ANIL KUMAR RASTOGI vs AWARD CREDIT (INDIA) LIMITED

THIS is an appeal against the judgment and order dated 30.4.1993 passed by District Consumer Forum, Shahjahanpur in Complaint Case No. 677/1993.

BRIEFLY stated the facts of the case before the District Consumer Forum are as follows : The complainant Sri Anil Kumar Rastogi is related to the Managing Director of opposite party (Awards Credit India Limited). The opposite parties were in the process of raising share capital for their Company without any publication. The opposite party, Company contacted a number of acquainted person who could deposit money in terms of share holding. As a first call the complainant deposited Rs. 2,000/- against receipts dated 15.2.1991 and 3.6.1991. The understanding reached between the parties at the time of depositing the money was that the opposite party will allot shares to the complainant within a period of six months on the basis of the amount of deposit. In the alternative the deposit was to be refunded to the complainant along with interest. The opposite party later on did not allot the shares nor issued the shares certificates despite demands. The meeting of the Board of Directors of the opposite party, Company held on 3.8.1991 decided that those persons who have already deposited money would be allotted shares but the complainant was not given this opportunity. On this, the complainant demanded back his deposited amount but the opposite party delayed the refund on one pretext or the other. The Company did not announce any other benefit in respect of the deposit made by the complainant. A notice was also issued to the opposite party but no shares were allotted to the complainant. The complainant, therefore, lodged a claim before the District Consumer Forum for refund of the deposited amount along with 18% interest per annum. A compensation of Rs. 500/- along with cost of Rs. 150/- were also claimed.

The stand taken by the opposite party in the written version before the District Consumer Forum was that the complainant was not a consumer. The District Consumer Forum had no jurisdiction to adjudicate the matter as the complaint was barred by Section 446 of the Companies Act. There was no agreement between the complainant and the opposite party in regard to allotment of shares. The receipts of the amount deposited by the complainant were signed by Sri Ram Naresh Rastogi who was the Managing Director and was later on turned out on account of misappropriation of funds and breach of trust.

THE parties led evidence before the District Consumer Forum and after hearing both the parties, the District Consumer Forum came to the conclusion that the money was not deposited with the opposite party for allotment of the shares and there was, therefore, no question of paying any consideration for a service and dismissed the complaint. Aggrieved of this order of the District Consumer Forum, the complainant has come in this appeal.

NOTICES were issued to the parties from time to time. On the last occasion the notice was issued in the month of February, 2001 for the next date fixed which was 18.4.2001. The notices have not come back unserved, hence service is presumed sufficient on both the parties. Since 18.4.2001 the dates in continuity have been fixed but the parties have not put in their appearance before this Commission. We, therefore, propose to decide the case on the basis of records available on file. The version of the opposite party before the District Consumer Forum was that the complainant deposited the amounts with Sri Ram Naresh Rastogi in his personal capacity and the amount was not meant for appropriation by M/s. Awards Credit (India) Limited. A perusal of the papers filed along with the memo of appeal which had also been filed before the District Consumer Forum will reveal that the complainant deposited an amount of Rs. 1,500/- on 15.2.1991. A further amount of Rs. 500/- was deposited with the opposite party on 3.6.1991. The receipts of this deposit have been issued by M/s. Award Credit (India) Limited and the receipts have been signed by the authorised officials/Director. On these receipts the signatures also appears on the stamp paper of Sri R.N. Rastogi who was the Managing Director of the Company as has been admitted by the opposite party in their written statement. It is a different matter that Sri R.N. Rastogi was later on turned out by the Company for breach of trust etc. But it has not been denied by the opposite party that at the appropriate time when the receipts were issued and the deposits were made, Sri R.N. Rastogi continued to be the Managing Director of the Company. Therefore, the plea of the opposite party that the amount was appropriated by Sri R.N. Rastogi has to be jettisoned. The District Consumer Forum has wrongly come to the conclusion that the amounts were deposited as personal deposit for which no consideration was paid. The Forum failed to see the remarks printed on the reverse of both the receipts in which it has been clearly indicated that the "amount deposited vide receipt is transferable either in the head of the share capital or in Fixed Deposit Scheme of the Company, but it is the discretion of the Company. If the Company fails to allot the shares in due course it will pay interest as per Company rules". In the circumstances, it was not a personal deposit for the personal purposes of Sri R.N. Rastogi who was the Managing Director of the Company. Presuming otherwise that Sri R.N. Rastogi was not the Managing Director of the Company, it makes no difference because the receipts have been issued by M/s. Award Credit (India) Limited and authorised official/Directors have also signed the receipts and the purpose for which the money has been deposited is quite clear which includes either allotment of shares or treating the money so deposited as a Fixed Deposit along with interest admissible as per rules of the Company. We, therefore, find that there was clear deficiency in service on the part of the opposite party, M/s. Awards Credit (India) Limited and the complainant has been put to a loss of Rs. 2,000/- plus interest payable on the amount. In the process the complainant also underwent the mental tension. The District Consumer Forum, therefore, did not weigh the evidence in the proper prospective and dismissed the complaint. Rather the complaint should have been decreed and the Forum should have ordered for refund of the amount along with interest @ 18% per annum which should also cover the damages caused to the complainant. The judgment and order of the District Consumer Forum are, therefore, liable to be set aside and appeal is liable to be allowed. ORDER The appeal is allowed. The judgment and order of the learned District Forum are set aside and complaint is decreed with the direction that the opposite party shall pay to the complainant an amount of Rs. 2,000/- along with interest @ 18% per annum with effect from the date of deposit till the date of payment. There will be no order as to cost. Let compliance of this order be made within a period of six weeks from the date of order. Let copy of this order be made available to the parties as per rules. Appeal allowed.