KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACADU THIRUVANANTHAPURAM OP.243/1992 JUDGMENT DATED:12..08..2010 PRESENT JUSTICE SHRI.K.R.UDAYABHANU : PRESIDENT SHRI.S. CHANDRAMOHAN NAIR : MEMBER 1.T.C. Mathai, Ponnakuzhiyil House, Ramanchira, Muthoor.P.O, Thiruvalla, Kerala. 2.Mrs.Elizabeth Mathai, : COMPLAINANTS W/o T.C.Mathai, -do- -do- (Both R/by a Power of Attorney- Major.K.Mathews, 38, Slaippan Street, Madras-600 021.) Vs. 1.K.S.G.Vergis, Chairman & Managing Director, Owner’s Farm & Urban Rehabilitation- : OPPOSITE PARTIES Coy. Private Limited., T.C.32/1092, Near All Saints, Beach.P.O, Thiruvananthapuram-7. 2. Mrs.Ponnamma Vergis, -do- -do (By Adv:Sri.Avanakuzhy.S.Jayakumar) JUDGMENT JUSTICE SHRI.K.R. UDAYABHANU : PRESIDENT As per the order of the National Commission in First Appeal-297/02, the matter has been remitted back to the State Commission for deciding the limited issue with regard to the payment of the balance amount of Rs.4.25.lakhs by the respondents and interest if any payable thereon to the complainants and also the joint and several liabilities of the respondents. This Commission as per order dated:11/4/2008 had allowed the OP in part directing the opposite parties to pay a sum of Rs.4.25.lakhs and Rs.1.25 lakhs as evidenced by Ext.P12 cheque and Ext.P13 promissory note (remembered as Ext.P13 and P14) and directed that the complainants would be entitled to realize the amounts from the assets of the deceased 1st opposite party vested with the 2nd opposite party if any and also held that the complainants will be entitled for interest at 9% per annum from the date of the complaint on Rs.1.25.lakhs. The claim with respect to the other sum of Rs.4.25lakhs was negatived as the condition mentioned in Ext.P14 (remembered as Ext.P15) agreement that soon after the payment of the final instalment of Rs.4.25lakhs the property shall be re-transferred to the 1st opposite party has not been undertaken to be fulfilled. It was in the absence of such an undertaking or explanation with respect to the above clause in the agreement that the above claim was disallowed. The National Commission has noted that this Commission has upheld the case of the complainants that in fact a sum of Rs.9.75 lakhs was paid by the complainants to the 1st opposite party and further the obligation mentioned in Ext.P15 agreement is to re-transfer the land in question after receiving the final instalment of Rs.4.25 lakhs as mentioned in Ext.P15 agreement. Hence the re-conveyance of the land in question arises only after payment of the final instalment of Rs.4.25 lakhs. It was also pointed out that the State Commission has held that the entire venture was a hoax meant to deceive the contributors of AGRICITI launched by the opposite parties and hence the stipulation in the agreement that 31.24 acres of land were first conveyed under the scheme infavour of the complainants itself become suspect. The National Commission has also directed to examine as to the responsibility of the 2nd opposite party as the counsel for the 2nd opposite party/2nd respondent had submitted before the National Commission that the entire responsibility would be that of the 1st respondent and that the 1st respondent is no more and the 2nd respondent has not inherited any assets from him. 2. Subsequent to the remand, both sides appeared and the matter re-heard. It is evident from the order of the National Commission that the complainants have received a sum of Rs.4.25.lakhs deposited by the opposite parties in the criminal court where proceedings under Sec.138 of the Negotiable Instrument Act was pending and the finding of the criminal court was upheld and the special leave petition dismissed by the Supreme Court. 3. The OP has been filed by the complainant/husband and wife seeking for a direction to the opposite parties to refund Rs.9.5.lakhs with interest and also for an order of compensation for the mental agony etc on account of the deficiency in service on the part of the opposite parties. 4. It is the case of the complainants that in 1986 the 1st opposite party launched a scheme by name AGRICITI a project for austensibly for rehabilitation of professionals, NRIs, Jawans, Technocrats etc and promised a risk free return for the amount invested. It was publicised that 2 companies by name Owners Farm & Urban Rehabilitation Company Private Ltd (OFURCO and the AGRICITI people) and the other as Owners Agrotech Company Private Limited (Agrotech and the Heuristic people) have been formed for the above purpose. It was advertised that the above companies envisaged a full-fledged agricultural city and would generate huge profits to the owner contributors. The proposal was to have dry land development. The 1st opposite party was mentioned as the Chairman and Managing Director of both the companies. It was advertised that 1500 hectares of fertile land has already been acquired in Thirunalvely and Chidambaranath Districts of Tamilnadu, just 150 Kms away from Thiruvananthapuram. Opinions of many officials and experts from the Governments of Kerala, Tamilnadu and Central Government including the photographs of the Former President of India Mr.Gyani Zail Singh was published. At the time complainants were employed in Kuwait. The 1st opposite party visited Kuwait repeatedly and introduced the complainants to become owner contributors for the schemes. The complainants made the first payment on 15/3/1987 by cheque, a sum of Rs.62.500/-. Subsequently payments were made in cheques and cash. The brothers and sister in law of the complainants also joined the scheme but later withdrew entertaining doubts. 