State Consumer Disputes Redressal Commission
Manipal Finance Corporation Ltd., vs Shri Cyril Dunha, on 18 February, 2013
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA Appeal No. 43/2012 Manipal Finance Corporation Ltd., Regd.Office, Manipal House, Manipal 576 104 Represented by its Authorised Officer, Sri Narendra Pai Appellant/ O.P. v/s Shri Cyril DCunha, A-1, Alpha Building, St. Anez,Panaji Goa. Respondent/ Complainant Appellants/O.Ps. is represented by Adv. Shri S. Samant Respondent/Complainant is represented by Adv. Shri U. Rao Coram: Shri Justice N.A. Britto, President Shri Jagdish Prabhudesai, Member Dated: 18/02/2013 ORDER
[Per Shri Justice N.A. Britto, President] O.P. in C.C. No. 01 of 2012 has filed this appeal and it is directed against order dated 26/10/2012 of the Lr. District Forum, North Goa, at Porvorim.
2. Some facts are required to be stated to dispose off this appeal.
3. The Complainant had invested with the O.P. a sum of Rs.34,000/- and Rs.29,000/- under their Shreyus Certificates on 08/12/2001 and 01/01/2002 respectively for a period of 60 months @10.5 % to be compounded yearly. The said certificates were to mature on 08/12/2006 in the sum of Rs.55,998/- and 01/01/07 in the sum of Rs.47,763/- respectively.
4. The O.P. , a public limited company, registered under the Companies Act, 1956 on or about 23/05/2005 filed a petition under section 391 (2) of the said Companies Act, 1956 before the Company Judge of the High Court of Karnataka at Bangalore being Company Petition No.89/2005 which was admitted on 12/07/2005. Pursuant to the orders passed in the said Company Petition notices were issued convening meetings of shareholders/ debenture holders and subordinated debt holders. We are proceeding on the assumption that the meeting of subordinated debt holders was held on 20/04/2005 to approve the Scheme of Arrangement and the formula for the settlement of subordinated debt holders was adopted. They were to be paid as follows:
3.1 The Subordinate Debtholders shall be settled as follows:
a) 10% of the principal amount due within 12 months from the effective date.
b) 15% of the principal amount due within 24 months from the effective date.
c) 20% of the principal amount due within 36 months from the effective date.
d) 25% of the principal amount due within 48 months from the effective date.
e) 30%of the principal amount due within 60 months from the effective date.
f) Interest, if any, accrued upto the appointed date within 72 months from the effective date.
3.2 Interest payable to any Subordiante Debtholders on their debts after the appointed date shall stand unconditionally and fully waived by the Subordinated Debtholders.
4. HARDSHIP CASES 4.1 Notwithstanding anything contained in the Scheme, the Committee shall be entitled to consider any application from the NCD Holders and Subordinated Debtholders as hardship cases justifying settlement/repayment earlier than the period for settlement mentioned in the Scheme.
4.2 The decision of the Committee in this regard shall be final and binding.
5. The scheme of arrangement approved at the said meeting also stipulated that it was conditional upon and subject to the approval of the requisite majority of the creditors of the Company as required under the Act, as well as subject to the sanction of the High Court of Karnataka at Bangalore in terms of section 394 of the Act.
It was further stipulated that the scheme would be subject to any modification or amendment that may be directed by the High Court of Karnataka as well as in amendments that may be incorporated in the scheme pursuant to the respective meetings of the creditors.
6. Thereafter the said Company Petition came to be withdrawn on or about 20/10/2009 with liberty to file a fresh petition, after preparing a fresh scheme for repayment of dues under non-convertible debentures and subordinate debts.
7. Admittedly, no further scheme of arrangement to pay the money due to the creditors has been formulated nor approval sought from the High Court of Karnataka. Nevertheless, it has been submitted by Shri Samant, the lr. advocate of the Opposite Party, that 60% of the amount due to the Complainant would be paid to the Complainant irrespective of the result of the present appeal. We assume that this submission is in accordance with the statement made by the O.P. before National Commission in R.P.No.3425 of 2006 and ors.
8. The only point raised on behalf of the O.P. is of limitation. According to them, the complaint was clearly time barred and it ought to have been filed within 2 years of 08/12/2006 and 01/01/2007 respectively and the complaint having been filed only on 04/01/12 the same is hit by Section 24A of the Consumer Protection Act, 1986.
9. The Lr. District Forum has negatived the plea of limitation taken by the O.P. observing that the staggered repayment over a period of 6 years represent a promise or commitment by the O.P. to pay the maturity values to the Complainant.
The cause of action is therefore recurring and last occurred on 20/04/2011 and therefore the complaint filed on 04/01/2012 is within limitation.
