FA.647/2007 against CD.No.422/2003 District Consumer Forum, Karimnagar.

Between:

K.S.Raju

(Wrongly described as

President, Nagarjuna Group of Companies,

Nagarjuna Hills, Panjagutta, Hyderabad – 500 082.

…Appellant/O.P.No.1.

And

1.Md.Hassena,

   W/o.Md.Yakub Ali,

   Aged about 30 years, Occ: Housewife,

   R/o.H.No.T2/342, Tilak Nagar,

   Godavarikhani, Karimangar.

…R.1/Complainant.

2.Chief Managing Director,

   M/s.Nagarjuna Finance Limtied,

   H.No.1-2-597/12, Valmikinagar,

   Domalguda, Hyderabad – 29.

3.Mahalakshmi Factoring Service Limited,

   6, Nariman House, Paralees Courtlane,

…R.2 and R.3/O.Ps.2 and 3.

Counsel for the Appellant          :  Mr.O.S.Sastry.

Counsel for the Respondents    :  Mr.M.V.L.Narasaiah (for R.1)

                                                      R.2 and R.3 served through paper publication.

FA.648/2007 against CD.No.421/2003 District Consumer Forum, Karimnagar.

Between:

K.S.Raju

(Wrongly described as

President, Nagarjuna Group of Companies,

Nagarjuna Hills, Panjagutta, Hyderabad – 500 082.

…Appellant/O.P.No.1.

And

1.Md.Yakub Ali (died)

   S/o.Bashumiya,

   Aged about 36 years, Occ: Teacher,

   R/o.H.No.T2/342, Tilak Nagar,

   Godavarikhani, Karimangar.

…R.1/Complainant.

2.Chief Managing Director,

   M/s.Nagarjuna Finance Limtied,

   H.No.1-2-597/12, Valmikinagar,

   Domalguda, Hyderabad – 29.

3.Mahalakshmi Factoring Service Limited,

   6, Nariman House, Paralees Courtlane,

…R.2 and R.3/O.Ps.2 and 3.

4.Md.Hassena,

   W/o.Md.Yakub Ali,

   Aged about 30 years, Occ: Housewife,

   R/o.H.No.T2/342, Tilak Nagar,

   Godavarikhani, Karimangar.

(Impleaded as per order dt.4.4.2008)

Counsel for the Appellant          :  Mr.O.S.Sastry.

Counsel for the Respondents    :  Mr.M.V.L.Narasaiah (for R.1)

                                                      R.2 and R.3 served through paper publication.

QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT,

AND

SRI SYED ABDULLAH, HON’BLE MEMBER.

THURSDAY, THE FIRST DAY OF JULY,

TWO THOUSAND TEN.

Common Oral Order (Per Hon’ble Sri Justice D.Appa Rao, President)

*******

1.         These appeals are preferred by opposite party No.1 against the orders of the District Consumer Forum, Karimnagar, directing opposite parties 1 to 3 to pay the maturity amounts covered under the Fixed Deposit Receipts issued by M/s.Nagarjuna Finance Limited with interest and costs.

2.         Though the District Forum has passed separate orders on the complaints filed by husband and wife against the very same parties, in view of the fact that common questions of fact and law arise we deem it fit that a common order can be passed in these two appeals.

3.         The case of the complainants in brief is that they had deposited amounts with opposite parties 2 and 3 viz. M/s.Nagarjuna Finance Limited which in turn agreed to pay the amounts after maturity.  By virtue of the order of the Company Law Board, they had surrendered the F.D.Rs, and though they promised to pay did not pay the amounts.  They requested time to wail till the reframing of the schedule for payment of the amounts, which was not done and therefore, they prayed that the amounts be paid to them.

4.           In September, 2000 Nagarjuna Group disinvested the shareholding from the Company and withdrew from the financial services sector and handed over the management and control to Mahalaxmi Factoring Services Limited, R.3 herein.  In fact he has no concern either with opposite party No.2 or opposite party No.3.  He resigned of his directorship with effect from 16^th September,   Therefore, it is R.3 that was liable to pay the amount.  Therefore, he prayed for dismissal of the complaint with costs.

5.         Opposite party No.2, 3 and 4 did not choose to contest and therefore, they were set exparte. 

6.         The complainant in CD.No.422/2003 in support of her case filed her affidavit evidence and got the documents marked as Exs.A.1 to A.8, while the opposite parties filed Exs.B.1 to B.4.      The complainant in CD.No.421/2003   support of his case filed his affidavit evidence and got the documents marked as Exs.A.1 to A.9, while the opposite parties filed Exs.B.1 to B.3.         

7.         The District Forum after considering the evidence placed on record opined that 60% of shares of the Nagarjuna Finance Company were sold away along with management to opposite party No.3  

8.         Aggrieved by the said orders, opposite party No.1 preferred these appeals contending that despite the fact that he had filed documentary evidence in order to substantiate that he has no concern with Nagarjuna Finance Company and he was ceased to be a Director still mulcting liability against him was bad under law and prayed for dismissal of the complaints against him.

9.         The point for consideration is whether the order of the District Forum is vitiated by mis-appreciation of facts?

10.       It is an undisputed fact that the complainants had deposited amounts with Nagarjuna Finance Company, which was later taken over by opposite party No.3 company viz. M/s.Mahalaxmi Factoring Services Limited.  Form No.32 shows that the appellant K.S.Raju had ceased to be a director with effect from 16^th September, 2000, whereas the deposits were made on 5.7.2002, which was subsequent to his resignation.  Therefore, at no stretch of imagination he could be mulcted with the liability.  At any rate, the Directors are not personally liable for the due of the company.  This discussion is unnecessary in view of the fact that the appellant has no concern whatsoever either with the company or with its transactions.  The District Forum did not consider Form No.32 prescribed under Companies Act to find out the liability of the appellant/opposite party No.1 in this regard.  The orders of the District Forum will no longer sustain against opposite party No.1/appellant herein. 

11.         Consequently, the complaints are dismissed against opposite party No.1/appellants herein.       

PRESIDENT

MEMBER

DtVVR.