery of fine of ₹10,000/- each from the Respondents/JDs, as ordered above, along with the certified copy of the order dated 15.11.2016 passed in Consumer Complaint No.195 of EA No.39 of 2017 11 In CC No.195 of 2015 2015 be sent to the District Collectors, New Delhi and Chandigarh and to submit their reports.
16. Certified copy of this order be sent to the complainants/DHs free of charge.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (MRS. SURINDER PAL KAUR) MEMBER August 04, 2017 (Gurmeet S)