State Consumer Disputes Redressal Commission
Manager, M/S Duncans Industries Ltd. vs Shri Chitta Ranjan Sikdar on 2 March, 2012
State Consumer Disputes Redressal Commission
State Consumer Disputes Redressal
Commission
West
Bengal
BHABANI BHAVAN (GROUND FLOOR)
31, BELVEDERE
ROAD, ALIPORE
KOLKATA 700 027
S.C. CASE NO. FA/10/2011 & FA/11/2011
DATE OF
FILING:07/01/11 DATE OF FINAL ORDER:02/03/12
APPELLANTS/OPS: : 1) Manager
M/s
Duncans Industries Ltd.
31,
N.S. Road,
Kolkata-700 001
P.S. Hare Street
2) M/s Duncans
Industries Ltd.
31,
N.S. Road,
Kolkata-700 001
P.S. Hare Street
RESPONDENT/COMPLAINANT : Shri
Chitta Ranjan Sikdar
S/o-
Late Santosh Kr. Sikdar
350,
NSC Bose Road
Tollygunge,
Kolkata-700 047
BEFORE : HONBLE
JUSTICE : Sri Kalidas Mukherjee,
President.
HONBLE
MEMBER : Smt.
S. Majumder.
HONBLE
MEMBER : Sri
S. Coari.
FOR THE APPELLANT/PETITIONER : Mr. A. K. Bandyopadhyay
Ld.
Advocate
FOR THE RESPONDENT/OP : Mr. Ved Sharma
Ld.
Advocate
: O R D E R :
No.7/02.03.12 HONBLE JUSTICE SRI KALIDAS MUKHERJEE, PRESIDENT Two appeals are taken up together being identical in nature. These appeals were heard analogously. In each appeal separate MA applications bearing no.MA-282/2011 and MA-283/2011 were filed by the appellant herein praying for passing an order for payment in terms of the order of BIFR on 16 January, 2012.
The case of the complainant/respondent herein, in short, is that the OPs launched the scheme of fixed deposit from the public for investment. The petitioner invested money under the FD Scheme with the OPs. After the maturity of the fixed deposits the original fixed deposit certificates were submitted with the OPs for payments. Those receipts were duly acknowledged by the OPs.
Thereafter the OPs sent a letter to the petitioner that they moved the Company Law Board and they would pay the entire amount in instalments. The petitioner wrote several letters to the OPs but the payment was not made. For the said reason the complainants filed the complaints before the Learned District Forum praying for an order directing the OPs to refund the entire amount of Fixed Deposits with interest and compensation. The Learned District Forum, Kolkata, Unit-II allowed the complaints in case no.241/2010, 240/2010.
The Learned Counsel for the appellant submits that the appellant company was declared a sick industrial company under the provisions of Section 3 (1) (O) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as SICA) on 21.02.07 and a reference was made before the Board for Industrial and Financial Reconstruction (BIFR) (hereinafter referred to as Board). It is contended that the final scheme was approved by the Board on 16.01.12 and the direction has been made therein to make payment to the extent of 85% of the principal amount of the fixed deposits within the period from 90 days to 180 days. It is submitted that the time frame as set by the Board has not yet expired and the appellant will make payment to the fixed deposit holders as per the direction made by the Board. It is submitted that the scheme framed by the Board is to be accepted by all concerned and no suit or proceeding will continue in any court of law. The Ld. Counsel has further referred to the provision contained in Section 32, 34 of the SICA and submits that there is provision for penalty if the payment is not made within the specified time as set by the Board. In this connection, the Ld. Counsel has referred to the decision of the Honble National Commission in the case of J. K. Cotton Spinning & Weaving Mills Company Ltd. versus Amin Uddin Ahmad reported in I (2007) CPJ 320 (NC) and the order passed by the Honble High Court, Calcutta in case no.APO/58/2011/APOT 593/2002. It is submitted that from the aforesaid cases it would appear that the matter reached its finality with the framing of the scheme by the Board. With reference to the order passed by the Honble National Commission in the case of J. K. Cotton Spinning & Weaving Mills Company Ltd. versus Amin Uddin Ahmad (Supra) it is submitted that the payment was directed to be made as per the scheme framed by the Board with retrospective effect. Learned Counsel has referred to the decision reported in 2010(1) CLJ (Cal) [M/s Duncan Industries Ltd. versus Biswajit Roy & Another]. Under the circumstances, the Ld. Counsel for the appellant submits that an opportunity may be given to the appellant to make payment as per the direction of the Board.
The Ld. Counsel for the respondent submits that the judgment of the Honble High Court, Calcutta in case no. APO/58/2011/APOT 593/2002 has no bearing in the facts of the instant case, in as much as, no issue was framed and there was no decision on any substantial question of law. The Ld. Counsel submits that in such view of the matter the order of the Honble High Court in the aforesaid case can be treated to be per incuriam.
The Ld. Counsel for the respondent further submits that Section 22 of the SICA has no manner of application, in as much as, as per the provision of SICA no proceeding will continue against the properties of the company. It is contended that the property as mentioned under Section 22(1) of the SICA does not include the fixed deposits. In this connection, the Ld. Counsel has referred to the decision reported in 1992 SCR (2) 999 [Sri Chamundi Mopeds Ltd. versus Church or South India Trust Association]. The Ld. Counsel in the matter of fixed deposit has referred to the provision contained in Section 58 (A) of the Companies Act. It is submitted that the company stands in the position of a trustee and is bound to make repayment so far as the fixed deposits are concerned.
