BEFORE THE HON’BLE DISTRICT CONSUMER DISPUTES REDRESSAL

COMMISSION AT, __________________

EA ______ of 20____

In Re:

CC ______ of 20 ____

..……….Judgement Debtor/Applicant

Versus

……….…Decree Holder/Respondent

Application for Stay of Recall/Cancellation of warrant under section 72

of Consumer Protection Act, 2019 issued in EA No. …………against
………………….

The humble applicant most respectfully begs to submit as under:

1. That the applicant/judgment debtor is a Society, which is formed and
duly constituted under the provisions of the Multi State Co-operative
Societies Act 2002. Further, the applicant is one of the societies
comprising the Sahara Group of Cooperative Societies.
2. That the decree holder instituted a consumer complaint no.
____________ against the applicant society with regard to the purported
payment of maturity amount of the depositor/investor therein which
was allegedly invested/ deposited in the applicant society by the name
and style of ________.
3. That this Hon’ble Commission, in the aforesaid consumer complaint
instituted by the complainant/decree holder, passed an order dated
__________. For the compliance of the said order the execution petition
___________ is instituted.

4. That bailable warrant has been issued by the Hon'ble Commission on

_________against the applicant under Section 70 CrPC read with
Section 72 of the Consumer Protection Act, 2019.

5. That it is to be brought to the notice of the Hon'ble Commission that

the Hon'ble Supreme Court has from time to time held that warrants
should be issued as a last resort. The Hon'ble Supreme Court in its
judgment passed in the suit of L.T. Finance Limited v. Pramod
Kumar Rana and Others (Civil Appeal No. 5894-5895 of 2021) has
given the following legal ruling:
“Bailable warrants are to be issued as a last resort and only in a case where it is found that
the opponent parties are not co-operating at all and that they are avoiding appearance
before the National Commission deliberately and/ or they are not represented at all either
through their authorized representative or through their counsel.”

The copy of judgment / order passed by the Hon’ble Supreme Court is

marked and annexed herewith as Annexure A-1 to this application.

6. That further more it is to be noted that the Hon’ble Calcutta High

Court in its judgment/order dated 12.08.2022 passed in CRR no.
2955 of 2022, Samasth Infotainment Pvt. Ltd. & ors. Vs. The
State of West Bengal & ors. in which one of the issue which has
been discussed in its order is whether District Consumer Disputes
Redressal Commission (hereinafter referred to as ‘DCDRC’) can issue a
warrant of arrest against the Judgment Debtor in an execution
proceeding to which the Hon’ble Calcutta High Court has categorically
stated that:
“While comparing the provisions contained in Section 71 and Section 72 of the said
Act, it is ascertained that if the decree holder wants execution of its order, they must
take recourse of Section 71 and the execution will proceed in accordance with order
XXI of the Code of Civil Procedure.
 In the execution proceedings, the commission having power of executing court
cannot take recourse to Section 72 and take a shortcut and coercive method for
execution of its order.
For the reasons stated above, this court comes to an irresistible conclusion that in
the execution application, the commission cannot issue warrant of arrest for
enforcement of its order. The Commission has, of course, the authority to issue
warrant of detention of Judgment Debtor in civil Prison in accordance with the
provision under the code of Civil Procedure. It cannot issue warrant of arrest against
the Judgment Debtor following the part B of Chapter VI of the code of Criminal
Procedure.”

The copy of judgment / order passed by the Hon’ble Calcutta High

Court is marked and annexed herewith as Annexure A-2 to this
application.

7. The Hon’ble Calcutta High Court while allowing the petition exercising
its jurisdiction under Article 227 of the Constitution of India and
section – 482 of Cr.P.C. had even observed the following:
“…it is brought to the notice of this court that the District Consumer Dispute
Redressal Commission, in the state of West Bengal has been consistently passing
similar type of orders which are palpably illegal….”

