KERALA STATE ONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD THIRUVANANTHAPURAM APPEAL NOS.789/06, 790/06 & 791/06 COMMON JUDGMENT DATED 11.12.09 PRESENT SMT.VALSALA SARANGADHARAN -- MEMBER SRI.M.V.VISWANATHAN -- JUDICIAL MEMBER APPEAL NO.789/06 1. C.H.Mahabaleshwara Sharma, Chalathadka House,P.O,Kuntikana, Kasargod. 2. C.H.Keshava Prasad, -- APPELLANTS Chalathadka House, P.O.Kuntikana, Kasargod. (By Adv.G.S.Kalkura) Vs. 1. V.Sumithra, Retd.Teacher, W/0 M.Sathyanarayana, R/at Swamy Kripa, Perdala, Badiadka, Kasargod. 2. Sri.M.M.Infotech Ltd., Regd.Office No.56, Shardata Plaza, IX Main, 3rd Block, Jayanagar, Bangalore. 3. Udayasankar.M. -- RESPONDENTS No.13, KEB Layout, Vivekananda Nagar, BSK 3rd Stage, Bangalore-85. 4. Mahabale Bhat.M. No.435, 1st G.Cross, 3rd B.Main, Hosakerehalli, BSK 3rd stage, Bangalore. 5. K.Shivarama Bhat, No.289, 1st Main 6th Cross, Hanumantha Nagar, Bangalore 19. 6. M.V.Rajesh, Lalithya, Puthur.P.O, DK 574201. (R1 by Adv.Narayan.R) APPEAL 790/06 1. C.H.Mahabaleshwara Sharma, Chalathadka House,P.O,Kuntikana, Kasargod. 2. C.H.Keshava Prasad, -- APPELLANTS Chalathadka House, P.O.Kuntikana, Kasargod. (By Adv.G.S.Kalkura Vs. 1. D.Radhamoni, Teacher, D/0 M.Sathyanarayana, A.U.P.S.Manya, Perdala.P.O, Kasargode. 2. Sri.M.M.Infotech Ltd., Regd.Office No.56,Shardala Plaza, 1Xth Main, 3rd Block, Yayanagar, Bangalore. 3. Udayasankar.M. -- RESPONDENTS No.13, KEB Layout, Vivekananda Nagar, BSK 3rd Stage, Bangalore-85. 4. Mahabale Bhat.M. No.435, 1st G.Cross, 3rd B.Main, Hosakerehalli, BSK 3rd stage, Bangalore. 5. K.Shivarama Bhat, No.289, 1st Main 6th Cross, Hanumantha Nagar, Bangalore 19. 6. M.V.Rajesh, Lalithya, Puthur.P.O, DK 574201. (R1 by Adv. George Cheriyan Karippaparambil) APPEAL NO.791/06 1. C.H.Mahabaleshwara Sharma, Chalathadka House,P.O,Kuntikana, Kasargod. 2. C.H.Keshava Prasad, -- APPELLANTS Chalathadka House, P.O.Kuntikana, Kasargod. (By Adv.G.S.Kalkura Vs. 1. M.Sathyanarayana High School Road,PO Perdala Badiadka, Kasargode. 2. Sri.M.M.Infotech Ltd., Regd.Office No.56,Shardala Plaza, 1Xth Main, 3rd Block, Yayanagar, Bangalore. 3. Udayasankar.M. -- RESPONDENTS No.13, KEB Layout, Vivekananda Nagar, BSK 3rd Stage, Bangalore-85. 4. Mahabale Bhat.M. No.435, 1st G.Cross, 3rd B.Main, Hosakerehalli, BSK 3rd stage, Bangalore. 5. K.Shivarama Bhat, No.289, 1st Main 6th Cross, Hanumantha Nagar, Bangalore 19. 6. M.V.Rajesh, Lalithya, Puthur.P.O, DK 574201. (R1 by Adv.George Cheriyan Karippaparambil) COMMON JUDGMENT SRI.M.V.VISWANATHAN,JUDICIAL MEMBER The above 3 appeals are preferred from the common order dated 21st June 2006 passed by CDRF, Kasaragod in CC Nos.146/05,147/05 & 148/05. The appellants in these appeals were the opposite parties 3 and 4 in the aforesaid consumer complaints. Those complaints were preferred against opposite parties 1 to 8 alleging deficiency in service on the part of the opposite parties on account of their failure to refund the deposited amounts with the assured interest accrued there on. The complainants in those complaints deposited amounts with the first opposite party Shri. M.M.Infotech Ltd; formerly Shri. M.M.Fincop Ltd. The opposite parties therein are styled as Directors and agents of the first opposite party Sri. M.M.Infotech Ltd. The first respondent in these appeals was the complainant and the 2nd respondent was the first opposite party Sri.M.M.Infotech Ltd. Respondents 3 to 6 are the opposite parties 5 to 8 in the said consumer complaints. The 2nd opposite party C.H.Gopalakrishna Bhat is not a party in these appeals. It is averred in the condonation petition which was filed along with these appeals that the second opposite party died on 20.10.06 and that the appellants (opposite parties 3 and 4) are the sons of the second opposite party C.H.Gopalakrishna Bhat. The above appeals were filed on 6.11.06. So at the time of institution of these appeals, the second opposite party was no more and his legal representatives are the appellants (opposite parties 3 and 4). But no petition is seen filed to get the appellants impleaded as the legal representatives of the deceased second opposite party C.H.Gopalakrishna Bhat. 2. Before the forum below, the opposite