State Consumer Disputes Redressal Commission
Vinod Kumar vs Aerens Entertainment Zone Pvt. Ltd. on 25 November, 2019
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.202 of 2017 In Consumer Complaint No.238 of 2015 Date of Institution : 12.12.2017 Date of Decision : 25.11.2019 1.
Vinod Kumar Sharma S/o Late Sh. V.C. Sharma, R/o H.No.614, Sector 36-B, Chandigarh.
2. Aditya Sharma S/o Sh. Vinod Kumar Sharma, R/o H.No.614, Sector 36-B, Chandigarh.
........Complainants-DHs Versus
1. Aerens Entertainment Zone Ltd., 6th Floor, Mahindra Towers, 2A, Bhikaji Cama Palace, New Delhi-110066, through its Director/ Managing Director/Authorized Signatory.
2. Aerens Entertainment Zone Ltd., Festival City, Village Quadian and Faguwal, G.T. Road (NH-I), Ludhiana, through its Director/Managing Director/Authorized Signatory.
3. Aerens Entertainment Zone Ltd., O/o Flat No.507, 5th Floor, Skipper Corner, 88 Nehru Place, New Delhi, South Delhi DL- 110019.
4. Rajesh Jainarain Aeren, Director of Aerens Entertainment Zone Ltd., R/o 6th Floor, Mahindra Towers 2A, Bhikaji Cama Palace, New Delhi-110066.
5. Chandan K Singh, Authorized Signatory of Aerens Entertainment Zone Ltd., R/o G-7, 1st Floor, Green Park (near Evergreen Sweet Shop), New Delhi.
6. Dileep Bhagtani, Authorized Signatory of Aerens Entertainment Zone Ltd., O/o Flat No.507, 5th Floor, Skipper Corner, 88 Nehru Place, New Delhi, South Delhi DL-110019.
7. Vinay Kumar, Director of Aerens Entertainment Zone Ltd., R/o B-
124-SF, Parsavanath Paradish Mohan Nagar, Ghaziabad- 201007 UP.
EA No.202 of 2017 2In CC No.238 of 2015
8. Sukhwinder Singh, Director of Aerens Entertainment Zone Ltd., R/o H.No.2193, Bazar Bansan Wala Kucha Sham Dass, Amritsar 143001 Pb.
(Names of Respondents/JDs No.3 to 7 were deleted, vide order dated 22.03.2018).
......Respondents-JDs Execution Application under Section 27 of the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President Present:-
For the complainants/DHs : Sh. Munish Goel, Advocate For the respondent No.7 : Sh. Atul Goyal, Advocate.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
This Execution Application has been filed by the complainants/DHs (hereinafter to be referred as "DHs"), under Section 27 of the Consumer Protection Act, 1986 (in short, the Act"), against the opposite parties/respondents-JDs (hereinafter to be referred as "JDs") for non-compliance of the order dated 17.05.2017 passed by this Commission in the above mentioned Consumer Complaint.
2. Briefly stated, being allured by the assurances of the JDs, the DHs purchased a site from the JDs bearing No.LGF-30 measuring 550.87 sq.yds. on Lower Ground Floor, in "Festival City" at Ludhiana.
The DHs paid the total payment of ₹51,17,081/- to the JDs towards the price of the said site. Thereafter, the JDs issued Agreement to Sell in favour of complainant No.1 and his wife, namely Sunita Sharma, on 06.08.2008. Smt. Sunita Sharma expired on 06.02.2015. She had prepared a Will dated 14.04.2014, as per which after her death, the share in the shop, in question, would go to his son, namely Aditya Sharma. Thus, DH No.2 stepped into the shoes of Smt. Sunita EA No.202 of 2017 3 In CC No.238 of 2015 Sharma, after her death. The JDs further agreed to pay Monthly Minimum Guarantee of ₹72,164/- (per month) to the DHs from the date of receiving the entire consideration amount of ₹51,17,081/- i.e. from August, 2008 till the actual lease rent started from the said unit. The JDs paid partial amounts towards Monthly Minimum Guarantee, but they did not pay the same since January, 2014. They also failed to deliver the possession of the fully constructed site, having complete basic amenities; which compelled the DHs to file Consumer Complaint bearing No.238 of 2015. Despite service of notice, the JDs did not appear in the complaint and were proceeded against ex parte. The complaint was allowed in favour of the DHs/complainants, vide order dated 17.05.2017, directing the JDs:-
i) to refund the amount of ₹51,17,081/- to the complainants, along with interest at the rate of 9% per annum from the respective dates of deposit till realization;
ii) to pay the arrears of Minimum Monthly Guarantee, from January, 2014 till the date of this order, as per Ex.C-7. They shall also pay the remaining unpaid arrears of Minimum Monthly Guarantee for the period 2009-10 to 2012-13;
iii) to pay ₹5,00,000/-, as compensation for the mental tension and harassment suffered by the complainants;
iv) to pay ₹50,000/-, as litigation expenses.