Therefore the Learned Registrar (Judicial Service) was directed to

circulate this order to all DCDRCs and State Consumer Dispute
Redressal Commissions for their information and future guidance”

8. That in the light of the aforementioned Judgment/ orders passed by

the Hon’ble Apex Court and the Hon’ble Calcutta High Court, the
DCDRCs are having no jurisdiction/ power to issue warrant of arrest
against the judgment debtor in execution proceedings.

9. That such action of the Hon’ble DCDRC can be imputed to affix

criminal vicarious liability upon the applicant. It is the settled
principle of law that in matters and disputes pertaining to a body
corporate, vicarious liability on the part of the Managing Director and
director would arise provided any provisions exists in that behalf in
the statute. It is settled that statutes indisputably must contain
 provision fixing such vicarious liabilities. Even for the said purpose, it
is obligatory on the part of the complainant to make requisite
allegations which would attract the provisions constituting vicarious
liability.

10. That it is to be noted herein that neither the Indian Penal Code
1860, Consumer Protection Act, 2019 nor the Multi State Cooperative
Societies Act, 2002 contain any specific provisions for the affixation of
vicarious liability.

The Hon’ble Supreme Court of India in its judgement of Maksud

Saiyed v. State of Gujarat [(2008) 5 SCC 668)] has held the
following:

“The Penal Code does not contain any provision for attaching vicarious liability on the part of
the Managing Directors of the Company when the accused is the Company..The Bank is a
body corporate. Vicarious liability of the Managing Director and Director would arise
provided any provision exists in that behalf in the statute. Statutes indisputably must contain
provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the part
of the complainant to make requisite allegations which would attract the provisions
constituting vicarious liability.”

The Hon’ble Supreme Court in its judgment of Keki Hormusji Gharda

v. Mehervan Rustom Irani [(2009) 6 SCC 475] has unambiguously
stated the following:

“The Penal Code, 1860 save and except in some matters does not contemplate any vicarious
liability on the part a person. Commission of an offence by raising a legal fiction or by
creating a vicarious liability in terms of the provisions of a statute must be expressly stated.
The Managing Director or the Directors of the Company, thus, cannot be said to have
committed an offence only because they are holders of offices.”

Therefore in the present circumstance wherein neither of the statutes

concerned with the dispute in hand and the concerned statues
contain any specific provision with regard to applicability or affixation
of vicarious liability, the same cannot be affixed upon the applicant.
11. That Hon’ble Madhya Pradesh High Court, Indore Bench has
specifically observed in its judgment dated 24.06.2022, titled as
Rajesh Jain v. The State of Madhya Pradesh
MANU/MP/1566/2022 that specific allegations have to be attributed
towards the concerned director in order to prosecute the said director.
The relevant excerpt of the judgment is being reproduced herein
below:

“The law is well settled that to prosecute the director of the company, specific allegations
have to be made that he or she was in charge of the day to day affairs of the company or was
specifically responsible for running the affairs of the company”

12. That in addition to the settled principle of law provided herein

above with regard to the aspersion of specific averments/allegations
having to be made against the concerned director in order to affix
criminal liability, it is also pertinent to note that the doctrine ‘mens
rea’ is an essential ingredient in order to successfully prosecute an
individual under such specific circumstances.

13. That the Hon’ble Supreme Court of India in its judgment of

Jethsur Surangbhai v. State of Gujarat 1984 SCC (Cri) 474 had
observed that merely being the Managing Director of a company does
not make an individual liable to be prosecuted or convicted. The
Hon’ble Supreme Court has laid down as follows:

“The only ground on the basis of which the High Court has convicted him is that as he was the
chairman of the Managing Committee, he must be held to be vicariously liable for any order
given or misappropriation committed by the other accused… In a criminal case of such a
serious nature mens rea cannot be excluded.”

That the Supreme Court further observed that in the absence of any
evidence either direct or circumstantial criminal liability cannot be
affixed upon the Managing Director.

The Hon’ble Apex Court has even gone to the extent to observe and
record that failure to act with care and caution in the process of
 signing papers and approve tenders in regard to a body corporate and
the negligence thereof also cannot be construed to be a positive proof
of his intention to commit an offence in the absence of any direct
evidence.

