# Prahlad Kumar Gupta and another v. State of U.P. and others

- **Citation:** (2008) 1 ILRA 150
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2007-12-05
- **Case number:** Civil Misc. Writ Petition No. 59971 of 2007
- **Bench:** V.M. Sahai, R.N. Misra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/prahlad-kumar-gupta-and-another-v-state-of-u-p-and-others-41254
- **Pages:** 4

## Headnote

Constitution of India, Art. 226-Order
passed by district Consumer Forumchallenged-petitioners running business
of
deposit
of
money
on
interestcomplainant invested huge money F.D.
issued-but on production of receiptspetitioner's
company
denied
the
payment-Consumer Protection Act 1986provides
complete
code-can
not
be
interfered by writ court.

Held: Para 9

Learned counsel for the petitioner has
argued
.that
business
run
by
the
petitioners could not be termed as
Banking, but we do not agree with this
contention. When the petitioners and
their
Companies
were
indulging
in
getting
money
deposited
by
the
customers on interest and the F.D.R
were issued, they were duty bound to
make
payments
and
such
type
bf
transactions definitely terms as Banking.
Case law discussed:
2005 (3) AWC 4110, AIR 1994 Kerala-19

## Text

150 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.12.2007

BEFORE
THE HON'BLE V.M. SAHAI, J.
THE HON'BLE R.N. MISRA, J.

Civil Misc. Writ Petition No. 59971 of 2007

Prahlad Kumar Gupta and another

...Petitioners
Versus
The State of U.P. & others...Respondents

Counsel for the Petitioners:
Sri Pradip Kumar
Sri Ashutosh Srivastava

Counsel for the Respondents:
S.C.

Constitution of India, Art. 226-Order
passed by district Consumer Forumchallenged-petitioners running business
of
deposit
of
money
on
interestcomplainant invested huge money F.D.
issued-but on production of receiptspetitioner's
company
denied
the
payment-Consumer Protection Act 1986provides
complete
code-can
not
be
interfered by writ court.

Held: Para 9

Learned counsel for the petitioner has
argued
.that
business
run
by
the
petitioners could not be termed as
Banking, but we do not agree with this
contention. When the petitioners and
their
Companies
were
indulging
in
getting
money
deposited
by
the
customers on interest and the F.D.R
were issued, they were duty bound to
make
payments
and
such
type
bf
transactions definitely terms as Banking.
Case law discussed:
2005 (3) AWC 4110, AIR 1994 Kerala-19

(Delivered by Hon'ble V.M. Sahai, J.)

1. By invoking jurisdiction of this
Court, under Article 226 of Constitution
of India through this writ petition, the
petitioners have challenged jurisdiction of
District Consumer Forum Budaun in
passing the order dated 2.2.2007 in
Consumer Complaint No. 306 of 2002, by
which the petitioners have been ordered to
pay the amount of Fixed Deposit Receipts
in favour of Km. Pragya Bharti, Rohit
Kumar
and
Akshey
Kumar,
the
complainants of the case and some other
persons named in annexure-3.

2. We have heard learned counsel
for the petitioners, learned Standing
Counsel for respondent nos. 1 and 2 and
learned counsel for respondent no.3.

3. The main grievance of the
petitioners is that District Consumer Form
(hereinafter called as Forum) has no
jurisdiction to intervene in such matters,
in which payment of money is involved.
The complainants have remedy of filing
civil suit for recovery of money, if any.

4.

Surprisingly
enough,
the
petitioners have not made party to the
aforesaid complainants, in whose favour
orders have been passed. It appears from
the contents of writ petition that the
Forum has passed the orders on different
dates in favour of the persons named in
the list Annexure-3 to the writ petition
and recovery proceedings are being
initiated by the respondents to execute
those orders. The petitioners were running
business of deposit of money on interest
in the name and style of M/s Godavari
Hire Purchase Pvt. Ltd, M/s Godawari
Installments, Pvt. Ltd, M/s Bros Hire
Purchase Pvt. Ltd and M/s Raj Financers
1 All] Prahlad Kumar Gupta and another V. State of U.P. and others
151
Registered. They were Directors of the
said Companies. Said companies were
engaged in the business of private
financing. A number of persons deposited
their money in the aforesaid Companies
and said Companies issued F.D.Rs but
when depositors /consumers presented
their receipts for payment, the aforesaid
Companies refused to make payment,
therefore,
customer
approached
the
Forum and got orders in their favours.
The copy of complaint filed by Km.
pragya and two others before the Forum is
Annexure-4 and the written statement
filed by the petitioners is Annexure 4A. In
para 6 of additional pleas of written
statement, the petitioners have not even
clearly admitted deposits. Contents of
para 6 are quoted below:

";g fd ifjoknh us vkd"kZd C;kt dks ns[krs gq,
vius LokFkZ ds dkj.k rFkk dfFkr :i;k tek fd;k gksxkA"

5. In para 7, it has been mentioned
that business of aforesaid Companies
have failed and the petitioners are not in a
position
to
make
payment
to
the
customer. This shows that the customers
were cheated by the petitioners and they
collected huge amount from the innocent
people and failed to make payment. This
is a fraud and cheating on the part of
petitioners and their Companies. This is
no ground to refuse payment of customers
that the business of petitioners has failed.
No where, petitioners have been declared
insolvent.

6. As regard jurisdiction of Forum is
concerned, we are of the opinion that the
Forum has jurisdiction to intervene in the
said matters and give relief to the
consumers. Section 2 (d) of Consumer
Protection Act 1986, defines consumer as
under:
2(d) "consumer" means any person,
who
(i) buys any goods for a consideration
which has been paid or promised or partly
paid and partly promised or under any
system of deferred payment and includes
any user of such goods other than the
person
who
buys
such
goods
for
consideration paid or promised or partly
paid or partly promised, or under any
system of deferred payment when such
use is made with the approval of such
person, but does not include a person who
obtains such goods for resale or for any
commercial purpose; or
(ii) hires or avails of any services for a
consideration which has been paid or
promised or partly paid and partly
promised, or under any system of deferred
payment and includes any beneficiary of
such services other than the person who
hires or avails of the services for
consideration paid or promised, or partly
paid and partly promised, or under any
system of deferred payment, when such
services are availed of with the approval
of the first mentioned person, but does not
include a person who avails of such
services for any commercial purpose".

7. It is evident from clause 2 of said
Act
that
the
petitioners
and
their
Companies were beneficiary of deposits
made by the customers and in lieu thereof,
the petitioners and their Companies had
promised to repay the deposits to the
customers along with interest. The money
deposited by the customers were utilized
by the petitioners for their own benefit
and took advantage of same, therefore, in
not making the payment of depositors
along with interest by the petitioners and
their Companies, they lacked in service,
which has been defined under Section
2(0) of said Act which runs as under:
152 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
2(0) service" means service of any
description which is made available to
potential users and includes, but not
limited to, the provision of facilities in
connection
with
banking,
financing
insurance, transport, processing, supply of
electrical or other energy, board or
lodging or both, housing construction,
entertainment,
amusement
or
the
purveying of news or other information,
but does not include the rendering of any
service free if charge or under a contract
of personal service."

8. The definition given above
includes
provisions
of
facilities
in
connection
with
banking.
The
enforcement of payment of F.D.R against
a Finance Company or Society doing
business of banking can be ordered by the
Forum. In the case of Allahabad Bank
Vs. Shiv Swaroop Srivastava; 2005 (3)
A.W.e 4.110 (UPC), the State Consumer
Disputes Redressal Commission U.P.
Lucknow has clearly held that deficiency
in service by the Banking Companies is
still covered under the jurisdiction of
Consumer Forum. In that case, the
complainant had invested Rs.35,000/ with
the appellant Bank in the shape of F.D.R
but when receipt was presented for
payment, the Bank refused on the ground
that it had been obtained by fraud. The
matter went to District Consumer Forum,
who on the basis of evidence recorded
findings that claim of the complainant
was genuine and ordered for payment of
F.D.R money. Against said order, the
appeal was preferred to the State
Consumer Forum under section 15 of the
Act. The State Forum confirmed the
jurisdiction
of
District
Forum
and
dismissed the appeal preferred by the
Bank.