3. The JDs were directed to comply with the said order within a period of one month from the receipt of certified copy of the order, failing which the compensation amount was also ordered to carry EA No.202 of 2017 4 In CC No.238 of 2015 interest at the rate of 9% per annum from the date of passing of the said order till realization thereof.
4. However, the JDs failed to comply with the order passed by this Commission, within the stipulated period, which compelled the DHs to file the present execution application under Section 27 of the Act, to award punishment to the JDs, as per law.
5. This Execution Application came up for hearing on 14.12.2017 and report of the registry was sought, whether there was any stay order and whether any amount had been deposited by the JDs as per above order and the case was fixed for 20.12.2017. As no stay order was received, nor the awarded amount was deposited, so on 20.12.2017, notices of the Execution Application, along with Show Cause Notices under Section 251 read with Section 262 of the Code of Criminal Procedure, 1973 read with Section 27 of the Act were ordered to be issued to the JDs for 07.02.2018. On 07.02.2018, it was reported by the registry that notice along with Show Cause Notice was not collected by the counsel for the DHs. So fresh notice along with Show Cause Notice was again ordered to be issued to the JDs for 22.03.2018, as per previous order. On 22.03.2018, Sh. Atul Goyal, Advocate, had appeared and filed Memo of Appearance on behalf of JD No.4 and stated that original complaint had been filed against the Aerens Entertainment Zone Limited through its Director/Managing Director/Authorized Signatory and Rajesh Jainarain Aerene, Director was not impleaded as a party by name in the complaint. Hence the said individual person cannot be impleaded as a party in execution EA No.202 of 2017 5 In CC No.238 of 2015 proceeding. He further submitted that Rajesh Jainarain Aerene had ceased to be director of the company w.e.f. 20.06.2011 whereas the complaint was filed on 17.09.2015 and the Execution Application had been filed on 12.12.2017. Therefore, the name of Rajesh Jainarain Aeren, Director-OP/JD No.4 was ordered to be deleted from array of parties. It was also observed by this Commission that perusal of file shows that JDs No.3,5,6&7 were not parties in the original complaint. Hence, they were also ordered to be deleted from the array of parties. The registry was directed to make the necessary note in the head note of the Execution Application. Accordingly, notices/show cause notices were ordered to be issued to the JDs/OPs (i.e. JDs No.1 & 2), who were parties in the original complaint for 08.05.2018. On 08.05.2018, as per report of Registry, notices sent to JDs on 04.05.2018 were not received back. However, notice sent to JD/OP No.2 for previous date was received back with the report 'improper address'. Learned counsel for the DHs was directed to furnish the correct address of JDs/OPs No.1&2 as per previous order, whereupon fresh notice was ordered to be issued for 04.07.2018. On 04.07.2018, as per report of the Registry, notices sent to JD/OP No.1 on 25.05.2018 and JD/OP No.2 on 19.06.2018 had not been received back. Fresh notice/Show Cause Notice was ordered to be issued to the JD/OPs No.1 & 2 for 23.08.2018. On 23.08.2018, as per report of the Registry, notice sent to JD/OP No.1 on 12.07.2018 was received back with the report "left" and notice sent to JD/OP No.2 on 12.07.2018, was received back with the report "not met despite repeated visits". Learned counsel for the EA No.202 of 2017 6 In CC No.238 of 2015 DHs was directed to furnish correct address of JD/OP Nos. 1 & 2, before the date fixed i.e. 14.09.2018. On 14.09.2018, learned counsel for the DHs had filed an application (M.A. No.2119 of 2019) for furnishing correct address of the JDs/OPs No.1 & 2. The same was allowed and fresh notice, along with Show Cause Notice, was ordered to be issued to the JDs/OPs No.1 & 2 on the correct address, mentioned in the aforesaid application for 16.11.2018. On 16.11.2018 also, it was reported by the Registry that notices along with Show Cause Notices sent to JD/OP No.1 on first address were received back with report 'no such address" and on second address, with report 'left'. Notice along with Show Cause Notice sent to JD/OP No.2 was received back with report 'incomplete address'. Learned counsel for the DHs was directed to furnish correct addresses of JD/OPs No.1 & 2 before the date fixed