M/s. Roshan Oil Mills Ltd. … Complainant
United India Insurance Co. Ltd. … Opp. Party
Restitution - Section 144 of the Code of Civil Procedure- Matter remanded by the Supreme Court - Jurisdiction of the National Commission to direct restitution - Held- National Commission has jurisdiction in the matter.
Section 22 of SICA - Proceedings can be taken against the guarantors - Section 22 of SICA - No bar
DATED, 18th September, 2002
D.P. WADHWA, J.(PRESIDENT)
Two questions arise for consideration :-
(i) Is the National Commission barred from initiating restitution proceedings against the Complainant and its guarantors.
(ii) Since the complainant is before the BIFR can the proceedings be stayed u/s 22 of the Sick Industrial Companies (Special Provisions) 1985, (for short “SICA”)?
These restitution proceedings have been initiated in pursuance of the order of the Supreme Court in Civil Appeal No. 2339/92 filed by the United India Insurance Co. Ltd. in the case of United India Insurance Co. Ltd. Vs. Roshan Lal Oil Mills which was against the order of the National Commission dated 26.3.92 allowing the complaint of the Complainant. By this order National Commission had directed the United India Insurance Co., the Opposite Party to pay Rs. 61,65,902/- with interest @ 18% per annum to the Complainant. Aggrieved by this order, the Insurance Company filed an appeal before the Supreme Court. At the time when notice was issued by the Supreme Court on 14.7.1992, it was directed that “the respondents are allowed to execute the order but the payment shall be made to them on furnishing security of immoveable property to the satisfaction of the appellant.”.
In pursuance to this interim order of the Supreme Court, the amount of Rs. 81,83,247/- was deposited by the Insurance Company in the Registry of the National Commission on 19.8.1992 which included interest up to 10.8.1992. This amount was allowed to be withdrawn by the Complainant and it was directed by this Commission that interest up to 7.10.1992 shall be payable. Guarantee of immoveable property was furnished by Mr. Girdhari Lal Gupta, Mr. Kamal Gupta, Mr. Motilal Gupta, Mrs. Asha Singla, Mr. Rishab Singla and Mr. Shyam Lal Gupta as per the interim order of the Supreme Court.
Thereafter, the appeal was finally decided by the Supreme Court on 27.7.99. The appeal was allowed. Operative portion of the order is as under :-
“In view of the above, the appeal is allowed, the judgement passed by the Commission is set aside and the case is remanded to the Commission for a fresh hearing in accordance with law in the light of the observations made above.
Since the judgement of the Commission has been set aside, the insurance money paid to the respondent shall be refunded to the appellant within three months from today with interest @ 18% per annum for whole of the period they have retained the money with them. The appeal is disposed of in the above terms but without any order as to costs. It is hoped that the Commission will dispose of the matter at an early date, say within six months, if possible”.
At the instance of the Insurance Company proceedings have been initiated for restitution of the amount as ordered by the Supreme Court against the complainant. A plea was put forward that since the complainant is before the BIFR, no proceeding could be initiated against it in view of Section 22 of ‘SICA’. We were unable to accept this submission. We were executing the order of the Supreme Court directing restitution of the amount withdrawn by the Complainant in terms of earlier order of the Supreme Court. That apart, we also issued notices to the guarantors to make payments of the amount obtained by the Complainant in terms of the order of the Supreme Court. This led to filing of these applications, praying for withdrawal of notices/cancellation of the notices issued by this Commission.
Civil Procedure Code may not be applicable as such in the proceedings before the consumer forum. But the principles of Code which are based on justice, equity and good conscience can certainly be made use of Section 144 of the Code which deals with application for restitution is, in relevant part, is as under :-
“Application for restitution – (1) Where and in so far as a decree [or any order] is [varied or reversed in any appeal, revision or other proceeding or is set aside or modified in any suit instituted for the purpose, the Court which passed the decree of order] shall, on the application of any party entitled in any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree [or order] or [such part thereof as has been varied, reversed, set aside or modified] and, for this purpose, the Court may make any orders, including orders for the refund of costs and for the payment of interest, damages, compensation and mesne profits, which are properly [consequential on such variation, reversal, setting aside or modification of the decree or order].”