14. That the Hon’ble Apex Court has attributed extraordinary

significance to the intention or ‘mens rea’ in the commission of a
crime. It has consistently stated that in order to ascertain criminal
liability the intention to commit a crime is paramount and the same
shall be explicitly proven. That the Apex Court in its judgment of
Sunil Bharti Mittal v. CBI (AIR 2015 SC 923) has laid down two
essential ingredients for the determination of individual liability upon
the applicant for the alleged wrongdoings of the Society. The
indispensable ingredients are as follows:

i. Mens Rea

ii. Sufficient Evidence

The Hon’ble Court held as follows:

“No doubt, a corporate entity is an artificial person which acts through its officers, directors,
managing director, chairman etc. If such a company commits an offence involving mens rea,
it would normally be the intent and action of that individual who would act on behalf of the
company. It would be more so, when the criminal act is that of conspiracy…..

However, at the same time, it is the cardinal principle of criminal jurisprudence that there is
no vicarious liability unless the statute specifically provides so.

Thus, an individual who has perpetrated the commission of an offence on behalf of a

company can be made accused, along with the company, if there is sufficient evidence of his
active role coupled with criminal intent.”

That specifically indicating that in order to implicate, prosecute and

convict an individual but not limited to the managing director, director
or any primary managerial post in the society (body corporate), it is
specifically required to provide direct and specific evidence towards
his/her wrongdoing and also unambiguously provide for criminal
intent of the individual in the wrong doing by the society (body
corporate).
15. That the Hon’ble Supreme Court of India in the case titled as
H.K. Sigla v. Avtar Singh Saini and Others, 1 (2019) CPJ 3 has
held that for any default committed by the Society and in absence of
any personal liability imposed on the individual, the individual to be
imprisoned under Section 27 of the Consumer Protection Act, 1986 or
its corresponding section, i.e. Section 72 of the CPA is doubtful. The
Apex Court has specifically and verbatim held as follows:

“In this appeal, it is to be noticed that there is no order passed against the appellant herein by
the District Forum in its individual capacity. The appellant was shown as Secretary of the
Society during the relevant period. For the default committed by the society, and in absence
of any personal liability imposed on the appellant, the appellant is to be imprisoned
under Section 27 of the Act is doubtful.”

16. That in the present case, no specific allegations whatsoever has

been leveled upon the applicant either in the Consumer Complaint
Petition or the Execution Application.
17. That though the settled principle of law as enumerated
hereinabove that the vicarious liability on part of the Managing
Director and Director would arise only when the statutes contain the
provision fixing such liability, thus the MD or Director cannot be said
to have committed an offence only because they are holders of offices.
18. Be that as it may the present matter is regarding payment of the
purported maturity amount and for the purposes of the same, it is
imperative to bring to the knowledge of this Hon’ble Commission that
the Hon’ble Supreme Court has passed an order dated 29.03.2023
vide which it has established a method by which payments of the
investors shall be discussed. The details of the same are being
provided hereinbelow:
19. That in the interest of the public and taking into account the
practical difficulties being faced by the Group of Societies, the Union
of India/Central Government, Ministry of Corporation had moved an
I.A. bearing no. 56308 of 2023 in Writ Petition (Civil) No. 191 of
2022 titled as Pinak Pani Mohanty Versus Union of India &
Others before the Hon’ble Supreme Court of India.
20. That the Hon’ble Apex Court thereafter, was pleased to
pronounce the judgment on 29.03.2023 in which certain directions
were given for redressal of grievances of the depositors of Sahara
Group of Co–Operative Societies, of which the applicant society is also
a part.
21. That the Hon’ble Apex Court, vide its aforesaid order dated
29.03.2023, directed SEBI to deposit the amount of Rs 5,000 Crores
in the account of Central Registrar of Co-operative Societies, so that
the same may be disbursed in favour of the genuine depositors of the
aforesaid Sahara Group of Cooperative Societies after proper
identification and verification of the documents produced by the
claimants/ investors/ depositors.
22. That Apex Court has further directed that the entire exercise
will be completed by the Central Registrar at the earliest, but not later
than 9 months from the date of the aforesaid order i.e. 29.03.2023,
under the supervision of the Central Registrar of Cooperative
Societies, Hon’ble Mr. Justice R. Subhash Reddy (Former Judge of the
Hon’ble Supreme Court of India) and one Amicus Curiae Mr. Gaurav
Aggarwal Advocate. The relevant portion of the order dated 29.03.2023
is reproduced herein below:
“.. the prayer sought in the present application seems to be reasonable and which
shall be in the larger public interest/ interest of the genuine depositors of the Sahara
Group of Co-operative Societies,. Therefore the present application is disposed of
with the following directions:-
i. Out of the total amount of Rs. 24,979.67/- Crores lying in the Sahara-SEBI
refund account, Rs. 5000 Crores be transferred to the Central Registrar of
Cooperative Societies, who in turn shall disburse the same against the
legitimate dues of the depositors of the Sahara Group of Cooperative
Societies….
ii. The disbursement shall be supervised and monitored by justice R. Subhash
Reddy, former judge of this court with the able assistance of Shri Gaurav
Agarwal, learned advocate who is appointed as amicus curiae to assist
Justice R Subhash Reddy as well as the Central Registrar of Cooperative
Societies in disbursing the amount to the genuine depositors of the Sahara
Group of Cooperative Societies…..”
 Copy of the order dated 29.03.2023 passed by the Hon’ble Apex Court
is being annexed herewith as Annexure A-3 to this application.