parties 2 to 4 entered appearance and filed joint written version denying the alleged deficiency in service. They contended that they are not the Directors and Agents of the first opposite party and that they did not approach the complaints to get the amounts deposited; that they did not misuse the amount collected from the complainants as fixed deposits and that there was no office of the second opposite party at Badialuka; that the complainant is bad for mis-joinder of opposite parties 2 to 4; that there is no cause of action against the opposite parties 2 to 4 and the CDRF, Kasaragod has no jurisdiction to entertain the complaints. Thus, the opposite parties 2 to 4 prayed for dismissal of the above complaints. 3. A perusal of the proceeding papers in the aforesaid complaints would show that the notices issued to opposite parties 1 and 5 to 8 were returned un delivered and that the forum below treated or considered the service of notice on opposite parties 1 and 5 to 8 as sufficient. Thereby the opposite parties 1 and 5 to 8 were declared ex-parte. Before the forum below, the complainant in CC 147/05 was examined as PW1. The above three complainants were tried jointly and evidence was recorded in CC 147/05 as the leading case. Exts. A1 to A16 documents were produced and marked on the side of the complainants. No oral evidence was adduced from the side of the opposite parties 2 to 4. Exts.B1 to B9 documents were produced and marked on the side of the opposite parties 2 to 4. The opposite parties 1 and 5 to 8 remained ex-parte. 4. The following points were framed by the forum below for determination:- 1. Whether this forum has jurisdiction to try the complaints and whether there is cause of action for filing the complaints? 2. Whether opposite parties 2 to 4 are the mis-joinder of parties? 3. Whether there is deficiency in service on the part of the opposite parties in not refunding the deposit amounts to the complainants? 4. Whether the complainants are entitled to compensation and if so, the quantum thereof? 5. On an appreciation of the facts, circumstance and the evidence on record, the forum below answered the aforesaid points in favour of the complaints and thereby passed the impugned common order directing the opposite parties to pay the amounts deposited by the complainants with interest at the rate of 18% per annum from the respective dates till 13.9.05 and there after future interest at the rate of 6% per annum. The opposite parties are also made liable to pay compensation of Rs.5000/- each to the complaints with costs of Rs.2000/- each. Aggrieved by the aforesaid order dated 21st June 2006 passed by CDRF, Kasaragod in CC No.146/05, 147/05 & 148/05, the present appeals are preferred by the opposite parties 3 and 4 therein. 6. The First Appeals 789/05 is preferred from the order in CC 146/05. First Appeal 790/06 is preferred from the order in CC 148/05 and First Appeal 791/06 is preferred from the order in CC 147/05. When these appeals were taken up for final hearing, there was no representation for respondents 2 to 6 (opposite parties 1 and 5 to 8). We heard the learned counsel for the appellants (opposite parties 3 and 4) and the first respondent (complainant) in these appeals. The respondents 2 to 6 (opposite parties 1 and 5 to 8) remained absent through out the proceedings. Notices issued to the respondents 2 to 6 were returned un-served with the postal endorsement addressee left. So, the notices on respondents 2 to 6 were effected by substitute service by paper publication. It was published in the Kannada daily by name Hosadiganatha Cannada Daily. Even thereafter, there was no representation for respondents 2 to 6. 