State Consumer Disputes Redressal Commission
Vijay Dhawan vs D.C. M. Financial Services Ltd on 7 April, 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: 07-04-2008 (1) Appeal No. A-154/2004 (Arising from the order dated 03-03-2003 passed by District Forum (East), Saini Enclave, Delhi in complaint case No. 180/2003) Vijay Dhawan, -Appellant W/o Baldev Raj Dhawan, In person. H.No. 3939, Gali No. 13, Shanti Mohalla, Delhi-110031. Versus M/s D.C. M. Financial Services Ltd. -Respondent 75, Amrit Nagar, NDSE Part I, New Delhi-110003. (2) Appeal No. FA-153/2004 (Arising from the order dated 03-03-2003 passed by District Forum (East), Saini Enclave, Delhi in complaint case No. 180/2003) Bharti Dhawan, -Appellant Wife of Anil Dhawan, In person. H.No. 3939, Gali No. 13, Shanti Mohalla, Delhi-110031. Versus M/s D.C. M. Financial Services Ltd. -Respondent 75, Amrit Nagar, NDSE Part I, New Delhi-110003. 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) Aforesaid two appeals arise from the order dated 3rd March 2003 passed by the District Forum whereby the complaint of the appellants were dismissed not being maintainable in view of the fact that the respondent had already applied for Company Law Board for adjudication for declaring them SICK and as such complaint is barred.
2. In identical cases we have taken a view that merely because the Company come under liquidation does not debar the consumer who had made deposit by way of F.D. in the Company to seek remedy under the Consumer Protection Act, which as per section 3 of the Act is an additional remedy and not in derogation of any other law for the time being in force which includes Company Act also. Section 3 provides as under:-
3. Act not in derogation of any other law- The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
3. The Supreme Court has while elaborating the scope of section 3 taken the aforesaid view in the following cases:-
SCOPE OF SECTION 3 OF ACT 1986
(i) Secretary, Thirumurugan Coo-operative Agricultural Credit Society Vs. M. Lalitha (Dead) through LRS and Ors. Civil Appeal No. 92 of 1998 decided on 11-12-2003.
Reported in S.C. & N.C. Consumer cases (1996-2005).
10. 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.
(ii) Fair Air Engineers Pvt. Ltd. and Anr. Vs. N.K. Modi, 1996 (6) SCC 385.
It would, therefore be clear that the legislature intended to provide a remedy in addition to the consequent arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure.
In view of the object of the Act and by operation of section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matter in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act.
(iii) Smt. Kalawati and others Vs. M/s United Vaish Co-operative Thrift and Credit Society Ltd. R.P. No. 823 to 826 of 2001, SC & NC Consumer Law Cases (1886-2005) 275
4. Section 3 is worded in widest terms and leaves no one in doubt that the provisions of CPA shall be in addition and not in derogation of any other law for the time being in force. Thus even if any other Act provides for any remedy to litigant for redressal by that remedy a litigant can go to Dist. Forum if he is a consumer under CPA. That remedy exists in any other law which creates the right is no bar to District Forum assuming jurisdiction.
4. Perhaps it is section 22 of the SICA which is being invoked by the respondent. In order to appreciate the aforesaid contentions 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.
5. 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 the respondent are barred by section 22 of SICA. 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.
6. 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. 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 for which consumer is entitled for compensation for mental agony, harassment and loss.
7. Deficiency in service has been defined by section 2(1)(g) of the Consumer Protection Act, 1986 as under:-
Deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
8. Suit for recovery of money is altogether 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.
9. In suit for recovery the element of compensation is not included compensation arises from the allegation of deficiency in service or from unfair trade practice or restrictive trade practice or sale of defective goods.
10. The word compensation appearing in the Consumer Protection Act as in the words of Supreme Court in Ghaziabad Development Authority Vs. Balbir Singh (2004) 7 CLD 861 (SC) the word compensation has wide connotation and encompasses in its own multifarious factors. The observations of the Supreme Court 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.
11. 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 as well as in the context of definition of deficiency in service or 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.
12. 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. 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, remedy provided under the Consumer Protection Act is additional and still 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 after two weeks or so would get itself declared sick.
This itself amounts to unfair trade practice for which the wrong doer has to compensate the consumer adequately in addition to the amount to which the consumer is legally and rightfully entitled.
13. As regards the compensation over and above the actual loss suffered by the consumer, the Supreme Court has in Sovintorg (India) Ltd. Vs State Bank of India(1999) 6 SCC 406 6 99(SLT) 454 2(99) CPJ 4(SC) 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. All these factors or reliefs are not permissible under the suit for recovery of money.
Therefore the instant proceedings under the Consumer Protection Act are not at all covered within the definition of suit which in the words of Supreme Court is generic term.
14. Further consumer is not concerned with the reason the Company becomes sick or goes under liquidation. Rather such a situation arises due to the mismanagement of affairs of the Company by its functionaries and breach of any promise on this account amounts to deficiency in service as defined by Section 2(1)(g) which means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
15. Foregoing reasons persuade us to allow the appeal, set aside the impugned and send back the matters to the District Forum for deciding it afresh.
16. Parties shall appear before the District Forum on 09-05-2008 for the aforesaid purpose.
17. Both the appeals are disposed of in aforesaid terms.
18. A copy of the order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room.
19. Announced on 7th April, 2008.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj