Andhra Pradesh High Court – Amravati
Botta Ramesh Chandra vs District Consumer Dispute Redressal on 28 April, 2026
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APHC010128092015
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3332]
(Special Original Jurisdiction)
FRIDAY, THE TENTH DAY OF APRIL
TWO THOUSAND AND TWENTY SIX
PRESENT
THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI
I.A.No.1/2024 IN/AND WRIT PETITION NO: 7017/2015
Between:
1. Botta Ramesh Chandra, S/o Surya Prakash Rao, Hindu, Male, Aged
about 40 years, Director- V R Chits & Investments Pvt ltd. Door no:36-
46-37 Kancharapalam, Visakhapatnam- 8 andhra pradesh.
...PETITIONER
AND
1. The State of Andhra Pradesh, Represented By Its Secretary (Civil
Supplies) Secretariat Building Hyderabad, T.S.
2. The District Consumer Forum No II, Visakhapatnam, Represented By Its
President, Opposite To District Court, Maharanipet, Visakhapatnam.
3. D.Rama Rao, S/o Appla Swami, Hindu, Male, Aged About 65 Years
Resident Of Door No- 36-34-5, Kancharapalem, Visakhapatnam- 8.
4. D.Nukaratnam, W/o D Rama Rao Hindu, Female, Aged About 55 Years
Resident Of Door No- 36-34-5 Kancharapalem, Visakhapatnam- 8.
5. V.Adi babu, S/o A Jogulu Hindi, Male, Aged About 35 Years Resident Of
Door No- 56-12-14, Kancharapalem, Visakhapatnam- 8.
6. V.Rajeshwari, W/o Adi Babu, Hindu, Female, aged about 30 years.
Resident of Door No-56-12-14, Kancharapalem, Visakhapatnam- 8.
...RESPONDENT(S):
Petition under Article 226 of the Constitution of India praying that in the
circumstances stated in the affidavit filed therewith, the High Court may be
pleased to issue a Writ, order or direction, more particularly one in the nature
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of a Writ of prohibition, prohibiting the second respondent from proceeding
with any enquiries/ passing any orders in EA No 4 of 2010 in CC .272 Of 2009
and EA.No.5 of 2010 in CC.No.274 of 2009 filed by the respondents 3 and 4 &
respondents 5 and 6 respectively, pending disposal of the recovery and
distribution to the creditors of VR Chits and Investments Pvt Ltd.
Visakhapatnam including. Respondents 3 to 6 herein: under AP protection of
depositors of financial establishments Act 1999 by the competent authority
that is addition deputy director o general of police (CID), Hyderabad or to any
other order or orders:
IA NO: 1 OF 2015 (WPMP 9338 OF 2015
Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased to
stay all further proceedings in EA No 4 of 2010 in CC 272 Of 2009 and EA No
5 of 2010 in CC 274 of 2009 by the second respondent pending disposal of
the writ petition or to passIA NO: 1 OF 2024
Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased to
permit the petitioner to amend the prayer as to issue a Writ order or direction
more particularly one in the nature of a Writ of Mandamus declaring the
orders passed by the 2nd respondent i.e., the District Consumer Forum No II
Visakhapatnam, Represented by its President, Opposite to District Court,
Maharanipet, Visakhapatnam in CC.No.272 Of 2009 and in CC.No.274 of
2009 is illegal, arbitrary, without power or jurisdiction, liable to be set-aside,
and passIA NO: 2 OF 2024
Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased to
permit the petitioner to amend the prayer in WP.No. 7017 of 2015 as follows:
It is therefore prayed that this Hon’ble Court may be pleased to permit the
petitioner to amend the prayer as to issue a Writ order or direction more
particularly one in the nature of a Writ of Prohibition declaring the orders dated
10-12-2009 passed by the 2nd respondent i.e., the Hon’ble District Consumer
Forum No II Visakhapatnam, in CC.No.272 Of 2009 and in CC.No.274 of
2009 is illegal, arbitrary, without power or jurisdiction, liable to be set-aside,
and pass such other order or orders may deem fit and proper in the
circumstances of the case instead off “to issue a Writ order or direction more
3particularly one in the nature of a Writ of prohibition prohibiting the second
respondent from proceeding with any enquiries/ passing any orders in EA No
4 of 2010 in CC.No.272 Of 2009 and EA.No.5 of 2010 in CC.No 274 of 2009
filed by the respondents 3 and 4 respondents 5 and 6 respectively pending
disposal of the recovery and distribution to the creditors of VR Chits and
Investments pvt Ltd., Visakhapatnam including Respondents 3 to 6 herein
under AP protection of depositors of financial establishments Act, 1999 by the
competent authority that is addition deputy director general of police CID
Hyderabad and passCounsel for the Petitioner:
1. PALLA BALU ANIL KUMAR
Counsel for the Respondent(S):
1. KAMBHAMPATI RAMESH BABU
2. GP FOR CIVIL SUPPLIES (AP)
Reserved on: 23.02.2026
Pronounced on: 28.04.2026
Uploaded on: 28.04.2026The Court made the following order:
The case of the petitioner is that, he is the director of M/s VR Chits and
Investments Private Limited, a company registered under the Companies Act.
The said company was established for doing business in chits and investments
and also running the educational institutions. In order to develop the business
and for running educational institutions, the company has borrowed
Rs.1,80,000/- (in total) from respondent nos.3 & 4 on 15.04.2003 and
Rs.80,000/- from respondent nos.5 & 6 on 21.03.2003 under promissory notes
of even dates in their favour agreeing to repay the amounts with interest @ 24%
4to respondent nos.3 & 4 and 14% to respondent nos.5 & 6. Likewise, the
company has borrowed various amounts from 1946 persons including the
unofficial respondents herein.
2. It is the further case that, since the company could not pay back the
amounts borrowed by it to the creditors/lenders due to financial loss in the
company‟s business, the respondent nos.3 & 4 and respondent nos.5 & 6 filed
Consumer case Nos.272 & 274 of 2009 respectively before the 2nd respondent,
for recovery of amount due to them with an allegation of deficiency of service,
which were allowed on 10.12.2009. Thereafter, the respondent nos.3 & 4 filed
E.A.No.4 of 2010 and respondent nos.5 & 6 filed E.A.No.5 of 2010 against the
petitioner and one Sri V.Madhusudhan Rao, who is the Managing Director of the
Company. Pending consideration of the EA proceedings, V.Madhusudhan Rao
died on 05.03.2010, as such, the case against him was dismissed as abated.
Now, the EAs are pending against the petitioner only, under Section 27 of the
Consumer Protection Act, with a prayer to issue arrest warrant against the
petitioner and to punish him and recover the awarded amounts from him.
3. It is the further case of the petitioner that, the Deputy Superintendent of
Police (CID) representing the state, had also filed a criminal case in C.C.Nos.1
& 2 of 2007 under AP Protection of Depositors of Financial Establishments Act,
1999 (for short, „Act, 1999‟) before the Metropolitan Sessions Judge-cum-
special judge, Visakhapatnam, wherein the petitioner was arrayed as accused
no.5 along with late V.Madhusudhan Rao and the unofficial respondents (3 & 5)
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were arrayed in the list of creditors and hence, all the properties of the company
and the petitioner are under attachment under the Act, 1999. Under the scheme
of the said Act, after sale of attached properties of the company by way of public
auction, the amounts due to each creditors, will be paid by the competent
authorities, appointed by the government. In the present case, Additional Deputy
Director General of Police (CID) is the competent authority.
4. The further case of the petitioner is that, the total amount due to the
entire list of creditors is Rs.26,97,58,185/- and in the process of auction of some
of the attached properties, the competent authority has realized about 17 crores
of rupees and the auction for the remaining properties was fixed on 02.04.2015
and 03.04.2015. The bid amounts are deposited in SBI, account held by
CBCID, Hyderabad and presently about Rs.18 crores is lying to the credit of that
account relating to the V.R.Chits and Investments Private Limited. Hence, the
distribution of the amounts to the creditors will be done by the competent
authority. As such, the unofficial respondents have no right to prosecute the
petitioner under section 27 of Consumer Protection Act and the 2nd respondent
has no jurisdiction to conduct enquiry in the E.As filed by the unofficial
respondents.