7. The learned counsel for the appellants argued for the position that the opposite parties 2 to 4 in the aforesaid consumer complaints had no connection with the first opposite party Shri.M.M.Infotech Ltd; and that the opposite parties 2 to 4 were not the Directors or Agents of the first opposite party, Shri.M.M.Infotech Ltd., and that there is nothing on record to support the case of the complainants that the opposite parties 2 to 4 collected the deposit amounts from the complainants or they misused the amount collected from the complainants. He much relied on B2 and B3 status report issued by the register of companies with respect to Shri.M.M.Fincop Ltd. It is further submitted that the forum below failed to consider the documentary evidence adduced from the side of the opposite parties 2 to 4. It is also submitted that the forum below did not afford sufficient opportunity to opposite parties 2 to 4 to adduce further evidence in support of their pleadings. It is vehemently argued by the counsel for the appellants that the forum below had no territorial jurisdiction to entertain the complaint in those consumer complaints and that the forum below has gone wrong in making the Directors of the first opposite party/company personally liable. He also relied on the decision rendered by the Hon.High Court of Kerala reported in 2002 (2) KLT 342-1983 KLT 1024 and that of the Hon.National Commission reported in 2008 CPJ 472 (CP) (NCDRC) II (2007) CPJ 175 (NC) and 1 (200) CPJ 55 (NC). Thus, the appellants prayed for setting aside the impugned order passed against the opposite parties 2 to 4 in those consumer complaints. On the other hand, the learned counsel for the first respondent (complainant) supported the impugned common order passed by the forum below and prayed for dismissal of the present appeals. 8. The points that arise for consideration are:- 1. Whether the opposite parties 2 to 4 in the consumer complaints 146/05, 147/05 & 148/05 were the Directors or Agents of the first opposite party Shri. M .M. Infotech Ltd (formerly Shri. MM.Fincop Ltd) at any point of time? 2. Whether the complainants in those consumers complaints have succeeded in establishing their case that the opposite parties approached them at their residence in Kasaragod and that the complainants deposited the amounts covered by A1 to A10 cumulative deposit receipts at the office of the first opposite party Sri.M.M.Infotech at its office in Kasaragod or at the office of the second opposite party C.H.Gopalakrishna Bhat? 3. Whether the forum below can be justified in fastening liability on opposite parties 2 to 8 by treating them as the Directors and agents of the first opposite party Sri.M.M.Infotech Ltd? 4. Is there any legally sustainable ground to interfere with the impugned common order dated 21.6.06 passed by CDRF, Kasaragod in CC.Nos. 146/05, 147/05 & 148/05? 9. POINTS 1 TO 4:- The case of the complainants in the CC 146/05, 147/05 & CC 148/05 is that they deposited amounts with the first opposite party, Shri.M.M.Infotech Ltd; on various dates and evidencing the aforesaid deposit the opposite parties issued cumulative deposit receipts. The complainants have also got a case that the opposite parties approached the complainants at their residence in Kasaragod and they effected the deposits at the office of the first opposite party Sri. M.M.Infotech Ltd; at Kasaragod. In the complaint it is not specified the place at which the complainants deposited the amounts. Exts.A1 to A10 are the cumulative deposit receipts evidencing the deposit made by the complainants. Before the forum below those cumulative deposit receipts were marked as A1 to A10. But the Lower Court Records forwarded to this Commission do not contain A1 to A10 receipts. Exts.A11 and A12 are the returned lawyer notices issued by the complainants to the first opposite party Sri.M.M.Infotech Ltd., Bangalore. A long with the aforesaid lawyer notices the complainants had also forwarded photocopies of the aforesaid cumulative deposit receipts. The aforesaid cumulative deposit receipts were issued from the registered office of the first opposite party Sri.M.M.Infotech Ltd; Bangalore. Those receipts were signed by the authorized signatory. It would also show that those cumulative deposit receipts were issued for the amounts deposited with the first opposite party. In those cumulative deposit receipts there is no mention of any Branch Office or Regional Office of the first opposite party at Kasaragod. There is nothing indicative of the fact that the opposite parties 2 to 4 signed the aforesaid cumulative deposit receipts or there was any endorsement made by them. A1 to A10 cumulative deposit receipts would not give any indication regarding issuance of those receipts at the instance or under the direction of opposite parties 2 to 4. On the other hand, those cumulative deposit receipts would only show that those receipts were issued by the authorized signatory of Sri.M.M.Infotech Ltd; registered office, Gandhi Bazaar, Main Road, Bangalore. There is nothing to infer that those receipts were issued by the opposite parties 2 to 4 or from the office of the first opposite party at Kasaragod or from the office of the second opposite party, C.H.Gopalakrishna Bhat at Kasaragod. 