Sunita Jain & 21 Ors vs Modern Denim Ltd

Deepa Sharma, Presiding Member

The present Appeals have been filed against the order dated 20.04.2016 in Complaint No.25 to 27 of 2010. Vide the impugned common order, all the three complaints were disposed of on the ground that common question of law and fact was involved. Vide this order, I dispose of the three First Appeal No. 732, 733 and 734 of 2016 filed against the impugned order since issue raised in these appeals is the same and common question of law is involved and the facts in all the three appeals are also identical.

The admitted facts of the case is that Appellants  who are the complainants ( hereinafter referred to as ‘complainants’)  had under a scheme of the respondent deposited their monies in fixed deposit somewhere in the year 1997. The money continued to remain deposited with the respondents and finally in the  year 2008-09, deposited amounts had been returned to individual depositors. The depositors, however, filed three complaints before the State Commission in the year 2010 alleging that no interest had been paid on their deposited amount which had accrued during the intervening period from the date of deposit till the date of refund of the deposited amount and claimed the interest for that period.

The claim was contested by the respondents alleging that complaint was barred by time and also on the ground that at the time the respondent had received their deposited amount, they had issued an undertaking whereby they had waived their right to interest on the deposited amount and, therefore, they cannot claim interest and the complaint was not maintainable.

After hearing the arguments, the State Commission had passed the impugned order whereby it  had dismissed the complaints on merit as well as on the ground that it was barred by limitation.

As regards the findings of the State Commission on the point of limitation is concerned, the findings are perverse since cause of action, if any, arose in the year 2008-09, during that time period the complainants had received the principal sum and they found that their interest accrued on the principal amount had not been paid.  The complaints had been filed in 2010 i.e. within two years from the date of cause of action, thus the complaints were filed within limitation.  The findings of the State Commission on this count is hereby set aside.

On merit, however, it is contended by the respondents that complainants had received the entire principal sum which they had deposited and had also given an undertaking that they were foregoing their interest.  It was submitted that undertaking given was voluntarily and without any force or coercion.  It is argued that no evidence was led by the complainants on record showing any force or coercion.  It is also argued that Company has become sick company under Section 22 of SICA Act at the time when the complaints were filed but now that order has been vacated and Company is not under Board for Industrial and Financial Reconstruction ( in short, BIFR) scheme and is not facing any insolvency. It is submitted that only principal amount was returned to the depositors on the undertaking.  It was done when the matter was pending before the BIFR and the BIFR had permitted the respondent to return the depositor’s money.  It is argued that once the undertaking is given and deposits had  been taken back, the issue of interest does not arise.  It is argued by counsel for the complainants that under the scheme floated by the respondents, it  had promised to give the interest on the deposited amount and the liability to pay interest cannot be absolved by simply taking an undertaking which was not voluntarily and was given  under the circumstances existing at that time.  It is argued that since the company was under BIFR so the complainants thought of taking their principal money back from the respondents. It is submitted that respondents were not ready to return their principal sum without the undertaking and, therefore, undertaking had been given to ensure refund of their deposited amount which has been lying  with the respondents since 1997 though scheme was valid only for 6 months.

I have given my thoughtful consideration to this argument of counsel.  It is apparent from the impugned order that State Commission has not considered this aspect of the case which now has the implications on the rights of the complainants.  Also, it is apparent that evidences had not been fully led by the parties before the State Commission.  Therefore, while setting aside the impugned order, I remand the matters back to the State Commission to decide the complaints on merit after taking on record the evidences of the parties.

Parties to appear before the State Commission on 06.04.2023.