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Judgment
Dr Inder Jit Singh, Presiding Member
The present Revision Petitions (RPs) have been filed by the Petitioner against Respondents as detailed above, under section 58(1)(b) of Consumer Protection Act 2019, against the orders dated 09.11.2021 of the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as the ‘State Commission’), in First Appeals (FAs) No. 738/2021 and 739/2021 in which orders dated 08.02.2021 of District Consumer Disputes Redressal Commission, Bangalore (hereinafter referred to as District Commission) in Consumer Complaints (CCs) no 572/2020 and 573/2020 were challenged, inter alia praying for (i) setting aside the orders dated 09.11.2021 of the State Commission passed in Appeal Nos. 738/2021 and 739/2021 (ii) setting aside the orders dated 08.02.2021 passed by the District Commission in Complaint Nos. 572/2020 and 573/2020.
While the Revision Petitioner (hereinafter also referred to as OP) was Appellant and the Respondent(s) (hereinafter also referred to as Complainants) were Respondents in the said FAs 738/2021 and 739/2021 before the State Commission, the Revision Petitioner was OP and Respondent(s) were Complainants before the District Commission in the CC Nos. 572/2020 and 573/2020.
Notice was issued to the Respondents on 29.12.2021. Parties filed Written Arguments/Synopsis on 02.06.2023 (Petitioner) and 06.06.2023 (Respondents/Complainants) respectively. The operation of orders passed by the Fora below were stayed vide this Commission’s order dated 29.12.2021 subject to petitioner depositing the entire decretal amount with the District Forum.
Brief facts of the case in RP/1147/2021, as emerged from the RP, Order of the State Commission, Order of the District Commission and other case records are that the Complainant filed Complaint No. 572 of 2020 under Section 35 of the Consumer Protection Act, 2019 alleging that the complainant deposited sum of Rs.7,90,000/- in the OP’s company for the assured interest @17% per year which is payable every year. After deposit, the OP paid interest @17% till May 2019. Thereafter they stopped paying the interest, for which the complainant preferred the complaint alleging deficiency in service with prayer to direct the OP to pay the entire F.D. amount alongwith interest from the date of payment of default. RP/1148/2021 involves similar facts. In this case the complainant filed Complaint No. 573/2020 and had deposited Rs.5,10,000/- with the OP.
The District Commission allowed the complaints in part with cost. The District Commission directed the OP to refund the deposited amount of Rs.7,90,000/- alongwith interest @17% from 24.06.2019 till the date of payment and also directed to pay Rs.5000/- towards damages and Rs.5,000/- towards litigation expenses (in CC/572/2020) and Rs.5,10,000/- alongwith interest @17% from 24.06.2019 till the date of payment and also directed to pay Rs.5000/- towards damages and Rs.5,000/- towards litigation expenses (in CC/573/2020). The OP did not appear before the District Commission, hence proceeded exparte in both the complaints.
Aggrieved by the orders passed by the District Commission dated 08.02.2021, the OP filed Appeals No. 738/2021 and 739/2021 before the State Commission with a delay of 122 days. Applications for condonation of delay were filed by the OP. The State Commission dismissed the Applications for condonation of delay filed by the OP as well as the Appeals stating that “the appellant ought to have filed these appeals well within time. This Commission will not wait for the decision whether to prefer the appeal or not. The appeal has to be filed within 45 days from the date of order. Hence, the application is not acceptable and not fit to allow in the eye of law. Further, the reasons narrated for not appearing before the District Commission is not satisfactory, because they admit that the notice was served on them but it was not reached the management of the Opposite Party/Company. Hence, they could not represent the complaint before the District Commission. Further, on going through the order passed by the District Commission, the notice was issued both physically and also through ‘e’mail, but the Opposite Party have not appeared before the District Commission knowing fully that the complainant has filed a complaint. Hence, the reasons are not acceptable in the eye of law. There is no any illegality or irregularity in the order passed by the District Commission. Hence, the appeals are liable to be dismissed.”
The Petitioner/OP challenged the said order dated 09.11.2021 passed by the State Commission in both the Appeals viz 738/2021 & 739/2021 mainly on the following grounds:
(i) the impugned judgment & order passed by the State Commission is illegal, unjust, unreasonable, arbitrary, without proper appreciation of facts and not sustainable in law and hence liable to be set aside. The State Commission ought to have appreciated that notice in complaint No. 572/2020 before District Forum ought to have been served upon the Petitioner Corporation itself. Instead, the notice was handed over to one of the employees who was working in the Petitioner Corporation. The said person failed to inform the Petitioner Corporation with regard to the same as a consequence of which, the Petitioner Corporation was unable to effectively address the issue before the District Forum.
