IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY SIXTH DAY OF AUGUST TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION Nos.9315, 9534 & 9556 of 2002 W.P.No.9315 of 2002: Between: Rajeeva, S/o.Y.B.Kohthari, C/o.Janapriya Hotel, Opp: New Bus Stand, Sangareddy Town, Medak District, Presently residing at H.No.3-5-65/2, Rajampet Rod, Sangareddy, Medak District. ..... PETITIONER AND 1 The Government of Andhra Pradesh, Rep. by its Secretary, Law & Justice, Secretariat Buildings, Hyderabad. 2 The District Consumer Forum, Sanga Reddy, Medak District. 3 T.Hari Ramulu, S/o.Papaiah, R/o.Sangareddy Town, Medak District. 4 Bhanuteja Chit Funds Pvt. Ltd., Registered Firm, Nataraj Complex, Near New Bus Stand, Sangareddy Town, Medak District. 5 Smt. P.Vijaya Mohan, W/o.Mohan Rao, Bhanuteja Chit Funds Pvt. Ltd., H.No.4-7-155/A, Near Saibaba Temple, Sangareddy Town, Medak District. 6 Ravindranath, Managing Director, M/s. Vishweshwara Pharmaceuticals, Cinema Road, Sangareddy. 7 J.Vasanth Reddy, Managing Director, Near Shriram Chit Funds, Opp: New Bus Stand, Sangareddy. 8 T.Srinivas Goud, Managing Director, C/o.Manager, Nataraj Theatre, Sangareddy, Medak District. 9 A.Anjaneyulu, Managing Director, R/o.Cheriyal Village, Sangareddy Village and Mandal, Medak District. 10 M.Venkateshwar Rao, Managing Director, C/o.Gopala Krishna, Opp: New Bus Stand, Sangareddy. 11 Smt. Sridevi, W/o.Dattatreya Rao (Director), Telecom Quarters, Near Telecom Bhavan, Sangareddy. 12 M.Narasimhulu (Director), R/o.Behind T.T.D. Kalyana Mandapam, Sangareddy. 13 Kiran Kumar, Managing Director, S/o.K.Seshagiri Rao, C/o.K.Seshagiri Rao, C.I. of Police, Thungathurthy Police Station, Nalgonda District. 14 M.Venkateshwarlu, S/o.Gangaiah, C/o.Annapurna Enterprises, Latha Complex, Opp: New Bus Stand, Sangareddy, Medak District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to to issue a writ, order or direction mire particularly one in the nature of WRIT OF CERTIORARY quashing the order F.A.No.150 of 2002 dt:20.4.2002 passed by the State Consumer Disputes Redressal Commission, Hyderabad declaring it as null and void and direct the State Commission to remand the case to the District Consumer Forum at Sangareddy for denovo enquiry and pass. Counsel for the Petitioner:MR.A.SAMEER KUMAR Counsel for the Respondent No.: GP FOR LAW & LEGISLATIVE AFFAIRS Form-NIC-OGS/WP{TML} WRIT PETITION No.9534 of 2002 Between: Rajeeva, S/o. Y.B.Kothari, C/o. Janapriya Hotel, Opp: New Bus Stand, Sangareddy Town, Medak District. ..... PETITIONER AND 1 The Government of Andhra Pradesh, REp. by its Secretary, Law Department, Secretariat Buildings, Hyderabad. 2 The District Consumer Forum, Sangareddy, Medak District. 3 Smt.M. Vijaya Kumari, W/o. Shankar Goud, R/o. H.No. 2-7-21, Opp. Hanuman Temple, Sadasivpet Town, Medak District. 4 Bhanuteja Chit Funds Pvt. Limited, Regd. Firm, Natraj Complex, Near New Bus Stand, Sangareddy Town, Medak District. 5 Smt. P. Vijya Mohan, W/o. Mohan Rao, Bhanuteja Chit Funds Pvt. Limited, H.No. 4-7-155/A, Near SAibaba Temple, Sangareddy, Medak District. 6 Ravindranath, M/s. Vishweshwara Pharmaceuticals, Cinema Road, Sangareddy. 7 J.Vasanth Reddy, Advocate, Near Shreeram Chit Funds, Op. New Bus Stand, Sangareddy. 8 T.Srinivasa Goud, C/o. Manager, Natraj Theatre, Sangareddy. 9 A.Anjaneyulu, R/o. Cheriyal Villages, Sangareddy Mandal, Medak District. 10 M.Venkateshwar Rao, C/o. Gopala Krishna, Teacher, Opp. New Bus Stand, Sangareddy. 11 Smt. Sridevi, W/o. Dathathreya Rao (Director), Telecom Quarters, Near Telecom Bhavan, Sangareddy. 12 M.Narsimulu, (Director), R/o. Behind T.T.D.Kalyana Mandapam, Sangareddy. 13 Kiran Kumar, S/o. K.Seshagiri Rao, C/o. K.Seshagiri Rao, C.I. of Police, Thungathurthy Police Station, Nalgonda District. 14 M.Venkateshwarlu, S/o. Gangaiah, C/o. Annapurna Enterprises, Latha Complex, Opp. New Bus Stand, Sangareddy, Medak District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to to issue a Writ, order or direction and more particularly one in the nature of WRIT OF CERTIORARI quashing the orders in F.A.No. 149 of 2002, dated 2-4-2002 passed by the state Consumer Disputes Redressal Commission Hyderabad declaring it as null and void and direct the state Commission to remand the case to the District Consumer Forum at Sangareddy for denovo enquiry and pass Counsel for the Petitioner:MR.A.SAMEER KUMAR Counsel for the Respondent No.: GP FOR LAW & LEGISLATIVE AFFAIRS Form-NIC-OGS/WP{KRD} WRIT PETITION No.9556 of 2002 Between: Rajeeva, S/o. Y.B.Kothari, C/o. Janapriya Hotel, Opp: New Bus Stand, Sangareddy Town, Medak District. ..... PETITIONER AND 1 The Government of Andhra Pradesh, Rep. by its Secretary, Law Department, Secretariat Buildings, Hyderabad. 2 The District Consumer Forum, Sangareddy, Medak District. 3 Topaji Enterprises, SAngareddy, Rep. by its Prop. Topaji Anantha Krishna, S/o. Eshwaraiah, H.No. 2-3-138, Madhava Nagar, Sangareddy. 4 Bhanuteja Chit Funds Pvt. Limited, Regd. Firm, Natraj Complex, Near New Bus Stand, Sangareddy Town, Medak District. 5 Smt.P.Vijaya Mohan, W/o. Mohan Rao, Bhanuteja Chit Funds Pvt. Limited, H.No. 4-7-155/A, Near Saibaba Temple, Sangareddy, Medak District. 6 Ravindranath, M/s. Vishweshwara Pharmaceuticals, Cinema Road, Sangareddy. 7 J.Vasanth Reddy, Advocagte, Near Shreeram Chit Funds, Op. New Bus Stand, Sangareddy. 8 T.Srinivasa Goud, C/o. Manager, Natraj Theatres, Sangareddy. 9 A.Anjaneyulu, R/o. Cheriyal Village, Sangareddy Mandal, Medak District. 10 M.Venkateshwar Rao, C/o. Gopala Krishna, Teacher, Opp. New Bus Stand, Sangareddy. 11 Smt. Sridevi, W/o. Dathathreya Rao (Director), Telecom Quarters, Near Telecom Bhavan, Sangareddy. 12 M.Narsimulu, (Director), R/o. Behind T.T.D.Kalyana Mandapam, Sangareddy. 13 Kiran Kumar, S/o. K.Seshagiri Rao, C/o. K.Seshagiri Rao, C.I. of Police, Thungaturty Police Station, Nalgonda District. 14 M.Venkateshwarlu, S/o. Gangaiah, C/o. Annapurana Enterprises, Latha Complex, Opp. New Bus Stand, Sangareddy, Medak District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to to issue a Writ, order or direction and more particularly one in the nature of WRIT OF CERTIORARI quashing the orders in F.A.No. 151 of 2002, dated 2-4-2002 passed by the state Consumer Disputes Redressal Commission Hyderabad declaring it as null and void and direct the state Commission to remand the case to the District Consumer Forum at Sangareddy for denovo enquiry and pass Counsel for the Petitioner:MR.A.SAMEER KUMAR Counsel for the Respondent No.: GP FOR LAW & LEGISLATIVE AFFAIRS The Court made the following: Form-NIC-OGS/WP{KRD} THE HON'BLE SRI JUSTICE V.ESWARAIAH WRIT PETITION Nos.9315, 9534 & 9556 of 2002 COMMON ORDER: These three writ petitions are ﬁled by the same petitioner Mr.Ravija, S/o.Y.B.Kothari questioning the orders of the District Forum under the Consumer Protection Act, 1986, Sangareddy, Medak District in Consumer Dispute Nos.74/99, 73/99 and 84/99 which are conﬁrmed by the State Consumer Disputes Redressal Commission, Hyderabad in F.A.Nos.150/2002, 149/2002 and 151/2002. It is the case of the petitioner that the persons who are shown as 3rd respondent in all these writ petitions and who are subscribers of 4th respondent-Bhanuteja Chit Funds Pvt.Ltd. ﬁled a complaint before the District Forum against the company and other Directors and Managing Directors stating that they became the subscribers of the chit series run by the 4th respondent-chit fund company for the period of 40 months for a total sum of Rs.50,000/- at a monthly subscription of Rs.1,250/- and after paying the subscription amounts regularly, they participated in the auction and became highest bidders, but the respondents therein failed to pay the said amount. It is stated that 1st respondent in the complaint is the Chit Fund Company, and respondents 2 to 12 therein are Directors and Managing Directors and incharge personnel for conducting the business of the Chit Fund Company at the relevant point of time. They are also personally liable for payment of the amounts to the subscribers, but their action in non-payment of amount to the subscribers clearly goes to show that there is deﬁciency in service and they are grossly neglecting and also cheating the subscribers by playing fraud. The petitioner herein shown as 9th respondent in all three consumer cases before the District Forum. A counter has been ﬁled by the petitioner herein before the District Forum stating that he is only a shareholder and he is neither incharge of the chit fund company nor conducted any chit fund business. The 2nd respondent in the complaint is only the Managing Director and ever since he took the charge of the 1st respondent company he has not conducted any meeting as such the petitioner herein is not aware of the position of the company and therefore, he is not liable for payment of the subscription amount to the complainants. During course of the enquiry before the District Forum, the complainants were examined and marked various documents on their behalf. The petitioner herein was also examined as one of the witnesses on behalf of respondents. The petitioner herein except stating that he is a shareholder and not a Director or discharged the aﬀairs of the company, he has not furnished any other particulars of the Directors and Managing Directors of the company. It is stated that even the Managing Director has resigned and somebody has taken over the charge. There was a general denial of allegations without furnishing any material whatsoever pointing out the responsible persons. Having regard to the facts of the case, the District Forum after considering the oral and documentary evidence, held that as per the evidence adduced on behalf of the complainants in all three cases, there are 12 Directors including the Managing Director and the Managing Director has conducted business transactions on behalf of the Directors as well as shareholders of the company and therefore, all the directors and shareholders are responsible for loss and proﬁts of the company and they are also jointly and severally liable to the subscribers. Accordingly, it was held that there is deﬁciency of service on the part of the respondents/opposite parties, and accordingly, the consumer disputes were allowed directing the respondents/opposite parties therein to pay the amounts as claimed with interest at 18% p.a. Aggrieved by the said orders of the District Forum, the 9th respondent therein alone ﬁled appeals before the State Consumer Forum and the State Consumer Forum by the impugned orders, held that admittedly the petitioner herein has not stated in his counter or in his evidence as to who were actual directors and what are their names. In fact, the 14th respondent herein who was acted as Managing Director stated that he resigned as Managing Director without furnishing any material whatsoever, and therefore, the State Consumer Forum held that the petitioner herein, even assuming that he is a shareholder, he did not disclose the actual directors in written or oral and therefore, the contentions of the petitioner herein that he is not liable on the ground that he is only shareholder, was not accepted, and accordingly, dismissed the appeals. Aggrieved by the same, these writ petitions have been ﬁled, contending that the order of the State Commission is contrary to law and evidence on record and the petitioner is only the shareholder and member of the chit fund company, but he is not the Director or incharge of the aﬀairs of the said company, and therefore, the Forums below ought not to have granted any relief against the petitioner herein. Under Sec.15 of the Consumer Protection Act 1986, any person, aggrieved by the order of the District Forum, may prefer appeal before the State Commission, and against the order passed by the State Commission, an appeal lies under Sec.19 of the Act to the National Commission. Against the orders of the National Commission, an appeal lies to the Supreme Court of India under Sec.23 of the Act. Thus, there are two remedies available to the petitioner against the order passed by the State Commission by way of ﬁling an appeal to the National Commission and thereafter to the Supreme Court of India. Therefore, I am of the opinion that it cannot be said that there is no alternative remedy available to the petitioner. Admittedly, the 4th respondent-Bhanuteja Chit Funds Pvt.Ltd. is a company and hence its Directors and shareholders are liable to pay the dues to the subscribers. Though the petitioner approached before the State Consumer Disputes Redressal Commission as well as before this Court stating that he is not responsible and liable to pay the dues to the subscribers, but he did not disclose the names of persons, directors and managing directors who are responsible for the aﬀairs of the company. For the foregoing reasons, I do not see any merit in these three writ petitions, and hence these writ petitions are liable to be dismissed. These Writ Petitions are, accordingly, dismissed. No order as to costs. _____________________ V.ESWARAIAH,J Dated: 26.08.2008 Dsr .... REGISTRAR // TRUE COPY // SECTION OFFICER To 1 The Government of Andhra Pradesh, Rep. by its Secretary, Law & Justice, Secretariat Buildings, Hyderabad. 2 The District Consumer Forum, Sanga Reddy, Medak District. 3. 2CCs to 4. 2CD copies