w w w . L a w y e r S e r v i c e s . i n

Devanand Agarwala v/s Morepen Laboratories Ltd. & Another

    First Appeal No. A/1260/2016

    Decided On, 07 June 2018

    At, West Bengal State Consumer Disputes Redressal Commission Kolkata

    By, MEMBER

    For the Appellant: Jayanta Roy, Tapasi Roy, Advocates. For the Respondents: Tarun Chakraborty, Advocate.

Judgment Text

Shyamal Gupta, Member

Aggrieved over dismissal of the complaint case by the Ld. District Forum, Kolkata, Unit-I (North) this Appeal is moved by the Complainant u/s 15 of the Consumer Protection Act, 1986.

In short, case of the Complainant before the Ld. District Forum was that, he invested some money with the OP No. 1 in the year 2001 for a period of 12 months. Prior to the maturity date, Complainant deposited the original FDR Certificate to the office of the OP No. 2. As the Complainant did not receive the maturity proceeds, the complaint was filed.

OP No. 1, by filing its WV, submitted that the complaint case is barred by limitation. It is further stated that over non-receipt of maturity proceeds, some depositors moved the Company Law Board, New Delhi. Upon receipt of various applications, the CLB suo motu invoked powers as enshrined u/s 58A(9) of the Act and passed an order on 19-08-2003 for reschedulement of the payment after hearing all the concerned parties and upon considering the submissions made on behalf of the depositors and on behalf of the company on the term as detailed out in the said order. It is stated that substantive rights of the parties are subject to the Company Law Board’s power to modify the same and once the Company Law Board exercise the said power, no statutory Tribunal can seek to enforce the original contract. It is further stated that, once the power u/s 58 A (9) stands exercised, the original contract stands merged to the order of Company Law Board and thereafter, by virtue of Sec. 58 A (10), read with Sec. 621 and 622, the revised obligations flowing out of Sec. 58 A (9), the said order would be enforceable only in the manner set out u/s 621, read with Sec. 622. Since, in the instant case, the matter was covered by the order of the Company Law Board, thus the depositor could neither invoke the jurisdiction of Ld. District Forum nor seek enforcement of the terms of the original contract. Therefore, according to the OP, the present complaint case was not maintainable. It is contended that, in view or the Order of the Company Law Board dated 19-08-2003, the maturity date as mentioned in the FDR Certificate was no longer the maturity date. Thus, non-payment of the deposits on such date did not create any liability for the OP. It is the further contention of the OP that, the order of Company Law Board is binding on all depositors, whether any application had been filed before it or not. Further, in the light of said order, as passed by the Company Law Board, jurisdiction of other Courts to entertain matters pertaining to deposits has been barred. Thus, the Ld. District Forum lacked jurisdiction to decide or entertain the complaint case. The OP further stated that owing to severe financial crunch, the OP approached the Hon’ble Himachal Pradesh High Court at Shimla with a scheme of arrangement and compromise which was approved by the Hon’ble High Court vide its order dated 04-08-2009. Pursuant to said order of the Hon’ble High Court, the Central Government filed an Appeal which was heard and admitted by the Hon’ble Court. While admitting the Appeal, the Hon’ble Court directed that the OP may proceed to implement the said scheme as approved by the Hon’ble Court vide its order dated 04-08-2009, but such implementation shall be subject to the final decision in the main Appeal. It is stated that, as per said scheme, necessary shares has been allotted to the Complainant to the value of 75% of the FD amount.

Decision with reasons

We have heard the Ld. Advocates for the parties and perused the documents on record.

It is firstly argued by the Ld. Advocate of the Respondent that the instant complaint case was hopelessly barred by limitation.

It is a fact that the FDR matured in the year 2002; whereas the complaint case was filed in the year 2009. However, it appears that the cheque issued by the Respondent being the maturity proceeds of the subject FDR got bounced and later on the Respondent communicated to the Appellant that pursuant to the order passed by the Company Law Board on 19-08-2003, the payment scheduled was stretched by a further period of 4 years. Accordingly, as per revised payment schedule, the Respondent was supposed to make full and final payment of the maturity proceeds by the year 2007. Since the Respondent did not keep its word, the Appellant filed the case in the year 2009. Thus, in our considered opinion, the instant complaint case was not hit by limitation.

