BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD
F.A. 1843/2007 against C.C. 872/2005, Dist. Forum-I, Hyderabad.
Between:
1) Sripada Chit Funds Pvt. Ltd.
Rep. by Managing Partner
Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Fund Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
2) Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Funds Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
3) Shiv Kumar
S/o. T. Rajamallaiah
Age: 48 years,
H.No. 1-6-302
Kanoji Bazar
Secunderabad-500 003. *** Appellants/
O.Ps 1 to 3.
And
1) Smt. Talla Tarabai
W/o. Talla Anand
Age: 56 years
R/o. 23-5-25,
Insle Kaladarwaza
Shalibanda, Hyderabad. *** Respondent/
Complainant
2) S. Laxman Kumar
S/o. S.L. Krishna
Age: 48 years,
H.No. 1-8-32/1
Bapubagh,
138, Pender Ghast Road
Secunderabad. *** Respondents/
O.P. No. 4.
F.A. 1844/2007 against C.C. 874/2005, Dist. Forum-I, Hyderabad.
Between:
1) Sripada Chit Funds Pvt. Ltd.
Rep. by Managing Partner
Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Funds Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
2) Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Funds Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
3) Shiv Kumar
S/o. T. Rajamallaiah
Age: 48 years,
H.No. 1-6-302
Kanoji Bazar
Secunderabad-500 003. *** Appellants/
O.Ps 1 to 3.
And
1) Talla Anand
S/o. Late Badraiah
Age: 60 years
H. No. 5-6-622/4, Abids
Hyderabad-500 001. *** Respondent/
Complainant
2) S. Laxman Kumar
S/o. S.L. Krishna
Age: 48 years,
H.No. 1-8-32/1
Bapubagh,
138, Pender Ghast Road
Secunderabad. *** Respondent/
O.P. No. 4.
F.A. 1846/2007 against C.C. 900/2005, Dist. Forum-I, Hyderabad.
Between:
1) Sripada Chit Funds Pvt. Ltd.
Rep. by Managing Partner
Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Funds Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
2) Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Funds Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
3) Shiv Kumar
S/o. T. Rajamallaiah
Age: 48 years,
H.No. 1-6-302
Kanoji Bazar
Secunderabad-500 003. *** Appellants/
O.Ps 1 to 3.
And
1) Talla Anand
S/o. Late Badraiah
Age: 60 years
H. No. 5-6-622/4, Abids
Hyderabad-500 001. *** Respondent/
Complainant
2) S. Laxman Kumar
S/o. S.L. Krishna
Age: 48 years,
H.No. 1-8-32/1
Bapubagh,
138, Pender Ghast Road
Secunderabad. *** Respondents/
O.P. No. 4.
F.A. 1847/2007 against C.C. 901/2005, Dist. Forum-I, Hyderabad.
Between:
1) Sripada Chit Funds Pvt. Ltd.
Rep. by Managing Partner
Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Funds Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
2) Sanga Ashok Kumar
S/o. Late S.L. Krishna
Age: 52 years
Managing Partner in
Sripada Chit Funds Pvt. Ltd.
Office at : 3-3-18, 1st Floor
R.P. Road, Secunderabad
R/o. H.No. 1-8-32/1
Bapubagh, Penderbhast Road
Secunderabad.
3) Shiv Kumar
S/o. T. Rajamallaiah
Age: 48 years,
H.No. 1-6-302
Kanoji Bazar
Secunderabad-500 003. *** Appellants/
O.Ps 1 to 3.
And
1) Smt. Talla Tarabai
W/o. Talla Anand
Age: 56 years
R/o. 23-5-25,
Insle Kaladarwaza
Shalibanda, Hyderabad. *** Respondent/
Complainant.
2) S. Laxman Kumar
S/o. S.L. Krishna
Age: 48 years,
H.No. 1-8-32/1
Bapubagh,
138, Pender Ghast Road
Secunderabad. *** Respondent/
O.P. No. 4. .
Counsel for the Appellants: M/s. M. Laxmi Prasad.
