INDIAN BANK vs SUKHDEV SINGH And OTHERS

WHETHER the employee of a bank, which was not even a party to the substantive proceedings before the District Forum, can be sentenced to imprisonment under Section 27 of the Act by the said redressal agency? This is the primal significant question in this set of two connected revision petitions.

THE facts merit notice with relative brevity and may be noticed from Revision Petition No. 17 of 1993, Indian Bank v. Shri Sukhdev Singh & Others. From the record thereof it appears that as many as 187 complaints on individual basis were preferred against M/s. Favourite Small Investment Ltd., Calcutta before the District Forum, Hissar. All these appear to have been clubbed together and disposed of by a short ex parte order dated the 29th of May, 1992 (Annexure A-1). It is evident there from that M/ s. Favourite Small Investment Ltd. had floated a small saving scheme on an All India basis and succeeded in alluring a number of investors to subscribe to the said scheme with rosy promises of payment on maturity alongwith interest etc. and other benefits. All the complainants had purchased certificates and contributed to the said scheme and it was the case that on the maturity thereof the said Favourite Small Investment Company collected the original documents from the complainants on the promise of making the refund orders etc. But thereafter both the Head Office at Calcutta and Branch Office at Hissar lay closed and dead, leaving the complainant-investors in total darkness as to how their amounts were to be refunded, if at all. What deserves highlighting is that in all the complaints only the Favourite Small Investment Ltd. with its Head Office at Calcutta and Branch Office at Hissar were made parties. The District Forum issued two consolidated registered A.D. notices to the opposite parties, which were received back undelivered with the report that they had left without apparently leaving any address. Noticing that even earlier orders of the District Forum dated 30th of January, 1992 had not been responded to, the District Forum proceeded to decide all the complaints ex-parte. Without more all the complaints were summarily disposed of with the following conclusion in a short order. "We have heard Shri Kul Bhushan Jain Advocate for the complainants and gone through the files. It is quite clear from certified copies of receipts, first installment receipt and acceptance letters, another receipt and then certificates attached in all the files details of which have been mentioned in Annexure-8 referred above, that all of them had become the members of said scheme and had purchased said certificates on payment of first installment and further on payment of amount toward remaining installments the said certificates had matured for payment as claimed by them. It is a matter of record which on the face of it speaks in their favour and it is a matter of regret that both the respondents did not at all care to move into the matters despite the facts that registered letters were issued to them. We are of clear opinion that such a callous attitude adopted by the respondents amounts to unfair trade practice continuation of which must be curtailed by the administrative machinery so far as possible. With such expressions we are within our rights to accept all the complaints and award the amount of maturity mentioned in each certificate as per details referred above. We have learnt from the past to the effect that respondents had not cared to attend our orders already passed against them as referred above and as such we further award interest to all the complainants at the rate of 18% per annum from the date of maturity till the date of realization of the amount."

It would then appear that a similar set of nearly 156 complaints (Shri Jarnail Singh S/o Dalip Singh and 155 Others v. Favourite Small Investment Ltd.) came up for disposal in virtually identical circumstances and were disposed of in the following terms by an order dated a year later on the 28th of May, 1993 : - "We have gone through the complaints and are of clear opinion that on the basis of documents complainants in Cases Nos. 416/93 to 543/93, 563/93 to 593/93, 124/ 93 & 125/93 are entitled for the refund of said amount with interest and accordingly we have prepared Annexure of such persons pointing out material details therein. We also award interest to them @ 18% p.a. and accordingly disposed of these complaints in their favour and against the respondents severally and jointly as discussed above. We are not in a position to grant any relief to other claimants since neither they are residents of Hissar District nor the certificates purchased by them were ever issued by respondents-No. 2 being Branch Office of respondent No. 1 at Hisar and as a matter of fact we have no territorial jurisdiction to intervene into such matters and as such these complainants are advised to seek remedy at proper places."