10. The opposite parties 2 to 4 in their written version categorically contended that they never approached the complainants for getting the fixed deposits from the complainants. It is also contended that the opposite parties 2 to 4 were not having any sort of connection with the first opposite party Shri. M. M. Infotech Ltd. They also denied the case of the complainants that they are the Directors or Agents of first opposite party Shri.M.M.Infotech Ltd. It is also denied by them that the second opposite party was having any office at Kasaragod and that the complainants deposited amount at the office of the second opposite party in Kasaragod. But the complainants have not adduced any acceptable evidence to controvert the case of the opposite parties 2 to 4. In other words, the complainants have not adduced any acceptable evidence to support their case that they deposited the amounts covered by A1 to A10 cumulative deposit receipts at the office of the first opposite party Sri.M.M.Infotech Ltd. in Kasaragod or at the office of the second opposite party C.H.Gopalakrishna Bhat in Kasaragod. 11. The complainant in CC 147/05 was examined before the forum below as PW1. He deposed that A1 to A10 cumulative deposit receipts were having the endorsement made by opposite party No.4. But there is nothing on record to show that 4th opposie party made endorsement in A1 to A10 receipts. PW1 could not point out the aforesaid endorsement of 4th opposite party in A1 to A10 receipts. PW1 has also deposed that the office of first opposite party was functioning at Krishna building, Main Circle, Badialukka in the year 2001. But, no evidence is forthcoming from the side of the complainants to support the case of PW1 that the first opposite party was having an office in Badialukka at Kasaragod. PW1 himself has admitted the fact that he has not produced any document to show that during the year 2001 the first opposite party was having an office at Badialukka in Kasaragod.PW1 has also admitted the fact that there is no mention in the complaint that A1 to A10 were issued from Kasaragod with the endorsement of opposite parties 2 to 4. Had there been any such office of the first opposite party Sri.M.M.Infotech functioning in Kasaragod, then that would have been borne out by A1 to A10 receipts. It is to be noted that the first opposite party Sri.M.M.Infotech is a registered Company. The details of the office of the first opposite party limited company is incorporated in the register of companies. There can be no doubt about the fact that if there was any such branch office or regional office for a registered company functioning in Kasaragod district that could be established by producing the necessary documents. But in this case complainant miserably failed to produce any such document to support the testimony of PW1 that the first opposite party Sri.M.M.Infotech Ltd. was having an office at Badialukka in Kasaragod District, during the year 2001. There is also nothing to show that A1 to A10 cumulative deposit receipts were issued from Kasaragod or that the amounts covered by those cumulative deposit receipts were collected from Kasaragod. 