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D.P. Wadhwa, J. (President)

1. Considering the huge pendency of cases in Consumer Forums against Non-Banking Financial Companies (NBFCs) by the depositors all over the country, it is an unfortunate story of loot by NBFCs and then these very NBFCs taking shelter in the safe heaven of schemes framed by the Company Law Board in any of the regions of the country much to the chagrin of the poor depositors.

2. These revisions by the petitioner, a Non-Banking Financial Company has the usual defence of scheme framed by Company Law Board, Western Region when most of the depositors had no notice of hearing before the Company Law Board. That reflects the unjustness of the case for a depositor living in far corner of the country and when he is in a dark even to enforce the payment under the scheme. For one he is a depositor who was not a party to the proceedings before the Company Law Board and is not aware of the order and then for breach of the scheme he has to approach the Reserve Bank of India to take cognizance of the offense committed by the NBFC and then the usual endless proceedings before a Criminal Court as he has no control over the criminal proceedings, if any, instituted by the RBI. It was submitted before us that the scheme framed by the petitioner covered all the depositors and for non-compliance of the scheme about 8000 complaints were made to the RBI but not a single complaint had been filed against the petitioner in the Criminal Court.

3. A question of utmost importance has been raised in these revisions and that is the jurisdiction of Consumer Forum vis-a-vis that of the Company Law Board, latter exercising jurisdiction under Section 45QA of the Reserve Bank of India Act, 1934 though constituted under Section 10E of the Companies Act, 1956.

4. In this batch of 11 revisions there are respondents- complainants who had made deposits with the petitioner, a Non-Banking Finance Company (NBFC) which deposits were not repaid to the complainants as per the terms and conditions of the deposits. These depositors-complainants filed complaints before the different District Forums under the Consumer Protection Act, 1986 (for short the Consumer Act). Complaints were allowed by the District Forums and the appeals filed by the petitioner-NBFC were dismissed by the respective State Commissions. Now these petitions under clause (b) of Section 21 of the Consumer Protection Act, 1986.

5. It is contended before us by the petitioner that it being NBFC, functions under the guidelines of Reserve Bank of India (RBI for short) within the purview of the Reserve Bank of India Act, 1934. Petitioner, it is stated, had received deposits from various depositors from all over the country to the tune of over Rs. 350.00 crores. Petitioner has its registered office at Mumbai and branches at various places in the country from where deposits were taken from the depositors. It is contended that a scheme was framed on 16.4.99 by Company Law Board ( western branch) which was subsequently modified on 22.12.2000. That scheme was in the interest of the depositors including the respondents-complainants herein. Complaints in the present case were filed in between the period from 1999 to 2001 before different Consumer Forums. It is not contended that District Forum had no territorial jurisdiction to take cognizance of the complaints filed before them. Strong reliance has been placed by the petitioner on a order dated 9.11.00 rendered earlier by this Commission in the case of M/s. Allianz Capital & Management Services Ltd. vs. N.P. Grover & Ors. [I (2000) CPJ (NC) 617] where this Commission took the following view:

14. The question now which arises is : whether Company Law Board was authorized to frame scheme and if such scheme is permissible under Section 45QA and binding on the complainants as the scheme is now the main plank of defense of the petitioner- an NBFC.

15. Section 45QA when analyzed would mean under sub section (1) every deposit accepted by a non-banking financial company, unless renewed, shall be repaid in accordance with the terms and condition of such deposit. This is the mandate of the law. Under sub section (2) when NBFC has failed to repay a deposit or part thereof in accordance with the terms and conditions of such deposit Company Law Board is to be moved by an application filed by the depositor or Company Law Board can itself of its own motion take action. However, Company Law Board has to be satisfied that an order is necessary to safeguard the interest of the Company, the depositors or in the public interest. Thereafter NBFC has to make payment of such deposit or part thereof forthwith or within such time or subject to such condition as may be specified in the order. It is not that NBFC has to approach the Company Law Board. Sub-section (2) does not talk of any scheme which would apply to all the depositors. Before making any order regarding repayment of the deposit made by the depositor Company Law Board has to give reasonable opportunity of being heard to the NBFC and to other persons interested in the matter. It would be thus seen that Company Law Board may pass an order suo moto and even without any application having been filed by the depositor. Section 45QA does not empower the Company Law Board to pass an order effecting all the depositors without granting them opportunity of hearing as that is the requirement of law and Company Law Board has to grant reasonable opportunity of being heard not only to NBFC but also to 'other persons interested in the matter' which would mean all other depositors who had not made any application to the Company Law Board.