10. Shri Samant, the lr. advocate of the O.P., has placed reliance on the case of Iqbal Krishan Sharma & 2 Ors vs. Maruti Udyog Ltd., VII 1992 (2) CPR 14, as approved in Iqbal Krishan Sharma vs. Maruti Udyog Ltd., III 1992 CPJ 69
11. Admittedly, as per scheme of arrangement approved by the O.P. Company at its meeting on 20/04/2005 it was stipulated that 30% of the principal amount would have been paid at end of 60 months and interest accrued upto the appointed date, within 72 months. In other words, the last instalment of the principal amount would have been due from the effective date i.e. the date on which the order of the High Court of Karnataka sanctioning the Scheme was filed with the Registrar of Companies. Effective Date is defined in clause 1.1 (e) of the said Scheme of Arrangment. If the Scheme itself did not go through, where was the question of there being any effective date for a cause of action to be reckoned therefrom? The Lr.
District Forum was wrong to assume that the effective date was 20/04/2005 when the Scheme was neither approved as required nor filed before the Registrar of Companies.
12. In Iqbal Krishna Sharma, the Delhi State Commission observed as follows:
Even if the Company wanted to make some scheme of arrangements for paying the creditors, that does not stop the running of the period of limitation. It is regrettable that the complainant did not try to find out as to whether any scheme was framed by Maruti Udyog Ltd. or not. Though in the complaint is is stated that they had been visiting the office of the respondent very often but they did not make any enquiry in that regard nor wrote any letter after to them. If they had done so, they would have come to know the correct facts. It is also not understandable as to why the complainant did not take any action against the respondent during the last 15 years.
13. The above view of the State Commission was approved by the National Commission in appeal, by observing that the State Commission was perfectly right in rejecting the claim as hopelessly barred by limitation.
14. Admittedly, maturity value of the said 2 certificates were due to the Complainant on 08/12/2006 and 01/01/2007 respectively. It is not the case of the Complainant that because of the Scheme having been approved, or the petition having been filed before the Karnataka High Court that he did not file the complaints within 2 years from 08/12/06 or 01/01/2007 and waited to file the same until 04/01/12. On the contrary, the Complainant himself stated that the cause of action arose in December 06 and in January 07. If that be so, the Complainant ought to have filed the complaint/s within 2 years from 08/12/06 and 01/01/07 as provided by Section 24A of the Consumer Protection Act, 1986.
In case the Complainant was prevented from filing the complaint/s for some sufficient cause, the Complainant ought to have filed an application and sought condonation of delay. That has not been done. On the facts pleaded by the Complainant upon legal advice in para 9 of the complaint the lr. District Forum was not at all justified in concluding that the cause of action was a recurring one and last occurred on 20/04/2011. District Forums are not expected to make out a case contrary to what a Complainant has stated. District Forum is expected either to accept or reject a case made out by the Complainant. The Lr.
District Forum has failed to find out what was meant by effective date under the said proposed scheme of arrangement and has proceeded on the assumption that it would have been 20/04/2005. The effective date as per the said Scheme was the date on which the order of the High Court sanctioning the scheme would be filed with the Registrar of Companies. The scheme, admittedly was not sanctioned. On the contrary, the petition was withdrawn and therefore there was no question of there having been any effective date from which limitation could have been computed. As already stated the Complainant rightly pleaded that the cause of action arose in December 06 and January 07 and if that be the case the Complainant ought to have filed the complaint within 2 years therefrom and the complaint which was filed on 04/01/2012 was hopelessly time barred and as such ought to have been dismissed by the Lr. District Forum. The Lr. District Forum ought not to have made a case for Complainant contrary to the case pleaded by the Complainant. It is now well settled that a complaint which is barred by limitation cannot be entertained by the Fora under the Consumer Protection Act. (See State Bank of India vs. B. S. Agricultural Industries AIR 2009 SC 2210) Earlier, in Haryana U.DA. vs. B. K. Sood, 2006 (1) SCC 164, the Apex Court had also held that Section 24-A of Consumer Protection Act expressly casts a duty on the Fora admitting a complaint, unless the Complainant satisfies the Fora, that the Complainant had sufficient cause for not filing the complaint within a period of two years from the date on which the cause of action had arisen.
15. In case the Complainant had any difficulty the Complainant could have always approached the O.P. as a hardship case as defined in the said Scheme. In case the Complainant has serious apprehension, as pleaded in para 7 of the complaint, he ought to have been prompt in filing the complaint in time and not waited for another three years. No doubt, the Complainant is a senior citizen and lives with his brother who was the nominee of the said two certificates, but what does give an impression to the Lr. District Forum that he is a burden on his brother?
16. In the circumstances, we have no other option but to allow the appeal and set aside the impugned order and dismiss the complaint as time barred which we hereby do with no order as to costs.
[Shri. Jagdish Prabhudesai] [Shri Justice N.A. Britto] MEMBER PRESIDENT