WORLD LINK FINANCE LTD. vs M.R.DIXIT

SINCE the abovementioned appeals, filed by the appellant named above, under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as ''the Act'') have common facts and also raise common questions for consideration, the same with the consent of the learned Counsel for the appellant and the respondent/learned Counsel for the respondents have been heard together and are being disposed of finally by this common order.

THE facts, relevant for the disposal of the abovementioned appeals, lie in a narrow compass. THE appellant is a non-banking Company, duly incorporated and registered under the Companies Act, 1956, having its Registered Officer at 151, Maker Chambers, III-Nariman Point, Mumbai and a Branch Office at 1102, Akash Deep Building, 26-A, Barakhamba Road, New Delhi. In all the abovementioned appeals, the respondents had made deposits with the appellant. THE deposits, so made by the respondents, with the appellant, were to carry interest at the agreed rate and after the date of maturity, the same were payable by the appellant to the respondents together with interest. Since the appellant failed to pay the amount of deposits together with the agreed rate of interest to the respondents, the respondents filed separate complaints against the appellant before the District Forum under Section 12 of the Act with the prayer that the appellant be directed to refund the amount of deposits together with interest, compensation and costs. The claim of the respondents, before the District Forum, was contested by the appellant. In the reply/written version, filed on behalf of the appellant, it was stated that the respondents were not ''consumers'' within the meaning of Section 2(1)(d) of the Act; that there was no ''privity of contract'' between the parties; and the period allowed for payment should have been reasonable - atleast for six months.

The learned District Forum, vide orders, being impugned in the present proceedings, have rejected the pleas/contentions raised by the appellant, allowed the complaints and have directed the appellant to refund the amount in question to the respondents/complainants with interest and costs.

FEELING aggrieved, the appellant has preferred the abovementioned appeals under Section 15 of the Act. Notice of the appeals, preferred by the appellant, was given to the respondents who has entered appearance either through their duly authorised Advocates or in person. We have heard the learned Counsel for the appellant, learned Counsel for respondents, the authorised representatives of the respondents and also the respondents who had appeared in person in the abovementioned appeals and have also carefully gone through the documents and material placed on record by the parties. In the light of the challenges laid and contentions advanced at the Bar, we formulate the following questions, which arise for our decision in the present appeals : (1) Wehther the respondents in the present appeals are ''consumers'' within the meaning of Section 2(1)(d) of the Act ? (2) Whether in view of order dated 31.3.1999, passed by the Company Law Board, Western Region Bench, Mumbai, under Section 45QA(2) of the Reserve Bank of India Act, 1934, in the matter of M/s. World Link Finance Ltd., the respondents/complainants could have approached a FORA constituted under the Act ? (3) Whether there was no ''privity of contract'' between the appellant and the respondents ? (4) Whether in view of the financial crunch stated to have been faced by the appellant, the appellant, in the given facts, deserved to be given more time for the repayment of the amount in question to the respondents ?

Question No. 1 :

THE term ''consumer'' has been defined in Section 2(1)(d) of the Act and, therefore, it would be appropriate for us to refer to that definition of the word ''consumer'' at this stage, which reads as under : "''consumer'' means any person who,- (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or (ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person. Explanation-For the purpose of Sub-clause (i) ''commercial purpose'' does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood by means of self-employment."

