AI Structured Summary
Not yet generated for this judgment
Judgment
THIS is an appeal against the judgment and order dated 8.2.2000 passed by District Consumer Forum, Jhansi in Complaint Case No. 60/1999.
THE facts of the case stated in brief are that the complainant has purchased 6500 units from the Life Insurance Corporation of India (Dhanvarsha Mutual Fund) costing Rs. 65,000/-. This was to mature on 31.3.1998 and the maturity amount was to be received on 1.4.1998. THE complainant sent the certificates etc. for getting the maturity amount but the same was not sent. Hence reminders were issued. According to the complainant he is retired person and he is facing great financial difficulty. Inspite of notice the amount has not been received. THErefore, the complainant has claimed the refund of the amount of Rs. 65,000/- alongwith 24% per annum interest. Opposite parties filed a joint written statement alleging therein that the warrants of redemption were sent by registered post. THE custody of the said letter was passed to the Postal Authorities and the opposite parties lost control over the same after the despatch. In view of these facts the opposite parties cannot be said to be deficient in service. It is further alleged that the complainant should have impleaded Postal Department as party to the proceedings and as such the complaint is bad for non-joinder of necessary parties including the Postal Authorities and Bank. It was further alleged that some persons got the redemption warrants encashed at Surat People''s Cooperative Bank Limited, Ring Road Branch. The complainant was accordingly advised by letter dated 5.3.1999 to lodge a complaint with the Office of the Banking Ombudsman but he has not taken any action on it. It is also alleged that the appellant has received two demand drafts worth Rs. 6,99,750/-, and Rs. 2,64,000/- in respect of 54 redemption cheques. The appellant has refunded the amount to the complainant. It was further alleged that the District Forum has no jurisdiction to try the case.
The learned District Forum, after considering the case of the parties, came to the conclusion that there was deficiency on the part of the appellant. Hence it allowed interest at the rate of 11% per annum on Rs. 65,000/- from 1.4.1998 to 2.6.1999. It also allowed Rs. 500/- as cost to the complainant.
AGGRIEVED against the order of the learned District Forum, the opposite party has come in appeal and has challenged the correctness of the order passed by the District Forum. We have heard the learned Counsel for the appellant without issuing notice to the opposite party/complainant as issuing notice to him would have financially burdened him and the judgment would have been the same.
LEARNED Counsel for the appellant has argued that there is no deficiency on behalf of the appellant and the appellant-Insurance Company has refunded the amount as soon as it got the amount from the Bank from which the fraudulent encashment was done. It has further been alleged that there is no deficiency on behalf of the appellant as the amount was sent through cheque. Now it is clear that the amount of Rs. 65,000/- has already been paid by the Insurance Company to the complainant. Now the question of interest remains to be decided. According to learned Counsel the redemption warrants were sent to the complainant by the appellant through registered post. Hence the liability of the appellant has ceased from that date. We are unable to agree with this proposition. LEARNED Counsel for the appellant has placed reliance on the case of H.P. Gupta v. Hiralal, (1970) 1 S.C. Cases 437. According to learned Counsel the principle laid down in this case goes to show that when the cheque of dividend or any amount has been posted by the appellant by registered post, it will mean payment to the opposite party. In this connection para 9 of the above case decided by the Supreme Court is relevant. For the sake of convenience this paragraph is reproduced below : "It is clear from Section 205(5) that the Company could pay dividend either in cash or by posting a cheque or a warrant at the registered address of the respondent. Article 132 of the Articles of Association also authorises the Company to pay dividend either in cash or by posting a cheque or a warrant to the share-holder at his registered address. The effect of Article 132 is that when a dividend warrant is posted at the registered address of the shareholder that would be equivalent to payment. Once a warrant is so posted, the Company is deemed to have paid and discharged its obligation. As aforesaid, the Articles of Association constitute an agreement between the Company and the share-holders and the latter are entitled to the payment of dividend in the manner laid down in the Articles and in that manner alone. Article 132 thus not only authorises the Company to make the payment in the manner laid down therein but amounts to a request by the share-holders to be paid in the manner so laid down. When, therefore, the Company posts the dividend warrant at the registered address of a share-holder, that being done at the share-holder''s request, the post office becomes the agent of the shareholder, and the loss of a dividend warrant during transit thereafter is the risk of the share-holder. In Indore Malva United Mills Ltd. v. Commissioner of Income Tax, this Court, on a request arising whether on the facts their payment was made in taxable territory, held that if by an agreement, express or implied between the creditor and the debtor, or by a request, express or implied, by the creditor, the debtor is authorised to pay the debt by a cheque and to send the cheques to the creditor by post, the post office being the agent of the creditor to receive the cheque and the creditor receives payment as soon as the cheque is posted to him. That being the position, the place where a dividend warrant would be posted, the post office being the agent of the shareholder, is the place where the Company has its registered office. It follows that the offence under Section 207 of the Act would also occur at the place where the failure to discharge that obligation arises, namely the failure to post the dividend warrant within 42 days. The venue of the offence, therefore, would be Delhi, and not Meerut, and the Court competent to try the offence would be that Court within whose jurisdiction the offence takes place, i.e. Delhi. This would be so both in law and common sense, for, if held otherwise, the Directors of the Companies can be prosecuted at hundreds of places on the allegation by share-holders that they have not received the warrant. That cannot be the intention of the legislature when it enacted Section 207 and made failure to pay or post a dividend warrant within 42 days from the declaration of the dividend an offence."
