RAVIKANT Vs. MRS VEENA BHATNAGAR

JUDGEMENT

(1.) THIS First Appeal is directed against the common Order dated 15.10.93 passed by the State Commission, Delhi in Complaint Case Nos. C -242, C243, C -255 of 92 & C -82 of 1993 convicting Shri Ravi Kant in all the four cases and Smt. Asha Lata in C -243/92 under Section 27 of the Consumer Protection Act, 1986. Consequently Shri Ravi Kant was sentenced to undergo one years simple imprisonment and to pay a fine of Rs. 5000/ - in each of the four cases. In case Shri Ravi Kant failed to pay the fine, he was directed to further undergo simple imprisonment for a period of three months and the sentences were to run concurrently. A fine of Rs. 10,000/ -was imposed on Smt. Asha Lata and in default of payment of fine she, was to undergo simple imprisonment for a period of one month.

(2.) TINE background of the appeal may first be noticed. Shri Ravi Kant Managing Director and Smt. Asha Lata, Director, who are husband and wife floated and got incorporated two Companies namely Instant Growth Funds (P) Ltd. and I.G.F. Leasing (P) Ltd. The Companies advertised and offered handsome interest of 36% per annum and 100% security of money by way of post -dated cheques and received deposits from the complainants and others. The said two companies failed in their service in refunding the deposits when due and the cheques were dishonoured on presentation. The complainants obtained decrees from the State Commission, Delhi against the said two Companies. In some of the case Shri Ravi Kant and Mrs. Asha Lata were parties in individual capacity and in those proceedings decrees have been passed against them also. As the opposite parties failed to comply with the Orders passed by the State Commission by paying the amount decreed within the period of three months, the opposite parties are liable to be prosecuted and punished under Section 27 of the Consumer Protection Act, 1986. This is what the State Commission did by a very detailed and reasoned order and convicted and sentenced the appellants.

(3.) WHEN the appeal came up for final hearing on 22.9.95 it was part heard. This Commission recorded that the conditions stipulated in our order dated 15.5.95 had not been complied with by the Appellants and thus the stay granted as per that order stood vacated and the order of imprisonment passed against the Appellant would be implemented. The final arguments were heard on 1.11.95 when the order was reserved. The main submission made at the time of hearing is that the Company is in process of liquidation and the Honble Company Judge of High Court of Delhi in the order dated 3rd June, 1992 had already given charge of the Company to the Official Liquidator attached to the Honble Company Court, that all proceedings are liable to be stayed against the Company by virtue of the provisions of Section 446 of the Companies Act and further more the Company after appointment of the Official Liquidator/Provisional Liquidator the charge of the Company goes in the exclusive hands of the liquidator and the Company can exclusively be represented through Official Liquidator and that no attachment or recovery can be made or enforced against tine Company by virtue of the provisions of Sections 441,442,446 and 537 of the Companies Act and in such cases the provisions of the Companies Act are to be followed as also by the Redressal Forum functioning under the Consumer Protection Act. It is further argued that a decree holder cannot resort to the recovery by way of simple execution in case of Company which is under process of liquidation, and the only remedy in such cases is to approach the concerned Company Court under the provisions of preferential payments under Section 530 of the Companies Act.