On a bare perusal of the above provisions of the Act, it is apparent that the definition of the word ''consumer'' as defined in Clause (d) of Sub-section (1) of Section 2 of the Act, is of a wide sweep, which includes a person who hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and also includes any beneficiary of such service. The above provision of the Act, as contained in Section 2(1)(d), came up for consideration before the Hon''ble Supreme Court in case Lucknow Development Authority v. M.K. Gupta, III (1993) CPJ 7 (SC)=(1994) 1 SCC 243 and heir Lordships of the Supreme Court in the abovesaid case have held : "To begin with the Preamble of the Act which can afford useful assistance to ascertain the legislative intention, it was enacted, to provide for the protection of the interest of consumers. Use of the word ''protection'' furnishes key to the minds of makers of the Act. Various definitions and provisions which elaborately attempt to achieve this objective have to be construed in this light without departing from the settled view that a preamble cannot control otherwise plain meaning of a provision. In fact, the law meets long felt necessity of protecting the common man from such wrongs for which the remedy under ordinary law for various reasons has become illusory.... The word ''consumer'' is a comprehensive expression. It extends from a person who buys any commodity to consumer either as eatable or otherwise from a shop, business house, corporation, store, fair price shop to use of private or public services. In Oxford Dictionary a consumer is defined as ''a purchaser of goods or services''. In Black''s Law Dictionary it is explained to mean, ''one who consumes. Individuals who purchase, use, maintain and dispose of products and services. A member of that broad class of people who are affected by pricing policies, financing practices, quality of goods and services, credit reporting, debt collection, and other trade practices for which State and Federal Consumer Protection Laws are enacted''. xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx The Legislature has taken precaution not only to define ''complaint'', ''complainant'', ''consumer'', but even to mention in detail what would amount to unfair trade practices by giving an elaborate definition in Clause (r) and even to define ''defect'' and ''deficiency'' by Clauses (f) and (g) for which a consumer can approach the Commission. The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense of user of services."

(Emphasis supplied) Almost a similar question, as to whether a depositor who has made deposits with a Company or a firm in response to an offer from the firm inviting deposits from the general public on promise of attractive rates of interest, is a consumer or not, came up for the consideration of the National Commission in case - Neela Vasant Raje v. Amogh Industries & Anr., III (1993) CPJ 261 (NC)=1986-1995 COnSUMER 446 (NS), and the National Commission in the abovesaid case has made the following observations which are of utmost significance in the present context : "In interpreting a social welfare legislation one should not make a narrow approach but should be guided by the principles of benevolent interpretation which will help to promote and achieve the object and purpose of the Act namely, to protect the interests of consumers and suppress the evil sought to be remedies by the statute, namely the unscrupulous exploitation of consumers. The main part of the definition of the expression ''service'' is couched in the widest possible language and it expressly covers ''service of any description'' other than any service rendered ''free of charge'' or ''under a contract of personal service''. The mere fact that a particular form of arrangement for provision of a facility does not fall within any of the specified categories enumerated in the inclusive part of the definition is absolutely of no consequence as long as the arrangement entered into between the parties is one of rendering ''service'' as that expression is generally understood in common parlance. We are quite clear in our minds that when a Company or a firm invites deposits on promise of attractive rates of interest and prompt repayment of principal and interest on the expiry of the stipulated period with full security for the investment in the shape of the assets of the Company or firm, it is in essence of an offer by the Company of providing to persons interested in a safe avenue for investment of their funds with an assurance of prompt repayment and full security of investment. The consideration for the arrangement consists of the fact that the Company or firm is enabled to use the funds deposited with it for the purposes of its business. Such a transaction in our opinion is clearly one of providing service for ''consideration'' and the depositor is clearly a ''consumer'' under the Act. In construing the scope of a Social Welfare Enactment we have to take note of the current state of our socierty and the ground realities of life confronting the common people. To be offered a safe avenue for investing one''s funds with assurance of reasonable return in the shape of interest and sound security for repayment is certainly to be regarded as a ''service'' under the contemporary conditions prevailing in our society. It is a well-known fact which we cannot lose sight of that it is common practice with many hundreds of thousands of middle class families and retired pensioners to invest their funds in such schemes of deposits launched by Companies and firms and it would not be right to take a hypertechnical view regarding such an arrangement and deny relief under the Act to these depositors in the event of the Company or firm failing to discharge their obligations in the matter of repayment of the principal and interest on the basis of the arrangement of service entered into between the parties. The default on the part of the Company or firm to carry out its obligations to repay the principal and/or interest constitutes, in our opinion, ''deficiency'' in service so as to warrant the filing of a complaint before a Consumer Forum seeking relief under the Act."

