State Consumer Disputes Redressal Commission
Rupinder Kaur Dhaliwal vs M/S Unitech Ltd. on 14 June, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
(Exercising the powers of Judicial Magistrate Ist Class conferred
under Section 27(2) of the Consumer Protection Act, 1986).
Execution Application No.47 of 2016
In
Consumer Complaint No.71 of 2015
Date of Institution: 04.08.2016.
Date of Decision : 14.06.2017.
1. Rupinder Kaur Dhaliwal wife of Dr.Manpreet Singh Dhaliwal,
2. Manpreet Singh Dhaliwal son of Dr.Manmohan S.Dhaliwal,
resident of Dhaliwal Hospital, Dutt Road, Moga, Punjab.
......Applicants/DHs/Complainants.
Versus
M/s Unitech Limited, SCO No.189-191, Sector 17-C, Chandigarh through
its Director/M.D. Sh.Ajay Chandra.
......Respondent/JD/Opposite party.
Execution Application under Section 27 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr.Harcharan Singh Guram, Member
Present:-
For the applicants-DHs : None
For respondent/JD : Ms.VertikaH.Singh, Advocate
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT This Execution Application has been filed by the applicants- complainants, under Section 27 of the Consumer Protection Act, 1986 (in short, the Act"), against the respondent-JD for non-compliance of the order dated 09.09.2015 passed by this Commission in the above mentioned Consumer Complaint.
2. Briefly stated, the complainants-DHs purchased a plot No.75 measuring 300 sq. Mtrs., Block-Bin Aspen Greens part of Mega Township known as "Uniworld City", Sector 107, Mohali, Punjab from the OP/JD for total consideration of Rs.84,92,706/- on 07.03.2011. They paid a sum of E.A. No. 47 of 2016 2 In C.C. No. 71 of 2015 Rs.78,51,515/- towards that sale consideration and the balance 5% amount was to be paid at the time of delivery of possession. As per Article 4(a)(i) of the Buyer's Agreement dated 11.05.2011, the possession of the plot was to be delivered within 18 months from the date of that Agreement. However, the possession of the plot was not delivered to them by the respondent/JD within the stipulated period. They visited the site and found that there was no development work and there was no chance of completing the Project in near future of 3 to 4 years. Therefore, they decided to get the refund of the amount, so deposited by them and for the payment of which they had taken a loan of Rs.55,38,000/- from the HDFC Housing Development Financing Corporation and regarding which Tripartite Agreement dated 11.05.2011 was executed by the parties. The possession of the said plot was not delivered by the respondent/JD, despite repeated requests by the applicants-complainants, which compelled the decree holders/complainants to file Consumer Complaint bearing No.71 of 2015, in which after service of notice, the respondent/JD did not appear and was proceeded against ex parte. The complaint was allowed in favour of the complainants/DHs, vide order dated 09.09.2015, granting following relief:-
i) to refund the sum of Rs.78,51,515/-, along with interest at the rate of 10% per annum from 11.11.2012 till the payment of that amount;
ii) to pay compensation of Rs.3,00,000/-;and
iii) to pay Rs.22,000/-, as litigation expenses.
3. Compliance of the said order was to be made by the respondent/JD within a period of one month of the receipt of certified copy E.A. No. 47 of 2016 3 In C.C. No. 71 of 2015 thereof. However, the respondent/JD failed to comply with the same within the stipulated period, which compelled the decree holders/complainants to file the above execution application under Section 27 of the Consumer Protection Act, 1986, to award punishment to the respondent/JD, as per law.
