ORDER

M.B. SHAH,J., PRESIDENT

Heard the learned counsel for the parties.

Being aggrieved and dissatisfied by the judgement and order dated 17.2.2006 passed in Appeal No.149/01 by the State Consumer Disputes Redressal Commission, Rajasthan rejecting the claim of the complainant for payment of interest on the fixed deposits, the complainant has preferred this revision petition.

As the amount was not paid, complaint was required to file Complaint No.1216/1998 before the District Forum, Jaipur-2. That complaint was dismissed on 25.10.2000.

Against that order, the petitioner preferred appeal no.1149/2001 dated 17.2.2006. During the pendency of the appeal, principal amount of Rs.15,000/- for each fixed deposit was returned to the complainant. However, the State Commission refused to direct the respondent to pay interest thereon.

Learned counsel appearing on behalf of the respondent submits that as the Board of Industrial and Financial Reconstruction (BIFR) proceedings are pending qua the respondent, this complaint was not maintainable. As against this, learned counsel appearing on behalf of the complainant has produced on record a letter dated 7.3.2003 written by the Bench Officer of the BIFR which refers to the decision rendered by the High Court of Karnataka in “Deepak Insulated Cable Corporation Ltd. V/s. Union of India and others (2001) Company KAR 401),” wherein it was held that a deposit made in the sick company is not a sum lent to the company but a sum held in trust by the company till the time of the maturity. The BIFR further informed the complainant that any claim made for return of the deposit with the company cannot be termed as a suit for recovery of money, attracting Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and that the protection of the said provision is not available to the sick company against the fixed deposits.

In our view, the said observation made by the BIFR is totally justified in view of the Section 22(1) which reads as under:-

“22. Suspension of legal proceedings, contracts, etc. (1) Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof [ and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company] shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority”.

The underlined portion clearly reveals that a suit for recovery of money in respect of any loan or advance granted to the industrial company cannot be maintained. However, deposit made with the company, cannot be termed as loan.

A Division Bench of Karnataka High Court on this issue has discussed as under:-

“He has placed reliance on the decision of the Supreme Court (sic) in Vijay Mills Company Ltd. Vs. State of Gujarat [1990] 68 Company Case 597. The apex court had occasion in that case to decide the question whether the provisions contained in section 22(1) of the Act extended to criminal prosecution of the company for its failure to pay the amount of sales tax recovered by it on behalf of the Government from the customers. The apex court held that the amount recovered from the customers by the company does not belong to it but it is held in trust to be passed over to the Government and in that view of the matter held that section 22(1) of the Act would not extend to the criminal prosecution for failure to pay the sales tax as the same does not come under the ambit of section 22(1) of the Act.

A deposit by the depositors is not a sum lent to the company but is a sum deposited with the company to be held in trust by the company till the time of maturity. It is not a loan in the strict sense of the term. Therefore, any claim made for return of a deposit made with the company cannot be termed as a suit for recovery of money due. Section 22(1) prohibiting as it does the taking up of certain proceedings against the company, without the consent of the Board, which proceedings in the natural course of things can be resorted to against the company without any reservation whatsoever by the person or persons interested, it goes without saying that the prohibitions contained in Section 22(1) do not lend themselves to any liberal interpretation. The said provisions must be interpreted in a limited sense and cannot be said to cover situations where there really is no element of execution, distress or the like against any property owned by the industrial company. Interpreting the term “no suit for recovery of money” thus, we find that it certainly would not cover a simple claim made by depositors for the return of their deposits after maturity. As held by the apex court in the decision, supra, it is a sum kept with the company by the depositors in trust for return after maturity. The learned single judge has on proper and detailed appreciation of the matter has come to the correct conclusion. The reasons assigned by the learned single judge for arriving at the said conclusion are well founded and do not call for any interference.”

In this view of the matter, the first contention raised by the learned counsel for the respondent that consumer complaint was not maintainable cannot be justified.

Next question would be with regard to the non payment of interest. In our view, there is no justifiable reason in not paying the interest on the fixed deposits which was accepted by the company by agreeing to pay a stipulated rate of interest @ 16.8% p.a.

However, learned counsel appearing on behalf of the respondent states that apart from the fact that the matter is pending before the BIFR, Company Law Board (CLB) has also finalized a scheme for re-payment of the deposited amount. Even as per the scheme framed by the CLB, respondent is required to pay interest @ 14% p.a. and the payment schedule was also fixed for refund of deposits which were less than Rs.20,000/- and as per time table prescribed therein, the amount shall be paid within 54 months from the date of maturity.

It is the contention of the learned counsel for the petitioner that petitioner was not a party to the proceedings before the CLB and the CLB has not issued any notices to the complainant.

In these set of circumstances, in our view, the payment of interest @ 14% p.a as per the scheme framed by CLB would be just and proper.

In the result, revision petition is allowed. Respondents are directed to pay interest @ 14% p.a on the amount of Rs.30,000/-. There shall be no order as to costs.

……………………………………J.

(M.B. SHAH)

PRESIDENT

………………………………………

(ANUPAM DASGUPTA)

MEMBER

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