Counsel for the Resps: M/s. B. Ramesh.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
SMT. M. SHREESHA, MEMBER
&
SRI K. SATYANAND, MEMBER
TUESDAY, THIS THE SECOND DAY OF MARCH TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) All these appeals are preferred by the opposite parties no.1 to 3 against the order of the District forum directing it to pay amount covered under various chits.
2) The District Forum by separate orders in identical cases in between the complainant and the appellant chit fund company passed identical order directing it to pay the amount to the complainant under the chits. Since common questions of fact and law arise, we are of the opinion that the matters can be disposed of by a common order. The parties are described as arrayed in the complaint for the sake of convenience.
3) The case of the complainants in brief is that the appellants are running a chit fund company under the name and style of Sripada Chit Funds Pvt. Ltd., inviting subscription of amounts under chits. The particulars of which are mentioned herein.
| S.No. | F.A. No. | C.C. No. | Amount | Period |
| 1. | 1843/07 | 872/05 | Rs.1,00,000/- | Jun-99 to Jun-2001 |
| 2. | 1844/07 | 874/05 | Rs.2,00,000/- | Jun-99 to Jun-2001 |
| 3. | 1846/07 | 900/05 | Rs. 50,000/- | Jun-99 to Jun-2001 |
| 4. | 1847/07 | 901/05 | Rs.1,00,000/- | Jun-99 to Sept.2001 |
The matter was referred to elders before whom they agreed to pay the amount. Despite repeated requests the appellants did not pay the amounts due under the chits and therefore filed the complaints for recovery of the amount together with compensation and costs.
4) The appellants/opposite parties no.1 to 3 resisted the case while admitting that opposite party no.1 registered before the Registrar of Companies however denied opposite party no.2 is the Managing Director and opposite parties no.3 and 4 are the Directors. However, the complainant had joined in the subscribed chit amounts and received the amounts after the expiry of the period. Since the opposite party no.1 was running into losses the business was closed in the year 2002 itself. At any rate, the claim was barred by limitation. While shifting the office the records were misplaced and they were unable to produce any documentary evidence to prove the factum of payment. The allegation that they agreed to pay the amount before the elders was false since last payment was made in June 2001, the complaint was barred by limitation by virtue of Sec.24A of C.P.Act. Therefore they prayed for dismissal of complaint with costs.
5) Opposite party no.4 alleged that he resigned as a director on 18.2.1996 and the same was accepted and his accounts were settled on the very same day. The termination of his directorship was acknowledged evident from the letter and minutes of the meeting enclosed with the counter and therefore he prayed for dismissal of the complaint with costs.
6) The complainants in proof of their case filed memorandum of association, receipts etc., given by the appellants to prove the receipt of the amounts towards chits. While the opposite parties filed the affidavit evidence of opposite party No. 3 & 4 and termination of the directorship, minutes of the meeting etc.
7) The District Forum after considering the evidence placed on record opined that the appellants admitted the receipt of the amount due under various chits however could not prove that it had refunded the amount. Since in one of the cases in C.C .No. 901/ 2005, the complainants made representation to one Meru Sangham dt. 10.3.2003 which in turn issued notice to the appellants which itself constitutes cause of action and therefore it opined that the complaint was within limitation and therefore it directed the appellants to refund the chit amount with interest @ 12% together with costs of Rs.2,000/-. However the complaint against opposite party No.4 was dismissed.
8) Aggrieved by the said decision opposite parties no.1 to 3 preferred these appeals contending that the District Forum ought to have dismissed the complaint on the ground of limitation and that representation to one Meru Sangham would not extend any limitation since the limitation would run from the date of termination of the chit.. The complaint having not been filed within two years as provided Sec.24-A of C.P. Act it is hopelessly barred by limitation. Therefore they prayed that the appeal be allowed with costs.
9) The point that arises for consideration is whether the order of the District Forum is liable to be set aside for mis-appreciation of facts and law in this regard?
