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IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE JURISDICTION  

CIVIL APPEAL NO. 10240   OF 2013

(Arising out of SLP(C) No.27607/2008)

PARIWAR CO-OPERATIVE HOUSING SOCIETY LTD.        Appellant(s)

                   VERSUS

CHANDRASHEKAR M. VIRKUD & ANR.                   Respondent(s)

O R D E R

Leave granted.

2. Heard Mr. Satyajit Desai, learned counsel in  

support of this appeal, Mr. Santosh Paul, learned  

counsel appearing for the first respondent and Mr.  

Vinay  Navare,  learned  counsel  appearing  for  the  

second  respondent.  The  appellant  Pariwar  Co-

operative Housing Society Ltd. (“Society” for short)  

has challenged the order dated 16.5.2008 passed by  

the National Consumer Disputes Redressal Commission  

in First Appeal No.69 of 2006 by filing this appeal.

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3. The short facts leading to this appeal are  

this  wise.  One Mr. Vitthal G. Kapuskar was the  

Chief Promoter of the appellant Society which has  

constructed a housing complex at Kanjur Marg (East)  

in  Mumbai.   It  so  transpires  that  though  the  

aforesaid Mr. Kapuskar, respondent No.2 herein, was  

the Chief Promoter, subsequently there were certain  

allegations  against  him  with  respect  to  the  

management  of  the  funds  of  the  Society  and  not  

taking necessary steps with respect to construction.  

Thereafter,  another  Managing  Committee  has  taken  

over which has presently filed this appeal.  

4. Respondent No.1 was one of the members of the  

Society. It was his case that he paid all necessary  

amounts as a member to get an apartment in the said  

Society but he was not allotted any apartment.  He,  

therefore, applied for refund of the amount which he  

had paid to the Society. The amount not having been  

refunded  to  him,  he  moved  the  Consumer  Disputes  

Redressal  Commission  of  the  State  of  Maharashtra  

under the Consumer Protection Act, 1986 by filing a  

complaint being Consumer Complaint No.388 of 2001.  

An order came to be passed in that proceeding on

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17.6.2005 holding the appellant Society responsible  

for neither giving him possession of any apartment  

nor returning the amount that was payable to him.  

Therefore, an order was passed against the appellant  

Society as well as against respondent No.2.  

5. The appellant Society carried the matter in  

appeal  before  the  National  Disputes  Redressal  

Commission pointing out that it was respondent No.2  

who was responsible for non-payment of the amount  

because  of  the  mismanagement  on  his  part  of  the  

Society's funds. The National Commission had passed  

an  interim  order  on  23.2.2006  directing  the  

appellant  Society  to  deposit  the  entire  amount  

payable  to  the  second  respondent,  in  the  State  

Commission out of which 50% amount was allowed to be  

withdrawn by respondent No.1 on furnishing personal  

bonds.  Accordingly,  respondent  No.1  has  withdrawn  

that amount.  The appeal was ultimately heard and  

disposed of by the National Commission by its order  

dated 16.5.2008 and under that order, the appellant  

Society and respondent No.2 were directed to pay to  

respondent No.1, the amount as awarded by the State  

Commission along with interest at 9% per annum.

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6. The submission of the appellant Society, as  

stated earlier, is that the appellant Society was  

not responsible for the misdeeds of respondent No.2  

and the Society was being unnecessarily held to  pay  

this amount. We have heard the learned counsel for  

the  parties.  The  order  passed  by  the  State  

Commission  was  an  ex-parte  order  and  that  was  

because at that particular point of time, respondent  

No.2 was in jail.  In any case, by the time the  

matter  was  heard  in  the  National  Commission,  a  

notice was published in the newspaper for respondent  

No.2 to appear before the National Commission but he  

did not appear before the National Commission and  

this order came to be passed.

7. Mr. Desai, learned counsel appearing for the  

appellant pointed out that the appellant Society is  

consisting of middle class people and they are now  

being  made  to  suffer  for  the  actions/misdeeds  of  

respondent  No.2.  Mr.  Navare,  learned  counsel  

appearing  for  respondent  No.2  on  the  other  hand,  

submitted that the members of the present Managing  

Committee were also along with respondent No.2 in

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all these transactions which took place from time to  

time.   

8. Having noted these facts, however, we are of  

the  view  that  as  far  as  the  present  case  is  

concerned, respondent No.1 had made the payment when  

respondent No.2 was incharge of the Society and the  

present Managing Committee was not in the picture.  

That  being  so,  the  responsibility  to  refund  the  

amount primarily lies on the respondent No.2 and in  

the event of his failure, on the appellant Society.  

In the circumstances, we modify the order passed by  

the  National  Commission  as  well  as  the  State  

Commission   and  hold  respondent  No.2  primarily  

responsible  for paying the amount of Rs.4,02,382/-.  

We allow this appeal to that extent.  

9. We had asked Mr. Navare on the last date of  

hearing to  seek instructions  from respondent  No.2  

whether he would be agreeable to make the payment.  

He  has  informed  that  he  does  not  have  any  such  

instructions. In  the circumstances,  we direct  the  

respondent No.2 to make the payment of Rs.4,02,382/-

in eight weeks' time, failing which it would be open

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to respondent No.1 to take further action by moving  

the  State  Commission  under  Section  27  of  the  

Consumer  Protection  Act,  1986  against  respondent  

No.2 Kapuskar. In the event  respondent No.2 makes  

the payment in the course of those proceedings, well  

and good. However, in the event of his failing to  

make payment, the consequences will follow.  In the  

event respondent  No.2 deposits  the entire  amount,  

half  of  the  amount  therefrom  will  be  paid  to  

respondent  No.1  and  the  remaining  half  would  be  

permitted to be withdrawn by the appellant. The 50%  

amount  which  is  presently  lying  in  the  State  

Commission will continue to remain there until then.  

However, in the event of respondent No.2 being sent  

to imprisonment on his failing to make payment, this  

50%  amount  which  is  deposited  in  the  State  

Commission  will  be  permitted  to  be  withdrawn  by  

respondent No.1.

10. We  are  informed  that  there  are  many  other  

proceedings which are pending between the appellant  

Society  and  respondent  No.2,  and  many  cases  are  

filed by the depositors against respondent No.2. We,  

therefore, make it clear that this order will be

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confined to the facts of this case.    

11. Appeal is disposed of as above.  No order as  

to costs.

..........................J (H.L. GOKHALE)

.........................J  (KURIAN JOSEPH)

New Delhi; November 12, 2013.