M.K. BIDDAPPA & ORS. vs CHANDRAKANTHA & ORS.

By this order, we propose to dispose of the above noted revision petitions involving similar question of law and facts against the common impugned order of the State Commission dated 29.11.2016 vide which the State Commission disposed of the Execution Appeals No. 51 of 2015 and 108 to 176 of 2015.

Briefly stated, the facts relevant for the disposal of the revision petitions are that respondent no.1 in respective revision petitions filed their individual consumer complaints before the concerned District Forum alleging that they deposited their hard earned money with respondent no.2 M/s Chanakya Finance Corporation (Regd.), a partnership firm having eight partners including the petitioners. The respondent no.2, however, failed to pay the deposited amount with interest as promised.

The District Forum after following the due procedure allowed the complaints filed by respondent no.1 in the respective revision petitions and directed respondent no.2 partnership firm as also its partners to pay to the respective complainants their deposited amounts with 12% interest from the respective date of maturity of the deposits. The aforesaid order has become final.

The petitioners as also the other Judgment Debtors failed to comply with the above noted directions. The complainants decree holders, therefore, filed applications under section 27 of the Consumer Protection Act, 1986 ( in short, the Act). The District Forum after due notice to the Judgment Debtors including the petitioners and after due hearing, allowed the applications under section 27 of the Act and sentenced the petitioners and the other Judgment Debtors who are partners of Judgment Debtor Finance Corporation to undergo imprisonment for a period of three years and pay the penalty of Rs.10,000/- in each case.

The petitioners being aggrieved of the order of the District Forum preferred Appeals No. 51 of 2015 and 108 to 176 of 2015 seeking setting aside of the order of conviction. The plea of the petitioners in the appeals were that they were the sleeping partners and since inception of the partnership firm, no profits were ascertained or distributed by the managing partners. It was also pleaded that even accounts of the firm were never disclosed to the petitioners by the managing partners. The State Commission vide common order dated 29.11.2016 dismissed the above noted appeals. Being aggrieved, the petitioners have come up in revisions by filing separate revision petitions.

Learned counsel for the petitioners has contended that impugned order of the Fora below convicting the petitioners under section 27 of the Act are erroneous for the reason that Fora below have failed to appreciate that petitioners are not the active partners of the firm and they were never in control of day to day management of the affairs of the Judgment Debtor Finance Corporation. It is contended that Finance Corporation was managed fully by respondents Judgment Debtors A L Nanjundaraje Urs and Rajeev Lochana and the petitioners did not have any inkling about the management of the affairs of the Finance Corporation by them. Therefore, the petitioners ought not have been saddled with the huge financial burden and convicted on the ground of non compliance of the directions.

We do not find merit in the above contention for the reason that admittedly the petitioners were partners in the Judgment Debtor Chanakya Finance Corporation. Therefore, they are jointly and severally liable for the liability of the firm and cannot get away with the liability by raising a plea that they were not the active partners. Otherwise also, vide order under execution, the District Forum held the petitioners jointly and severally liable for the payment of the dues of the decree holders. The said order has become final. Therefore, the executing court has no power to go behind the order and entertain the plea of the petitioners that they were not the active partners.

The second contention of learned counsel for the petitioners is that Fora below have failed to appreciate that Judgment Debtor Finance Corporation have sufficient assets to pay the dues of the decree holders depositors and amount could be easily recovered by attaching the assets of the firm and recovering the same by sale of those assets. It is contended that District Forum allowed the application moved by some decree holders under section under section 151 CPC and directed thus: "The moveable and immovable properties belonging to the respondents-judgment debtors be attached as per Rules and the amount due may be realized. " Learned counsel has contended that as the moveable and immovable properties of the Judgment Debtors have been attached, the dues of the decree holders can easily be recovered by disposing the attached properties of the Judgment Debtor Finance Corporation. Therefore, there is no justification for conviction of the petitioners under section 27 of the Act.

There is no merit in the above contention. Merely because, immovable and immovable properties of the Judgment Debtors was attached pursuant to the order dated 30.08.2014, it cannot be said that decree holders could not have initiated proceedings under section 27 of the Act. Looking from the other angle, the fact remains that attachment order referred to by learned counsel for the Judgment Debtors, was passed in the year 2014. Almost, three years have gone by but till date, the dues of the decree holders have not been paid and order under execution has not been complied with. Therefore, the petitioners cannot be permitted to take shelter of attachment order passed about three years back.

It is pertinent to note that from the facts of the case, it is obvious that petitioners and other Judgment Debtors started a non banking finance corporation and they have duped hundreds of depositors. Not only this, they have failed to pay the awarded amounts to the depositors despite of directions of the District Forum. From this it is clear that this is clear case of deliberate non compliance of the directions of the District Forum. Therefore, we do not find any fault with the order of the Fora below convicting the petitioners under section 27 of the Act.

In view of the discussion above, we dot find merit in the above revision petitions. Revision petitions are accordingly dismissed.