In our opinion this case does not apply to the facts of the cases in hand. The Apex Court has interpreted the provisions of Section 205(V) of the Companies Act and Article 132 of the Articles of Association with reference to the criminal proceedings pending against the appellant who was the Director Incharge of the Company. The Hon''ble Supreme Court held that according to Section 207 of the Companies Act, that the offence is committed at a place where the dividend is not paid or the cheque or warrant in respect of, therefore, has not been posted within the prescribed time. It also came to the conclusion that the section makes the failure to post the cheque of the dividend etc. within the prescribed time it does not make an offence if the other party, to whom it is directed, has not received the same. According to the Hon''ble Supreme Court, the cause of action will arise only at the registered office from where the warrant is to be posted and not at any other place. As mentioned above, the liability in a criminal case is different from the liability in a civil case. The provisions of law are strictly construed in the case of criminal liability where intention is one of the main ingredients. In the case of civil liability, we have to go by the principles of law which are applicable in such cases. Therefore, the case mentioned above and referred to by the learned Counsel for the appellant which was decided on the basis of provisions of Companies Act and Articles of Association cannot be made applicable in a civil liability. As those provisions are special provisions relating to the offences mentioned in the Companies Act, therefore, this case law does not apply to the facts of these cases because it cannot be said that the post office is the agent of the addressee unless there is a contract to the contrary. The case of Hanuman Gupta v. Hiralal (supra), was explained by the Hon''ble Supreme Court in Renusagar Power Company Ltd. v. General Electric Company & Ors., AIR 1985 SC 1156. Thus this observation of the Hon''ble Supreme Court clears the entire controversy with regard to the service by registered post under the Companies Act and under the normal circumstances.
IN the case of Commissioner of INcome Tax v. Patney and Company, (1959) Vol. 36 INcome Tax Report page 488, the question arose as to whether the post office is the agent of the sendor or the addressee. The Hon''ble Supreme Court, after considering the various laws, came to the conclusion that in the case of payment by cheque which is sent by post, the determination of place of payment would depend upon the agreement between the parties or by course of conduct of the parties. If it is shown that the creditor authorised the debtor, either expressly or impliedly to send the cheque by post the property in the cheque passes to the creditor as soon as it is posted. The post office on such cases is an agent of the person to whom the cheque is posted if there is an express or implied agreement to this effect. Referring to the case of Commissioner of INcome Tax v. Ogale Glass Works Limited, (1954) 25 ITR 529=(1955) 1 SCR 183, it relied on a passage at para 204 in Ogale case whare it was observed as under : "Of course, if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sendor himself."
LEARNED Counsel for the appellant has further relied on the case of Union of India v. Mohd. Nazeem, (1980) 1 S.C. Cases 284. In this case the question arose whether the post office acts as an agent of the sendor or addressee/creditor. In that case a registered letter was sent beyond the territorial limits of India. The Hon''ble Supreme Court held that the provisions of Indian Post Office Act did not apply to the places beyond the territorial limits of India. Postal communication between two different parties is established by postal treaties concluded among them. This question was not decided in this case and was left open. Therefore, the case does not lay down any law which is an issue in these cases. Thus on the basis of this case law it can safely be inferred in the present case that the normal course of conduct between the parties was that the cheque was being sent by post by the appellant and it was delivered to the addressee at place where he was residing. In such a case the post office will be the agent of the sendor in terms of the decision in the case of Commissioner of Income Tax v. Ogale Glass Works Limited (supra).
In view of these case laws, it is clear that the appellant cannot escape its liability of sending the redemption warrants to the right person and to see that they have been served on the right person because the post office is the agent of the appellant.
THUS we find that there was deficiency of service on the part of the appellant and it is liable to pay interest as awarded by the learned District Forum. The appeal is, therefore, liable to be dismissed. Order The appeal is dismissed and the judgment and order of the learned District Forum are confirmed.
LET compliance of the order be made within a period of two months from the date of this order. Let copy as per rules be made available to the parties. Appeal dismissed.