23. That keeping in view the order dated 29.03.2023 passed by the
Hon’ble Supreme Court of India, the Hon’ble Allahabad High Court in
the matter of Umesh Kumar Vishwakarma vs. State of UP & Ors.
[Writ-C No. 3827 of 2023], while reiterating the observations and
judgment made by the Apex Court in the order dated 29.03.2023 and
in corollary to the same, passed the order dated 10.04.2023, the
relevant portion of which is being reproduced hereunder:
“…it would be appropriate that the petitioner may approach the
Central Registrar of Cooperative Society or to Amicus Curiae
recommended by the Hon’ble Supreme Court for the payment of his
maturity amount.
With the aforesaid observation,. the writ petition is disposed of.”

Copy of the order dated 10.04.2023 passed by the Hon’ble Allahabad

High Court is being annexed herewith as Annexure A-4 to this
application.

24. That, further, in the matter of Saharayn Universal Multipurpose

Society Ltd. & Ors. vs. Suresh Chandra Arya [Appeal No.
295/2020], it was held on 27.04.2023 by the Ld. State Consumer
Disputes Redressal Commission, Uttar Pradesh at Lucknow that the
amount invested shall be disbursed to the investor as per the order
dated 29.03.2023 passed by the Apex Court, i.e., through the Central
Registrar of Cooperative Societies, New Delhi in accordance with the
directions provided and within the time period as stipulated in the
order dated 29.03.2023.
A similar order dated 11.04.2023 was passed in the matter of Sahara
Credit Cooperative Society Ltd &ors. vs. Anil Kumar Singh &ors.
[Appeal No. 900/2019] by the Ld. State Consumer Disputes
Redressal Commission, Uttar Pradesh at Lucknow.
 Copy of the orders dated 27.04.2023passed by the Ld. State
Consumer Disputes Redressal Commission, Uttar Pradesh, at
Lucknow, is annexed herewith as Annexure A-5.
Copy of another order dated 11.04.2023 is annexed herewith as
Annexure A-6.
25. That further similar order has been passed by the Hon’ble State
Consumer Dispute Redressal Commission Chandigarh, in the case
titled as Reena Devi versus Humara India Credit Co-operative
Society Ltd. Vide [Appeal No. 34/2023], Hon’ble Court took the
cognizance of an order passed by the Hon’ble Apex Court. Vide order
dated 29-03-2023 and in corollary to the same passed an order of
Dismissal Vide order dated 26-05-2023. The relevant portion of the
same are stated below :–
"However, for the reasons slated in our detailed order dated 16.05.2023,
we take our Judicial hands off from the present matter in view of the order
dated 29.03.2023 passed by the Hon’ble Supreme Court in the Case titled as
“Pinak Pani Mohanty VS Union of India & Ors. Writ Petition(s) (Civil) No.
191/2022”. In this view of the matter, the Appellant is directed to take
necessary steps for recovery of due amount through the Central Registrar of
Cooperative Society, as per the mandate of Hon’ble Supreme Court. if so
advised. The present appeal stands disposed of in terms of the above. All
pending applications, if any, shall stand disposed off accordingly.”

