CITATION | 2024 SCC ONLINE SC 757 |
DATE OF JUDGMENT | 5 April, 2024 |
COURT | Supreme Court of India |
APPELLANT | Annapurna |
RESPONDENT | Malsiddappa |
BENCH | Justice Vikram NathJustice Satish Chandra |
INTRODUCTION
In the case of ANNAPURNA B. UPPIN vs MALSIDDAPPA. The complainant approached the District Consumer Dispute Redressal Forum claiming that the firm with which the complainant was under partnership deed since 21st April 11, 2002 was dissolving and the complainant had to receive investment return with 18 % interest per annum.
The complainant complained in the district forum that the firm was made in 2002 and he has no record of the deed with him now. The Managing Director has passed away and there is plausibility that either the company will cease into the existence or it will be dissolved.
The forum believed that the case of receiving the 18 % of interest over the investment per annum is a complete profit/gain situation and it is against the Consumer Protection Act of 1986.
FACTS OF THE CASE
- The complainant being the partner of the firm which was registered under the Companies Act, in 2002. The Managing Director of the Firm Basvaraj Uppin passed away in March 2003. The status of the firm got confused. It was either about to be ceased as an existent firm or about to get dissolved.
- The respondent No1 asserted in the complaint before the DCDRF that he invested in the firm the amount of Rs.5 Lakhs in the partnership firm which was to be payable in 120 months with the interest of 18% per annum. He asked for payment but each time it was let down with one or another pretext.
- The opposition party no 1 was the partner and the opposition parties 2 to 5 were the legal heirs of the deceased. They were arrayed before the DCDRF. The opponent no 2 is the widow of the deceased and 3 to 5 were his sons. Therefore, the legality of each opponent in the firm was 10 percent, they were liable to pay the opposition party 1.
- Ergo, the opponents 2 to 5 appeal in the SCDRC, Bangalore. The appeal was accepted and the matter was remanded. The judgment of DCDRC was set aside as it was claimed that the other party was not given the opportunity to be heard.
- The DCDRF now started the complaint with new terms and reconsidered the case again. The DCDRF on the order dated 13.01.2021 again claimed relief to the complainant. The appellant filed an appeal again in the SCDRC and was rejected. Therefore, the appellants filed a Revision Petition in the NCDRC which was again rejected as impugned order of the said appeal.
ISSUES RAISED
- The question is whether the complainant gets relief of Rs. 5 Lakh invested and 18% interest per annum?
- The issue is whether the respondents have to pay the relief to the complainant or not?
- The key issue is whether the appellants’ appeal is justifiable?
ENMITIES OF COMPLAINANT
- The complainant invested his hard earned money of Rs 5 Lakhs in the partnership firm expecting that he will get his money back with interest but the firm ditched him.
- The complainant asked for his money at prematurity. The firm refused and said they will pay at the time of maturity. The complainant waited.
- The complainant asked for the money at the time of the maturity, the firm said no. This caused frustration to the complainant and he pressurized the firm to pay.
- The complainant was told that he will not get his money as the Managing Director has passed away and there is no liability on any other person whom he will get paid with.
- The complainant claimed that the deceased’s legal heirs are actively working in the firm and they are liable to pay him as he is suffering a great financial loss.
- The firm did not agree and still not paid the complainant and at last resort the complainant had to file a complaint for his relief.
ENMITIES OF APPELLANTS/RESPONDENTS
- The learned counsel of the Appellant stated that the complainant is not a “consumer” and has filed for illegally recovering of money from the respected firm.
- The counsel stated that the complaint is invalid as the firm was dissolved after the death of the Managing Director of the firm and therefore legal heirs are not liable to pay. The records are not in hand but it was dissolved as there was no interest of any heirs to take over the firm.
- The receipt of the deposit of money of Rs 5 Lakh is fake. Validity should be proven.
Referred case:
Jai Narayan Misra vs Hashtunumunisa Begum 2019
It was ordered by the Hon’ble Supreme Court that the legal heirs are not liable to or are not binding over any liability to pay until it is mentioned in the agreement or the deed.
- The assertions made by the complainant is invalid as there is no deficiency of work by the firm and no communication was made from their side for money recovery until months.
