BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.

Date of filing : 21/03/2009

Date of Order : 30/09/2011

Present :-

Shri. A. Rajesh, President.

Shri. Paul Gomez, Member.

Smt. C.K. Lekhamma, Member.

C.C. No. 175/2009

Between

 

And

 

C.C. No. 176/2009

Between

And

 

C.C. No. 177/2009

Between

And

C.C. No. 178/2009

Between

And

C O M O M O R D E R

A. Rajesh, President.

1. The matter involved in the above complaints being the same and the parties being the same, the prayer in I.A. No. 340/2011 in C.C. No. 175/2009 was allowed which was not opposed. So a joint trial was allowed and we are disposing off the above complaints by this common order.

2. The case of the complainants are as follows :

In C.C. No. 175/2009, the complainants jointly applied for 100 bonds issued by the opposite parties by paying an amount of Rs. 1,00,000/-. Accordingly on 19-02-2004, the opposite parties had issued 100 regular income bonds with a value of Rs. 1,000/- each to the complainants. The interest for the aforesaid bonds was at the rate of 10% p.a. being Rs. 833/- payable each month. Interest for the bonds were paid by the opposite parties to the complainants only till 31-03-2005. In the mean time, at the behest of the 1^st opposite party liquidation proceedings were initiated for winding up proceedings, which was approved by the Single Judge of the Hon'ble High Court of Chennai. Subsequently, the above judgment was set aside by a Division Bench of the Hon'ble High Court of Chennai. The complainants understood that the liquidation proceedings initiated at the behest of the opposite parties is a ruse wriggle out of their commitment to pay the invested amount with the agreed interest to the depositors. Thus, the complainants are before us seeking direction against the opposite parties to pay Rs. 1 lakh with 12% interest due there on from 31-03-2005 till payment together with a compensation of Rs. 50,000/- and Rs. 10,000/- being the costs of the proceedings.

3. In C.C. No. 176/2009, according to the complainants, they have obtained 50 bonds with a value of Rs. 1,000/- each. The interest for the bonds was at the rate of 10% p.a. being Rs. 417/- payable each month.

4. In C.C. No. 177/2009, as well the complainants availed themselves of 100 bonds with a value of Rs. 1,000/- each. The interest for the bonds were at the rate of 10% p.a. being Rs. 833/- payable each month.

5. In C.C. No. 178/2009, the complainants deposited an amount of Rs. 50,000/- as a cumulative deposit for a period of 36 months with the 1^st opposite party. The deposit carrying interest at 11.5% p.a. was to mature on 02-07-2006. The opposite parties have failed to pay the maturity amount of Rs. 69,305/-. Hence the complaint.

6. Version filed by the 1^st and 2^nd opposite parties :

The complainants are not consumers as defined in the Consumer Protection Act 1986 and the complaint is hence not maintainable. The complainants have not hired any service for consideration from the opposite parties. Owing to financial constrains, the opposite party company had filed applications before the Hon'ble High Court of Madras for the approval of a scheme of arrangement/compromise between the opposite party company and its deposit holders and bond holders as Company Application Nos. 854 and 855 of 2005 under Section 391 of the Companies Act 1956. At the meeting of the deposit holders, the following Resolution was passed by the deposit holders present in person and by proxy representing 79% of the depositors, that is more than 3/4^th majority:-

“RESOLVED that the consent of the deposit holders of the Company be and is hereby accorded to the scheme of the arrangement/compromise between integrated Finance Company Limited and its class of creditors as provided in the notice calling this meeting.

FURTHER RESOLVED that the Board of Directors of the Company be and are hereby authorised to make and/consent to the modifications, alterations or amendments in the scheme, which are desired, directed or imposed by the High Court of Judicature at Madras or any other authority.”

At the meeting of the bond holders, the following Resolution was passed by the bond holders present in person and by proxy representing 77.73% of the bond holders that is more than 3/4^th majority:-

“RESOLVED that the consent of the bond holders of the Company be and is hereby accorded to the scheme of arrangement/compromise between Integrated Finance Company Limited and its class of creditors as provided in the notice calling this meeting.

“FURTHER RESOLVED that the Board of Directors of the Company be and are hereby authorised to make and/or consent to the modifications, alterations or amendments in the scheme, which are desired, directed or imposed by the High Court of Judicature at Madras or any other Authority.”