10) It is an undisputed fact that the appellants ran a chit fund company wherein the appellants are the directors. It is also not in dispute that the complainants in all these appeals subscribed the amounts towards chits in the year 2001. While the complainants assert that the amounts due under the chit fund was not refunded, the appellants alleged that they had paid the amount, however, they do not have any proof. Therefore, the District Forum is right in observing that the appellant had to pay the amount if otherwise entitled to.
11) Importantly the appellants had taken the plea of limitation. The complainant obviously thinking that no rules of procedure would apply to the proceedings under the Consumer Protection Act, did not file the certificate from the Registrar of Companies, to find out as to who is the Managing Director and directors of the company. The complainant having known the defence of the appellants could have obtained the certificate from the Registrar of Companies whether there was any proceeding mentioning the closure of the company. Equally when the appellant No. 4 took the plea that he resigned from the post of Directorship on 18.2.1996 and that the accounts were closed and that he had no liability whatsoever, the complainant ought to have obtained a certificate from the Registrar of Companies to know whether in fact appellant No. 4 had resigned from the directorship of the company. Appellant No. 2 denied that appellant Nos. 2 to 4 were the directors at any point of time vide Exs. B1 to B3. The complainant did not contradict the said fact by obtaining documents from the Registrar of Companies.
12) The complainant in order to prove that the appellants were the directors filed Xerox copy of Memorandum of Association marked as Ex. A1 wherein the names of persons who had shares in the capital of the company was mentioned. Names of Sri Sirega Vishwanath Rao and Sanga Ashok was made a mention. They have enclosed a copy of annual return made up to 23.8.1993. The names of Ashok Kumar, Laxman Kumar, Shiva Kumar whom the complainant impleaded were arrayed as 2, 5 and 13 and not directors. They have also filed xerox copy of Articles of Association where the names of Ashok Kumar, Laxman Kumar, Shiva Kumar were not mentioned under the coloumn names, description of the subscribers.
13) According to them the chit was closed in 2001 and the business was closed in 2002. The complainant having subscribed the chit, which according to him in June, 1999, and concluded in the month of June, 2001, ought not to have waited up till 2.6.2004 to claim the amount. No registered notice, whatsoever was issued solely on the ground that they referred the matter to one Meru Sangam, pleaded that, it would extend the period of limitation.
14) The Supreme Court in State Bank of India Vs. B.S. Agriculture Industries (I) reported in (2009) 5 SCC 121 opined that the Dist. Forum is duty bound to determine whether a complaint is barred by limitation irrespective of such plea raised by the parties. Their Lordships opined that :
“Section 24A of the Act, 1986 prescribes limitation period for admission of a complaint by the consumer fora thus:
"24A. Limitation period - (1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2) Notwithstanding anything contained in sub- section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:
Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.
It would be seen from the aforesaid provision that it is peremptory in nature and requires consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, `shall not admit a complaint' occurring in Section 24A is sort of a legislative command to the consumer forum to examine on its own and whether the complaint has been filed within limitation period prescribed there under. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside. “
15) Evidently the complainant did not file application u/s 24A to condone the delay in filing the complaint. . In the complaint it was averred that the cause of action arose on payment of commencement of chit in June, 1999, the last payment was made in the month of June, 2001, receipts and the pass book issued by the appellants would show that said amount is still not paid, and as such the cause of action still continues. It is not known how the amount payable in 2001 would survive up till 2.6.2004 the date on which the complaint was filed. Under the Consumer Protection Act a complaint has to be filed within two years from the date of accrual of cause of action. Extension of limitation is also provided. The complainant did not issue any notice before filing the complaint, in order to find out as to the version of the appellants, so as to get over the question of limitation.
16) In view of the above discussion, we are of the opinion that simply because the complainant has raised the dispute before some Meru Sangam, the said fact was not even proved, would extend the limitation. The Dist. Forum went wrong in observing that the complaint was within limitation.
17) In the result the appeals are allowed setting aside the orders of the Dist. Forum. Consequently the complaints are dismissed. However, no costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
3) ________________________________
MEMBER
Dt. 02. 03. 2010.
*pnr
“UP LOAD – O.K.”
