Usha Rectifier Corpn. (I) Ltd. vs S.CHITTI TALLI

OPPOSITE party No. 1 before the District Froum is appellant in this appeal under Section 15 of the Consumer Protection Act, 1986 (for brevity, ''the Act'').

APPELLANT is a company registered under the Companies Act, 1956. With a view to set up plants, it issued advertisements inviting applications from the public and existing share-holders for allotment of shares and convertible debentures. The respondent along with the application deposited Rs. 1,000/- towards first payment for allotment of 50 Nos. of convertible debentures in the Indian Bank, Koraput Branch (O.P. 2 before District Forum) and she was granted a receipt bearing No''. 9445505 dated 19-10-1989. As the respondent did not receive the debenture certificates after expiry of a long period, she approached opposite party No. 2 who addressed a letter to its Head Office at New Delhi since the bank scroll indicating deposit was sent to the New Delhi, Main Branch of the bank. Respondent contacted PCS Data Products, New Delhi on 20th April, 1990 but in vain. In July, 1990, opposite party No. 2 reminded the New Delhi main branch and on 18-10-1990 the main branch instructed the Koraput branch to intimate the respondent to approach the appellant directly. Respondent addressed a letter on 19-10-1990 to appellant where the receipt number of the bank and other particulars for issue of debentures certificates. Since no allotment was made even after one year; respondent intimated the appellant for refund of the deposited amount along with interest. Despite the same no reply having been received, the District Forum was approached on 21-9-1991 for redressal. On receipt of the copy of the complaint, the appellant addressed a letter to the District Forum indicating that the respondent has not given the number of the application and has only mentioned the number of bank''s acknowledgement slip which is not sufficient to trace out records since it was running eight series of debentures. It was further indicated that the respondent should be directed to send full particulars of the application to the appellant with date along with the series of debentures in which the application was made and assured all cooperation. The opposite party No. 2, the Koraput branch did not state its case. However, it appears that a copy of the scroll sent by it to its main branch at New Delhi was handed over to complainant.

Respondent filed the copies of bank''s receipt, her letter dated 18th October, 1990, Registration receipt of the letter, bank''s scroll and application bearing No. 5927044 (without the details therein being filled up) before the District Forum. District Forum on the basis of these materials held that the appellant having received the amount is to refund the same. It directed the appellant to refund the money with interest at the rate of 6% per annum from the date of deposit of the money, i.e. 19-10-1989 within 10-2-1992 in favour of the respondent. It was further directed that in case of failure, the appellant would be liable to pay to the respondent interest at the enhanced rate of 8% per annum from 11-2-1992 till the date of payment. Aggrieved by the aforesaid order, the appellant has preferred this appeal.

IT is submitted by the learned Counsel for the appellant that the complaint being vague, appellant did not get any opportunity to state its case and no direction should have been given on the basis of such a complaint. IT is further submitted that the appellant is a registered company under the Monopoly & Restrictive Trade Practices Rules, 1970 in the register maintained for the purpose. IT is further stated that in view of such registration, the appellant-company does not come under the purview of the Act. IT is further stated that there is no question of unfair trade practice since the shares and debentures are not goods. Shares and debentures are not items of manufacture or commercially dealt with by the appellant-Company. A share-holder of a company is not a consumer. Under Section 12 of the Act a Consumer to whom service provided can file a complaint. On the finding that allegations contained in the complaint about deficiency in services are proved, the redressal agency can issue a direction as provided under Section 14 of the Act. Therefore, redressal agency is to find out; (i) whether a complainant is a consumer, (ii) whether assertions in the complaint relate to any services, (iii) whether the service, if any, has been rendered by the opposite party, (iv) whether there is any deficiency in service rendered by the opposite party, (v) whether the complainant has suffered on account of the deficiency in service rendered and (vi) whether the deficiency is on account of the negligence of the opposite party. Redressal Agency is to consider the question of issuing direction on basis of findings on these points.