5. Hence, writ of prohibition is filed, praying this Court to prohibit the 2nd
respondent from proceeding with the enquiry/passing any orders in E.A.No.4 of
2010 in C.C.No.272/2009 filed by the 3rd and 4th respondents and E.A.No.5 of
2010 in C.C.No.274/2009 filed by the 5th and 6th respondents, pending disposal
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of the recovery and distribution, to the creditors of VR Chits and Investments Pvt
Ltd., Visakhapatnam including unofficial respondents herein, under AP
Protection of Depositors of Financial Establishments Act, 1999.
6. Later, I.A.No.1/2024 was filed seeking amendment of prayer to issue writ
of mandamus to declare the order passed by the 2nd respondent i.e., the District
Consumer Forum No II, Visakhapatnam, rep. by its President, Opposite to
District Court, Maharanipet, Visakhapatnam in C.C.No.272 & 274 of 2009, as
illegal, arbitrary, without power or jurisdiction and is liable to be set aside.
7. Heard Sri V.V.N.Narayana Rao, learned counsel for the petitioners, Sri
Kambhampati Ramesh Babu, learned counsel for respondent nos.3 to 6 and Sri
Appasani Vineeth, learned Assistant Government Pleader for civil supplies.
8. Learned counsel for the petitioner in elaboration to what has been stated
in the affidavit submitted that, though the unofficial respondents cannot be
termed as complainants or consumers as per Section 2(5), 2(6), 2(7) and 2(11)
of The Consumer Protection Act, 2019, they have filed consumer cases and the
2nd respondent, without even having jurisdiction passed an award dated
10.12.2009. He further submitted that, pursuantly, the unofficial respondents
have filed E.A.s under Section 27 of the Consumer Protection Act, 2019 with a
prayer to issue arrest warrant against the petitioner and to punish him and
recover the awarded amounts from him.
He further submitted that, having invoked AP Protection of Depositors of
Financial Establishments Act, 1999 vide C.C.Nos.1 & 2 of 2007, the unofficial
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respondents cannot invoke the provisions of the Consumer Protection Act,
2019, particularly when they does not fall under „consumers or complainants‟
nor it was a „consumer dispute‟, as such the award passed under the said act by
the 2nd respondent is without jurisdiction and bad in the eye of law. He further
submitted that, the said award has to be set aside and the 2nd respondent
cannot proceed with the enquiry in the E.A.s. Accordingly, prayed to allow the
writ petition.
9. Per contra, the learned counsel for the unofficial respondents contended
that, the petitioner‟s company being a financier lured them through their
advertisements for fixed deposits on the premise of paying interest at lucrative
rates and therefore, the unofficial respondents have deposited certain monies
with the petitioner‟s company and pursuantly, the company issued two fixed
deposits in the form of Promissory notes on the even date. He further submitted
that, despite lapse of maturity period, the petitioner-company did not even pay
the principle amount of the FDs much less the interest accrued thereon and
thereby rendered deficient service for them, as such, they have filed Consumer
Case Nos.272 & 274 of 2009 under the Consumer Protection Act, 2019, before
the 2nd respondent, for recovery of amount due to them.
He further submitted that, the consumer protection act is a special act
and no other act can take away the same, as such, invoking Act, 1999 will not
come in the way of invoking Act, 2019, as such, the petitioner cannot question
the proceedings made under the Consumer Protection Act, 2019. He further
submitted that, having filed writ petition in nature of Writ of Prohibition, the
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petitioner cannot seek amendment to change the nature of the writ as „Writ of
Mandamus‟ and also it is barred by limitation and is guilty of delay and latches.