The Madras High Court has allowed the said Company Petition and accorded sanction to the Scheme of Compromise/Arrangement by its Judgment and Order dated 19-08-2006. Though the above judgment of the Single Bench of the Hon'ble High Court of Madras was set aside by the Division Bench in OSA 308 of 2006 and others vide Common Judgment dated 30-04-2008, the Opposite party Company filed Appeals before the Hon'ble Supreme Court of India and the same are numbered as Special Leave to Appeal (Civil) Nos. 12737-12740/2008 that has been admitted and notice has been ordered to be issued to the parties and the matter is sub judice. The complainants are accordingly bound by the resolutions passed with over 3/4^th majority at the meeting of the Bond holders held on 10-08-2005 and as such the complainants are estopped from now contending that amounts are payable by the opposite parties. In view of the proceedings before the Hon'ble Supreme Court of India, the complainants' remedies are barred as the complainants are bound by the said proceedings and the final outcome thereof. The complaint has no cause of action on account of the above. The 1^st and 2^nd opposite parties request to dismiss the complaint with costs to them.

7. The other opposite parties as well filed separate versions raising the very same contentions.

8. In C.C. No. 175/2009, the 3^rd complainant was examined as PW1. Exts. A1 and A2 were marked on the side of the complainants. In C.C. No. 176/2009, the 3^rd complainant was examined as PW1 and Exts. A1 was marked on the part of the complainants. In C.C. No. 177/2009, the 2^nd complainant was examined as PW1 and Ext. A1 was marked on the side of the complainants. In C.C. No. 178/2009, the 3^rd complainant was examined as PW1 and Exts. A1 to A5 were marked on the side of the complainants. Consolidated proof affidavit of the witness for the opposite parties has been filed and the witness was examined as DW1, Exts. B1 to B7 were marked on the side of the opposite parties. Heard the counsel for the parties.

9. The points that emanated for consideration are :-

1. Whether the complainants are consumers within the purview of the Consumer Protection Act?

2. Whether the complaints are maintainable in this Forum?

3. Whether the complaints are barred by limitation?

4. Whether the complainants are entitled to get the respective amounts as claimed for?

5. Compensation and costs of the proceedings?

10. Point No. i. :- Apart from the contentions in the version of the opposite parties, nothing is on record to show that the complainants are not consumers as defined in Section 2(1)(d) of the Consumer Protection Act. Moreover, indisputably 'financing' is a service as per Section 2 (1)(o) of the Consumer Protection Act. Therefore, we are only to hold that the complainants are consumers under the provision of the Consumer Protection Act.

11. Point No. ii. :- At the threshold, the opposite parties raised the question of maintainability of these complaints by filing I.A. Nos. 269/2010, 270/2010, 271/2010 and 347/2010 in C.C. Nos. 175/2009, 176/2009, 177/2009 and 178/2009 respectively. This Forum vide separate orders dated 11-03-2011dismissed the above applications. relying on the decision of the Hon'ble National Commission in Manohar Lal Bhandari and another Vs. Sun Earth Ceramics Ltd. (2009 CTJ 68). The orders in the above interlocutory applications have not been challenged by the opposite parties. In the above circumstances, we are not go to re-open the issue. Hence rejected.

12. Point No. iii. :- The question of limitation raised by the opposite parties as well is unsustainable especially so, because even according to the opposite parties at their instance an SLP is pending before the Hon'ble Supreme Court to approve the scheme of arrangement/compromise between the opposite parties and its deposit holders and bond holders.