The Respondent Company further challenged the jurisdiction of the Consumer Fora to entertain the subject complaint in view of the orders passed by the Company Law Board and Hon’ble Himachal Pradesh High Court at Shimla. In this regard, our findings are appended below.

On careful consideration of the relevant legal position, it appears to us that the fact of exclusion of jurisdiction of a Tribunal cannot be readily inferred; it should be explicit. In a given case, the jurisdiction is also excluded by necessary implication if there are clear unambiguous indicia or determining parameters in the statute governing the establishment, duties, functions and powers of the Tribunal.

In Firm Seth Radha Kishan (deceased) represented by Hari Kishan v. The Administrator, Municipal Committee, Ludhiana, reported in 1963 AIR 1547, the Hon’ble Supreme Court observed thus:

"...... A statute, therefore, expressly or by necessary implication, can bar the jurisdiction of civil Courts in respect of a particular matter. The mere conferment of special jurisdiction on a Tribunal in respect of the said matter does not in itself exclude the jurisdiction of civil Courts. The statute may specifically provide for ousting the jurisdiction of civil Courts; even if there was no such specific exclusion, if it creates a liability not existing before and gives a special and particular remedy for the aggrieved party, the remedy provided by it must be followed. The same principle would apply if the statute had provided for the particular Forum in which the remedy could be had. Even in such cases, the civil Court's jurisdiction is not completely ousted."

In Firm & Illuri Subbayya Chetty & Sons v. The State Of Andhra Pradesh, 1964 AIR 322 a Constitution Bench of the Hon’ble Supreme Court laid down as under:

"The exclusion of the jurisdiction to entertain civil causes will not be assumed unless relevant statute contains an express provision to that effect or lead to necessary and inevitable implication of such nature. The mere fact that a special statute provides for certain remedies may not by itself necessary exclude the jurisdiction of the civil Court to deal a case brought before it in respect of the matters covered by the statute."

It is noteworthy here that the Companies Act, 1956 (1956 Act) does not specifically exclude the jurisdiction of the Consumer Fora to give redressal in the event of deficiency in service on the part of a Company. In other words, the Respondent is amenable to the jurisdiction of the Consumer Fora under the Consumer Protection Act, 1986 (1986 Act) whenever any instance of deficiency in service takes place.

If we evaluate the true implications of Sec. 3 of the 1986 Act in the light of the observations of Hon’ble Supreme Court enunciated through its catena of decisions, e.g., Lucknow Development Authority vs M.K. Gupta, 1994 SCC (1) 243, it would clearly show that the remedy of approaching the CLB constituted under Section 10-E of the 1956 Act under the provisions of Section 45-QA(2) of the RBI Act is in addition to the remedy available under the 1986 Act. A depositor or depositors may approach either the Consumer Forum or the CLB under Section 45-QA(2) read with sub-section (9) of Section 58-A of the 1956 Act given that there is no apparent 'exclusion of jurisdiction' of Consumer Fora from entertaining dispute at the behest of a depositor.

The provisions of 1986 Act shall have to be interpreted as broadly as possible to enlarge the jurisdiction of Consumer Fora under the 1986 Act and not to divest them of jurisdiction. This view is supported by the judgment of the Hon’ble Supreme Court in Lucknow Development Authority case (supra) wherein their Lordships held as under:

"The provisions of the Act, thus, have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit oriented Legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to attempted objective of the enactment."

Sec. 58A(9) of the 1956 Act runs as follows:

'Where a company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the Company Law Board may, if it is satisfied, either on its own motion or on the application of the depositor, that it is necessary so to do to safeguard the interests of the company, the depositors or in the public interest, direct, by order, the company to make repayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the order: Provided that the Company Law Board may, before making any order under this sub- section, give a reasonable opportunity of being heard to the company and the other persons interested in the matter'.