It is submitted that the fixed deposits matured in the year 2003 and at that time it was not a sick industry and there was no reference to the Board. It is submitted that withholding the repayment after the date of maturity goes to show that there was illegality on the part of the company and when there was illegality at the initial stage, it could not be cured by any subsequent act whatsoever. It is contended that the act of the appellant in withholding the repayment was illegal per se.
The Ld. Counsel for the respondent submits that the scheme framed by the Board is not applicable and all the aspects were not considered in the judgment of the Honble National Commission as reported in I (2007) CPJ 320 (NC). In this connection, the Ld. Counsel for the respondent has referred to the judgment of the Honble Delhi High Court in LG Electronics Vs. Usha (India) Ltd. & Another in case no.EFA(OS) 16/2003. It is submitted that no payment has yet been made to a single consumer. It is contended that so far as the fixed deposit is concerned the recommendation of the Board was made on the basis of bi-partite agreement and the fixed deposit holders not being made a party therein, the recommendation of the Board would not be applicable in the instant case.
We have heard the submission made by the Ld. Counsel for the parties. Under Section 22(1) of SICA no proceeding will continue against the Industrial Company for execution, distress or for the recovery of money or for enforcement of any security against the Industrial Company in respect of properties of the company except with the consent of the Board or the appellate authority, as the case may be.
In the instant case the fixed deposit holders contention is that they did not get the maturity value of the fixed deposits.
In the instant case the fixed deposit receipts matured in the year 2003. The complaint was filed in the year 2010 before the Ld. District Forum. The appellant company was declared a sick industry in the year 2007. In the case of J. K. Cotton Spinning & Weaving Mills Company Ltd. versus Amin Uddin Ahmad reported in I (2007) CPJ 320 (NC) the Ld. District Forum had allowed the complaint with the direction to the OP to pay interest on the deposited amount @ 18% per annum w.e.f. 19.05.87 and thereafter the scheme was finally sanctioned by the Board and as per the sanctioned scheme, the Honble National Commission was pleased to direct the payment of the principal amount. The observation made by the Honble National Commission in Para 4 (8) is quoted hereunder:-
On and from the date of the coming into operation of the sanctioned scheme or any provision thereof, the scheme or such provision shall be binding on the sick industrial company and the transferee company or, as case may be, the other company and also on the share holders, creditors and guarantors and employees of the said companies.
In Paragraph 5, the Honble National Commission was pleased to observe as follows:-
In our view, considering the aforesaid provisions the State Commission ought not to have ignored the scheme. State Commission had, thus, acted with material irregularity and the order passed by it, therefore, deserves to be modified to the extent that respondent is not entitled to any interest on the deposited amount..
In the case of B. K. Dey and Ors. versus Duncans Industries Ltd. in connection with ACO 158 of 2011, APOT 593 of 2002 the Honble High Court, Calcutta was pleased to observe as follows:-
Now, it appears that this question of repayment of deposits is covered by an order of the Board for Industrial and Financial Reconstruction dated 29th September, 2011.
Moreover, according to SICA if the Board is in consideration of rehabilitation of a company by passing orders to that effect, no court has jurisdiction to entertain a parallel proceeding ...
The Learned Counsel for the respondent in the written notes of argument has cited a decision in the case of Mahesh Chandra Sharma versus M/s Modern Threads ( India) Ltd. in revision petition no.2355/2006 before the Honble National Commission. It appears that in the said case the matter was pending before the Board (BIFR). But in the instant case the scheme was finally sanctioned by the Board.
From the provision contained in Section 22(1) of SICA, the observation of the Honble National Commission in the case of J. K. Cotton Spinning & Weaving Mills Company Ltd. versus Amin Uddin Ahmad (Supra) and the observation of the Honble High Court, Calcutta in the case of B. K. Dey and Ors. versus Duncans Industries Ltd. (Supra) it is clear that even after passing of the impugned order by the Ld. District Forum, the final scheme dt.16.01.12 as sanctioned by the Board would be binding upon all concerned. Under the circumstances, the contentions raised by the Learned Counsel for the respondents are not acceptable.
According to the final Scheme sanctioned by the Board on 16.01.12 as per point no.15.5
(c) under the heading Unsecured Fixed Deposit Holders at page-53 the direction runs as follows:-
i) An amount of Rs.66.07 Cr. to the extent of 85% of the principal amount of fixed deposits outstanding as on cut off date shall be paid in one time full and final settlement of all the dues of fixed deposit holders. Repayment shall commence within 90 days and shall be completed within 180 days (without carrying any interest) from the date of sanction of the Scheme.
ii) All interest including compound/penal interest, claims and balance of principal amount etc. on the fixed deposits shall stand waived immediately.
Having heard the submissions made by both sides and on perusal of the materials on record we are of the considered view that the respondents are entitled to get 85% of the principal amount of the fixed deposits as per the direction contained in the scheme. The repayment shall commence within 90 days and shall be completed within 180 days (without carrying any interest) from the date of sanction of the Scheme, as directed by the Board.
In the result, the appeals as stated above are allowed in part. The appellant herein is directed to make payment to the respondents as per the direction made by the Board (BIFR) on 16.01.12 as stated above. There will be no order as to costs. This judgment will govern the appeals bearing no.FA 10/2011 and FA 11/2011. The M.A. No. MA-282/2011 and MA-283/2011 also stand disposed of. The impugned judgments stand modified to the extent stated above. There will be no order as to costs.
MEMBER(SC) MEMBER(L) PRESIDENT