Copy of an order passed by the Hon’ble State Consumer Dispute

Redressal Commission is Annexed as Annexure A-7.

26. That, similarly, in the matter of Kiran Devi vs. Humara India Credit
Cooperative Society Ltd. [CC/347/2022], the Ld. District Consumer
Disputes Redressal Commission-I, U.T. Chandigarh, while reiterating
the observations and judgment made by the Apex Court in the order
dated 29.03.2023 and in corollary to the same, passed the order dated
10.05.2023, the relevant portion of which is being reproduced
hereunder:
 “v. Thus when it is clear from the aforesaid order passed by the Hon’ble
apex court titled as “Pinak Pani Mohanty vs Union of India &ors. (supra)
that the question of genuineness of the claims of the depositors/investors
with the Sahara Group of Cooperative Societies is to be exclusively
determined by the Special Authority and the manner and modalities for
making the payment is to be worked out by it in consultation with Hon’ble
Justice R. Subhash Reddy, former Judge of the Apex Court and Sh. Gaurav
Agarwal Amicus Curiae and for that purpose an amount of Rs. 5000 Crores
has been ordered to be transferred to the Special Authority out of “Sahara
SEBI refund account” for further disbursal of the claim except the Special
Authority authorized by the Hon’ble Apex Court vide the aforesaid order.
4. In the light of the aforesaid discussion, the proceedings of the instant
complaint are closed, with liberty to the complainant to approach the
Central Registrar of Cooperative Societies (Special Authority) for
determination of his claim/disbursal of the same. Accordingly, the
complaint stands disposed of.”

Copy of the order dated 10.05.2023 passed by the Ld. District

Consumer Disputes Redressal Commission-I, U.T. Chandigarh, is
annexed herewith as Annexure A-8.
27. That thus, in view of the order dated 29.03.2023 already pronounced
by the Hon’ble Apex Court, as well as the judgments passed by the
Hon’ble High Court and the Ld. State Consumer Disputes Redressal
Commission in line with and in support of the same, it is pertinent to
observe that in the present circumstances the compliance of the order
passed in the aforementioned consumer complaint of the present
decree holder can only be executed by the Central Registrar of
Cooperative Societies (hereinafter referred to as the ‘CRCS’) as the
Hon’ble Apex Court has vested exclusive jurisdiction to the Central
Registrar of Cooperative Societies for the same.
28. That in view of the said order of the Hon'ble Supreme Court, New
Delhi, the decree holder is required to be directed to file his
application before the Central Registrar for receipt of his payment in
respect of the judgment dated _______passed in complaint no._______.
 29. That the warrant issued by the Hon'ble Commission against the
applicant in the said Execution no. ______is bad in law and should
have been exercised as a last resort.
30. That if the warrant issued by the Hon'ble Commission is not
recalled/cancelled, the applicant/debtor will suffer irreparable loss
and social reputation will be tarnished, which cannot be
compensated. Therefore, in the interest of justice, the arrest warrant
issued against the applicant/debtor is liable to be recalled/cancelled.

PRAYER
Wherefore, in light of the aforementioned facts, circumstances and
legal aspects, it is most respectfully prayed that this Hon’ble
Commission may be pleased to:
I. Allow this application submitted by the applicant/debtor,
II. Recall/cancel the warrant dated ________ in the interest of
justice.

Date:
Place: Applicant/Judgement Debtor