12. From the side of the complainants A16 building tax assessment register maintained by Badialuka Grama Panchayath has been produced. The A16 building tax assessment register only shows that the second opposite party C.H.Gopalakrishna Bhat, son of Mahabaleswara Bhat was having house within the limits of that Gramapanchayath and the said house building was given the door No.150-A. A16 would also show that it is the true copy of the building tax assessment register for the year 2000-2002 and on 18.1.05 the ownership of the said house has been changed into the joint names of M.K.Purushothama Bhat and M.K.Balasubramania, son of Kesavabhat. But there is nothing to show that the second opposite party C.H.Gopalakrishna Bhat was having any office in Bedialuka. Thus, the complainants totally failed in establishing their case that the amounts covered by A1 to A10 cumulative deposit receipts were deposited at the office of the first opposite party in Kasaragod or at the office of the second opposite party in Kasaragod.. On the other hand, A1 to A10 deposit receipts would only show that the amounts covered by those receipts were deposited at the office of the first opposite party Sri.M.M.infotech Ltd; in Bangalore. The available evidence on record would show that no part of the cause of action has arisen within the territorial jurisdiction of CDRF, Kasaragod. 13. The opposite parties very vehemently contended that they are not the Directors or Agents of the first opposite party Shri.M.M.Infotech Ltd. and they were never connected with the first opposite party Sri.M.M.Infotech Ltd. and they had no occasion to canvass business for the first opposite party or its Directors. The opposite parties 2 to 4 much relied on B2 and B3 documents. B2 is the status report issued by the Asst. Registrar of companies, Garnitech Bangalore with respect to the first opposite party company Sri.M.M.Infotech Ltd.(formerly Sri.M.M.Fincop Ltd.) 14. Ext. B2 status report would show the name of the Directors of the first opposite party Company. It would also show that M/s.M.Mahabalabhat (6th opposite party) Saroja.U.S. and K.Sivaramabhat (7th opposite party) were the Directors of the first opposite party company, since it is incorporation. It would also show that Sri.M.Udayabhaskar (5th opposite party was appointed as the Director as per Form No.32 dated 1.12.2000 and that the then existing Director Saroja.U.S resigned with effect from 21.7.97. B2 status report would also show that M/s.M.Udayasankar, M.Mahabalabhat, K.Sivaramabhat continued as the Directors of the first opposite party company. B 2 status report would not give any indication that at any point of time the opposite parties 2 to 4 were appointed as the Directors of the first opposite party company. B3 is the fresh certificate of incorporation consequent on change of name nil of the first opposite party company from Sri.M.M.Fincop Ltd. to Sri.M.M.Infotech Ltd. In the aforesaid certificate of corporation issued by the Asst. Registrar of companies Karnataka, Bangalore would show that Udayasankar.M (5th opposite party) Mahabalabhat (6h opposite party) K.Sivaramabhat (7th opposite party) continued as Directors of the first opposite party company. It would not give any indication that the opposite parties 2 to 4 were appointed as the Directors of the first opposite party company. Exts. B5 to B9 are the Form No.32 filed before the Registrar of companies. These, documents would show that the opposite parties 2 to 4 were not the Directors of the first opposite party company. On the other hand, those Form No.32 would show that M.Udayasankar (5th opposite party) M.Mahabalabhat (6th opposite party) continued as the Directors and subsequently with effect from 6.11.2000 two other persons by name A.R.Moleyar and A.Bhat Moleyar were appointed as the Directors of the first opposite party Sri.M.M.Infotech Company. These documents would strengthen the case of opposite parties 2 to 4 that they never acted as the Directors of the first opposite party company. The complainants could not adduce any evidence to connect the opposite parties 2 to 4 that the opposite party Sri.M.M.infotech Ltd. or Sri.M.M.Fincop Ltd. There is nothing on record to substantiate the case of the complainants that the opposite parties 2 to 4 acted as the agents of the first opposite party company. The complainants have also failed to show that the opposite parties2 to 4 had any sort of connection or relationship with the first opposite party company. In effect, there is no acceptable evidence on record to substantiate the case of the complainants that the opposite