MUMBAI GRAHAK PANCHAYAT vs CHAMUNDI MOPEDS LTD

THIS is a complaint filed by Mumbai Grahak Panchayat in the public interest on behalf of about 90 consumers. The opposite party M/s. Shri Chamundi Moped Ltd. is a public limited party company registered under the Companies Act, 1956, The opposite following the year 1983 invited applications for registration of their new two-wheeler viz.- "Sport if Moped" on payment of advance deposit of Rs. 500/- per booking. The opposite party had also agreed to pay 10% interest on the initial deposit of Rs. 500/- till the date of delivery. THIS deposit together with accrued interest was to be adjusted against the total price payable by the consumer for the two wheeler at the time of delivery. Inter alia the terms of booking as under:- (i) Advance payment of Rs. 500/- (five hundred only) per booking which shall carry simple interest of 10% per annum from the close of the booking and upto the last date of preceding month in which intimation with regard to allocation shall be sent. Interest was to be paid on full calendar month basis.

(ii) No interest was to be paid if the cancellation takes place within 12 months from the date of close of booking. The refund of advance was to be effected after 60 days of reaching the claim to the Company for such refund.

For variety of reasons many consumers cancelled their bookings and applied for the refund of their advance amount of Rs. 500/- alongwith permissible interest. The complainant has filed Annexure-2 giving the list of such consumers who had made the bookings on payment of Rs. 500/- and subsequently cancelled the bookings. The necessary details in respect of each consumer are shown in Annexure.

THE complainant, therefore, claims the refund of deposit of Rs. 500/- alongwith interest plus Rs. 100/- towards damages/compensation to each consumer per month for the delay and Rs. 50/- for default in refunding the fixed deposit with costs of Rs. 500/- In response to the notice u/Sec. 13 of the Consumer Protection Act (for short, ''the Act''), Shree Chamundi Moped Ltd. filed its version. THE opposite party in its reply admitted the terms and conditions of the scheme of advance deposit of Rs. 500/- of the booking. However, opposite party has raised some contentions about the maintainability of the complaint. THE main contention raised by the opposite party is that it has been declared as a "sick industrial company" in Case No. 292/88 under the Sick Industrial Companies (Special Provisions) Act, 1985. It is further submitted that u/Sec. 22 of the aforesaid Act, there is a bar for continuation of any legal proceedings and therefore, the complaint be dismissed for want of jurisdiction. 2. We have heard Shri Shirish Deshpande and Shri Madhu Mantri for the complainant and Shri A.H. Mehta for the opposite party. The main contention of the opposite party is that as per opposite party has been declared as a sick industrial company, u/Sec. 22 of the Industrial Companies (Special Provisions) Act, 1985 (for short, "Industrial Companies Act", this complaint is not maintainable. In support of the arguments, Shri A.H. Mehta relied on the decision of District Forum. Surat in Case No. 161/89 dated 27.6.90 and an interim order of Karnataka High Court. We have carefully read Section 22 of the Industrial Companics Act. the aforesaid Section is in relation to suspension of legal proceedings, contracts, etc. But the said Section operates only for limited purpose viz., (1) Proceedings for the winding up of the industrial company. (2) For execution, distress or the like against any of the properties of the industrial company and, (3) In the appointment of a receiver in respect thereof Section 22 lays down that no proceedings for the aforesaid three requirements shall lie or be proceeded further except with the consent of the Board or the Appellate Authority. Even for the aforesaid three requirements, the proceedings can lie with the consent of the Board or the Appellate Authority. The instant proceeding is under the Consumer Protection Act and is not for any of the three requirements of Section 22 of the Industrial Companies, Act, mentioned above. The aforesaid Section is very clear and puts a bar on the proceeding limited to the aforesaid three requirements only. Shri A.H. Mehta submitted that requirement No. 2 mentioned above speaks of the "the like" against any of the properties of the Industrial Companies" According to Shri Mehta, the aforesaid word includes the proceedings under the Consumer Protection Act as it is the like against the properties of the Industrial Companies Act. We do not agree with the interpretation given by Shri A.H. Mehta for the simple reason that the property in question i.e. the refund of deposit amount is not the property of the Company but is the deposit amount lying in trust with opposite party of the consumers and therefore, even the requirement No. 2 mentioned above will not be applicable for this proceeding. In any case, in our view, Section 22(1) of the Industrial Companies Act will not be attracted to forestall the proceedings under the Consumer Protection Act. Shri A.H. Mehta, further argued that Sub-section 3 of Section 22 of the Industrial Companies Act provides that the proceedings shall remain suspended and therefore, also this complaint cannot proceed. In our view, Sub-section 3 of Section 22 of the Industrial Companies Act, is meant for purposes of staying the contracts, assurances of property agreements, settlements, awards, standing orders or other instructions in force if they are specified by the Board, within the provided limitation. We find no such declaration by the Board of staying any of the requirements of Sub-section 2 of Section 22 was placed before us. Under these circumstances, in our considered view, the provisions of Section 22 of the Industrial Companies Act cannot be invoked in this case. In fact, Section 22 has no relevance for purposes of a complaint under the Consumer Protection Act. We have also perused the order of the District Forum, Surat in the case of Grahak Parishad v. Shri Chamundi Moped Ltd. We respectfully differ with the observation made by the District Forum, Surat regarding the interpretation of Section 22 of the Industrial Companies Act. We have also perused the xerox copy of the order of the Karnataka High Court in the case of Chamundi Moped Ltd. v. Nalini Shukla Chagla and Others (CRP No. 6965/1989 dated 11.1.1990). The said order does not find any discussion about the interpretation of Section 22 of the Industrial Companies Act, and therefore, we are unable to gather the relevant discussion. Moreover, it is an interim order for the grant of stay. In absence of the complete case papers we are unable to get any guidance from the orders of the Karnataka High Court.