9. Learned counsel for the petitioner
has argued .that business run by the
petitioners could not be termed as
Banking, but we do not agree with this
contention. When the petitioners and their
Companies were indulging in getting
money deposited by the customers on
interest and the F.D.R were issued, they
were duty bound to make payments and
such type bf transactions definitely terms
as Banking.

Learned
Standing
Counsel
has
challenged maintainability of this writ
petition. The Kerala High Court in the
case of A.V. Georgekutty Vs. State of
Kerala AIR 1994 Kerala 19, clearly held
that the question as to who is a consumer
could be decided by the Consumer Forum
itself.

10. From various decisions, it is
clear that the High Court is not bound to
entertain every such writ, but jurisdiction
of High Court, under article 226 of the
Constitution of India is not clearly barred.
Whenever question of jurisdiction is
raised, the High Court normally permits it
under Article 226 of the Constitution and
examines whether proceedings instituted
before the Tribunal are within the
jurisdiction, but the High Court has
discretion to entertain such writ. The
Consumer Protection Act has clearly
made provisions for appeal. Any person
aggrieved from the order of District
Forum can prefer appeal to the State
Forum under section 15 of the Act and
any
person
aggrieved
by
the
judgement/order-of
State
Forum
can
prefer appeal to National -Forum under
Section 19 of the Act. The judgement of
National Forum is final. The intention of
legislature appears to provide for a speedy
and efficacious remedy, for resolving
1 All] Smt. Shanti Devi V. Office of Insurance Ombudsman and others
153
consumer disputes. The statement of
objects and reasons clearly mentions that
the Act is intended to provide speedy and
simple redressal of consumer disputes by
providing a self-contained quasi-judicial
machinery. The Act has created a
hierarchy of bodies under the Act with
power to hear appeals at every stage. No
one can say that the District, High Court
or Supreme Court Judges who preside
over the Consumer forums are not
competent to decide the question of
jurisdiction. They have long judicial
experience
to
face
such
questions,
however, complicated. They are not like
executive authorities who have no judicial
experience. It is well settled that such
bodies are entitled to decide whether they
have jurisdiction to decide a dispute and
whether the complainant before them is a
consumer within the meaning of Section
2(d). The intention of legislature would be
defeated if at the initial stage itself,
objections regarding the jurisdiction are
permitted to be raised before the High
Court because such proceedings are
bound to cause delay an the very purpose
of creating the new forum would be
defeated.

11. The petitioners can not get any
benefit of order dated 18.9.2007 shown to
us by Hon'ble Single Judge in Writ
Petition No. 45088 of 2007 against
District
Consumer
Forum's
order
regarding jurisdiction. Only admission of
said writ petition for hearing gives no
benefit to any party.

In view of our above discussion, we
are of the considered opinion that this writ
petition is devoid of merits and is liable to
be dismissed.

12. Accordingly, the writ petition is
dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 20.11.2007

BEFORE
THE HON'BLE AMITAVA LALA, J.
THE HON'BLE SHISHIR KUMAR, J.

Civil Misc. Writ Petition No. 69235 of 2005

Smt. Shanti Devi

...Petitioner
Versus
Office of Insurance Ombudsman and
others

 ...Respondents

Counsel for the Petitioner:
Sri Pramod Kumar Srivastava
Sri Anoop Baranwal

Counsel for the Respondents:
Sri Prakash Padia

Constitution
of
India,
Art.
226-writ
jurisdiction disputed question of factscan not be ground for rejection-unless
proved beyond doubt that can not be
resolved by writ court-claim of insurancy
policy rejected on pretext the policy
holder suppressed the disease-death due
to
heart
attack-working
even
after
deposit of premium not denied-heldInsurance
Act
1938
a
beneficial
legislation-denied of claim-not properdirection issued to pay whole amount
with 12% simple interest within one
month.

Held: Para 3

According to us, the Insurance Act, 1938
with
the
latest
amendment
is
a
beneficial piece of legislation. Therefore,
if a benefit which the petitioner is legally
entitled has been refused, Court can not
enter upon the arena to render equitable
justice. The Court of equity can not shut
out the eyes taking plea that there is