i.e. 07.12.2018. On 07.12.2018, learned counsel for the DHs had stated that they had visited the spot and found that the addresses of the JDs/OPs were correct. Accordingly, fresh summons along with Show Cause Notices were ordered to be issued to JDs/OPs on the addresses given in the Execution Application as well as the correct addresses filed by the DHs thereafter, for 01.02.2019. It was also ordered that a copy of the summons be sent to Commissioner of Police, New Delhi with the direction to serve the same on the OPs/JDs and if there is no one to receive the same, then affix a copy of the summon at the door/gate of the JDs/OPs and to report the status of the service before the date fixed in this Commission. On 01.02.2019 also, notices sent to the JDs had been received unserved with similar EA No.202 of 2017 7 In CC No.238 of 2015 reports and the compliance report of Commissioner of Police, New Delhi had also not been received. Accordingly, fresh summons along with show cause notice against JDs/OPs No.1&2 were again ordered to be sent to the Commissioner of Police, New Delhi for 18.03.2019 to get the same served on the JDs and in case there is no one to receive the same then affix a copy of the summon at the door/gate of the OPs/JDs and report the status of the service before the date fixed in this Commission. On 18.03.2019, as per report of the Registry, letter sent to Commissioner of Police, New Delhi for affixation of summons on 22.02.2019 had not been received back executed or unexecuted. Summons along with Show Cause Notices were sent to JDs/OPs No.1&2 through registered post A.D. on 22.02.2019, but neither RCs nor A.Ds had been received back. More than 30 days' period had already elapsed and the same were presumed to have been received by JDs/OPs No.1&2. However, JDs No.1&2 had not come present despite repeated calls and, as such, Bailable Warrants in the sum of ₹5,00,000/- with one surety of the like amount were ordered to be issued against JD/OP No.1 to Commissioner of Police, New Delhi for 02.05.2019. On 02.05.2019, as per report of the Registry, bailable warrants issued against JD/OP No.1 to Commissioner of Police, New Delhi on 29.03.2019 had not been received back executed or unexecuted and, as such, fresh bailable warrants were ordered to be issued against JD/OP No.1 as per previous order for 01.07.2019. On 01.07.2019, as per report of the Registry, bailable warrants issued against OP/JD No.1 through Commission of Police, New Delhi had EA No.202 of 2017 8 In CC No.238 of 2015 been received back with the report "Left the address". Learned counsel for the DHs sought time to furnish the correct address, which was allowed to be filed before the date fixed and the case was adjourned to 17.07.2019. On 17.07.2019, an application (M.A. No.1268 of 2019) had been filed by the DHs for furnishing correct address of JDs/OPs; which was allowed and the addresses of the JDs/OPs were ordered to be taken on record. Fresh bailable warrants in the sum of ₹5,00,000/- with one surety of the like amount were ordered to be issued against JDs/OPs on the fresh addresses as mentioned in M.A.No.1268 of 2019 to Commissioner of Police, New Delhi/Amritsar and SSP, Ghaziabad for 04.09.2019. On 04.09.2019, as per the report of the Registry, Bailable Warrants issued against JDs/OPs to Commissioner of Police, New Delhi and SSP, Ghaziabad had not been received back executed or unexecuted. However, Bailable Warrants issued against JDs/OPs to Commissioner of Police, Amritsar had been received back unexecuted. Therefore, fresh Bailable Warrants were again ordered to be issued against JDs/OPs, as per previous order, for 18.10.2019. On 18.10.2019, as per the report of the Registry, Bailable Warrants issued against JDs/OPs to Commissioner of Police, New Delhi, Amritsar and SSP, Ghaziabad had not been received back executed or unexecuted. It was observed by this Commission that several attempts had been made to serve the Bailable Warrants and, as such, learned counsel for the DHs was directed to file names of the Directors of the Company. Learned counsel for the DHs provided the names and addresses of the Directors of the Company; which were ordered to be taken on record. EA No.202 of 2017 9
In CC No.238 of 2015 Fresh Bailable Warrants in the sum of ₹5,00,000/- with one surety in the like amount were ordered to be issued against the Directors of the Company on the fresh addresses, to the Commissioners of Police, Ghaziabad and Amritsar for today i.e. 25.11.2019.