(ii) The State Commission ought to have appreciated that the Petitioner on receiving notice regarding execution proceedings initiated by the Respondent had promptly taken action and had immediately sought to set aside the order dated 08.02.2021 passed by the District Forum. Despite the difficulties faced by the Petitioner as a consequence of the COVID-19 pandemic which severely affected the functioning of Petitioner Corporation, on receiving notice regarding the execution proceedings had primarily arranged for the awarded amount before filing the Appeal before the State Commission.
(iii) The Hon’ble Supreme Court in Salem Advocates Bar Association, T.N. V Union of India (2005) 6 SCC 344, observed that “there is however, danger of false reports of service. It is required to be adequately guarded. The Courts shall have to be very careful while dealing with a case where orders for deemed service are required to be made on the basis of endorsement of such service or refusal. …..” The Hon’ble Supreme Court in G.P.Srinivasa vs. Shri. R.K. Raizada & Ors. (2000) 3 SCC 54 had clearly stated that “under Order 9 Rule 13 C.P.C. and ex-parte decree passed against a defendant can be set aside upon satisfaction of the Court that either the summons were not duly served upon the defendant or he was prevented by any ‘sufficient cause’ from appearing when the suit was called on for hearing. Unless ‘sufficient cause’ is shown for non-appearance of the defendant in the case on the date of hearing, the Court has no power to set aside an ex-parte decree. The words “was prevented by any sufficient cause from appearing” must be liberally construed to enable the court to do complete justice between the parties particularly when no negligence or inaction is imputable to erring party…….”
(iv) The State Commission ought to have appreciated that it was necessary for the case of the Petitioner Corporation to be heard before upholding the order passed by District Forum in the interest of principles of natural justice. The same would have brought to light the material fact that the complaint filed by the Respondent in itself would be not maintainable.
(v) The State Commission further erred in not observing that the alleged debt borrowed is only from one Anantrai Sheshagiri Kamat in his individual capacity. As a consequence of the same, the Petitioner Corporation cannot be made liable in such a situation as the Petitioner Corporation has absolutely no connection with the Respondent otherwise. The State Commission ought to have appreciated that the claim so borrowed by the Respondent reflects that the amount so alleged to have been borrowed is by paying an exorbitant interest, and accepting the presence of the debt herein, the said person has paid more than double the alleged borrowed amount which is a principle unsustainable in the eyes of law.
(vi) The State Commission ought to have appreciated that substantial justice would not have been delivered in case the Petitioner is not given an opportunity to be heard and argue the case on merits whereas the matter would be disposed off on a mere hyper- technicality. The State Commission erred in not noting that the entire transactions are contractual in nature and that the complaint filed by the Respondent ought not to have been entertained in the first pace. The impugned order passed by the State Commission is bad in law, illegal, improper, erroneous and calls for interference by this Commission to secure ends of justice.
Heard counsels of both sides. Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
(i) Counsel for Petitioner argued that the State Commission has erred in dismissing the Appeal on the ground of limitation because the Hon’ble Supreme Court in Cognizance for Extension of Limitation, Suo Moto Writ (Civil) NO.3 of 2020 had suspended the operation of limitation prescribed by any law in filing any petitions, applications, suits, appeals, and all other proceedings. The District Forum allowed the Complaint vide order dated 08.02.2021 and the Petitioner had filed the Appeal before the State Commission on 02.09.2021. The limitation prescribed by C.P.Act was not operational during this period and hence the appeal could not have been dismissed on ground of delay. Even otherwise, it is to be borne in mind that the hospitality industry was the worst hit industry in the pandemic. The period from 08.02.2021 to 02.09.2021 was the period when the deadly second wave had hit the country. During this period, the Petitioner Corporation was facing severe financial crunch as the hotel operations were on standstill. It was difficult to even pay the rents of buildings and salaries of employees. The appeal was thus filed by the Petitioner only after attaining operation stability. Therefore, a delay of 122 days was not substantial and the Respondent had indeed proved sufficient cause for the same. The State Commission has erred in not providing an opportunity to the Petitioner to present its case and dismissing the appeal on the ground of delay.