1st opposite party persuaded the complainant to take over the allotments of the brothers and sister in law of the complainant. The complainant agreed for the same. The complainants have paid a total amount of Rs.9.75 lakhs by cheques and in cash between 15/3/1987 and 25/2/1990. It is pointed out that as per letter dated:8/2/1990 the opposite parties have informed the balance amount to be paid is Rs.36,726.50. The same was also paid subsequently. The 1st opposite party had guaranteed ownership of land, infrastructure facilities and 5 years development for perennial crop cultivation against the payment of only Rs.10,000/- per acre. It was alsoprovided to execute sale deeds immediately on payment of 62.5% of the cost of land. It was directed that a development contract and general power of attorney should be executed infavour of OFURCO and Agrotech by every contributor before the execution of the document conveying land. 347.46% average annual growth was promised. 80 hybrid coconut seed lings per acre would be planted, it was offered. The complainants were not given the registered sale deeds as promised. Subsequently as per notice dated:1/6/1990 it was informed that for want of power connection the proposed schemes could not be materialized as promised earlier and those who wants to withdraw can do so. The complainants returned to India in 1990 on account of the Kuwait war. They had to leave every thing in Kuwait and escape. As per letter dated:12/11/1990 they requested for the refund of the entire amount. Two of the directors, Thomas.T.John, Deputy Managing Director and Thankamma.D.John have addressed the complainants admitting the payment of Rs.9.75 lakhs. They have mentioned that they themselves were cheated to the tune of Rs.25 lakhs. Later the opposite parties agreed to settle the matter and as there was no other alternative the complainants agreed to the terms of the opposite parties. A cheque for Rs.4.25 lakhs dated:5/1/1992, a promissory note for Rs.1.25 lakhs dated:11/1/1992 and an agreement dated:25/1/1992 agreeing to pay 4.25.lakhs in 3 monthly instalments commencing from 5/3/1992 was executed by the opposite parties. Subsequently the opposite parties resorting to evasive tactics issued a lawyer notice dated:12/2/1992 fabricating a false story of police torture and forcible execution of the above documents. The complainants approached the C.I of police Poonthura who declined to entertain the complaint. It is alleged that the police were in hand in glove with the opposite parties. The cheque presented was dishonoured. Hence CC.193/92 under section.138 of NI Act was filed in CJM Court, Thiruvalla. As a counterblast; the 1st opposite party filed a private complaint as CC.18/92 before the Additional JFCM, Thiruvananthapuram against the complainant and the C.I of police. Subsequently many news items appeared in Malayalam dailies regarding the schemes floated by the 1st opposite party that resulted in cheating of investors. Under improper legal advice the complainants had filed 2 complaints before the CDRF, Kollam in 1991. In the absence of relevant documents they had limited their claims respectively to Rs.99,500/- in each. The OPs were later transferred to CDRF, Pathanamthita and later withdrawn by the complainants for filing the present complaint. 5. The opposite parties have filed a joint version disputing the maintainability as the companies have not been impleaded. It is denied that the 1st opposite party had published advertisements as alleged. It is denied that the schemes were meant to cheat the contributors. It is alleged that the complainants were not ready to execute development contract and general power of attorney as per the terms. It is contended that the complainants have paid only Rs.62,500/-. It is alleged that the complainants were allotted land and they had promised to give the balance amount at the earliest. The opposite parties are not aware of the letter dated:3/2/1988. No such letter dated:8/2/1990 was sent by the opposite party. It is contended that the power of attorney holder of the complainant used to visit the AGRICITI and the concerned plots occasionally. It is alleged that the complainants themselves visited the property many times. It is alleged that the complainants are in receipt of registered sale deeds and that they have effected mutation and land tax is also paid by them. It is contended that on 3/2/1992 the complainants with the help of C.I of police, Poonthura kept the 1st opposite party under illegal custody and compelled the opposite parties to draw 7 cheques for a total amount of Rs.21,25,000/- and to sign on 3 stamped white papers in 6 letter heads of the companies and in 3 blank white papers. The above cheques and papers were taken away by the 1st complainant. After release from the custody of police the 1st opposite party had complained before the authorities and filed CC.18/92 which was subsequently re-numbered as CC.189/96 and the same is pending before the JFCM(III), Thiruvananthapuram. It is contended that the opposite parties are doing everything for the materialization of the project. It is also contended that the 1st opposite party was honoured with national awards for the concept and its successful implementation. Opposite parties have sought for the dismissal of the complaint. 