K RADHA KRISHNAN Vs. KARNATAKA CONSUMER FORUM REGD

JUDGEMENT

(1.) By this common judgement, all these appeals are being decided together inasmuch as they arise out of common order rendered by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (for short 'the State Commission') in complaint case no. 89 /1997. By the impugned order, the complaint filed by respondent no. 1 Karnataka Consumers' Forum (Regd. ) was allowed. The appellants were directed to jointly and severally refund the amounts deposited by various depositors as per the list appended with the complaint and also to pay interest @18% p. a. from the date of the complaint till the date of entire payment was made. They were also directed to pay amount of Rs. 1 lakh by way of compensation to the depositors.

(2.) It is not necessary elaborately set-out the facts of each complainant's case. Suffice it to say that the appellants were past Directors of respondent no. 2 Madras Motor Finance Guarantee Company Limited (for short 'MMFGC Ltd. '). It appears that the MMFGC Ltd. was incorporated under the Companies Act, in or about 1975. It appears that the MMFGC Ltd. issued an advertisement on 11.11.1992 calling for deposits from members of the public under various deposit schemes on basis of attractive rates of interest. The advertisement showed that the company was incorporated on 10.09.1975 having business of hire-purchase finance and leasing. The company was controlled by the Board of Directors. In response to such advertisement a large number of public members deposited several amounts under the MMFGC Ltd. with a view to earn higher rate of interest on the deposits. On 30.11.1995, a publication was issued by the Reserve Bank of India, prohibiting the MMFGC Ltd. from accepting any further deposits or renewing the deposits which were already accepted. The depositors gathered that such embargo was placed by the RBI because the MMFGC Ltd. had not maintained required liquid assets. The depositors also learnt that misleading advertisement was published by the MMFGC Ltd. with a view to collect huge deposits. Some of the depositors sought refund of the deposits. MMFGC Ltd. did not refund the depositors' amount. It appears that some of the creditors of the MMFGC Ltd. filed winding up petition before the Company Court at Chennai. It also appears that an Official Liquidator was appointed during pendency of the said proceedings by the High Court. Taking up cause of all the depositors, enlisted as per the list filed with the complaint, respondent no. 2, i. e. , Karnataka Consumers' Forum (Regd. ) filed complaint case no. 89 / 1997 in the State Commission. The following reliefs were sought:-

(3.) Though, notice was issued by the State Commission of all the appellants yet only original OP No. 3 Mr. V. B. Desai, appeared before the State Commission. His contention was that the complaint was barred by limitation. He further submitted that he had retired as director of the MMFGC Ltd. on 06.08.93 and had no liability to refund the deposits. He further submitted that in view of section 446 of the Companies Act, 1956, the complaint was barred. It was submitted that without leave of the Company Court no such complaint could have been filed by the respondent no. 1 (complainant).