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2006 DIGILAW 276 (UTT)

Raju @ Kulwinder Singh v. Kulwant Singh

2006-05-31

K.S.GUPTA, P.D.SHENOY

body2006
ORDER Dr. P.D. Shenoy, Member — The respondents in this case viz Shri/Smt. Kulwant Singh, Jagtar Singh. Rajinder Singh, Dharam Pal Singh, Darshan Singh, Gulzar Singh, Guljinder Singh and Parmajit Kaur were the complainants before the District Forum. They deposited different amounts with the respondent Company at Kurait, District Ropar, Punjab. As the money was not returned with interest they filed a complaint with the District Forum against Raju @ Kulwinder Singh son of Gurdeep Singh, Managing Director of Helious Group. The opposite parties 1, 2 and 3 contested the case raising several grounds. The OP 1 has stated that he is merely an Assistant Branch Manager of OP 4. OP 2 has stated that he was the Post Master at Morinda Post Office and had no concern with the company. OP 3 has stated that she was an employee of the company appointed on a salary basis by affixing her signature on the receipts as per directions of the OP 1. She further submitted in her affidavit that loans were collected by OP 1 who was the Administrator and In-charge of the Branch office at Kurali, hence, OP 1 was responsible to the company as well as investors for the conduct and business of branch office. After perusing the affidavit and various records of the case and hearing the parties, the District Forum accepted the complaint against OP 1, OP 2 and OP 4 with costs quantified as Rs. 1000/-, while the complaint was dismissed against OP 3 without any cost. OP 1, OP 2 and OP 4 were directed to make payment of the maturity value of the amount deposited as reflected in the investment book with 18% interest from the date of maturity till realization. 2. Aggrieved by the order of the District Forum Raju @ Kulwinder Singh and Gurdeep Singh son of Nikka Singh have filed an appeal before the State Commission. Before the State Commission, the official liquidator of High Court of Bihar has informed the Commission “that M/s Helious Finance and Investment Ltd., has gone into liquidation vide order of the Hon’ble High Court, Patna dated 08.10.1999 and the official liquidator has been appointed as provisional liquidator. Before the State Commission, the official liquidator of High Court of Bihar has informed the Commission “that M/s Helious Finance and Investment Ltd., has gone into liquidation vide order of the Hon’ble High Court, Patna dated 08.10.1999 and the official liquidator has been appointed as provisional liquidator. But till date the office of the official Liquidator, High Court Patna has not taken the possession of the said company and the report has already been filed before the Hon’ble High Court, Patna for further direction Ld. Counsel for the appellants has not placed before the State Commission any judgments of Hon’ble High Court, Patna. 3. The State Commission held that “the respondents were not parties to the proceedings before Hon’ble Patna High Court. Since the final order has not been passed, mere proceedings before the Hon’ble High Court, Patna could not be attracted to forestall the proceedings under the Consumer Protection Act, brought by the complainant for the refund of their respective amounts and the interest lying due. We accept the prayer of the Id Counsel for the appellants and modify the impugned order holding that the liability of the deposits and interest in all such cases shall rest with the company. Respondent No. 2 Helious Group, through its Chairman/ Director/ Officer Bearer, Reg. Helious Bhavan, Station Road, Patna (Bihar). The appellant No. 1 Raju @ Kulwinder Singh who had collected the money from the complainant on behalf of the company will pursue the matter with the company for refund of the amounts received from the complainant and shall be jointly and severally liable to make the payment. Since appellant No. 2 was not an employee of the company and is a Government Employee impugned order qua, Gurdeep Singh, is set aside. For the reasons recorded above, the appeal is partly allowed. Order of the District Forum in each case is affirmed subject to aforesaid modification.” 4. Dissatisfied by the order of the State Commission Raju @ Kulwinder Singh has filed this revision petition. Submission of the revision petitioner 5. The revision petitioner has stated that the findings of the State Commission that the order of liquidation has not been passed, mere proceedings before the Hon’ble High Court, Patna could not be attracted to forestall the proceedings under the Consumer Protection Act is altogether wrong. Submission of the revision petitioner 5. The revision petitioner has stated that the findings of the State Commission that the order of liquidation has not been passed, mere proceedings before the Hon’ble High Court, Patna could not be attracted to forestall the proceedings under the Consumer Protection Act is altogether wrong. Once M/s Helious Finance and Investment Ltd., has gone into liquidation vide order of Hon’ble High Court, Patna, dated 08.10.1999 and the official liquidator has been appointed as provisional liquidator, the finding of State Commission being an unilateral act cannot be sustained. The appellant is not the share holder of the company or Director or Partner in the company. The appellant was simply an employee of the company. The appellant has already resigned from the company before filing of the complaint by the respondents vide letter dated 03.10.1998 and the company has accepted the resignation. Hence the order of the State Commission that the appellant is jointly and severally liable to make payment is altogether wrong. 6. As the respondent could not argue their case in person being the depositor, Shri Ashutosh Sharma was appointed as amicus curiae. Submissions of the Id Counsel for the respondent No. 1 : 7. The main contention raised by the revisionist/ the petitioner is that the petitioner being the employee of Helious Group of Companies could not be held liable to pay the deposited amount by the complainant with the said company Admittedly, the employee of the company cannot be held personally liable for the acts of the company, but in the present case the respondent has failed to prove before the District Forum that he was the employee of the company, it is the finding of the District Forum that the petitioner had persuaded the respondent to make deposits with M/s. Helious Group and in fact himself collected the deposits it is a finding of the District Forum that the petitioner alongwith his father had represented themselves as the Managing Director of the company Helious Group and played fraud. State Commission in page 3 of the judgment have categorically stated that there is nothing on record to suggest that the company had undergone liquidation before the passing of the order of the District Forum. Findings : 8. The revision petitioner has not proved that he was an employee of the Helious Group by producing the relevant documents. State Commission in page 3 of the judgment have categorically stated that there is nothing on record to suggest that the company had undergone liquidation before the passing of the order of the District Forum. Findings : 8. The revision petitioner has not proved that he was an employee of the Helious Group by producing the relevant documents. The affidavit filed by Smt Sukhwinder Kaur who was arrayed as OP 3 before the District Forum indicates that the petitioner was the Administrator and In-Charge of the Branch Office at Kurali and he was the person who was responsible for accepting the deposits made by various depositors. There is nothing on record to suggest that the company has undergone liquidation before passing of the order of the District Forum and subsequently also the provisional liquidator has expressed his helplessness and has not taken possession of the property. The Apex Court in PDA v. Skipper Construction Company Pvt. Ltd.1 has discussed the concept of lifting of Corporate veil and held that: The concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or for defrauding others, the Court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned The fact that Tejwant Singh and Members of his family have created several corporate bodies does not prevent this Court from treating all of them as one entity belonging to and controlled by Tejwant Singh and family if it is found that these corporate bodies are merely cloaks behind with lurks Tejwant Singh and / or members of his committing illegalities and/or to defraud people. 9. Accordingly, we do not see any legal infirmity or jurisdictional error in the orders passed by the lower fora. Therefore, the revision petition is dismissed. There shall be no order as to costs. Revision Petition dismissed. *******