A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 1461/2006 against C.C 98/2006, Dist. Forum-II, Hyderabad.
Between:
Smt. N. Sarala Devi
W/o. N.P. Vital Sarma
Age: 63 years,
R/o. 6-3-596/A/15
Naveen Nagar Colony
Khairatabad
Hyderabad. *** Appellant/
Complainant
Vs.
1. M/s. Abheeshta Finance Company
Flat No. 117, Sovereign Shelters
Behind Ganga Jamuna Hotel
Lakdikapool, Hyderabad. *** O.P. No. 1
2. A.P.V. Subbaiah
S/o. Late Rangaiah
Age: 68 years,
R/o. D-81, Madhura Nagar
Hyderabad-500 038. *** O.P. No. 2.
3. M. Madan Mohan Rao
S/o. Narasimham
D.No. 12-2-823/A/30,
Santoshnagar
Mehidipatnam
Hyderabad-500 028. *** O.P. No. 3
4. M. Sreenivas
S/o. M. V. Sastry
R/o. 12-2-823/A/28
Geetha Apartments
Santoshnagar
Mehidipatnam
Hyderabad-500 028. *** O.P. No. 4
5. Capt. K. Kishan
S/o. Late Yellaiah
Plot No. 609
Naveen Nagar Colony
Banjara Hills, Hyderabad *** O.P. No. 5
6. Smt. K. Vijaya Lakshmi
W/o. K. Shiva Kumar
R/o. 2-2-647/49,
Central Excise Colony
Nallakunta
Hyderabad-500 013. *** O.P. No. 6.
7. N. Venkateswara Rao
S/o. Late N. Krishna Rao
R/o. 2-2-1137/4/A
New Nallakunta, Hyderabad. *** O.P. No. 7
8. P. S. Bhasker Rao
S/o. Chalapathi Rao
R/o. B-31, F-4
Vijayanagar Colony-28 *** O.P. No. 8.
Counsel for complainant: M/s. M. Ramgopal Reddy
Counsel for O.P3 & O.P5 M/s. G. Rajesham
Counsel for O.P.4 & O.P8 M/s. M. Kalyana Ramakrishna
Counsel for O.P6 & O.P7 M/s. A. Suryanarayana Murthy
QUORUM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
THURSDAY, THE FIFTH DAY OF FEBRUARY TWO THOUSAND AND NINE
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
Appellant is unsuccessful complainant.
2) The case of the complaint in brief is that Opposite Parties 2 to 8 are directors of Opposite Party No. 1 finance company. She deposited an amount of Rs. 50,000/- on 8.5.1998 with Opposite Party No. 1 under FDR wherein it agreed to pay the amount with interest . The opposite parties paid interest for certain periods and failed to pay interest from 7.5.2002, however renewed the FDR from time to time by making endorsement on the reverse of FDR. Thereupon she issued a legal notice on 24.8.2004 but the opposite parties did not pay the amount. Therefore she filed the complaint for refund of the amount covered under the FDR with interest together with compensation and costs.
3) Opposite Party No. 2 resisted the case. He alleged that he retired from Opposite Party No. 1 long back after due procedure. The complainant was not a consumer nor he was liable to render any service to her There was no privity of contract. Opposite Party No. 1 is a subsidiary unit of M/s. Abheeshta Finance Pvt. Ltd. One Sri M. V. Sastry father of Opposite Party No. 4 was controlling the affairs. The complainant is his friend. When the directors had demanded accounts from Sri M. V. Sastry and others there was no co-operation and as such he retired by his letter Dt. 29.4.1997. The Board passed a resolution appointing one Sri N. Krishna Rao in his place. He did not carry out any of the functions of the company. His retirement was accepted on 1.4.2000. The complainant never approached him. The FDR was expired by 8.5.2000. It is barred by limitation. Therefore, he prayed for dismissal of the complaint.
4) Opposite Party No. 3 filed counter adopted by Opposite Party No. 5 denying their liability. The affairs of the firm were mismanaged. They have no concern with the deeds committed by others. The claim was barred by limitation. The complaint was set up by Opposite Party No. 4 a close relative of complainant. Therefore he prayed for dismissal of the complaint with exemplary costs.
5) Opposite Party No. 4 resisted the case. He alleged that he is deaf and dumb. He never received any amount covered under the FDR. He was not responsible for day to day transaction of it. He was never involved in the business. He was a silent partner. He did not commit any deficiency in service, and therefore prayed for dismissal of the complaint.