parties 2 to 4 collected the fixed deposit amounts covered by A1 to A10 cumulative deposit receipts in their capacity as the Directors or Agents or employees of the first opposite party company. They have also failed to show that the opposite party 2 to 4 acted for and on behalf of the first opposite party company or its Directors. But unfortunately, the forum below did not consider the aforesaid contentions of the opposite parties 2 to 4. The forum below made the opposite parties 2 to 4 also liable to pay the amounts covered by A1 to A10 deposit receipts without appreciating the available evidence on record. The forum below has also failed to consider the material issue regarding the territorial jurisdiction of the CDRF, Kasaragod to entertain the complaint involved in the aforesaid OP Nos.146/05 147/05 & 148/05. There is no evidence to support the finding of the forum below that the transaction of acceptance of fixed deposit amounts covered by A1 to A10 deposit receipts had taken place within the territorial jurisdiction of CDRF, Kasaragod. There is no definite finding whether the first opposite party company had any office in Kasaragod or that the amounts covered by A1 to A10 fixed deposit receipts were received from the office of the first opposite party in Kasaragod. So, the forum below cannot be justified in coming to the conclusion that the forum below was having the territorial jurisdiction to entertain the complaints in OP.Nos.146/05, 147/05 & 148/05. 15. The appellants (opposite parties 3 and 4) have also contended that the forum below cannot be justified in making the directors of the first opposite party/company personally liable. It is a settled position that the Directors of a company cannot be made personally liable for the liability of the company. There can be no doubt about the fact that the company is a separate entity and the liability of the company cannot be imposed on its Officers or Directors. But this aspect regarding the personal liability of the Directors of a registered company has not been considered by the forum below. It is also to be noted that the Directors can be made personally liable only after lifting the corporate veil of the company. But there must be sufficient materials available on record to proceed against the Directors of the company by lifting corporate veil. But, all these aspects have not been considered by the forum below while passing the impugned order. More over, the impugned order is silent about the personal liability of opposite parties 2 to 8. It is not made clear whether the liability is joint and several. Thus, in all respects the impugned common order dated 21.6.2006 passed by CDRF, Kasaragod in OP.No.146/05, 147/05 & 148/05 is liable to be set aside. We are of the view that this is a fit case to be remitted back to the forum below for fresh consideration and disposal of the same on merits. The parties can also be given further opportunity to adduce evidence in support of their respective pleadings. Another important aspect to be noted at this juncture is the service of notice on opposite parties 1 and 5 to 8. The proceedings paper in CC 147/05 would show that the notice issued to opposite parties 1 and 5 to 8 were returned unclaimed and no fresh notice was ordered in the matter. But the opposite parties 1 and 5 to 8 were declared ex-parte and the matter was proceeded by treating them as ex-parte. The aforesaid procedure followed by the forum below cannot be considered as a just and proper method. So, the forum below is further directed to issue fresh notice to the parties in the aforesaid OP Nos.146/05, 147/05 and 148/05. With the above observations these appeals are disposed of. In the result, the Appeal Nos.789/06, 790/06, 791/06 are allowed to the extent that the impugned common order dated 21.6.2006 passed by CDRF, Kasaragod in OP Nos.146/05, 147/05, 148/05 is set aside and the matter remanded to the forum below for fresh consideration and disposal of the same in accordance with law. As far as these appeals are concerned, the parties are directed to suffer their respective costs. M.V.VISWANATHAN -- JUDICIAL MEMBER VALSALA SARANGADHARAN -- MEMBER | 
