Standard Motor Products Of India Ltd vs B Damodaran

THIS is an appeal against the order dated 2nd March, 1993 passed by the State Consumer Disputes Redressal Commission, Tamil Nadu, at Madras by which it ordered the present appellant to pay Rs. 1,36,813/ - with interest at the rate of 18% per annum from 28th January, 1989, till payment plus Rs. 25,000/ - as compensation to respondent No. 1 herein who was complainant before the State Commission.

FOR the purpose of disposal of this appeal it is not necessary to give the fact in detail. Suffice it to say that the present respondent No. 1 had filed a complaint against Union Company (Motors) Pvt. Ltd. and the present Appellant Standard Motors Products of India Ltd., alleging that for purchasing a Standard -20 Diesel Van manufactured by the opposite party No. 2 Standard Motor Products of India Ltd. (Appellant herein), he had paid Rs. l,36,813/ -to the manufacturer through opposite party No. 1, Union Company (Motors) Pvt. Ltd. in 1988. The vehicle was agreed to the delivered on or before 10th February, 1989. However, the vehicle was not delivered to him. Hence, the Complaint which was filed by him in 1992 before the State Commission for directing the opposite party No. 2 i.e. Appellant herein to deliver the vehicle and to pay compensation in the sum of Rs. 6,00,000/ - The State Commission allowed the complaint against the manufacturer. No relief was granted against the Union Company (Motors) Pvt. Ltd. as no amount was paid to that party and, therefore, it was held that service of that party had not been hired by the complainant.

THE order against the Appellant was passed ex -parte as it had not appeared before the State Commission. In this appeal, the Appellant has given reason for its non -appearance but, it is not necessary to go into that as the other contention of the Appellant that the State Commission could not have entertained the complaint has force.

LEARNED Counsel appearing for the complainant pointed out that the Appellant -Company had been declared sick by the Board for Industrial and Financial Reconstruction on 9th December, 1988 and a scheme for rehabilitation of the Company has been prepared by the I.D.B.I On 27th June, 1990 the Board passed an order under Sections 22(1) and 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short the Act) declaring that the said provisions shall apply in the case of the sick company till 31st March, 1991. Vide order dated 12th March, 1991 the declaration was extended for a further period of six months w.e.f. 1st April, 1991 till 30th September, 1991 or till the finalisation of the rehabilitation scheme whichever was earlier. Order dated 1st January, 1992 shows that vide order dated 31st July, 1991 the declaration was extended upto 31st December, 1991. Vide order 1st January, 1992 it was further extended to 28th February, 1992. On 7th April, 1992 the Board passed an order that vide order dated 25th January, 1991, the scheme for revival or rehabilitation of sick industrial company, M/s. Standard Motors Products of India Ltd. had been sanctioned and hence it was necessary to provide the Company with the protection contemplated under Section 22(3) of the Act. Therefore, the Board further ordered : - ''Now, therefore, in exercise of the powers conferred by Sub -section (3) of Section 22 of the aforesaid Act for due implementation of the said scheme, we hereby declare that the operation of all contracts, assurances of property agreements, settlements, awards, standing orders or other instruments in force to which the sick industrial company is a party or which may be applicable to it, immediately before the issue of this order, shall remain suspended for a further period of one year with effect from 1st March, 1992 and enforcement against the Company of all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder, before the said date shall remain suspended for the said period.''

On 27th January, 1993, further order was passed under Section 22(3) of the said Act extending the suspension of the contracts etc. for a further period of one year w.e.f. 1st March, 1993.

THE Complaint before the State Commission was filed sometime in 1992 and was decided on 2nd March, 1993 while the declaration made under Section 22(3) of the Act was in force.

A similar case titled ''M/s. Standard Motors Products of India Ltd. v. M. Athithan & Ors.'' I (1993) CPJ 134 (NC) came before this Commission and it was remarked in that case as follows : ''Therefore, when the scheme was under consideration and the BIFR had issued the necessary declaration which was in force at the time the Complaint who entertained and disposed of, the State Commission could not take notice of the suspended contract nor could pass an order about the refund of the advance in anticipation of declaration of the BIFR coming to an end. Under Clause (b) of Sub -section (4) of Section 22 any right, privilege, obligation or liability so remaining suspended or modified shall become revived and enforceable only on the cessation of the declaration. Thus, the order of the State Commission as far as it relates to the direction issued against the first opposite party (i.e. appellant in F. A. No. 108 of 1991) cannot be upheld.'' The above observation of this Commission clearly applied to the present case.

Hence, we accept the present appeal and set aside the impugned order and dismiss the complaint filed by the complainant. It is of course, made clear that the complainant will be at liberty to file a fresh complaint on cessation of the declaration referred to above.

WE may further point out that according to the rehabilitation scheme sanctioned by the Board for Industrial and Financial Reconstruction, copy of which has been filed, the repayment of advances made by customers are repayable in four equal instalments from 1994 -95 to 1997 -98 without any interest. It is not clear whether the said scheme has been implemented or not. It is for the complainant to find out about the above fact. The parties are left to bear their own costs of the present proceedings. Ordered accordingly.