2000 (1) TMI 906 - Commission - Companies Law

Issues Involved:
1. Whether 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, 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?

Issue-wise Detailed Analysis:

Question No. 1:
The term 'consumer' is defined under section 2(1)(d) of the Consumer Protection Act, 1986. The definition includes any person who buys goods or hires/avails services for a consideration, and also includes any beneficiary of such services. The Supreme Court in Lucknow Development Authority v. M.K. Gupta [1994] 1 SCC 243 highlighted that the term 'consumer' is comprehensive and aims to protect the economic interests of consumers. Similarly, the National Commission in Neela Vasant Raje v. Amogh Industries [1986-1995] Con. 446 (NS) emphasized a benevolent interpretation of the term to include depositors who invest in a company or firm for attractive interest rates. The Commission concluded that the respondents are 'consumers' within the meaning of section 2(1)(d).

Question No. 2:
The appellant argued that the complaints should have been dismissed in light of the Company Law Board's order dated 31-3-1999 under section 45QA(2) of the Reserve Bank of India Act, 1934. However, the West Bengal Consumer Disputes Redressal Commission in Gyan Singh v. Carry On Savings & Investments Ltd. III [1994] CPJ 9, and the Chandigarh Consumer Disputes Redressal Commission in Ms. Simran Macker v. DCM Financial Services Ltd. I [1999] CPJ 654, held that the Consumer Protection Act provides an additional remedy and does not bar complaints under the Act. The Commission agreed, stating that the jurisdiction of FORAS under the Act is not ousted by the Company Law Board's order.

Question No. 3:
The appellant contended that there was no 'privity of contract' as the deposits were made through another dealer. However, the appellant admitted in the Memorandum of Appeal that the deposits were forwarded to the appellant, which issued Fixed Deposit Receipts to the depositors. The Commission found that the Fixed Deposit Receipts constituted a contract containing all essential conditions. Thus, the plea of no 'privity of contract' was rejected.

Question No. 4:
The appellant claimed a financial crunch and requested more time for repayment. The Commission dismissed this argument, stating that the appellant is bound to repay the fixed deposits and cannot absolve its liability due to insufficient liquidity. This view aligns with the State Commission, Maharashtra's decision in Family Planning & Medical Aid Trust v. Pune Cooperative Bank Ltd. 1993 (3) CPR 370.

Conclusion:
The appeals filed by the appellant were dismissed, and the appellant was directed to pay Rs. 500 in each case to the respondents as litigation expenses. The appeals were disposed of accordingly.

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