ANY person receiving an amount to do something is to refund the amount if he does not discharge the obligation. This is ancillary to the agreement whether specific or implied. Failure to refund the amount is a deficiency in service. If support of any decision is necessary for this view, it will be found from the decision of the National Commission reported in II (1992) CPJ 387 (NC)=1991 (1) CPR 184 (Mumbai Grahak Panchayat v. M/s. Lohia Machine Ltd.) where M/s. Lohia Machines Ltd. received money from intending purchasers of its product. When inspite of repeated representations from various intending purchasers who cancelled their booking, the amounts received as advance were not refunded, a society filed complaint on behalf of consumers. National Commission gave direction for refund of the amount. In II (1992) CPJ 756 (N. Maduram Financial Services (P) Ltd. v. Modern Wollens Ltd.), it has been held that persons purchasing debentures/shares from the company or existing shareholders are consumers. Hence, respondent is a consumer and her complaint that she is not getting refund of the money deposited is entertainable by the District Forum. 8.Next question for consideration is whether there is deficiency in service in the present case. When appellant advertised for allotting debentures on application with cash deposit of application money and authorised Indian Bank, Koraput Branch (O.P. No. 2 before the District Forum) for receiving deposits along with applications for allotment of debentures, it declared that on deposit, applications shall be considered for allotment of debentures. Respondent having deposited the amounts is entitled to consideration for allotment of the debentures and in case of no allotment, she is entitled to get refund of the money from appellant. If no allotment is made, respondent has a right to know the cause thereof. This minimum obligation for intimating the person to whom service is to be rendered require no statutory provision in this regard. It is ancillary to every service. No person paying the money for getting any debentures allotted ever expects that he would neither get the benefit nor the money and would not get confirmation in that regard. It is the right of a consumer to get back the-amount when no allotment of debentures has been made. Only case made out by the appellant is that in absence of details it is not possible on its part to assist the consumer in the matter. In appeal also the same question is raised without explaining the circumstances under which the money cannot be refunded by it. It is stated in the memorandum of appeal that debentures must have been allotted since no application for allotment is pending. Difficulty in tracing out is explained to be the volume of applications received. We are not impressed with the explanation. The common principle relating to money matters is that debtors are to follow the creditors. When a person receives from another to discharge its obligation, it stands in position of debtor until it discharges the obligation. If it cannot discharge the obligation, it is his duty to refund the amount received. Therefore, it was the duty of appellant to explain how it has utilised the money received from complainant. It may be clarified that appellant does not dispute that its agent the bank has received the money. If it would have been disputed, it would have taken no time for us to come to a conclusion that money has been received as indicated in the receipt and correspondence of opposite party No. 2, the Koraput branch of the bank with Delhi main branch.

DATE of receipt, amount received, the name of depositor were known to the officers of appellant which being a body corporate has no living mind and is to act through individuals. What steps appellant has taken after receipt of letter from complainant is not explained to us. When a letter is received, making a grievance, is an obligation of any person whether individual or body corporate, rich or poor, powerful or destitute, to send a reply. This is the minimum courtesy in a society. This is more important where grievance is made in matters of money since the same is the main cause for creating disturbance in a society. If no reply is given, the cause for the same should be explained when questioned in any adjudicating agency. Absence of reply to complainant and absence of explanation to the District Forum or even in this appeal leads to an inference that appellant did not attach any importance to such letter. Nothing less than negligence can be inferred from such circumstance. We are of the opinion that appellant was negligent in not giving any reply. If appellant would have sought for assistance from complainant to send further details, the process of adjudication might have taken a different turn.