The next point raised in the complaint is that the complainant is not a "consumer" as defined under the Consumer Protection Act and therefore, also, the complaint is not maintainable. We have already taken the view in the case of Mumbai Grahak Panchayat v. Hiro Honda (Complaint No. 23 dated 10.10.1990) and in the case of Mumbai Grahak Panchayat v. Andhra Pradesh Scooters Ltd., (Complaint No. 25/90 dated 5.11.1990) relying on the judgment of National Commission, New Delhi in the case of Mumbai Grahak Panchayat v. Lohiya Machine Ltd. (Original Petition No. 15/90 decided on 26.9.90) I (1991) CPJ 26 (NC). In the case supra, the National Commission has taken the view that failure on the part of the Company to discharge its obligation of refunding deposit amount to the persons who had cancelled their bookings with the stipulated interest immediately after the expiry of the period of 60 days from the date of receipt of cancellation advice, is a clear cut case of deficiency in the service of the opposite party. The facts and circumstances of the present case are similar to that of the case of M/s. Lohiya Machine Ltd. and therefore, in our view, the ratio of the aforesaid decision of the National Commission will apply to the facts and circumstances of the present case.

IN the present case we find that the complainant who has filed this complaint on behalf of about 90 consumers has proved the allegations made in the complaint. We also find that the opposite party has failed to refund the advance amount to the consumer'' even after their advice of cancellation of the booking. We, therefore, find that the consumers listed in Annexure 2 are entitled to receive their amount of deposit together with interest at 18% on the deposit which has been retained by the Company beyond agreed period of 60 days from the date of receipt of the cancellation advice. Similarly, as regards the costs of Rs. 500/- , we are of the view that the complainant deserves the cost on account of expenditure which they have incurred in collecting the necessary information from large number of consumers and for persuing this complaint. However, we find that the opposite party became sick industrial company at a later stage and till then the Company could take suitable steps to pay to the consumers their amount of deposit. Under these circumstances, we pass the following order:- ORDER (i) The opposite party M/s. Chamundi Moped Ltd. is directed to pay to each consumer figuring in Annexure-2 an amount of Rs. 500/- (Rs. five hundred only) towards the refund of advance deposit for booking a scooter with 18% interest p.a. for the period between the date of expiry of 60 days from the date of cancellation of booking till the date of actual repayment of the advance deposit amount together with 18% p.a. interest to each consumer.

(ii) The direction of payment of interest will apply even in respect of those persons not included in Annexure-2 to whom the Company might have refunded the advance deposit, subsequent to the receipt of notice of this petition.

(iii) The opposite party is also directed to extend the similar reliefs to all other unascertained persons also, who are similarly situated by treating this as a public interest litigation, with further direction to the opposite party to furnish this Commission an exhaustive list containing the names and particulars of all the persons residing in Maharashtra State to whom refund of deposit amounts remained outstanding as unpaid despite the Company having duly received from them advice of cancellation of their booking of scooter. The list to be filed by the respondent Company should exhaustively cover all cases of customers residing in the State of Maharashtra to whom refunds of advance deposits have accrued due and are remaining unpaid, despite the lapse of 60 days from the date of receipt by the Company of their cancellation advice. The aforesaid list be filed before this Commission within a period of three months from today.

(iv) The Opposite party is directed to pay to the complainant-Mumbai Grahak Panchayat, a sum of Rs. 5000/- by way of costs of this complaint. (v) The claim of complainant for grant of Rs. 100/- p.a. as compensation and Rs. 50/- per day for additional compensation in refunding'' the fixed deposit amount to the consumer is hereby rejected in view of the award of additional interest of 9% p.a.

Complaint allowed with costs.