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Judgment
V. Suri Appa Rao, J.—Petitioner has sought for quashing of proceedings in C.C. No. 20/2010 in E.P. No. 35/2010 arising out of complaint 354/2009 on the file of the IV Additional District Consumer Disputes Redressal Forum, Bangalore initiated u/s 27 of the Consumer Protection Act on the ground that the petitioner being the Director is not liable for prosecution in respect of the orders passed by the District Consumer Forum and State Forum. The brief facts of the case are :
Respondent Nos. 2 to 4 filed complaint before the District Forum against the Company called M/s. Ittina Properties Pvt. Ltd., represented by Maheshwarappa, Director of the said company, alleging that deficiency in service and it is further-contended that they have received advance amount promising to sell the flats has either delivered the flats nor returned the money paid by the respondents. After the enquiry, the District Forum directed the company to complete the project and hand over the flats. However, the said order came to be modified by the State Forum whereby the Company was directed to return the advance amount with interest. But the Company has not complied with the orders of the State Forum. Therefore, the respondent Nos. 2 to 4 have filed Execution Petition. The petitioner filed this petition seeking to quash the prosecution against her.
The respondent Nos. 2 to 4 contended that during the life time of Maheshwarappa, Director of the Company, the petitioner is one of the Directors of M/s. Ittina Properties Pvt. Ltd., actually engaged in the business and affairs of the Company. Therefore, she is liable to be prosecuted for the offence punishable u/s 27 of the Consumer Protection Act.
Learned Counsel for the petitioner submitted that there are no allegations against the petitioner that she is criminally liable for prosecution u/s 27 of the Act and there are no adjudication under the Act. It is further submitted that there is no provision fastening the liability on the petitioner that she is criminally liable to be prosecuted under Sections 25 and 27 of the Act. Therefore, the proceedings against the petitioner is liable to be quashed
Per contra, the learned Counsel for the respondents submitted that after the death of Maheshwarappa, the petitioner who is the daughter of late Maheshwarappa being the Director actually engaged in the business and affairs of the Company is liable to be prosecuted for the offence punishable under Sections 25 and 27 of the Act. It is further submitted that the petitioner is one of the Directors of the Company and she was in charge of business and affairs of the Company. Therefore, she cannot be permitted to contend that she is not responsible for answering the claim made by the respondents 2 to 4 in the Execution Petition.
The point that arise for consideration is :
Whether the petitioner is liable for prosecution u/s 27 of the Consumer Protection Act" ?
The copy of the order sheet in Execution Proceedings No. 35/2010, Complaint No. 354/2009 at Annexure ''A'' clearly indicates that the respondent Nos. 2 to 4 filed Execution Proceedings against the petitioner and others i.e. M/s. Ittina Properties Pvt. Ltd. representing by its Director, after the death of her father Maheshwarappa. The District Consumer Forum ordered notice to the petitioner and five others on 07.05.2010. Admittedly, the petitioner is one of the Directors of the Company i.e. M/s. Ittina Properties Pvt. Ltd., along with her father Maheshwarappa. She is the 1st respondent in the Execution Petition. Notice served to the petitioner in the execution proceedings. The order passed by the State Consumer Forum is at Annexure ''C'' clearly indicates the petitioner is arrayed as opposite party No. 1 in the complaint No. 354/2009 as one of the Directors of the Company along with her father Maheshwarappa.
The fact that the petitioner is also the Director of the Company along with her father Maheshwarappa is not denied. The learned Counsel for the 2nd respondent sub-mitted that during the pendency of the Execution Proceedings, the petitioner and other Directors paid some amount representing the Company. Therefore, the petitioner is aware of the proceedings and the order passed by the District Consumer Forum and the State Forum and also the liability on the party of the Company.
Under the provisions of Section 5 of the Companies Act, in case of death of Managing Director or Director, other Directors are equally liable for prosecution as well as the proceedings. The petitioner being the active member of the Company and also the Director of the Company is therefore cannot escape the liability of the Company. Hence, the petition filed by the petitioner seeking to quash the Execution Proceedings is not maintainable. Accordingly, the petition is therefore dismissed.