It is difficult to understand the arguments of the Ld. Counsel for the guarantors that this Commission has no jurisdiction or power to direct restitution from the guarantors and that no proceedings can be taken against the guarantors who were not party in the proceedings before the National Commission which led to the passing of the order which was ultimately set aside by the Supreme Court. This argument may appear to be attractive at first blush but it has no merit. It was also contended that it would be for the Supreme Court to direct the restitution proceedings against the guarantors u/s 144 of the Code. We do not think so. It would be certainly for the National Commission to initiate restitution proceedings and put the parties at par as they were before passing of the order dated 26.3.92.
Jurisdiction of the National Commission for executing its order is given u/s 25 & 27 of the Consumer Protection Act which section we quote –
25. “Enforcement of orders by the Forum, the State Commission or the National Commission – Every order made by the District Forum, the State Commission or the National Commission may be enforced by the District Forum, the State Commission or the National Commission, as the case may be, in the same manner as if it were decree or order made by a court in a suit pending therein and it shall be lawful for the District Forum, the State Commission or the National Commission to send, in the event of its inability to execute it, such order to the court within the local limits of whose jurisdiction –
(a) in the case of any order against a company, the registered office of the company is situated, or
(b) in the case of an order against any other person, the place where the person concerned voluntarily resides or caries on business or personally works for gain, is situated,
and thereupon, the court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution.”
27. “Penalties” – Where a trader or a person against whom a complaint is made [or the complainant] fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person [or complainant] shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousands rupees but which may extend to ten thousand rupees, or with both:”
Provided that the District Forum, the State Commission or the National Commission, as the case may be, may, if it is satisfied that the circumstances of any case so require, impose a sentence of imprisonment or fine, or both, for a term lesser than the minimum term and the amount lesser than the minimum amount, specified in this section.
A complainant can certainly be proceeded against u/s 25 & 27 and then there is no reason why the guarantors could not be proceeded against under these provisions. If the proceedings against the Complainant are permissible u/s 25 of Consumer Protection Act, 1986 as argued by Mr. Dhir, there would be then no bar against the guarantors to be proceeded against.
Section 22 of ‘SICA’ , in relevant para, is as under :
“Where the Board, after considering the report submitted by the operating agency and report thereon, if any, of the Secretary submitted in pursuance of an order made by the Board or the Chairman or in accordance with the rules made under the Act, is of the opinion that the report of the operating agency is not complete with respect to any of the matters referred to it for inquiry by the Board, the Board may direct the operating agency to make such further inquiry as it may deem necessary and submit a further report to the Board”.
We are unable to read in this Section 22 anything which prohibits National Commission for proceeding against the guarantors in the circumstances of the present case. Proceedings before the National Commission cannot be treated as suit for the recovery of the money or for the enforcement of any security against the Complainant or of any guarantee in respect of any loan or guarantee to the Complainant. There is, thus, no bar for the National Commission u/s 22 of the ‘SICA’.
Mr. Dhir Ld. Counsel for the guarantors has been unable to show us any judgement of the Supreme Court which is against the view taken by us that we have jurisdiction in the matter.
We find there has been persistent attempt on the part of the Complainant and the guarantors not to abide by the order of the Supreme Court.
We may also note that while the complainant is taking advantage of Section 22 of the ‘SICA’, it was not possible to serve him in normal way and he had to be served by means of publication. On one hand it is submitted that the matter may be expeditiously disposed of and at the same time these applications have been filed which only delay proceedings.
We do not find any merit and all the applications which are dismissed with costs which we assess at Rs. 5000/-
( D.P. WADHWA )
( J.K. MEHRA )
MEMBER ……………………… ( RAJYALAKSHMI RAO)
( B.K. TAIMNI )