BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD
F.A. 1845/2007 against C.C. 881/2005, 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.
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
THURSDAY, THIS THE FIFTEENTH DAY OF APRIL TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) Opposite Parties preferred this appeal against the order of the Dist. Forum directing them to pay Rs. 4 lakhs covered under the Fixed Deposit Receipt (FDR) together with interest and costs.
2) The case of the complainants in brief is that opposite party No. 1 is a company registered under Companies Act, 1956, and opposite parties 2 & 3 are its directors. They were also running a chit fund company under the name and style of M/s. Sripada Chit Funds Pvt. Ltd. At their request they subscribed in the chit. They have also requested them to deposit the amount which would carry interest. Accordingly, she deposited an amount of Rs. 4 lakhs on 10.6.2000 on which the appellants promised to pay interest @ 12% p.a. viz., Rs. 4,000/- per month. They paid interest till 28.9.2001 and there after stopped payment. When demanded they have been dragging on the matter for one reason or other. They have also taken up this issue with community elders for amicable settlement. Therefore, they sought for recovery of the amount covered under the FDR together with interest @ 12% p.a., i.e., Rs. 4,000/- per month from October, 2001, Rs. 10,000/- towards mental agony, Rs. 10,000/- towards compensation and expenses.
3) The appellants resisted the case. They alleged that neither the first appellant is the Managing Director, nor appellants 2 & 3 are its directors of so called the finance company in the name of 1st appellant. They equally denied that an amount of Rs. 4 lakhs was deposited and that they paid interest and stopped payment. Section 24A of the Consumer Protection Act prescribed period of limitation. Since the last payment according to the complainant was in September, 2001 and the complaint having been filed in 2004 was barred by limitation and therefore prayed for dismissal of the complaint with costs.
4) Opposite Party No. 4 equally resisted the case. He alleged that he resigned from the Directorship on 18.2.1996. It was accepted by the company. His accounts were settled. They have no concern with the appellant company. Since he was not even a director at the time when the complainant had deposited the amount, he was not liable. The complaint is barred by limitation, and therefore prayed for dismissal of the complaint with costs.
5) The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A4 marked while the respondent No. 2 herein filed Exs. B1 to B3.
6) The Dist. Forum after considering the evidence placed on record opined that she had deposited an amount of Rs. 4 lakhs under Ex. A1 FDR mentioning that in one of the complaints in C.C.No. 901/2005 the complainant filed Ex. A6 representation given by Meru Sangham wherein notice was issued Ex. A7 to the appellants it would constitute continuous cause of action and therefore not barred by limitation and therefore it directed the appellant to pay Rs. 4 lakhs together with interest @ 12% p.a., from 10.6.2001 till the date of realization besides costs of Rs. 2,000/-.
7) Aggrieved by the said decision, opposite parties 1 to 3 preferred the appeal contending that the Dist. Forum did not appreciate either the facts or law in correct perspective. It ought to have seen that the complaint was barred by limitation as the maturity date for payment under FDR was on 10.6.2001 and the complaint was filed on 2.6.2004 beyond two years contrary to the provisions of the Consumer Protection Act. It was barred by limitation. No application was filed u/s 24A of the Consumer Protection Act. There is no provision under the Consumer Protection Act wherein the limitation starts to run even after expiry of two years on the ground that it was continuous one.
8) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
9) It is an undisputed fact that the appellants are running chit fund business, wherein they invited the public to deposit amounts under FDR scheme wherein they would pay the said amount together with interest. It is not in dispute that an amount of Rs. 4 lakhs was deposited by the complainant on 10.6.2000 wherein the appellants promised to pay the said amount with interest @ 12% p.a., viz., Rs. 4,000/- per month. Though they paid interest till 28.9.2001 and thereafter they stopped paying. When they demanded the amount they did not pay and therefore they filed the complaint.
10) The contention that was taken by the appellant chit fund company is that the deposit was made on 10.6.2000 and the complaint having been filed on 2.6.2004 beyond two years contemplated u/s 24A of the Consumer Protection Act was barred by limitation.
11) In the FDR the date of maturity was mentioned as 10.6.2001. It promised to pay interest every month at Rs. 4,000/-. They paid interest as agreed upon till 28.9.2001 and stopped payment subsequently. It is not the case of the appellants that the complainants never demanded the amount and that they were ready to pay the amount. However, they stated that they closed the chit fund company in 2002 and the accounts that they had maintained were misplaced while shifting the office. They categorically stated that they are not in a position to produce any evidence before this Commission for the reasons aforestated.
12) The question is whether the claim is barred by limitation. The chit fund company admitted issuance of FDR Ex. A1. The chit fund company did not establish that it had suffered loss and consequently closed the business No proceedings were taken for winding up of the company. For all practical purposes under law the company is still existing. Obviously it had taken such a plea to get over the payment.
13) The learned counsel for the complainant contended that the appellant company is engaged in financial transactions viz., receiving deposits. It is a non-banking financial institution coming within the purview of Reserve Bank of India Act. Section 44(1b) of Reserve Bank of India Act defines deposit as follows :
‘Deposit’ includes and shall be deemed always to have included any receipt of money by way of deposit of loan or in any other form, but does not include……”
Undoubtedly, going by this definition this transaction is to be treated as deposit.
14) In regard to deposits Article 22 of Limitation Act stipulates commencement of period of limitation only from the date of demand. Though three years have been contemplated under the Limitation Act, the Consumer Protection Act provides two years. Assuming without admitting that the complainant did not demand in writing within three years of the maturity, still notice issued on filing of the complaint demanding the amount could be construed as notice of demand. As we have earlier pointed out it is not the case of the appellants that it had paid the amount or promises to pay the amount. The appellants could not prove that two years have been elapsed after demand is made. Therefore no question of limitation arises in this case. As opposite party No. 4 (R2 herein) had proved that he was no more a director and ceased to be as such, the complaint against him was dismissed. The burden is on the appellant to prove that it need not pay the amount in view of Ex. A1 deposit receipt, issued by it. The defence that the records were misplaced is to avoid any explanation for non-payment. This cannot be taken advantage by it. We do not see any mis-appreciation of fact or law by the Dist. Forum in this regard.
15) In the result the appeal is dismissed with costs computed at Rs. 5,000/-. Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 15. 04. 2010.
*pnr
“UP LOAD – O.K.”