Moreover, the petitioner did not question the award passed by the 2nd
respondent at appropriate time and the said order has attained finality. If at all
petitioner has any grievance against the award, he has to file an appeal before
the appellate forum, without doing so, the petitioner had filed the present writ
petition. In support of his contentions, learned counsel relied on the judgment of
the Apex court in Pandian Tractors Vs District Consumer Dispute Redressal
Forum1 and accordingly prayed to pass appropriate orders in that regard.
10. In reply, learned counsel for the petitioner submitted that the petitioner
had filed I.A.No.1/2024 seeking amendment of prayer to declare the order
passed by the 2nd respondent i.e., the District Consumer Forum No II,
Visakhapatnam, rep. by its President, Opposite to District Court, Maharanipet,
Visakhapatnam in C.C.No.272 & 274 of 2009, which is pending consideration. In
support of his contentions, learned counsel for the petitioner relied on the
judgment laid down by the Apex court in Life Insurance Corporation of India
Vs Sanjeev Builders Private Limited 2 and accordingly prayed to pass
appropriate orders in that regard.
11. Perused the record and considered the submissions of learned counsel
for the respective parties.
1
2011 SCC OnLine Mad 2175
2
(2022) 16 Supreme Court Cases 1
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12. The prime grievance of the petitioner is that, having invoked AP
Protection of Depositors of Financial Establishments Act, 1999 vide C.C.Nos.1
& 2 of 2007, the unofficial respondents have filed consumer cases, before the
2nd respondent, invoking the provisions of the Consumer Protection Act, 2019
vide C.C.No.272 & 274 of 2009 with an allegation of deficiency of service,
wherein the 2nd respondent has passed an award dated 10.12.2009, without
having any jurisdiction. Pursuantly, to realize the decreetal amount, the
unofficial respondents have filed E.A.Nos.4 & 5 of 2010 for execution of the
said award and that the 2nd respondent is proceeding with the enquiry.
13. It is the contention of the petitioner that, the unofficial respondents cannot
be termed as complainants or consumers as per Section 2(5), 2(6), 2(7) and
2(11) of The Consumer Protection Act, 2019, as such they cannot file
consumer cases before the 2nd respondent. Whereas the unofficial
respondents contended that, since the consumer protection act is a special act,
invoking AP Protection of Depositors of Financial Establishments Act, 1999 will
not come in the way of invoking Act, 2019.
14. A perusal of the consumer award dated 10.12.2009 would indicate that the
unofficial respondents have invested an amount in the petitioner‟s company as
fixed deposits and in turn, since the RBI has banned regular FD bonds, the
petitioner‟s company, has issued two fixed deposit bonds in the form of
promissory notes. The contest made by the complainants (unofficial
respondents herein) is that, though the maturity period is completed, the
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amounts were not paid, not even the principal amount and thereby rendered
deficient service for them causing mental agony. Whereas, in the counter filed
by the petitioner‟s company, it was contended that, since the police seized all
their records, the company is unable to know whether the unofficial
respondents have deposited any amounts with the company and that, since the
unofficial respondents have relied on the regular promissory notes, they have to
approach competent civil court for recovery of money but they have
approached the District Consumer forum which lacks jurisdiction. When the
petitioner company is not sure whether the unofficial respondents have
deposited amounts or have given loan, it cannot contend that they are
depositors. After framing points for consideration, the District Consumer Forum
has held that the documents covered by Exhibits A1 & A2 are Fixed Deposits
and not promissory notes simplictor, as such the complainants has right to
approach the District Consumer Forum for their redressal and accordingly
passed an award directing the petitioner company to pay the amount covered
under the fixed deposits.