13. Point No. iv. :- Admittedly in C.C. No. 175/2009 on 19-02-2004, the 1^st opposite party had issued 100 secured redeemable non-convertible regular income bonds of Rs. 1,000/- each which amounts to Rs. 1 lakh to the complainants evident from Ext. A1 bond certificate (in C.C. No. 175/2009). The interest rate offered in Ext. A1 is 10% being Rs. 833/-. In C.C. No. 176/2009, on 19-02-2004 the 1^st opposite party had issued 50 secured redeemable non-convertible regular income fully paid bonds of Rs. 1,000/- each which amounts to Rs. 50,000/- to the complainants evident from Ext. A1 bond certificate (in C.C. No. 176/2009). The interest rate as per Ext. A1 is 10% comes to Rs. 417/-. In C.C. No. 177/2009, on 19-02-2004 the 1^st opposite party had issued 100 secured redeemable non-convertible regular income fully paid bonds of Rs. 1,000/- each which amounts to Rs. 1 lakh to the complainants evidenced by Ext. A1 bond certificate (in C.C. No. 177/2009). The interest rate in the bond certificate is 10% which amounts to Rs. 833/-. In C.C. No. 178/2009, the 1^st and 2^nd complainants deposited a sum of Rs. 50,000- with the 1^st opposite party on 02-07-2002. As per Ext. A1 (in C.C. No. 178/2009), the details of deposit is as follows :

Amount of deposit Rs. 50,000

Period of deposit in months Rs. 36

Rate of interest (% p.a.) 11.5

Date of maturity 02-07-2005

Amount payable on maturity Rs. 69,305

14. In C.C. No. 178/2009, the opposite parties took a contention that the maturity amount has already been disbursed to the 2^nd complainant and she has signed in the reverse side of Ext. A1 to that effect. But it is pertinent to note that the opposite parties did not have such a case in their version. Further, in Ext. A7 letter dated 16-06-2005 the Branch Manager of the 1^st opposite party acknowledged the receipt of original of Ext. A1 signed only by the 2^nd complainant and agreed to pay the maturity amount of Rs. 69,305/- without reason as to the acceptance of the same without the consent of the 1^st complainant.

15. This Forum considers the case as below conclusively :

1. The complainants in C.C. No. 175/2009, 176/2009 and 177/2009 had obtained the bonds and the complainants in C.C. No. 178/2009 deposited amount aforesaid. Not controverted.

2. The opposite parties had contracted to pay an interest to the bonds as mentioned aforesaid and had paid till 31-03-2005, but thereafter not paid. Hence liable till date.

3. Since the Hon'ble Supreme Court has not given a final verdict on the issue, the complainants still have a case before this Forum.

4. The learned counsel for the opposite parties vehemently contended that the opposite parties 2 to 8 are not at all liable to pay amounts to the complainants since they are not the present directors of the 1^st opposite party. However, they have not produced any document to disprove their vicarious liability.

5. Since the primary grievance of the complainants have been met squarely, no order as to costs or compensation seems to be called for.

16. In view of the above, we partly allow the complaint and direct as under :

1. In C.C. No. 175/2009, the opposite parties shall jointly and severally pay to the complainants Rs. 1,00,000/- (Rupees one lakh only) together with interest @ 10% p.a. from 31-03-2005 till realisation.

2. In C.C. No. 176/2009, the opposite parties shall jointly and severally pay to the complainants Rs. 50,000/- (Rupees fifty thousand only) together with interest @ 10% p.a. from 31-03-2005 till realisation.

3. In C.C. No. 177/2009, the opposite parties shall jointly and severally pay to the complainants Rs. 1,00,000/- (Rupees one lakh only) together with interest @ 10% p.a. from 31-03-2005 till realisation.

4. In C.C. No. 178/2009, the opposite parties shall jointly and severally pay to the 1^st and 2^nd complainants the maturity amount claimed together with interest @ 11.5% p.a. from the date of maturity till realisation.

The order shall be complied with, within a period of one month from the date of receipt of a copy of this order.

Pronounced in open Forum on this the 30^thday of September 2011.

Sd/-A. Rajesh,President.

Sd/- Paul Gomez, Member.

Sd/-C.K. Lekhamma, Member.

Forwarded/By Order,

Senior Superintendent.

A P P E N D I X

In C.C. No. 175/2009 :-

Complainant's Exhibits :-

Opposite party's Exhibits :-

In C.C. No. 176/2009 :-

Complainant's Exhibits :-

Opposite party's Exhibits :: Nil

In C.C. No. 177/2009 :-

Complainant's Exhibits :-

Opposite party's Exhibits :: Nil

In C.C. No. 178/2009 :-

Complainant's Exhibits :-

Opposite party's Exhibits :: Nil

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Date of Despatch of this Order ::

By Post ::

By Hand ::