(Emphasis supplied)

THE abovementioned decisions of the Apex Court and that of the Apex Commission clinch the matter finally and placing reliance on the abovesaid decisions of the Hon''ble Supreme Court and that of the National Commission, we hold that the respondents in the abovenoted appeals are decidedly ''consumers'' within the meaning of Section 2(1)(d) of the Act. Question No. 2 :

DURING the course of arguments, the learned Counsel for the appellant submitted that in view of order dated 31.3.1999, passed by the Company Law Board, Western Region Bench, Mumbai under Section 45QA(2) of the Reserve Bank of India Act, 1934, in the matter of the appellant Company, the complaints filed by the respondents before the District Forum constituted under the Act were not maintainable and should have been dismissed by the District Forum on the above ground alone. This very question came up for consideration before the West Bengal Consumer Disputes Redressal Commission, Calcutta, in case Gyan Singh & Ors. v. Carry On Savings & Investments Company Ltd. & Ors., III (1994) CPJ 9, and the West Bengal State Commission, in the abovesaid case of Gyan Singh & Ors. has held : "With regard to the contention of the opposite parties that the matter should be adjudicated in the Company Law Board instead of filing this complaint before this Commission and it is not maintainable before the Consumer Disputes Redressal Forum, we do not agree with such views of the opposite parties because we are of the opinion that this Commission can entertain such complaint received from the complainants/petitioners and there is no bar to entertain such complaint by us in view of provisions of Section 3 of the Consumer Protection Act by way of additional remedy claimed by the complainants/petitioners if such actions are not in derogation of the provisions of any other law for the time being in force."

(Underlined by us) A similar view has been taken by the Consumer Disputes Redressal Commission, U.T. Chandigarh, in case - Ms. Simran Macker v. M/s. DCM Financial Services Ltd. & Ors., I (1999) CPJ 654. This Commission, in Case No. CA-528/97 - entitled Thapar Agro Mills Ltd. v. Geetanjali Vasuja, has also taken the same view.

In view of the position explained above, we are of the view that even after passing of order dated 31.3.1999 by the Company Law Board, the jurisdiction of FORAS constituted under the Act is not ousted and a ''consumer'' aggrieved can still approach a FORA constituted under the Act for redressal of his grievances. Question No. 3 :

THE learned Counsel for the appellant, during the course of arguments, submitted that the respondents had not made deposits directly with the appellant but through another dealer and as such there is no ''privity of contract'' between the appellant and the respondents. Insofar as the above aspect is concerned, the position is that the appellant in the Memorandum of Appeal, in Paragraph 2(B) has itself stated that the respondents made investments through the concerned dealer which were forwarded to the appellant against which the appellant issued Fixed Deposit Receipts in the name of the concerned depositors through the concerned dealers. It would, thus, be clear that the respondents had routed their deposits to the appellant through the authorised dealers and the appellant had accepted the deposits and had issued Fixed Deposit Receipts to the depositors. As a matter of fact, the Fixed Deposit Receipts, issued by the appellant in favour of the respondents is in the nature of a contract which includes all essential conditions such as the amount of deposit, the period of deposit, the date of repayment and the rate of interest, etc. In the presence of the above facts it cannot reasonably be believed that there was no ''privity of contract'' between the appellant and the respondents and the plea taken by the learned Counsel for the appellant is liable to be rejected summarily. Question No. 4 : The learned Counsel for the appellant, during the course of arguments, submitted that the appellant is suffering from financial crunch and for the above reason the appellant is not in a position to make the repayment. It was stated by him that in view of the above fact, the learned District Forum should have given atleast 6 months'' time to the appellant for repaying the amount in question to the respondents. In our opinion, the above contention advanced by the learned Counsel for the appellant is also without substance because when a fixed deposit is given, the opposite party is bound to repay the amount and it cannot absolve itself of the liability on the plea that it does not have sufficient liquidity. Almost a similar view has been taken by the State Commission, Maharashtra in case Family Planning and Medical Aid Trust v. Pune Cooperative Bank Ltd., III (1993) CPJ 1318=1993 (3) CPR 370. No other point was urged or pressed.

IN view of the position explained above, in our opinion, the abovementioned appeals, filed by the appellant are liable to be dismissed. Accordingly, the same are dismissed. IN the facts and circumstances of the case, the appellant is also burdened with costs and it is directed that the appellant shall pay a sum of Rs. 500/- in each case to the respondents by way of litigation expenses. The appeals mentioned above stand disposed of in above terms. Appeals dismissed.