6. Today also, the Bailable Warrants issued against JDs/OPs to Commissioner of Police, Ghaziabad and Amritsar have not been received back executed or unexecuted. Sh. Atul Goyal, Advocate has filed an application (M.A. No.2347 of 2019) on behalf of Mr. Vinay Kumar Chaudhary (Ex-Additional Director of JD No.1) for placing on record copy of order of winding up of JD No.1-Company dated 18.03.2016 passed by the Hon'ble Delhi High Court and praying for dropping of the proceedings of the present Execution Application against the JDs, in view of the winding up order of the JD-Company under the provisions of Section 446 of the Companies Act, 1956.
7. I (exercising the powers of Judicial Magistrate Ist Class conferred under Section 27 (2) of the Act) have heard the matter on merits, with regard to the Show Cause Notice under Section 251 read with Section 262 of the Code of Criminal Procedure, 1973, as well as Under Section 27 of the Act.
8. Admittedly, there is no stay order against order dated 17.05.2017 passed by this Commission. At the time of arguments also, learned counsel for JDs No.7 failed to place on record any order passed by the Appellate Fora, staying execution of the order impugned. So far as the M.A. No.2347 of 2019 filed by learned counsel for JD No.7 is concerned, it needs to be mentioned that names of the EA No.202 of 2017 10 In CC No.238 of 2015 JDs No.3 to 8, including JD No.7, have already been ordered to be deleted, vide order date 22.03.2018. So far as the appointment of Official Liquidator as per order dated 18.03.2016 passed by the Hon'ble Delhi High Court is concerned, it needs to be mentioned that by this order, the Company i.e. Aerens Entertainment Zone Ltd., has been sentenced to pay the aforesaid fine, on account of non- compliance of order dated 17.05.2017 passed by this Commission in original complaint (CC No.238 of 2015) and, as such, the passing of this order will not affect the Liquidation Proceedings. Accordingly, the application filed by learned counsel for JD No.7 (name of which has already been deleted) stands disposed of.
9. Under these circumstances, the order passed by this Commission on 17.05.2017 has become final. It is also proved on record that the 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 shall not be less than one month but which may extend to three years and fine can also be imposed.
10. The fact remains that in the complaint, only the Company i.e. Aerens Entertainment Zone Ltd. was arrayed as OPs No.1 & 2. The Executing Court cannot travel beyond the decree or order/award. The decree can only be got executed against the person/company, EA No.202 of 2017 11 In CC No.238 of 2015 who was party in the concerned proceedings. In the present case, the Company i.e. Aerens Entertainment Zone Ltd. was arrayed as opposite parties No.1 & 2 in the complaint. Since the opposite parties are a Company i.e. Aerens Entertainment Zone Ltd., as such, the question to be decided is whether, a Company can be sentenced or only a fine can be imposed on the Company?
11. 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.EA No.202 of 2017 12
In CC No.238 of 2015 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 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 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, under Section 27 of the Act. 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 if 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 EA No.202 of 2017 13 In CC No.238 of 2015 guilty and sentence can be imposed.
12. 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."
13. Similarly, identical view was taken by the Hon'ble Madras High Court in case Fidelity Industries Ltd. v. State 2006 (1) CTC
374.
14. 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 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 EA No.202 of 2017 14 In CC No.238 of 2015 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.
15. 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 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.
16. 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 JDs No.1 & 2-Company has failed to comply with the order, so it is liable to be punished with fine only for the disobedience of the order passed by this Commission in the complaint.
17. Accordingly, for wilful disobedience of the order passed by this Commission in Consumer Complaint No.238 of 2015, it is directed as under:
1. Aerens Entertainment Zone Ltd., 6th Floor, Mahindra Towers, 2A, Bhikaji Cama Palace, New Delhi-110066, through its Director/ EA No.202 of 2017 15 In CC No.238 of 2015 Managing Director/Authorized Signatory; and
2. Aerens Entertainment Zone Ltd., Festival City, Village Quadian and Faguwal, G.T. Road (NH-I), Ludhiana, through its Director/Managing Director/Authorized Signatory.
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/-.
18. Certificate of recovery of fine of ₹10,000/- from the JDs, as ordered above, along with the certified copy of the order dated 17.05.2017 passed in Consumer Complaint No.238 of 2015 be sent to the District Collectors, New Delhi and Ludhiana for effecting recovery and to submit their reports.
19. Certified copy of this order be sent to the parties free of charge.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT November 25, 2019 (Gurmeet S)