6) Opposite Party No. 6 resisted the case. Apart from repeating the averments made by Opposite Party No. 2 in his counter, she stated that she also retired from the firm by 1.6.2002, and her name was deleted from the list of partners and also from the list of directors of the company. The complainant never demanded any amount during the life time of Sri M.V.S. Sastry. These cases were filed at the instance of Sri P.S. Bhaskar Rao. She was not liable for the acts done by others after her retirement. The claim was not genuine and barred by limitation. Therefore, she prayed for dismissal of the complaint.
7) Opposite Party No. 7 resisted the case. He stated that he was unnecessarily impleaded. He was neither a partner nor a director of the company. His father N. Krishna Rao died on 21.12.2001. The complaint was barred by limitation. There cannot be personal liability on the L.Rs of the deceased partner or director of the company and therefore prayed for dismissal of the complaint.
9) The complainant filed her affidavit evidence and got Exs. A1 to A5 marked, while the opposite parties filed their affidavit evidence and got Exs. B1 to B21 marked.
10) The Dist. Forum after considering the evidence placed on record opined that earlier I.A. No. 102/2005 to condone the delay of 142 days in filing the complaint was allowed on 16.2.2006 and it has no bearing on the opposite parties 2 to 8 to take the plea of limitation. The Dist. Forum however opined that FDR was issued for a period of three years and the maturity date was 7.5.2002. The complaint was filed on 21.1.2005, The FDR does not show that there was any renewal nor cause of action was continuing. Since the maturity date was 8.5.2000 and the complainant having alleged that maturity date was 7.5.2002 failed to establish that it is within the period of limitation, dismissed the complaint.
10) Aggrieved by the said decision, the complainant preferred this appeal contending that Dist. Forum went wrong in re-opening the question of limitation when once it was condoned. Even assuming that there was delay under the Consumer Protection Act the relief cannot be denied on technical objections. The Dist. Forum ought to have considered the evidence and allowed the complaint.
11) Before going into the question of limitation we may state that though the Dist. Forum did not consider either the case of the complainant or that of the opposite parties, disposed it of only on limitation, we are of the opinion that instead of remanding the matter to Dist. Forum, we ourselves can go into the evidence to determine the issue.
12) At the out set we may state that the case of the complainant is that Opposite Party No. 1 is a private limited company registered under the Companies Act, 1956 and Opposite Parties 2 to 8 are its directors. The company issued the FDR agreeing to pay the amount mentioned in it. In order to prove the said fact the complainant has filed the FDR. Ex. A5. The complainant did not allege as to whom among the directors she had paid the amount and obtained receipt
13) A perusal of the documents filed by the opposite parties would undoubtedly indicate that M/s. Abheeshta Finance Pvt. Ltd., a company registered under the Companies Act, 1956 was constituted on 15.9.1993 consisting of following Directors evidenced under Ex. B19.
1. Avula Peda Venkata Subbaiah, S/o. Late Rangaiah
2. Moduga Madan Mohan Rao, S/o. Late M.L. Narasimham
3. Mylavarapu Srinivas, S/o. M. V. Sastry
4. Kanuganti Kishan, S/o. Late K. Yellaiah
5. Kaparti Vijaya Laxmi, W/o. K. Shiva Kumar.
Later a partnership firm under the name and style of M/s. Abheeshta Finance Company was constituted on 12.5.1994 with the following partners evidenced under Ex. B9.
1. Avula Peda Venkata Subbaiah, S/o. Late Rangaiah
2. Moduga Madan Mohan Rao, S/o. Late M.L. Narasimham
3. Mylavarapu Srinivas, S/o. M. V. Sastry
4. Kanuganti Kishan, S/o. Late K. Yellaiah
5. Kaparti Vijaya Laxmi, W/o. K. Shiva Kumar.
6. N. Krishna Rao, S/o. Late Veeraswamy.
7. M/s. Abheeshta Finance Private Limited.
14) We may clarify herein that M/s. Abheeshta Finance Private Limited, a company incorporated under the Companies Act was made as a partner to the partnership firm having 40% share vide Ex. B7 Dt. 12.5.1994. Opposite Party No. 1 was incorporated with the same nomenclature under the provisions of Indian Companies Act, 1956 came into existence on 23.4.1999 on conversion of M/s. Abheeshta Finance (P) Ltd with the name ‘ M/s. Abheeshta Chit Funds (P) Ltd..
Clause 7 of the Partnership Deed reads as follows :
“The an account/s may be opened in any bank/s in the name of the partnership firm and such account/s shall be operated under the join signatures of Sri P.S. Bhaskar Rao who is hereby authorized to operate the account/s and any one of the partners namely Sri A.P.V. Subbaiah, Sri M. Madan Mohan Rao and Sri M. Srinivas.
