State Consumer Disputes Redressal Commission
Krishan Mohan & Ors vs Electrex (India) Ltd on 25 September, 2007
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b)of the Consumer Protection Act, 1986 ) Date of Decision: 25-09-2007 Appeal No.A-1237/2003 (Arising from the order dated 16-06-2003 passed by District Forum(Central), ISBT, Kashmere Gate, Delhi H in Complaint Case No.291/2002) Krishan Mohan & Ors. Appellants A-7/17, Krishna Nagar, In person along with Delhi-110051. Mr. Rajesh Puri, Advocate. Versus 1. M/s Electrex (India) Ltd., Respondent No.1 2099/37, Sewak Chamber, Through Naiwala, Karol Bagh, Mr. B.S. Arora, New Delhi-110005. Advocate. CORAM : Justice J.D. Kapoor- President Ms. Rumnita Mittal - Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
JUSTICE J.D. KAPOOR, PRESIDENT (ORAL) The appellants jointly invested Rs. 60,000/- in six Fixed Deposits with the respondent out of which three were deposited on 13-04-1999 and other three were deposited on 16-01-2000. On maturity the amount was not paid to the appellants and consequently they filed complaint before the District Forum for payment of maturity amount and compensation.
2. Vide impugned order dated 16th June, 2003 the complaint was dismissed in view of the orders passed by three authorities namely the BIFR, the Karnataka High Court and the Company Law Board restraining them from making any payment as respondent company had gone into liquidation.
3. Through this appeal the impugned order has been assailed mainly on the ground that provisions of section 21 of the Sick Industrial Companies Act, 1986 are not attracted which bars the legal proceedings or any suit against those companies who are before the High Court u/s 446 of the Companies Act. According to the counsel for the appellant there is distinction between Fixed Deposit by the consumers with the companies and ordinary deposits and therefore ordinary deposits are beyond the provisions of Section 446 of the Companies Act and also SICA and are not applicable in respect of Fixed Deposits as such a deposit made in the sick company by the depositor is not a sum lent to the company but a sum kept as a Trust and therefore the Company cannot escape the liability under the garb of provisions of Section 22(1) of SICA 1985.
4. On the contrary the counsel for the respondent placed reliance upon the judgment of the Supreme Court in Patel Roadways Vs. Birla Yamaha Ltd. 2000 SC 1461 to the effect that suit is a generic term taking within its sweep all proceedings initiated by a party for realization of a right vested in him under the law and proceedings before consumer forum is a suit.
5. In order to appreciate the aforesaid contentions of the counsel for the parties reproduction of section 22 of SICA is necessary, which provides as under:-
Suspension of legal proceedings, contracts, etc. Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advances granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority.
6. Admittedly respondent company has not been declared as a sick company as yet. So much so BIFR even granted permission to the appellant to file suit by observing that permission to file the suit would not affect the assets of the company while at the same time protecting public money during the period the Board would take further steps for the rehabilitation of the company. Feeling aggrieved of the said observations and order passed by the BIFR the respondent filed an appeal before the Karnataka High Court and obtained stay against the said order. So much so even BIFR withdrew this order.
7. Now the question arises whether provisions of section 22 of the SICA are applicable in respect of FDRs or complaint filed u/s 12 of the Consumer Protection Act for deficiency in service seeking compensation and refund of the amount deposited with a company. The bare perusal of section 22 shows that it bars the following proceedings only:-
(a) Proceedings for the winding up of the industrial company.
(b) Proceedings for execution or the like against any of the properties of the industrial company.
(c) Proceedings for execution or the like against any of the properties of the industrial company.
(d) Suit for the recovery of the money.
(e) Proceedings for the enforcement of any security against industrial company or for any guarantee in respect of any loan or finance granted to the industrial company.
8. Even if it is presumed that complaint under section 12 of the Consumer Protection Act, 1986 is in the nature of suit still the fact remains that it is not a suit for recovery of money. As per section 3 of the Consumer Protection Act the remedy is additional and independent remedy and not in derogation of any other law for the time being in force. This remedy arises only on the allegations of unfair or restrictive trade practice and sale of defective goods or deficiency in service on the part of the service provider. Section 3 provides as under:-
3.
