ELAPULLY VAIDYANATHAN HARIHARAN vs MANHARLAL C SHAH

-THIS appeal is directed against the order dated 12. 8. 2005 passed by District Consumer Forum, South Mumbai in Consumer Complaint No. 27/04. The appeal is also seeking to challenge issuance of recovery certificate dated 7. 10. 06 against the appellant in execution proceedings.

THERE is delay of 2 years 4 months and 9 days in filing the appeal. Therefore, appellant has filed an application for condonation of delay. Delay is not deliberate or intentional. As there is legal point is involved in the matter, we deem it fit to condone the delay. Facts to the extent material may be stated as under: in all 16 complaints came to be filed in District Forum, South Mumbai against M/s. Roofit Industries Ltd. and in some of the complaints besides Chairman, Shri Suresh G. Motwani and Director, Shri Vinod G. Motwani were also added as co-respondents. In one of the two complaints Shri Kishore G. Motwani and Nitish Nigam and Co. were also made opposite parties. All these 16 complaints were decided by common order passed by District Consumer Forum, South Mumbai on 12. 8. 2005. By the said order opposite parties were directed to refund certain amounts of the complainants within time specified in the operative order. The Company and its Directors did not bother to pay the said amount to all the depositors and, therefore, a recovery proceeding was initiated by filing Execution No. 14/06. In the said recovery application copy of which is at page 73 (Exh.-C), opposite parties were shown as (1) M/s. Roofit Industries Ltd. , (2) Mrs. Suresh G. Motani, (3) M/s. J. M. Morgan Stanley, (4) Mr. Kilge. So, these four were the opposite parties/judgment debtors against whom recovery proceeding was filed and Section 25 application was thus moved against them. Vide Exh. D President of District Forum, South Mumbai passed order issuing process under Section 27 of Consumer Protection Act, 1986 and that process was issued against M/s. Roofit Industries, Mr. Suresh G. Motwani, J. M. Morgan Stanley Retail Ser. Ltd. Vide Exh. E at page 100, certificate of recovery under Section 25 (3) of Consumer Protection Act,1986 was issued by President-South Mumbai Forum on 7. 10. 1996 and by that certificate Collector, Mumbai was directed to attach the property of opposite party Nos. 1 to 4 but in the schedule of properties to be attached at page 103 name of appellants for the first time was mentioned and he was alleged to be Company Director of M/s. Roofit Industries Ltd. and his residential address B-9, Endeavour CHS, 90 Feet Road, Mulund (E), Mumbai-81 was shown as property liable to be attached along with Television, Refrigerators, DVD, Computers, Telephones, Fax machines, Xerox machines, Mobiles, etc. It is this order which for the first time came to be passed by the Forum below involving property of appellant herein. Against this issuance of certificate under Section 25 (3) of Consumer Protection Act, 1986, this appeal has been filed by the appellant herein.

We heard extensively Adv. V. Mannadiar for the appellant and Advocate U. B. Wavikar for the respondent.

WE are shocked to find that the learned Forum below was pleased to issue Recovery Certificate against the appellant''s personal property, when the appellant was not at all impleaded as opposite party or shown as Director of M/s. Roofit Industries Ltd. or when 16 other complaints were filed against the Company and some of the Directors of the said Company. Recovery proceedings or execution proceedings or proceedings under Section 25 of Consumer Protection Act, 1986 can be initiated only against those persons, who were originally cited as Chairman and Director of the Company, who committed default. If a person, who was Director, when complaint was filed was not made as opposite party in the org. complaint then he can not be proceeded against for the first time in the execution proceeding taken out cited under Section 25 or Section 27 of Consumer Protection Act, 1986. The basic principle governing disposal of consumer complaint is that no party should be condemned unheard. In the instant org. complaint, the appellant was not shown as Director of the Company-M/s. Roofit Industires Ltd. The Company-M/s. Roofit Industries Ltd. was impleaded, Shri Suresh G. Motwani, Shri Vinod G. Motwani, Shri Kishore G. Motwani were also impleaded as directors of the Company. One J. M. Morgan Stanley Retail Service Ltd. was also impleaded as opp. party in the original complaint, but nowhere in the org. complaint name of the appellant was cited as Director of the Company. So, when the award came to be passed it came to be passed against M/s. Roofit Industries and Motwani family and J. M. Stanley Retail Services Ltd. and one Mr. Kilge-an officer of Mumbai Police only. The appellant was never shown as Director of the Company in the org. complaint. So, in the course of execution proceedings taken out cited under Section 25 or 27 of C. P. A. , 1986 no process should have been issued against the appellant herein because he was not at all heard in the course of org. complaint decided by the Forum below. A person, who is not cited as opposite party in the org. complaint cannot be cited as judgment debtor for the first time in recovery proceedings filed under Section 25 or in any proceedings taken out under Section 27 of Consumer Protection Act, 1986. So, the order passed by the Forum below to issue recovery proceedings against the appellant herein for the first time in the course of execution proceedings is certainly bad in law and cannot be allowed to sustain in law. Moreover, it is pertinent to note that the appellant has mentioned that when he was in service with I. C. I. C. I. Ltd. , he was appointed as Nominee Director on the Board of Directors of M/s. Roofit Industries Ltd. After retirement, M/s. Roofit Industries Ltd. appointed him on its Board as an independent non-executive, professional Director. He was not in the service or employment of the Company, but he was simply paid consultation fee by the Company. Per sitting he used to get Rs. 2,000 as consultation fee. Only four meetings used to be held in any year, wherein he was called for consultation. Such a person, who was Non-Executive Director and had no control of the management of the Company cannot be said to be personally liable for the financial default committed by M/s. Roofit Industries Ltd. or its Managing Director or Working Directors, who were in the effective control of the finances of the Company. In any view of the matter, the order passed by the Forum below for issuing recovery certificate under Section 25 (3) of Consumer Protection Act, 1986 is not sustainable in law. We hold that a person, who was not org. opposite party in the complaint cannot be made answerable to a process issued against Section 25 (3) of Consumer Protection Act, 1986 or under Section 27 of Consumer Protection Act, 1986 and therefore, the appeal will have to be allowed quashing the order passed by the Forum below dated 7. 10. 1996. Hence, we pass following order: ORDER 1. M. A. No. 147/08 for condonation of delay is allowed. 2. Appeal is allowed. 3. Attachment order passed under Section 25 (3) of Consumer Protection Act, 1986 against appellant stands quashed and set aside. Liberty is granted to the decree holders to take appropriate legal steps against judgment debtors and the Forum is directed to follow principle of natural justice. 4. M. A. Nos. 147 and 148/08 stand disposed of. 5. Parties are left to bear their own costs. 6. Declared in open Court. 7. Copies of the order herein be furnished to the parties.

Appeal allowed.