6. PWs 1 & 2, RW1 examined and Exts.P1 to P24 marked. No evidence was adduced after remand. The exhibits were remembered after remand. 7. As already noted above the National Commission in the remand order has directed this Commission to decide the limited issue with regard to the payment of the balance amount of Rs.4.25.lakhs by the opposite parties and also the question of joint and several liabilities of the respondents. The National Commission has also observed that the State Commission has gone by surmises in assuming that pursuant to the agreement ie Ext.P15 by which the opposite parties had undertaken to pay the last instalment, the former had actually paid the amount of 4.25lakhs to the complainants but the land which was to be re-conveyed by the complainants had not been so re-conveyed. We find that the above observation of the National Commission is not correct. This commission has held in paragraphs 16 and 17 of the order dated:11/4/2008 which was the subject of appeal that the opposite parties are liable to pay Rs.4.25 lakhs to the complainants but as per recitals in Ext.P15 agreement an extent of 31.42 acres is mentioned as having transferred in the name of the complainants and soon after the repayment of the last instalment of the amount of Rs.4.25 lakhs the above property has to be re-conveyed to the opposite parties. As there was no undertaking to re-convey the land and also as the land was not reconveyed as mentioned in Ext.P15 the claim was negatived. There was no finding in the above order of this Commission that the opposite parties had actually paid the amount of Rs.4.25.lakhs covered by Ext.P15 to the complainant. Of course as pointed out by the National Commission, this Commission has held that the entire venture was a hoax meant to deceive the contributors of Agriciti. The National Commission has also noted that if so the stipulation in Ext.P15 agreement that 31.24 acres of land was first conveyed under the scheme in favour of the complainants itself become suspect. This commission was considerably carried away by the fact that the 1st complainant is a signatory to Ext.P15 agreement. Further in para 14 of the complaint the complainants have admitted the execution of Ext.P13 cheque, P14 promissory note and P15 agreement. In para 14 of the complaint it is mentioned that the complainants had no other effective alternative but to agree to the settlement proposed by the opposite parties. 8. At the time of hearing the power of attorney holder of the complainants has contended that the signature of the 1st complainant seen Ext.P14 is a fabrication. As pointed out by the counsel for the opposite parties the above contention cannot be approved in view of the specific pleading in para 14 of the complaint that the complainants had no other go but to agree to the settlement proposed by the opposite parties. All the same it is to be noted that had it been a case of conveyance of land in the year 1990 as contended in the version ie para 16 of the version that the above property is in the possession of the complainants and that the power of attorney holder of the complainant used to visit the plot occasionally and also along with their other relatives and that they have effected mutation and paid land tax and the land tax is still being paid by them the opposite parties could have produced some documentary evidence with respect to the above property allegedly conveyed to the complainants. In fact the identity of the above property has not been pleaded and no evidence adduced as to the identity/location/place of existence of the above property. We have already held on the basis of the evidence adduced and discussed in the judgment dated:11.4.2008 that the entire venture was a hoax. The contention of the power of attorney holder of the complainants that there was no such property owned by the opposite parties and transferred to the complainants stands proved in the light of the above circumstances. It has to be noted that it is only the opposite parties who can provide evidence with respect to the above 31.24. acres of land mentioned in Ext.P15 agreement. In the absence of any evidence on the part of the opposite parties with respect to the identity of the property and possession of the property by the complainants we find that the alleged sale deeds if any are only false documents managed to be executed if so executed. 