SIPANI AUTOMOBILES LTD. vs RAMA THAKUR

THIS revision petition is directed against order dated 8.5.1997 passed by Consumer Disputes Redressal Forum-II, New Delhi In order to appreciate the points raised for consideration it is necessary to state the background briefly.

IN 1989 M/s. Sipani Automobiles Ltd. introduced a car called Montana and invited general public to make bookings with a local dealer by depositing Rs. 10,000/- each. Several persons booked orders for the car. IN course of time, the cars were supplied to some of the persons who had booked orders for the same. Various defects were noticed. Ultimately, the manufacturer stopped the production of the car. IN the meanwhile, a large number of persons who had made the booking, cancelled their orders and asked the dealer to refund the booking amount together with interest. The manufacturer intimated the persons who had cancelled the orders, that the cases for cancellation were under process and necessary action was being taken. Such persons having failed to receive the booking amount together with interest approached District Forums constituted under the Consumer Protection Act. The District Forums directed refund of the booking amount together with 7% interest as per stipulation at the time of booking-up to the date of cancellation and 18% interest from the date of cancellation till date of actual refund together with amounts varying from Rs. 1,000/- to Rs. 2.000/- on account of costs. IN same cases, the manufacturer preferred appeal/revision against such orders and the same were disposed of. IN order to enforce the order, which had, thus, become final, the complainants applied for proceedings u/Sec. 27 of the Consumer Protection Act to D.F.-II. By the impugned order. District Forum-II has dealt with a number of such objections and the individual case number has been mentioned in the title of the order. The District Forum noted that none of the complainants had received the full amount in terms of the order of the District Forum/State Commission that the orders passed by the FORA had become final. It was further noted that non-bailable warrants were issued against Mr. S.K. Sipani, Managing Director of Sipani Automobiles Ltd. but the same remained un-executed. Mr. R.K. Sipani was, however, aware of the proceedings pending before the District Forum as the aforesaid Company had entered appearance through Advocates/ authorised representatives in various cases. IN exercise of the powers vested u/Sec. 27 the District Forum imposed simple imprisonment for 21/2 years on Mr. R.K. Sipani and directed that he be arrested and produced before the Forum so that he could be sent to Tihar jail to serve the said sentence. The order has been challenged through the present revision petition. Various complainants, who had applied u/Sec. 27 have been impleaded as respondents in the revision petition. Their names and particulars are mentioned in Annexure A and their total number is 124. Smt. Rama Thakur occurs as respondent No. 1. The revision petition came up for preliminary hearing on 23.5.1997. Mr. K.P. Sunder Rao, Advocate, appearing for the revision petitioner stated that payment in question shall be cleared within two months in terms of the order or as per settlement which the revision petitioner hoped to reach with individual applicants. He offered to place on record an undertaking in writing of Mr. R.K. Sipani, Managing Director. Since the undertaking was to be obtained from Bangalore, the registered office of the aforesaid Company, the case was adjourned to 28.5.1997 and operation of the impugned order was stayed till the adjourned date. On 28.5.1997 Mr. U.S. Gupta, authorised agent of the revision petitioner, placed on record an undertaking purporting to have been signed by Mr. R.K. Sipani. It was found that the undertaking was not categorical and when this was pointed out to Mr. Gupta, he prayed for filing a proper undertaking by 3.6.1997. The stay order was continued and it was directed that failing the furnishing of the undertaking by the adjourned date the stay shall stand automatically vacated. On 3.6.1997 Mr. R.R. Handa, Advocate filed another undertaking of Mr. R.K. Sipani. It was found that the undertaking did not mention the aforesaid time limit of two months for payment / settlement and was not accepted. It was made clear that in terms of the order dated 28.5.1997 the stay stood vacated. The case was adjourned to 1.8.1997 after notice of the revision petition to the respondents. On 1.8.1997, a large number of respondents appeared in person or through Counsel/authorised representatives. Mr. R.M. Tatia, Advocate for the revision petitioner was directed to furnish suitable number of copies of the revision petition as also of the Civil Writ Petition No. 2839 of 1997 in which Delhi High Court while issuing notice to the respondents for 14.10.1997 had stayed the execution of the arrest warrant issued against Writ Petitioner No. 2 therein namely Mr. R.K. Sipani in C.M. No. 5604 of 1997. Replies have been filed by various sets of respondents/their Counsel/authorised representatives. We have heard Mr. R.M. Tatia, Advocate for the revision petitioner, Mr. A.N. Gupta, Authorised representative for about 50 respondents, Mr. R.S. Sawhney, Advocate, Mr. G.L. Chawla, Advocate, Mr. Bipin K. Dwivedi, Advocate for some of the respondents, Mr. Kamal Nijhawan for another set of respondents, Mr. Pawan Kumar, Advocate for yet another set of respondents and Mr. D.N. Sharma, Advocaterespondent in person as well as other respondents, who wished to be heard. We have also carefully gone through the record. Mr. Tatia contended (i) that the District Forums in Delhi had no territorial jurisdiction as terms and conditions of booking contained an express stipulation that only Courts at Bangalore would have jurisdiction; (ii) that claim for the refund of the booking amount with or without interest did not constitute a ''consumer dispute'' and was outside the purview of the Consumer Protection Act; (iii) that in a large number of cases the complaint was filed after the expiry of a period of limitation. He placed reliance on a large number of decisions in support of his contentions.