4. This Execution Application came up for hearing on 10.08.2016. Notice was issued to the judgment debtor/respondent for 07.10.2016. On 07.10.2016, Sh.Lalit Gupta, Authorised Representative on behalf of judgment debtor/respondent appeared. In compliance of order dated 02.09.2016 passed by Hon'ble High Court of Delhi in the application under Section 391(1) of the Companies Act, 1956 staying the execution proceedings against the judgment debtor/respondent till further orders, the execution proceedings were adjourned sine die. On 28.02.2017, on the application of the applicants/DHs vide which photo copy of the order dated 15.12.2016 passed by the Hon'ble Supreme was placed on record wherein the Hon'ble Apex Court directed that the proceedings pending before all the Forums shall continue. Accordingly, notice was issued to the counsel for the respondent. On 06.04.2017, Ms.Vertika H.Singh, Advocate appeared on behalf of the respondent/JD. It was submitted that Sh.Ajay Chandra and Sh.Sanjay Chandra, OPs/JDs have been arrested and are in police custody in some Police Station in Delhi. Hence, their production warrants were issued for 09.05.2017.
5. On 09.05.2017, Show Cause Notice under Section 251 read with Section 262 of the Code of Criminal Procedure, 1973 was served upon Mr.Ajay Chandra, Director/Managing Director, Unitech Limited, SCO No.189-191, Sector 17-C, Chandigarh through the counsel for the E.A. No. 47 of 2016 4 In C.C. No. 71 of 2015 respondent/JD, directing him to put its defence or state whether the respondent/JD was ready to comply with the aforesaid order passed in above mentioned complaint and plead guilty or not of non-compliance.
6. On 31.05.2017, learned counsel for the respondent/JD prayed that one opportunity be given to show the bonafide of the opposite party. She was given one more opportunity with the direction to bring demand draft of Rs.25,00,000/- in the name of the decree holders for handing over to the applicants/DHs on the adjourned date. She was further directed that the company be informed that senior authorized signatories/functionaries be present on the date fixed and the case was adjourned for today i.e.14.06.2017 for further proceedings. But the said order has not been complied with.
7. The fact remains that there is no stay order against order dated 09.09.2015 passed by this Commission. At the time of arguments also learned counsel for the respondent/JD failed to place on record any order passed by the Appellate Fora, staying execution of the order impugned. Under these circumstances, the order passed on 09.09.2015 has become final. It is also proved on record that the respondent/JD has failed to comply with the directions issued by this Commission in the order under execution. Under above circumstances, the respondent/JD is 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.
E.A. No. 47 of 2016 5
In C.C. No. 71 of 2015
8. The fact remains that the respondent/JD is a company and, as such, the question is whether, a company can be sentenced of imprisonment or only a fine can be imposed on the company?
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 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) of the Act, it is clear that a Company can be prosecuted and punished for the offence E.A. No. 47 of 2016 6 In C.C. No. 71 of 2015 committed under Section 27 of the Act. The sentence of imprisonment, which can be imposed thereunder, cannot be imposed, the respondent/JD 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 Rs.2,000/-, but which may extend to Rs.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) of the Act itself includes the Company in the definition of 'person' and Section 27 also states that a trader or person, 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.
E.A. No. 47 of 2016 7
In C.C. No. 71 of 2015
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 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 E.A. No. 47 of 2016 8 In C.C. No. 71 of 2015 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 inSection 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 56of 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 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 E.A. No. 47 of 2016 9 In C.C. No. 71 of 2015 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 respondent /JD Company has failed to comply with the order, 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.71 of 2015, it is directed as under:
i) M/s Unitech Limited, SCO No.189-191, Sector 17-C, Chandigarh through its Director/M.D. Sh.Ajay Chandra, is held guilty of the offence punishable under Section 27 of the Consumer Protection Act, 1986 and is directed to pay a fine of Rs.10,000/-.
15. Certificate of recovery of fine of Rs.10,000/- from the Respondent/JD, as ordered above, along with the certified copy of the order dated 09.09.2015 passed in Consumer Complaint No.71 of 2015, be sent to the District Collector, Chandigarh and to submit his report.
16. Certified copy of this order be sent to the Decree- Holders/complainants free of charge.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER June 14, 2017 Lb/-