The Supreme Court has declined any relief to a Mysuru-based finance company's directors, who were sentenced to three years in jail under the Consumer Protection Act.
They were punished for “deliberate” failure to comply with orders to refund the money of hundreds of investors.
“You have taken people's hard-earned money and failed to pay them back. What is the solution for them?” a bench of Justices Madan B Lokur and Deepak Gupta asked senior advocate Basava Prabhu S Patil.
The counsel, representing M K Biddappa, a resident of Madikeri, and other woman directors of M/s Chanakya Finance Corporation, contended that they were only sleeping partners in the firm and never played any active role.
There were three woman directors who were housewives. They should not be held liable and are not to be arrested, Patil pleaded.
He also submitted there was no justification for imposing the maximum penalty of three-year imprisonment and Rs 10,000 fine under Section 27 of the Consumer Protection Act, 1986.
The investors could be paid back easily by selling the firm's moveable and immovable properties, which already stood attached by the consumer forum's directions, he said.
The bench, however, remained firm and dismissed the special leave petition filed against a May 5 order of the National Consumer Dispute Redressal Commission.
The commission had noted that it was obvious that petitioners started a non-banking finance corporation and they have duped hundreds of depositors.
“Not only this, they have failed to pay the awarded amounts to the depositors despite directions of the district forum. Thus, this is a clear case of deliberate non-compliance of the directions of the district forum,” the commission's bench, presided over by Justice Ajit Bharihoke, had said.
The petitioners have claimed that the finance corporation was managed fully by A L Nanjundaraje Urs and Rajeev Lochana, both from Mysuru. The petitioners are not aware of the affairs of the management.
The commission, however, said the petitioners were partners. They are jointly and severally liable and cannot get away with the liability by raising a plea that they were not the active partners, it said.
The commission had also noted that more than three years have passed since the August 30, 2014, order for the attachment of properties and no money has been paid back to the investors.