On behalf of the respondents, it was submitted that various pleas raised on behalf of the present revision petitioner, who were opposite parties in the various complaints, had been gone into by the District Forum. In some of the cases appeal/revision filed by opposite parties had been dismissed by the State Commission, Delhi and no further appeal/revision having been filed, the orders had become final. It was further submitted that in order to enforce an order passed against the company, the Managing Director or other Directors responsible for the business of the Company had been held liable to the penalty prescribed u/Sec. 27. Not only M/s. Sipani Automobiles Ltd. but its Managing Director, Mr. R.K. Sipani, had failed to satisfy the orders and, thus, a clear case for awarding the punishment u/Sec. 27 had been made out. It was high-lighted that in none of the cases was any plea put forward that the aforesaid Company had no ability or means to pay. In fact, an undertaking or assurance was given through various Advocates/authorised representatives who appeared in the proceedings, to make the payment and dates had been obtained with such an assurance. In fact, the Company failed to make the payment and thereby flouted the undertaking or assurance given to the District Forum/State Commission. What is more the personal attendance of Mr. R.K. Sipani could not be obtained through (a) direction conveyed through Company''s Advocate/authorised representative (b) bailable warrants and (c) non-bailable warrants. It was pointed out that the District Forum was left with no alternative but to pass the impugned order.

THERE is no denying the fact that there is conflict of opinion amongst the various State Commissions. The question raised in the present revision petition namely relating to territorial jurisdiction, the complaint being not covered by the provisions of Consumer Protection Act, and the complaints being barred by limitation were gone into and orders passed either by the District Forums or this State Commission from time-totime. No further revision having been filed against those orders, those orders became final. Recently, a bunch of appeals/revision petitions have been disposed of by our order in Sipani Automobiles Ltd. v. Tej Bahadur Jain, A-57/97 dated 28.8.1997. This Commission examined the various contentions as well as the case law and ultimately repelled the contentions raised on behalf of the Company for reasons noted in detail therein. It is considered totally unnecessary to go into the same questions again. Mr. Tatia next brought to our notice order passed by Delhi High Court in CWP 2839 of 1997 in CM No. 5604 of 1997 dated 21.7.1997. According to the interim order, the arrest of Mr. R.K. Sipani has been stayed and notice issued to the respondent in the writ petition for 14.10.1997.

MR. Tatia also submitted that the Company had filed a revision petition in the National Commission. The particulars of that revision petition were not made available. MR. Tatia, however, stated that the stay matter could not be taken up by the National Commission as no sitting of the Commission was being held since the retirement of the President thereof since 18.6.1997. Mr. A.N. Gupta, Authorised Representative of about 50 respondents stated that in the revision petition the time asked for making the payment in terms of the order/settlement which may be reached in individual cases was about three months. At the earliest opportunity he had made an application that the time asked for by the petitioner may be given. He further stated that he does not mind if a further period of 15-20 days is given to the Company to make the payment in terms of the orders which have attained finality. This submission of Mr. Gupta was adopted by most of the other learned Counsel/ their representatives or the respondents themselves. With regard to liability of the Managing Director u/Sec. 27, we may refer to a Division Bench judgment of Delhi High Court in Byford Leasing Ltd. v. Union of India & Ors., 57 (1995) DLT 623 (DB) in which it was held, "so far as question of personal liability of the Chairman/ Managing Director is concerned, we find that the conclusion arrived at by the State Commission in the impugned order is perfectly reasonable. A person in-charge of/and responsible for the conduct of business of the Company is liable to punishment for disobedience of the orders made by the concerned authorities, (vide para 13 of the report at pages 6 to 7). SLP against the said order of the Division Bench was dismissed as withdrawn in SLP Cri. No. 2498-2499 of 1995 dated 4.8.1995.

FOR the foregoing reasons, we find no merit in the revision petition which is, accordingly, dismissed with no order as to costs.

IN view of the direction of the Delhi High Court in CWP 2839 of 1997 dated 21.7.1997 Mr. R.K. Sipani shall not be arrested till the stay order is vacated by the High Court. The revision petition is disposed of in these terms. A Copy of the order be furnished to the parties as well as to District Forum-II. Revision dismissed.