The somewhat confusing state of the voluminous record discloses that a spate of applications for proceedings under Section 27 were thereafter instituted before the District Forum in which attachment orders etc. were sought to be issued under the signatures of the President alone. These were inter alia sought to be addressed curiously to the Branch Manager of the Indian Bank at Jorhat in Assam. It would appear that a correspondence betwixt the said Branch Manager and the District Forum ensued which ultimately led to the passing of the impugned order (Annexure A-9). Prior thereto it appears that Shri K.R. Malhotra Advocate put in appearance on behalf of the Central Office of the Indian Bank, Madras on the 31st of August, 1993 and later on the 10th of September, 1993 and gave in writing that the said bank seeks time for at least 30 days to get completed the information and requesting an adjournment to 7/12 October, 1993 to get the needful done. However, the District Forum proceeded to pass the primal impugned order dated the 17th of September, 1993. The operative and the concluding part whereof is as under : - "We accordingly impose a fine of Rs. 5,000/- and further punish Shri N. Basumatary, Branch Manager, Indian Bankat Road Jorhat, Assam-783001 with imprisonment for a term of 6 months. The warrant of arrest be issued and forwarded to concerned S.P. Jorhat to get him arrested and sent to jail and accordingly a Jail Warrant may also be issued. Copy of this order is also attached with this warrant of arrest with due care and caution under registereSd cover."

Apparently in compliance with the aforesaid order the Branch Manager Shri N. Basumatary was arrested on the 19th of October, 1993 and it was only on a petition before the Guwahati High Court that he was released on bail.

MR. H.C. Gupta the learned Counsel for the petitioners with great ability had spear-headed his argument by highlighting that at no stage was the petitioner-Indian Bank a party to the numerous complaints preferred by as many as 149 respondents who had chosen to knock at the door of the District Forum by. filing the complaints which were clubbed together for trial. Admittedly only the Favourite Small Investment Ltd. Calcutta was a party in the said proceedings and at no stage whatsoever in the trial of the complaints was the Indian Bank even remotely impleaded or was even aware of the proceedings. Reference was made to the substantive orders of the District Forum dated 29th of May, 1992 and later dated 28th of May,1993 in which the name of the Indian Bank was conspicuous by its absence either as a party or even by remote reference. In the aforesaid admitted factual background Mr. Gupta has contended that the substantive orders of the District Forum were consequently not at all binding on the petitioner Indian Bank at all. It was the submission that consequently the said bank could not be brought within the ambit of Section 37 when no substantive order stood passed against it. In any case the plea was that the innumerable employees of the Indian Bank and in particular the Branch Manager thereof could not possibly be roped in for any punishment under the aforesaid Section 27.

THERE appears to be patent and substantial merit in the submission aforesaid. However to truly appreciate the same one may first notice the relevant part of Section 27 in extenso as marginally amended by the Consumer Protection (Amendment) Act, 1993 w.e.f. 18th of June, 1993 : - "27. Penalties : - Where a trader or a person against whom a complaint is made (or the complainant) fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person (or complainant) shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees, or with both."

Now it needs no great erudition to notice that Parliament in its wisdom whilst enacting the stringent provision of Section 27 had originally mentioned only the trader, or the person against whom a complaint is made, as the primal subjects for the imposition of penalty under this Section. Even when substantial amendments in the original Act were introduced by the aforesaid amendment in 1993 the legislature in terms chose to extend it by only inserting the complainant also within the field of Section 27. The statutory provision though perhaps not exhaustive by its very language and tenor has now primarily indicated the trader, or the person against whom the complaint is made, or the complainant, as the primal persons who come within the range of this provision. If seems unnecessary if not wasteful to overly elaborate the matter within this jurisdiction because it stands well covered by recent precedent. In II (1993) CPJ 715, H.S.E.B. & Others v. Pirthi Singh this Commission had occasion to exhaustively examine the true purpose of Section 27 of the Act. After a meaningful discussion of the issue on the language of the statute and principle or precedent it was concluded as under : - "To conclude on this aspect, it appears to us that the true purpose and scope of Section 27 is to lay a statutory duty on the trader or a person against whom an order has been passed by a Consumer Court to comply therewith expeditiously. Failing that, it equally casts a duty on the redressal agencies to enforce compliance under the conferred Section of imprisonment and fine, if necessary."

WE would wish to reiterate the aforesaid conclusion with the further observation that the working of the consumer jurisdiction for the last 6 years of more have highlighted the fact that Section 27 is in a way a kingpin in the execution of the orders of the redressal agencies. The significance of the provision cannot be overrated. However in our view the stringent provisons thereof cannot be unreasonably elongated to bring within this field even persons or institutions who were never parties to the substantive proceedings or further to the inordinate length of including the employees of such persons as being within the scope of Section 27. Doing so would in our view stretching the provision of Section 27 beyond reasonable limits, if not doing violence to the language of the statute as now recently amended.

IN all fairness we must notice Mr. Bashamboo''s strains attempt to support the untenable orders of the District Forum on the purported basis of Rules 6,37,46 and 46-B of Order 21 of the Civil Procedure Code. The plea obviously has to be noticed and rejected. It is common ground that Order 21 of the Civil Procedure Code has not the least relevance or connection with proceedings under-Section 27 of the Act. As stands noticed in II (1993) CPJ 715, H.S.E.B. & Others v. Pirthi Singh (supra) the Section 27 is an altogether singular and independent provision providing a quasi-criminal sanction to the consumer jurisdiction, and entirely divorced from the niceties of the execution of decrees and orders in the Civil Courts under Order 21. To bring in the concept of a garnisee and the tangled provisions of Order 21 with its exhaustive 106 Rules in the summary consumer jurisdiction would be doing a patent disservice to the latter. We are clearly of the view that no assistance can be sought on behalf of the respondents on the provisions of Order 21 of the Civil Procedure Code and the aforesaid rules relied upon by Mr. Bashamboo. However we must record our appreciation of his fairness in conceding the established fact on the record that the INdian Bank nor any of its employee was ever a party to the substantive proceedings before the District Forum. For the fore-going reasons the answer to the question posed at the outset is rendered in the negative. It is held that the employees of a bank which itself was not a party to the substantive proceedings before the District Forum cannot be hauld up and sentenced to imprisonment under Section 27 of the Act.

Once it is concluded as above, it necessarily follows that the Revision Petition No. 17of 1993 must succeed. The impugned order of the District Forum dated the 17th of September, 1993 is patently without jurisdiction and we are constrained to set aside the same. Inevitably all consequential proceedings thereto by way of warrant of arrest and commitment to Jail must also fall alongwith it. Revision Petition No. 17 of 1993 is hence allowed in the said terms.

REVISION Petition No. 18 of 1993 has been preferred by Shri S.R.L. Narayanan, Deputy Chief Officer (Legal), Indian Bank and is directed against a similar order of the District Forum, Hisar dated the 29th of October 1993. The operative part of the order passed under Section 27 is as under : - "It is quite clear there from that you also do not want intentionally the order to be executed and as such you are liable for penalty under Section 27 of the Consumer Protection Act, 1986. Now you are hereby directed to remit the above mentioned amount by the 5th of November, 1993 positively, failing which order of penalty of imposing fine of Rs. 10,000/- and further imprisonment of one year would be issued against you."

The learned Counsel for the parties were agreed that the relevant issues of fact and law were identical and the Indian Bank nor Shri S.R.L. Narayanan have ever been a party to the substantive proceedings before the District Forum.

FOR the identical reasons recorded above in Revision Petition No. 17 of 1993 the aforesaid impugned order has to be consequently set aside as being patently without jurisdiction and the Revision Petition No. 18 of 1993 is allowed in the same terms. Revision Petitions allowed.