(ii) It is also contended by the Petitioner that the Respondent is not a consumer of Petitioner and a civil transaction is given a nature of dispute. Respondent alleged that she deposited Rs.7,90,000/- as fixed deposit with the Petitioner for assured return of 17% p.a. and that the Petitioner issued deposit slips for the FD. It is grossly misleading statement. The deposit was not towards fixed deposit, but towards a loan amount which was advanced by Respondent to the former Managing Director of Petitioner Corporation i.e. Shri A.S. Kamath. The said loan transaction was and admitted fact as is clear from the letter dated 15.10.2019 addressed by the Respondent to the current M.D. of Petitioner herein.
(iii) It is further contended that the Petitioner is a business organization running a hotel industry. In view of the same, the Petitioner cannot be termed as a “service provider” in respect of the loan transaction involved between the Respondent and the former Managing Director of the Petitioner. The dispute is a civil dispute not consumer dispute.
(iv) The District Forum has initially committed jurisdictional error in entertaining the respondents’ complaint as the Respondents are not consumers of Petitioner Corporation. Secondly the State Commission has committed error by failing to exercise its jurisdiction judiciously and correcting the error committed by the District Forum. Besides this, The State Commission has also acted in contravention of direction of the Supreme Court Cognizance for Extension of Limitation, Suo Moto Writ (Civil) 3 of 2020.
(v) On the other hand it is contended by the Respondents that the District Forum passed the ex-parte order on merits after duly service of notice by physically and through email. The OP has not shown any due diligence in the present matter. The OP falsely submitted that the Petitioner became aware of the proceedings only after the initiation of execution proceedings in the EA/39/2021, despite the fact that service of notice was made. The Petitioner has admitted that the notice was received by employee of Company, but not reached management of Company. The OP filed Appeal with a delay of 122 days. The OP failed to satisfy the State Commission for delay. Hence, there is no jurisdictional error in the impugned judgement passed by the State Commission. The Petitioner willfully not appeared before the District Forum despite service of notice. The Petitioner actively concealed with malafide intentions in the Revision Petition that notice is also served through electronic means U/s 65 of the Consumer Protection Act, 2019. The judgments passed by the Hon’ble Supreme Court relied upon by the OP have no relevance in the present matter because the Petitioner failed to represent before the District Commission despite duly service of notice. Hence, the Revision Petitions be dismissed by imposing heavy penalties upon the Petitioner/OP alongwith initiation of contempt of court & perjury proceedings against Narayan Anantral Kamal, Managing Director of Kamat Yatriniwas Pvt. Ltd. for making false averments & active concealment of facts upon affidavit in the RPs.
We have carefully gone through the entre facts and circumstances of the case, rival contentions of the parties, orders of the State Commission and District Commission and other case records. As was held by the Hon’ble Supreme Court in Rubi Chandra Dutta Vs. United India Insurance Co. Ltd. [(2011) 11 SCC 269] that the scope in a Revision Petition is limited. Such powers can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order. In Sunil Kumar Maity Vs. State Bank of India & Ors. [AIR (2022) SC 577] held that “the revisional jurisdiction of the National Commission under Section 21(b) of the said Act is extremely limited. It should be exercised only in case as contemplated within the parameters specified in the said provision, namely when it appears to the National Commission that the State Commission had exercised a jurisdiction not vested in it by law, or had failed to exercise jurisdiction so vested, or had acted in the exercise of its jurisdiction illegally or with material irregularity.”
In this case, District Forum has, after duly considering the evidence before it, given a clear finding that complainants have deposited the amount towards fixed deposit with the OP (Rs.7,90,000/- in CC/572/2020 and Rs.5,10,000/- in CC/573/2020) and OP has agreed to pay interest @17% p.a., and failure on the part of the OP to refund the same amounts to deficiency in service. Accordingly, the District Commission has given well-reasoned orders directing the OP to refund the deposit amounts along with interest, damages and litigation costs. Appeals filed before the State Commission have been dismissed on account of delay in filing the Appeals. The State Commission has given a well-reasoned and justified order for not condoning the delay.
We do not find any infirmity or material irregularity or jurisdictional error in the orders of the State Commission or District Commission. Hence the orders of State Commission dismissing the Appeals of the Petitioner herein and orders of the District Commission in allowing the complaints are upheld. Accordingly, both the Revision Petitions i.e. RP/1147/2021 and RP/1148/2021 are dismissed.
The pending IAs in the Revision Petitions, if any, also stand disposed off.