WHEN any money is received by a company, it is accounted for. Company must be maintaining separate registers to deal with shares and debentures. A scrutiny of the same would have assisted the company to trace out the deposit by complainant. Volume of applications is no explanation to avoid search. Failure to search out is a furtherance of negligence. When complainant has stated that evenafter one year of the deposit she has not received the debenture certificates and appellant who could have traced out the same has not made any endeavour in that respect, in the circumstances, we have no other alternative than to draw an inference that on account of negligence, applicant has not issued the debenture certificates. If certificates would have been issued, the same could have been brought to our notice also. Appellant, it appears, did not appreciate the seriousness of the allegation against it. One of the objects of the Act is to bring home seriousness in minds of those who are rendering service so that consumers do not suffer and are protected. Appellant has failed in this respect in conduct exhibited not only to complainant but also to Redressal Agency. It has made endeavour to exhibit the same attitude as in litigation before the Civil Courts to avoid which the Act has come to statute book.

From the aforesaid discussions we are satisfied that the appellant received the amount, has not allotted the debenture certificates for no fault of the complainant and appellant was required to refund the money deposited by the complainant when such demand was made. Since no explanation is available how the money has been utilised although the same was within the knowledge of the appellant.

APPELLANT has blamed District Forum that no opportunity was given to it to state its case. It is stated that the letter sent to the District Forum is not its reply. Under the Act, a Redressal Agency is to send a copy of the complaint to the opposite party and give him opportunity for 30 days from the date of receipt of the complaint to state its case in respect of the allegations made against him. If within the statutory period, any opposite party is not able to state his case, he may request for further time. A Redressal Agency has limited power. It cannot extend time beyond 15 days from the statutory period of 30 days. If no statement is received within time prescribed, redressal agency has to proceed ex-parte. Keeping the same in mind, it has been provided in Section 13 of the Act that decision of a redressal agency under the Act cannot be questioned if the principle of natural justice as is available in common law forum is violated if the provisions of the Act had been complied with. Letter of the appellant is itself its statement which reveals that without further particulars it is helpless. We have already discussed how appellant was not helpless. We have also indicated what the appellant could have done. To repeat, it could have sent a reply to complianant to assist it by supplying further particulars to locate the utilisation of the amount paid by the complainant, it could have searched the registers to locate the utilisation of the amount. Silence and inaction in these circumstances is a denciency in service and the same is outcome of negligence. Complainant being deprived of the amount has suffered on account of deficiency in service. Appellant prays for protection in view of the certificates obtained by it under the MRTP Act, 1969 and rules made thereunder. Decision of State Commission reported in II (1992) CPJ 763 (Usha Rectifier v. Jayshree Piishkar) is sought to be pressed to service. Delhi State Commission relied upon an earlier decision in Appeal No. A-15/89 (M/s. Appolo Tubes Ltd. v. Lalchand Malhotra) decided on 8-11-1990 for rendering the reported decision. A copy of this decision is not made available to us to examine the reasons behind the decision. We find that the provision under which the certificate was issued has been omitted by amendment to the Act in an ordinance. Apart from it, the decision is also distinguishable on facts. In the dispute before Delhi Commission after allotment of debentures, the allottee wanted refund. This was denied by the company. It was held that there is no deficiency in service. To such circumstances, a certificate granted may protect a company which we had not examined. No legislature would protect a company which is casual in its dealings with the persons applying for debentures after appropriating the amount paid by not issuing certificates or not refunding the amount. If this interpretation is not given, people will lose faith in Legislature where they would be duped to be deprived of their money and companies would be allowed to misappropriate the same. Trust reposed on companies by them would be observed more in its breach. Laws are made to have an orderly society and they are never intended to create imbalance in an orderly society.

COMING to question of direction, we are inclined to give an opportunity to the appellant. It is directed that the company shall intimate the appellants within two months of the date of receipt of this order the details of the certificates allotted to complainant prior to its receipt of copy of complainant in the District Forum. If no intimation is received, direction of the District Forum shall operate. In other words, if no debenture has been issued prior to the date of receipt of the complainant, by the appellant, it shall be bound by the direction of the District Forum. If no intimation is also sent by registered post to complainant within the time stipulated, the direction given under Section 14(1)(d) by the District Forum shall operate from the date of that order. In result, appeal is dismissed subject to aforesaid modification. Appeal dismissed. _______________