15) The complainant did not implead M/s. Abheeshta Finance Pvt. Ltd., one of the partners of Opposite Party No. 1.
16) The complainant did not adduce any evidence as to who among the directors she paid the amount and obtained receipt filed by her. It is not known who on behalf of the company was issuing receipts. This enquiry was necessitated in view of the fact that none of the opposite parties admitted that they were responsible for the administration of the company or that they have anything to do with it. Importantly, the complainant did not file any document from the Registrar of Companies to show as to the names of the directors and other relevant data. No doubt there were interse disputes among the directors of the erstwhile company. Opposite Party No. 2 alleges that he severed connections with the erstwhile company and has nothing to do with the present company. evident from Ex. B14. In his own notice under Exs. B10 mentioned that he resigned as director and the same was accepted by the Board. Despite such an evidence being produced the complainants did not bother to file any contra evidence.
17) We may state herein that evidently the proceedings under the Consumer Protection Act are summary in nature. If contentious issues of foregone conclusions are raised the consumer fora may not be able to determine such complicated questions, necessarily it has to direct the parties to approach the Civil Court for adjudication.
18) With the scanty evidence placed by the complainant, not keeping at track as to the exact directors whom she can implead, filed a complaint as though directors are liable personally as to the amount payable to her . It is not in doubt that M/s. Abheeshta Finance Pvt. Ltd., is a partner and the liability of the partners as far as their share is concerned would arise. It was not made a party.
19) The question of liability of Opposite Party No. 2 vis-à-vis his resignation, and subsequent constitution of company cannot be gone into, in view of the fact that the complainant did not file the very essential document Incorporation of the Company and the Directors and others who were responsible for the administration of the company.
20) The contention of Opposite Party No. 6 is that she was neither a director nor was a partner. In Ex. B21 partnership deed admittedly she was shown as partner. More over the claim was made against a private limited company. As per the provisions of the Companies Act there cannot be any personal liability to be fastened against her. She also alleges that she retired from the company on 28.3.2002 which was accepted in the meeting of the Board held on 28.9.2002 evidenced by letter Dt. 17.9.2002 confirmed on 8.10.2002.
21) Opposite Party No. 7 is admittedly son of late N. Krishna Rao, one of the directors who died as long back as on 21.12.2001. He was impleaded as one of the LRs of the deceased director. Evidently he was not a director. Obviously, no decree could be passed against the erstwhile director. In fact, he died even before commencement of the very same chit fund business. It is not known who was taken as director in the place of N. Krishna Rao. His name does not find a place in the extract of particulars taken from the Registrar of Companies marked as Ex. B19.
22) In regard to Opposite Party No. 8 nothing was mentioned as to how he could be liable to pay the amount. Admittedly even he was not a director. Therefore, we are unable to mulct liability against him.
23) We may state herein that the complainant did not allege in the complaint as to how the complaint was within limitation when the FDR was issued on 8.5.1999 by M/s. Abheeshta Finance Company . Though it was alleged that R1 a company, the complainant was undoubtedly in a confusion as to the status of Opposite Party No. 1. There was no renewal or endorsement. On Ex. A5 itself the maturity date was shown as 8.5.2000. As rightly pointed out by the Dist. Forum, the complainant has alleged that there was renewal but it does not find a place on the FDR. The averment in the complaint “ The opposite parties have been renewing the period of deposits from time to time by making endorsement on the reverse of the receipts issued to the complainant.” This is patently wrong. Ex. A5 does not show any of these renewals. It was wrongly pleaded and without verification, the delay was condoned. The fact remains that there was no such endorsement and it was hopelessly barred by limitation.
24) In the light of contentions taken by the opposite parties and particularly in view of the fact that there was no endorsement acknowledging the liability and in the light of various contentions taken by the opposite parties that some of them have retired and others had no concern whatsoever and we are of the opinion that these questions could not be determined in summary proceedings under the Consumer Protection Act. It is not a straight case where the amounts being collected under the FDRs. Serious questions of fact and law including that of collusion etc. were raised, we believe that this is a fit case where the Civil Court could go into these questions and determine the matter. The Dist. Forum did not advert to any of the contentions raised by the appellants in this regard. We believe that these contentions could not be gone into with the scanty evidence placed by the complainant. For the FDR issued in the year 1999, she filed the complaints in 2004, beyond the period of limitation.
25) Having considered the entire evidence placed on record, we are of the opinion that the appeal is liable to be dismissed.
26) In the result the appeal is dismissed. However, in the circumstances of the case each party to bear its own costs.
PRESIDENT LADY MEMBER
Dt. 05. 02. 2009.
*pnr
“UP LOAD – O.K.”
