State Consumer Disputes Redressal Commission
S.M. Gavai, vs Asian Alloys Limited on 4 March, 2008
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: 04-03-2008 Complaint Case No.C-130/1999 Mr. S.M. Gavai, -Complainant Chief of Protocol, through Ministry of External Affairs, Mr. Sumant De, South Block, Advocate. New Delhi-110001. Versus Asian Alloys Limited -Opposite Party B-53, Shivalik, Malviya Nagar, New Delhi-110017. CORAM: Mr. 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) Complainant who is chief of Protocol in the Ministry of External Affairs has alleged deficiency in service on the part of OP company and has claimed refund of Rs. 10 lacs deposited with the OP alongwith interest and compensation of Rs.50,000/- for mental agony and harassment.
2. Facts in brief are that the complainant under the suggestions of the Managing Director of OP company Mr. Pawan Kumar Sachdeva, invested a sum of Rs. 10.00 lakhs jointly with his wife Mrs. Reena Gavai. In response FDR NO.016661 dated 21/01.1998 was issued for a period of 1 year and would mature on 20.01.1999. The OP agreed to pay Rs.12,500/- per month to the complainant by way of interest in discharge of interest liability. The OP issued 12 post-dated monthly cheques.
3. The complainant was shocked and humiliated when the bank refused to honour the cheques on the grounds of insufficient funds. Since the cheques for April to June were also dishonoured he was shocked and called the entire deposit back. A letter was received by the complainant from the OP-Company on 02.09.1889. The maturity date of principal amount, the complainant deposited the issued cheque NO.505633 dated 21.01.1999 for Rs.10,00(ten lakhs) drawn on Bank of India, East of Kailash, New Delhi. The cheque was dishonoured on the ground of insufficient funds.
4. According to the complainant deficiency in service by the OP Company is not only in repayment of the amount of principal and interest, but also in failing to issue the Income Tax Declaration Certificate for Income tax declared every month.
5. OP denied any deficiency on its part and averred that the company suffered heavy losses because of the sudden slump in the steel market throughout the world. The OP registered themselves in the Board of Industrial and Financial Reconstruction, New Delhi under the provisions of section 15(1) of sick industry (special provision) Act. As per the section 22(2) of the sick Industry (Special Provision) Act, the companies which are registered under the above mentioned provisions get the special protection and recovery suits windup proceedings/ execution proceedings cannot be entertained against the said company. The company law Board has the jurisdiction to entertain the complaint of the suffered depositors against the defaulter company. Consumer forums have no jurisdiction to entertain the complaints of the depositors. OP requested him to accept the deposit amount in small installments without claiming any further interest but the complainant threatened the officers of the OP with dire consequences as he is the Chief of Protocol in Ministry of External Affairs, South Block, New Delhi. He tried to pressurise the OP through different High Police officials to make the payment of the deposit amount. It has already been informed to the complainant that the company is suffering a Financial Crisis with the request not to deposit cheques issued for encashment but complainant ignored the requests of the OP.
6. In order to appreciate the aforesaid contentions of the OP 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.
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. 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.
9. 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.
10. 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.
11. 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. 12. The Honble Supreme Court in case after case and recently in Secretary V/s Lalitha has taken a view that every consumer has an independent remedy under Sec.3 which has not been provided by any other law even if there are remedies available to him under the provisions of any other law. The observations of the Supreme Court are as under:-
(i) SECRETARY, THIRUMURUGAN CO-OPERATIVE AGRICULTURAL CREDIT SOCIETY V/S M. LALITHA (DEAD) THROUGH LRS & ORS. CIVIL APPEAL NO. 92 OF 1998 DECIDED ON 11-12-2003. Reported in S.C. & N.C. Consumer Cases (1996-2005) In Section 3 of the Act in clear and unambiguous terms it is stated that the provisions of 1986 Act shall be in addition to an not in derogation of the provisions of any other law for the time being in force.
From the statement of objects and reasons and the scheme of 1986 Act, it is apparent that the main objective of the Act is to provide better protection of the interest of the consumer and for that purpose to provide better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve purpose of the Act, various quasi judicial forums are set up at the district, State and National level with wide range of powers vested in them. These quasi judicial Forums, observing the principle of a specific nature and to award, whenever appropriate compensation to the consumers and to impose penalties for non-compliance of their orders.
13. The reason is simple. The Consumer Protection Act has introduced the concept of compensation to the consumer for the mental agony, harassment, physical discomfort, insult, humiliation and other deprivation, financial loss etc. on account of the deficiency in service having suffered at the hands of the service provider. The word compensation appearing in the Act has been given wide connotation by the Supreme Court so as to encompass in its fold all the aforesaid elements of defects in goods or services or loss suffered by the consumer. The observations of the Supreme Court in this regard, in the case of Ghaziabad Development Authority Vs Balbir Singh-(2004) 5 SCC 65, are noteworthy and 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.
14. 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.
15. 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.
16. In the result we allow the complaint with the following directions :-
(i) OP to pay the maturity amount of Rs. 11,00,000/- with interest @ 9% from the date of filing of the complaint
17. In view of the fact that OP-company had gone into liquidation we are inclined to award lump sum compensation of Rs. 50,000/- for the mental agony and harassment suffered by the complainant.
18. Aforesaid payment shall be made within one month from the date of receipt of this order.
19. Complaint is disposed of in aforesaid terms.
20. A copy of the order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to Record Room.
21. Announced on 4th March, 2008.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj