A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 649/2006 against C.C 1502/2004, Dist. Forum-III, Hyderabad.
Between:
H. S. Dakshina Murthy
S/o. Late Viswanadham
Age: 67 years
R/o. 6-3-597/A/15
V.R. Colony, Khairatabad
Hyderabad. *** Appellant/
Complainant
Vs.
1. M/s. Abheeshta Finance Company
Flat No. 117, Ground Floor,
Sovereign Shelters
Behind Ganga Jamuna Hotel
Lakdikapool, Hyderabad. *** O.P. No. 1
2. A.P.Venkata Subbaiah
S/o. Late Rangaiah
Age: 68 years,
R/o. D-81, Madhura Nagar
Sangeeva Reddy Nagar
Hyderabad-500 038. *** O.P. No. 2.
3. M. Madan Mohan Rao
S/o. Narasimham
12-2-823/A/30,
Santoshnagar Colony
Mehidipatnam
Hyderabad-500 028. *** O.P. No. 3
4. M. Sreenivas
S/o. M. V. Sastry
R/o. 12-2-823/A/78
Geetha Apartments
Santoshnagar Colony
Mehidipatnam
Hyderabad-500 028. *** O.P. No. 4
5. K. Kishan, S/o. Late Yellaiah
Plot No. 609, R/o. 6-3-249/7/1B
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
New 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
Hyderabad-500 018. *** 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 an unsuccessful complainant.
2) The case of the complaint in brief is that Opposite Parties 2 to 8 are directors of Opposite Party No. 1 a company registered under Companies Act, 1956. . He has deposited three FDRs for Rs. 1,25,000/-, Rs. 50,000/- and Rs. 35,000/- on 9.9.1996, 22.12.2001 and 22.12.2001 respectively wherein it agreed to pay the amount with interest . The opposite party paid interest for certain periods and failed to pay interest from 7.5.2002, however renewed the FDRs from time to time by making endorsement on the reverse of FDRs. Thereupon he issued legal notice on 24.8.2004 but the opposite parties did not pay the amount. Therefore he filed the complaint for refund of the amount covered under the FDRs 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 him. There was no privity of contract. While the first deposit was made during his tenure and the remaining two deposits were made subsequent to his retirement. 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 the 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 renewal said to have been made by Opposite Party No. 8 on the reverse of FDRs is not valid. He has no business or authority to renew it. It is barred by limitation. Therefore, he prayed for dismissal of the complaint.
4) Opposite Party No. 4 resisted the case. He alleged that he is deaf and dumb. He never received any amount covered under the FDRs. 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.
5) 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 had 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 and Sreedhar. They misappropriated the amount to a tune of Rs. 43 lakhs for which cases were filed. The deposits were signed by P. S. Bhaskar Rao who was neither a director nor a partner. He has no authority to endorse the renewal. The dates were tampered to save limitation. Therefore, she prayed for dismissal of the complaint.
6) Opposite Party No. 7 filed counter resisting 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. Sri P. S. Bhaskar Rao signed on the renewals obliging the complainant to enable him to lodge false cases. 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.
7) Opposite Party No. 8 resisted the case stating that he was not liable. He was not a director and therefore prayed for dismissal of the complaint.
8) Opposite Parties 1, 3, 5 did not choose to file any counter.
9) The complainant filed his affidavit evidence and got Exs. A1 to A10 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 the complainant did not file the original FDRs, instead it has filed xerox copies. When the partners were retired there was no reason why a case was filed against them. The complaint against Opposite Parties 2 to 8 was dismissed . It passed decree against Opposite Party No. 1 alone.
11) Aggrieved by the said decision, the complainant preferred this appeal contending that the Dist. Forum did not appreciate the facts in correct perspective. It ought to have passed the decree against Opposite Parties 2 to 8 who are partners of Opposite Party No. 1.
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 FDRs agreeing to pay the amount mentioned under the FDRs. In order to prove the said fact the complainant has filed Exs. A8 to A10 xerox copies of FDRs. It is not known as to what happened to originals. No mention was made in the complaint as to what happened to the original FDRs. Assuming without admitting that Opposite Party No. 1 a company has issued the FDRs it is not known why they were signed by Managing Partner. It is not known who exactly signed these receipts or the person who made the renewals. It was signed bearing with a seal ‘Authorized Signatory’. The complainant did not allege as to who among the directors he had paid the amounts and obtained receipts and the person who made such endorsement on these FDRs. The complainant filed the complaint on 28. 10. 2004, but for the endorsement, it would be barred by limitation.
13) A perusal of the documents filed by the appellants 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. B21.
1. Avula Peda Venkata Subbaiah, S/o. Late Rangaiah
2. Moduga Madan Mohan Rao, S/o. Late M.L. Narasimham
3. Mylavarapu Srinivas Rao, 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.
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. B14 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.
14) The complainant did not implead M/s. Abheeshta Finance Pvt. Ltd., one of the partners of Opposite Party No. 1.
15) The complainant did not adduce any evidence as to whom among the directors, he had paid the amounts and obtained receipts. It is not known, who on behalf of the company was issuing receipts or endorsing on the FDRs It is as vague as vagueness could be. 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 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. B6. In his own notice under Exs. B8 he mentioned that he resigned as director and the same was accepted by the Board. Despite such an evidence being produced the complainant did not bother to file any contra evidence.
16) 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 Civil Court for adjudication.
17) With the scanty evidence placed by the complainant, not keeping at track as to the exact directors whom they can implead, filed a complaint as though it was a partnership firm and that the directors are liable personally for the amount payable to him.
18) 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.
19) 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. However, 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 had 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. This was not controverted.
20) 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.
21) 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. He was impleaded solely on the ground that he renewed some of the FDRs. The competency or capacity under which he renewed was not even mentioned. Therefore, we are unable to mulct liability against him.
22) The Dist. Forum did not address to the question of limitation and as to how such an endorsement would save limitation. Even when the opposite parties disputed these endorsement and the person who signed had no authority, the complainant did not expatiate while filing the affidavit evidence. At the cost of repetition, it may be stated that endorsement of renewal was not made by any of these appellants though they were authorized to operate the accounts.
23) 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 the authority of the person who made endorsements, we believe that such an endorsement would not extend the limitation and the person who made such an endorsement has authority 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 were collected under the FDRs which could be directed to be paid. Serious questions of fact and law including that of collusion etc. were raised, we believe that this is a fit case where 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.
24) Having considered the entire evidence placed on record, we are of the opinion that the appeal has to be dismissed.
25) 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
“UPLOAD – O.K.”