9. We have already held in the above judgment that it has been established that the complainants have paid a total sum of Rs.9.75 lakhs. The above finding has not been disturbed by the National Commission. Hence the contention of the counsel for the opposite parties that Exts.P13, P14 and P15, the cheque, promissory note and agreement were documents got forcibly executed has no force in the light of the discussion in our judgment mentioned above. Further the clause for reconveyance of the property would not have been incorporated in ext.P15 agreement if the same was fabricated by the complainants. The contention of the counsel for the opposite parties that only the amount mentioned in Ext.P15 agreement is liable to be paid and that the same has been already paid vide the proceedings under sec.138 of the NI Act also cannot be upheld. It has to be noted that in Ext.P13 promissory note the recital mentions that the amount of Rs.1,25,000/- covered by the promissory note with interest at 12% is to be paid as part payment towards the total investment of 9.75.lakhs by the complainant in the Agriciti scheme. For the reasons mentioned in our judgment mentioned earlier. Ext.P13, P14 and P15 were executed consecutively in the month of January 1992 on 3 different dates and Ext.P15 the last one is executed on 25/1/1992. As per Ext.P15 the amount of Rs.4.25 lakhs is to be paid in 3 instalments ie Rs.1,41,667/- on 5/3/1992 and Rs.1,41,667/- on 5/4/1992 and Rs.1,41,666/- on 5/5/1992. Ext.P13 cheque is dated:5/1/1992 which evidently is payable on the above date and the promissory note is dated:11/1/1992. Hence it is evident that the amounts were agreed to be paid by the opposite parties in instalments and the last instalment is the one mentioned in Ext.P15 to be paid on 5/5/1992. The condition in the agreement, Ext.P15 is that after payment of the last instalment the property should be re-conveyed. Evidently the above was incorporated only as a face saving measure by the opposite parties or as a trap to evade payments. Hence we hold that the opposite parties are liable to pay Rs.4.5.lakhs covered by Ext.P15 apart from the payments covered by Ext.P13 cheque and P14 promissory note. The opposite parties would be liable to pay the above amount of Rs.4.25 lakhs to the complainants with interest at 9% per annum from the date of complaint. 10. This commission in para 16 of the above mentioned judgment has held that the liability of the 2nd opposite party is confined to Ext.P15 agreement as she is a signatory of Ext.P15. It has also to be noted that as per Ext.P21 the particulars submitted under Sec.303 (ii) of the Companies Act 1956 dated:15/5/1987 the 2nd opposite party is also one of the Directors of the impugned company. As noted above the 1st opposite party is no more. The 2nd opposite party is the legal heir of the 1st opposite party. Even otherwise the 2nd opposite party being one of the Directors of the Company and the 2nd opposite party also being a signatory to Ext.P15 agreement the 2nd opposite party will be jointly and severally liable for the sum of Rs.4.25.lakhs and interest due vide Ext.P15. Hence the complaint is allowed to the effect that the assets of the 1st opposite party as well as the 2nd opposite party personally also are liable and that the opposite parties are liable to pay 4.25.lakhs jointly and severally to the complainants with interest at 9% per annum from the date of complaint. The amounts are to be paid within 3 months from the date of receipt of this order failing which the complainants would be entitled for interest at 12% per annum from today, the date of this order. The complainants also would be entitled for a sum of Rs.7500/- towards costs. The complaint is allowed accordingly. JUSTICE K.R.UDAYABHANU: PRESIDENT S. CHANDRAMOHAN NAIR : MEMBER VL. APPENDIX COMPLAINANTS EXHIBITS Ext.P1 : Copy of POA dt:14.10.1992 jointly executed by the Complainants. Ext.P2 : Letter dt:3.2.1988 issued by the 1st OP to the 1st complainant. Ext.P3 : Annexure to Ext.P2 statement of accounts. & P4 Et.P5 : Letter dt:8.2.90 signed by 1st OP addressed to complainants. Ext.P6 : Copy of Printed notice in the name of OFURCO. Ext.P8 : Copy of Letter dt:12.11.1990 demanding repayment of the amount paid & an immediate payment of Rs.50,000/-. Ext.P9 : Copy of Printed advertisement of Agricity. Ext.P10 : -do- Et.P11 : -do- Ext.P12 :Copy of Ack from Thankamma John & her husband Thomas John, of Offurco admitting personal knowledgment of the payment of Rs.9,75,000/- by the complainants. Ext.P13 : Copy of Cheque dt:5.1.1992 for Rs.4,25,000/- jointly signed by the Ops drawn on the Pappanamcode Branch of SBT. Ext.P14 : Copy of Promisory Note dt:11.1.1992 for Rs.1,25,000/- signed by the 1st OP. Ext.P15 : Copy of Agreement/undertaking dt:25.1.1992. Ext.P16 & 17 : Newspaper Reports. Ext.P18 : Copy of Letter dt:11.6.1988 from OPs informing of possible enquiry by MRTP Commn. Ext.P19 : Is a copy of letter dt:2.3.1990 demanding POA from complainants. Ext.P20 : Original of Ext.P12 letter dt:18.11.1991 in her own handwriting. Ext.P21 : List of Directors Board of the Companies. Ext.P22 : Plaint in O.S.No.611/92. Ext.P23 : Reply affidavit of Ops in F.A.No.138/93. Ext.P24 : Postal Ack from KSG, 1st OP. COMPLAINANTS WITNESS PW1 : Major K.Mathews. PW2 : Thankamma T.John. OPPOSITE PARTIES WITNESS RW1 : K.S.G.Vergis. JUSTICE K.R.UDAYABHANU: PRESIDENT VL. S. CHANDRAMOHAN NAIR : MEMBER | 
