Consumer protection: The complaint not barred if default continues

The National Commission held the failure to repay the principal and interest had kept the cause of action alive, hence the complaint couldn't be regarded as time-barred

The directors of Atma Steel, a limited company, were closely acquainted with Major Dara Singh and his son Harveer Singh. They visited the Singhs at their Kanpur Nagar home to request them to deposit money in the company. The Singhs were assured that they would receive interest and would be allowed to withdraw their deposit along with interest whenever they wished to do so. The Singhs deposited Rs 25,000 on May 15, 1974.
 

When the Singhs needed funds in 1981, the company paid Rs 10,000 as interest but failed to pay the remaining amount, which continued as a deposit.
 

According to the Singhs, the amount due to them up to 1993 amounted to Rs 4,73,074.74. However, the company sent a reply on December 1, 1993, in which it claimed that it did not have the relevant documents. After follow-up, on October 10, 1995, the company assured them that it would resolve the grievance within a month. Since the company failed to make any payment, the Singhs filed a complaint before the Kanpur Nagar District Forum in Ghaziabad. The company did not bother to contest the case, so the Forum allowed the complaint.
 

The Forum ordered the company to pay Rs 25,000 along with 18 per cent interest from the date of deposit until actual payment, after adjusting the amount of Rs 10,000 which had already been paid. In addition, Rs 2,000 was awarded as compensation.

The company challenged the order before the Uttar Pradesh State Commission. It contended that the Kanpur Nagar District Forum lacked territorial jurisdiction to adjudicate the dispute as the company did not have a branch office at that location. It also argued that the complaint was barred by limitation. Additionally, it claimed that it did not have any records as everything had been burnt during the riots following Prime Minister Indira Gandhi’s assassination in 1984. However, the company did not produce the police FIR or other documentary evidence to substantiate its contention. The State Commission concluded that there was no evidence to prove that records had been destroyed due to riots and arson. The State Commission noted that the company had not bothered to contest the case before the District Forum. Hence, it dismissed the appeal and confirmed the District Forum’s order.
 

The company then filed a revision petition. It contended that the dispute about territorial jurisdiction and the cause of action having arisen prior to the enactment of the Consumer Protection Act had not been considered by the State Commission. The National Commission also noted that since the company’s directors had visited the Singhs at their Kanpur Nagar home, part of the cause of action had arisen there, and hence the Kanpur Nagar Consumer Forum had territorial jurisdiction to adjudicate the dispute.
 

The National Commission also observed that the law was well settled that the remedy under the Consumer Protection Act would be available even if the cause of action had arisen before its enactment. It also observed that the payment of interest of Rs 10,000 indicated that money was deposited with the company. It refused to believe that the company’s records were burnt in arson as no evidence was produced in support of this claim. It held that the failure to repay the principal amount along with interest had kept the cause of action alive. Thus, the complaint could not be termed as time-barred and beyond limitation.
 

By its order of September 19, 2024, delivered by Justice Sudip Ahluwalia, the National Commission dismissed the revision petition and confirmed the order in the Singhs’ favour.

The writer is a consumer activist