DHANALAKSHMI CONSOLIDATES INDUSTRIES LTD Vs. C S MENON

JUDGEMENT

(1.) WE intend to dispose of all the above titled appeals by a common order as the facts involved in all these appeals are practically similar.

(2.) WE may first take up the facts of First Appeal No. 157 in detail. The respondent of this appeal Shri C.S. Menon had made some fixed deposits with the Appellant Dhanalakshmi Consolidates Industries Limited (for short the Company) during the period he was working as frill time Director of the Company. These deposits were to carry interest at the rate of 14% per annum. Interest was paid to the Respondent-Complainant for some period and thereafter the Company defaulted in the payment. In spite of repeatd demands the Company did not pay the amount due to the complainant. Thereupon the complainant filed complaint before the State Consumer Disputes Redressal Commission, Tamil Nadu at Madras alleging that the Company carries on business of hire purchase and as financiars to invest in industrial projects, promote industry, to transact business as investors, promotors, financiers, guarantors and monetory agents. The Company is also authorised to receive deposits from and to lend money to any person association etc. and thus it is carrying on the business as financiers. For the purpose of their service, the Company periodically invited deposits from the public. On account of negligence on the part of the Managing Director of the Company and diversion of its funds, the Company has not been able to meet its commitments to its shareholders and also has not been able to settle its due to depositors and share-holders. According to the Complainant, he had availed the financial services of the Opp. Party. When the Complainant made request to the Opp. Party to refund the deposits with interest the Company asked the Complainant to submit the full statement of all deposits and accounts held by the Complainant and his relatives (who are Complainant-respondents in First Appeal Nos. 175,176,177,178,179,180 and 181)to enable the Company to compile the details. The Company also asked him to furnish details of the amounts received during the period January, 1989 till the end of January, 1992 against the said deposits. The Complainant submitted the details asked. Thereafter there was no response from the Company. The Complainant, therefore, prayed that the Company be directed to pay the sum (specified in the appeal) representing all capital deposits made by the Complainant with the Company, interest on the deposits and compensation for mental agony and harassment. The complaint of Shri C.S. Menon was contested by the Company. It admitted its activities. It was, however, further pleaded that the Complainant was not a consumer as no 'service, as contemplated underthe Consumer Protection Act, 1986 (for short the Act) was rendered towards him by the Company and there was no consideration for the 'service,. It was alleged that the Complainant was misusing his position a whole time Director and as signatory of the Company had drawn several amounts from the Company's Account in Allahabad Bank, Madras Branch, City Union Bank, Madras Branch and the record show that the drawing amount to about Rs. 1,10,566.61 from the City Union Bank and over Rs. 1.5 lacs from Allahabad Bank. Other amounts have also been drawn by the complainant from other Banks and other ad hoc payments have been paid to the complainant and the members of his family. The complainant also sold and disposed of many parts of commercial vehicles of the Company during 1989 and 1990 and has taken the amount in cash and not accounted for the Company. Therefore, all withdrawals and sales have been treated as payments towards his deposits and that of his family members. It is estimated that the Complainant would be accountable and liable for over Rs. 10.00 lacs after adjusting the deposits. Some technical objections were also taken to the effect that in a civil suit the Company has been restrained from paying its depositors until statutory dues of the shareholders were paid and further that the winding up proceedings in C.P. No. 138 of 1988 was pending in the Madras High Court and therefore, the complainant had no right to make complaint before the State Commission.

(3.) ALL these cases were separately disposed of by the State Commission. The Company was ordered to refund the amount of deposits along with interest and along with varying amount of compensation and costs.