JUDGEMENT
The DCDRF (Delhi Consumer Disputes Redressal Forum) analysed that in the order dated May 16, 2014, which was directed by the parties involved in the case had to pay the sum of Rs. 5 Lakhs with interest 18% per annum from the month of May 21, 2002 to May 20, 2012.
Later the interest rate was set at 9 % per annum until the amount is exhaustively paid. Furthermore, the complainant is awarded with the compensation of Rs. 2000 which also includes the costs of Rs. 1000. The resoluteness of Investment done by the complainant in the firm was to earn interest at the rate of 18% per annum. Therefore, it is as a commercial transaction and is not covered under the Consumer Protection Act 1986.
The judgement will be prospectively applied. As the District forum, state forum and national forum did not act under natural justice therefore, the appeal is allowed all the orders are set aside and the complaint has been dismissed.
The DCDRF allows the complainant to reach to any Competent Forum they may concern that may provide them a relief in any other act.
ANALYSIS
In this case, includes a firm Annapurneshwari Cotton Co. There are 3 partnership deeds in which 2 were unregistered deeds and 1 is a registered partnership deed. The complainant is a partner in the firm and invested Rs.5 Lakhs in the firm with which interest of 18% per annum. The Managing director of the firm died and the complainant filed a complaint against the legal heirs of the deceased to pay the money invested with interest. The legal heirs refused to do so. The complainant claimed for relief and the DCDRF ordered to pay the complainant the relief claimed. The legal heirs appealed and they appealed in the SCDRC for natural justice. The SCDRC remanded and ordered to set aside the previous orders.
The appellants were again dismay with the order of DCRDF as it ordered as same as before. The appellants approached to NCDRC which dismissed the Revision Petition.
The appellants were given a second chance to be heard and the order by DCRDF was that the complainant is allowed to approach any other forum in which he may get relief. The DCRDF claimed that the legal heirs are not liable to pay to the complainant as they are not concerned with any of the liabilities after the death of the partner unless it is mentioned in the agreement or the deed.
CONCLUSION
This case involved the matter of the complainant who was a partner in the firm Annapurneshwari Cotton Co. established in the year 2002. The Managing Director of the firm Basavaraj Uppin passed away in March 2003. The complainant claimed that he had invested in the firm Rs. 5 Lakhs which is payable with interest of 18% @ annum within 120 months.
The complainant claimed in DCDRF that he must be given relief by the legal heirs of the Managing Director. The DCDRF upheld that the complainant will be given relief by the legal heirs. The legal heirs i.e. the widow of Basavaraj Uppin and his sons appealed in the SCDRC claiming that they were not given the opportunity to be heard. The SCDRC remanded and the DCDRF had to set aside the ordered judgment and make a fresh start with the case.
The DCDRF again ordered the same judgement to provide relief to the complainant. The appellants afresh approached to the SCDRC but there appeal was rejected. The appellants filed a Revision Petition to the NCDRC which was also rejected as per the impugned order. It was claimed that the legal heirs of the deceased director were never interested in the firm and the due to 2 unregistered partnership deed and 1 registered deed will not make them liable to pay the relief to the complainant.
It was proven by the learned counsel before the DCDRF that the legal heirs i.e. the widow of the deceased respondent no 2 and his sons respondent no 3 to 5 were actively involved in the working of the firm. They were keeping up with the finances, book of accounts and receipts and payments. Therefore, the 2 unregistered deeds and 1 registered deed do not include the legal heirs’ involvement. It was ordered by the DCDRF that the legal heirs are not liable to pay until it is written in the agreement or the deed. The DCDRF allows the complainant to reach to any Competent Forum they may concern that may provide them a relief in any other act.
REFERENCES
- https://itatonline.org/digest/verdicts/annapurna-b-uppin-versus-malsiddappa-supreme-court/
- https://indiankanoon.org/doc/74922351/
- https://www.livelaw.in/pdf_upload/partnership-deed-1-447935.pdf
- https://blog.ipleaders.in/the-indian-partnership-act-1932/
- https://www.livelaw.in/top-stories/partnership-deed-cannot-automatically-bind-legal-heirs-of-deceased-partner-149067
Written by Khushi Oberoi, Student of Bharati Vidyapeeth deemed university. Intern at Legal Vidhiya
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