Act not in derogation of any other law- The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
9. Deficiency in service has been defined by section 2(1)(g) of the Consumer Protection Act, 1986 as under:-
Deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
10. Suit for recovery of money is altogether of different nature than the relief sought by a consumer under the Consumer Protection Act. In terms of section 14 (1)(d) of the Consumer Protection Act a consumer is entitled to an amount as compensation as to the actual loss and injury suffered by him due to the negligence of the opposite party and is also entitled for compensation as to the mental agony, harassment, physical discomfort and injustice suffered by him due to the deficiencies in service on the part of the service provider or sale of a defective goods by the trader or for unfair or restrictive trade practice. In suit for recovery the element of compensation over and above the actual recovery is wanting as such an additional relief arises from the allegation of deficiency in service or from unfair trade practice or restrictive trade practice or sale of defective goods.
11. The word compensation appearing in the Consumer Protection Act in the words of Supreme Court in Ghaziabad Development Authority Vs. Balbir Singh (2004) 7 CLD 861 (SC) has wide connotation and encompasses in its fold multifarious factors. The observations of the Supreme Court are as under:-
The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The Commission/ Forum must determine that such sufferance is due to malafide or capricious or oppressive act. It can then determine amount for which the authority is liable to compensate the consumer for his sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of law.
12. Thus when section 12 of the Consumer Protection Act is read with section 3 and the relief which the Consumer Forum are empowered to give u/s 14 of the Consumer Protection Act and a consumer is entitled to arising from the allegation of deficiency in service or sale of defective goods or unfair trade practice or restrictive trade practice the proceedings under Consumer Protection Act by no stretch of imagination are hit and barred by section 22 of SICA.
13. In this case there is an element of malafide on the part of the respondent to cheat gullible poor consumers. The FDS were accepted by the respondent company on 16-01-2000 knowing it well that it is a dead company and is going to initiate proceedings u/s 446 of the Companies Act or before the BIFR. Admittedly after two days i.e. 19-01-2000 the respondent company initiated proceedings for declaring it sick. No company worth its name can overnight become sick as respondent Company had hardly two days before getting the deposits from gullible people filed a petition for declaring it sick. Intention of cheating people and usurping money is writ large and manifest.
14. Thus from any angle we may examine the matter, we find that the relief and remedy sought under the Consumer Protection Act is not at all barred by the provisions of section 22 of SICA for the simple reason that it is by no stretch of imagination a suit for recovery or money suit as contemplated by the Code of Civil Procedure nor any rules and orders of C.P.C. govern the pleading under the Consumer Protection Act. Remedy and Relief under the Consumer Protection Act are in addition to and not in derogation of any other law for the time being in force arising from the allegations of deficiency in service or sale of defective goods or unfair or restrictive trade practice. Can we call a complainant seeking refund of the cost and compensation for sale of defective goods a civil suit for recovery or money suit? In our perception, answer is emphatic no.
15. As regards the compensation over and above the actual loss suffered by the consumer, the Supreme Court has gone to the extent of awarding interest in addition to the compensation on equitable grounds even if there is no such term of contract between the parties as laid down in Ghaziabad Development Authority Vs. Balbir Singhs case. So much so additional compensation can also be granted to the consumer for mental agony and harassment suffered by him over and above the interest over the Fixed Deposits as well as additional interest for non-payment of the maturity amount beyond the maturity date. Are all such reliefs permissible under the suit for recovery of money. Not at all. Therefore the instant proceedings under the Consumer Protection Act are not at all barred by the provision of Section 22 of SICA.
16. As is apparent in the instant case if such a view is taken that suit for recovery of money or the proceedings or remedy which is independent and additional provided under the Consumer Protection Act is not available to the consumer and is barred by the provisions of Section 22 of SICA, then every unscrupulous company will accept lacs of rupees from the consumers by way of FDRs and on the next day it gets itself declared sick.
This itself amounts to unfair trade practice as defined by section 2(1)(r) of the Consumer Protection Act, 1986 for which the wrong doer has to compensate the consumer adequately in addition to what the consumer is legally and rightfully entitled. Moreover such deposits are not a money lent but are given in trust.
17. Foregoing reasons persuade us to allow the appeal, set aside the impugned order with the direction to the respondent in the following terms:-
(i) Respondent shall pay the amount of Rs. 60,000/-
with agreed rate of interest of 15% from the date of deposit till the maturity date i.e. upto 2000 and thereafter @ 9% till realization.
(ii) Respondent shall also pay Rs. 10,000/- as cost of litigation.
18. Impugned order shall be complied with, within one month from the date of receipt of this order.
19. Appeal is disposed of in aforesaid terms.
20. F.D.R./Bank Guarantee, if any, furnished by the appellant be returned forthwith after completion of due formalities.
21. A copy of this order as per the statutory requirements, be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room.
22. Copy of this order be also sent the Presidents of all the District Fora.
23. Announced on the 25th September, 2007.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj