Manipal Soubhagay Nidhi Ltd. vs Soumya K.Prabhu

THESE Revision Petitions have been filed by Manipal Soubhagaya Nidhi Ltd. which is a Non-Banking Financial Company (NBFC), being aggrieved by the order of the State Consumer Disputes Redressal Commission, Karnataka(hereinafter referred to as the State Commission) which ruled in favour of the Respondents in the various appeals filed before it. There are 54 Respondents in this case. While the amounts deposited, the rate of interest and the maturity value as well as maturity dates vary in respect of these Respondents, since the nature of complaint and the Petitioner is the same in all these cases, it is being disposed of by this common order.

THE brief facts according to the Respondents are that they had purchased Soubhagaya Lakshmi Cash Certificates from the Petitioner and as per the Scheme on the date of maturity they were to be paid an enhanced stipulated amount along with interest. However, when the Respondents approached the Petitioner on their respective dates of maturity for the encashment due to them, Petitioner failed to pay them the assured amount and kept postponing the date on which they would be paid on one pretext or the other. THE Respondents, therefore, filed complaints before the District Forum seeking inter alia relief which included payment of the stipulated amount as per their Cash Certificates, compensation for mental agony, stress, cost of litigation as well as interest @ 18% on the Cash Certificate till the date of payment. The Petitioner Company submitted before the District Forum that District Forum did not have the jurisdiction to entertain the complaints since these were barred by limitation and may therefore, be dismissed. The District Forum after hearing both the parties on the basis of evidence produced before it stated that the complaint was maintainable and not barred by limitation on the grounds that it is a well established proposition that if a person who receives the deposit fails to pay it back, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to pay back the deposit. On merits also, the District Forum accepted the complaints of the Respondents on the ground that Petitioner itself had admitted regarding the failure to pay the maturity value of the certificates on the date of maturity or even within a reasonable time which amounts to deficiency in service. The District Forum, therefore, directed the Petitioner to pay the Respondents the maturity value as due to them as per their Cash Certificates and also compensated them for the costs of the proceedings.

Aggrieved by the orders of the District Forum, the Petitioner filed appeals before the State Commission reiterating that the complaint was barred by limitation and, therefore, the District Forum had wrongly accepted the Respondents complaint. The State Commission dismissed the appeals and upheld the order of the District Forum by agreed that the fora below that the cause of action is a recurring one because the deposits are made with an understanding that the amount is repayable on demand and, therefore, does not get barred by limitation. Hence the present revision petition.

NOTICE was last issued to parties on 19.11.2010 in all these cases and AD cards were received, except for four Respondents whose AD cards came back with the postal remarks absent, not found, or addressee expired. Since most of the Respondents have been served, the cases were listed for final hearing on 17.01.2011. Mr.Saleem Hasan and Mr.Wasim Beg, Advocates represented the Petitioner. Mr.V.N.Raghupathy, Advocate, represented the Respondents in R.Ps No.3906-08/2007 and 3913-3916/07. Mr.B.S.Prasad, Advocate represented the Respondents in R.P. No.3931-3937/07. None was present on behalf of the other Respondents. Counsel for Petitioner contended that the learned fora below had acted with material irregularity in exercise of its jurisdiction because they had ignored the statutory provisions of the Consumer Protection Act, 1986 wherein the Respondents had filed their complaints well after expiry of the period of limitation as provided under Section 24-A of the Act. This is clear from the fact that the maturity dates in the Cash Certificates in most of the cases were 2002 and almost all the complaints were filed in 2006 i.e. after a period of about 3 years from the period of limitation. Learned counsel for Petitioner in support of this contention cited a judgment of the Supreme Court in State Bank of India Vs. B.S.Agriculture Industries (I) (2009) 5 SCC 121, wherein the Supreme Court has held as follows: Section 24A of the Act is peremptory in nature and requires the 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 reason 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 24-A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within the limitation period prescribed thereunder. 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.

THIS Commission also had given similar ruling in a number of cases, the last being in P.U.D.A. & Anr. Vs. Krishan Pal Chander I(2010) CPJ 99(NC). Counsel for Petitioner, however, further stated that the Petitioner company was a well-established, credible financial institution and it had faced financial problems because a number of its members had defaulted and this was the reason why they could not honour the Cash Certificates issued to the Respondents on the respective dates of maturity. However, it had every intention of paying the Respondents in due course. In fact, in 2002 the Petitioner had outstanding dues amounting to Rs.92 crores and by 2008, the Petitioner company had paid Rs.80 crores to its depositors and only Rs.12 crores was still pending which was being paid to them in their turn. So far as present cases are concerned, the total amount (principal amount) involved is Rs.14,45,500/-. Counsel for Petitioner also submitted that in case Respondents are ready to reach a settlement, the Petitioner in the interest of ending this long pending litigation and keeping in view the financial status of many of the Respondents, as a gesture of goodwill and to establish its bonafide, is prepared to pay 60% of the original principal amount to each of the Respondents within one month. Mr.V.N.Raghupathy, Counsel appearing on behalf of Respondents in R.Ps No.3906-3908/2007 and Mr.B.S.Prasad, Counsel appearing on behalf of Respondents in R.Ps. No.3931-3937/2007, after consulting the Respondents in these cases stated that the terms offered by the Petitioner was acceptable to these Respondents and they would be prepared to receive 60% of the original amount in full and final settlement of the claims made against the Petitioner if the above payment is made within one month. We have heard learned counsel for the concerned parties at length and have gone through the entire records. We note that some of the cases before us are not barred by limitation. These are as follows: (i) R.P. No.3894/2007 (ii) R.P. No.3899/2007) and (iii) R.P. No.3901/2007)

In respect of Respondents in these cases, we direct the Petitioner to pay them the full maturity value since all of them had filed their complaints before the District Forum within the period of limitation. In respect of those cases which have been filed beyond the period of limitation, we agree that Section 24-A of the Act is relevant in these cases and that in view of the rulings of the Honble Supreme Court as well as this Commission, they are not admissible and thus liable to be dismissed on grounds of limitation. However, since the counsel for Petitioner has on a concession, offered to pay Respondents, 60% of the money due to them to put an end to this long pending litigation and in full and final settlement and this has also been accepted by the Respondents who have been represented by their counsel, we accept the settlement. In those time barred cases where the Respondents are not present, counsel for Petitioner has made a similar offer. We accept the concessional offer made by the counsel for Petitioner and direct the Petitioner to approach these Respondents with this offer. The orders of the learned fora are accordingly set aside. Petitioner is directed to pay 60% of the original amount invested by each of the Respondents to them within one month failing which 12% interest per annum would accrue on each amount due till such date it is paid. The revision petition is disposed with the above directions.