Sub-section (5) of Section 10-E of the 1956 Act lays down that the CLB shall in the exercise of its powers and the discharge of its functions under the 1956 Act or any other law be guided by the principles of natural justice. The proviso to sub-section (9) of Section 58-A categorically lays down that CLB may, before making any order under subsection (9), give a reasonable opportunity of being heard to the company and the other persons interested in the matter. Likewise, the proviso to sub-section (2) of Section 45-QA mandates that CLB may, before making any order under subsection (2), give an opportunity of being heard to the company and the other persons interested in the matter. Elaborate reasoning is not required to infer that 'the other persons interested in the matter' appearing in the proviso to sub-section (9) of Section 58-A of the 1956 Act and the proviso to sub-section (2) of Section 45-QA of the RBI Act also include the depositors and other creditors of the company. It also does not require any authority to say that any provision which adumbrates the principles of natural justice should be interpreted as a mandatory provision. Though the two provisions use the word 'may', the same should be interpreted as mandatory. Obligation was on the part of the CLB to order notices to all the depositors in a matter like this.

In this case, the Respondent has not placed on record any documentary proof to show that the Appellant was issued any notice in respect of the petition filed before the CLB. The conduct of the Respondent raises severe doubt regarding bona fide attempts of the Respondent to effect impeccable service.

Therefore, the Ld. Advocate for the Appellant is justified in contending that insofar as the Appellant in this case was concerned, the order passed by the CLB was a nullity and it had no binding effect whatsoever on the proceedings before the District Forum under the 1986 Act. Further, as per the legal position, the proceedings before appropriate Bench of CLB should be initiated by the aggrieved party at the place of company's registered office. This is cumbersome procedure. All the depositors could not be expected to appear before the CLB, New Delhi, especially when no notice was validly served on all the depositors, including the Appellant. In the opinion of the Hon’ble Supreme Court, when ordinary remedy provided under the alternative law is cumbersome, the consumer cannot be deprived of the remedy before the Consumer Fora.

In the light of our above findings, we derive at the following decisions:

First, the provisions of Sections 45-QA of the RBI Act and Section 58-A(9) of the 1956 Act, do not either expressly or impliedly bar the jurisdiction of the Forums constituted under the 1986 Act, from entertaining a consumer dispute case at the instance of the depositor claiming repayment of the deposit from a company. In view of Section 3 of the 1986 Act, remedy under the said Act is an additional remedy and the same cannot be taken away either by the RBI Act or by the 1956 Act. Second, the order of the Company Law Board, New Delhi cannot be construed as either taking away the right of the Appellant to approach the Consumer Forum or nullifying the order passed by the District Forum/State Commission.

Now, coming to the order passed by the Hon’ble Himachal Pradesh High Court at Shimla dated 04-08-2009, it appears that the Division Bench of the said Court vide its order dated 14-09-2010 set aside the aforesaid order of the Single Bench and directed it to decide the petition afresh. T

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hereafter, the Respondent No. 1 though preferred an Appeal before the Hon’ble Supreme Court, the Hon’ble Apex Court, vide its order dated 14-01-2011 disposed of the said Appeal without interfering with the order of the Division Bench of Hon’ble Himachal Pradesh High Court dated 14-09-2010. Thus, we find that, there was no legal impediment for the Appellant to move the Ld. District Forum to get back the maturity sum of subject FDR. The Ld. District Forum, seemingly, faltered in appreciating the true purport of the subject dispute and thus came to an erroneous decision which is not tenable in law. Admittedly, the Respondent No. 1 has not discharged its legal obligation which clearly indicates its gross deficiency in service. The Respondent No. 1 is legally bound to pay the maturity proceeds of subject FDR. Accordingly, the Appeal succeeds. Hence, ORDERED The Appeal stands allowed against the Respondent No. 1 with a cost of Rs. 2,000/-. The Respondent No. 1 shall pay the maturity proceeds of the subject FDR along with simple interest @ 9% p.a. over the maturity sum from the date of filing of the complaint case before the Ld. District Forum till full and final payment is made. In case the Respondent No. 1 fails/neglects to ensure strict compliance of this order, Appellant shall be at liberty to execute the order in accordance with law. The impugned order is hereby set aside.