15. Admittedly, the award passed by the 2nd respondent has attained finality
and the petitioner has not questioned the said award in time. Originally, the writ
petition was filed in the nature of writ of prohibition seeking to prohibit the 2 nd
respondent from proceeding with the enquiry/passing any orders in E.A.No.4 &
5 of 2010, later, I.A.No.1/2024 was filed seeking the amendment of prayer to
issue writ of mandamus to declare the award passed by the 2nd respondent as
illegal and arbitrary and to set aside the same. The said amendment
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application was opposed by the unofficial respondents stating that, if the
proposed amendments are allowed, the entire nature of the writ would change
since initially the petitioner has challenged the execution proceedings and now
by the proposed amendment, the proceedings in the consumer cases (which
are already disposed of) are sought to be challenged and also it is barred by
limitation/latches.
15. The petitioner did not question the award passed by the 2nd respondent
in time and when the unofficial respondents raised the said question, the
petitioner company had filed I.A.No.1/2024 seeking amendment of prayer and
thereby questioned the said award, after 15 years. This court is of the opinion
that, such an amendment should not be permitted particularly when the prayer
now sought, is barred by delay/latches. Moreover, the order passed by the 2nd
respondent in the year 2009, has created vested rights on the unofficial
respondents. Challenging it now, after 15 years, would cause prejudice to the
rights of the unofficial respondents which attained finality which the courts
should protect. In other words, permitting the petitioner to challenge the award
after lapse of 15 years through amendment would disrupt the finality of the
consumer forum decision. The Hon‟ble Supreme Court has ruled that the High
court should not entertain the writ petition against the consumer court orders, if
a statutory appeal is provided under Consumer Protection Act. No doubt, a writ
petition can be filed, if a consumer forum passed an award or order without
jurisdiction or in total violation of the principles of natural justice but a writ
petition cannot be entertained after lapse of 15 years and the judgment relied
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by the learned of the petitioner, in Life Insurance Corporation of India (supra
2) cannot be applied to the case on hand. In view of the same, the amendment
petition vide I.A.No.1/2024 is liable to be dismissed.
16. Now, the points that fall for consideration are that:
(i) whether the unofficial respondents can be termed as a consumers or
complainants;
(ii) whether the dispute between the petitioner and the unofficial respondents is
a consumer dispute;
(iii) whether there is any deficiency of service;
(iv) whether the unofficial respondents can invoke the Consumer protection Act,
2019 for recovery of money based on promissory notes.
17. If at all the Ex.A1 & A2 are promissory notes, then the unofficial
respondents have to approach the competent civil court for redressal of their
grievance but the 2nd respondent in the award stated that the Ex.A1 & A2 are
fixed deposit bonds but not promissory notes. When the 2 nd respondent has
given such a finding in the award, the petitioner has not questioned the same
by way of appeal before the appellate authority or before this court as stated
supra. Section 24 of the Consumer Protection Act, makes it clear that every
order of the District Forum, if no appeal has been preferred against such order
under the provisions of the said Act, will become final. Further an order
passed by the District Consumer Forum is appealable to the State Consumer
Forum under Section 15 of the Consumer Protection Act. The appeal time
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given is only 30 days with powers to condone further delay. Similarly, further
appeal is also provided to the National Consumer Commission under Section
19. When hierarchy of forums is provided under a special law, even the
question of lack of jurisdiction, has to be raised before the appellate forum
provided under the said Act. The Supreme Court very recently took exception
to the High Court to entertain Writ petition against orders of the District
Consumer Forums and emphasised that when there is a two tier appellate
system provided under a special law, parties will have to go only before that
forum and not to file a writ petition.
18. Moreover, the 2nd respondent has also, dealt with the aspects of
jurisdiction, the relation between the parties and whether the dispute can be
termed as consumer dispute and thereby held that it has jurisdiction and
accordingly, passed an award. Therefore, from the above, it can be said that
the unofficial respondents can invoke the Consumer protection Act since the
Ex.A1 & A2 are not promissory notes.
19. Certain provisions which are germane to the present case i.e., Section 2
of the Consumer Protection Act, 2019 which deals with the definitions is
extracted hereunder:
“2(5) “complainant” means–
(i) a consumer; or
(ii) any voluntary consumer association registered under any law for the
time being in force; or
(iii) the Central Government or any State Government; or
(iv) the Central Authority; or
(v) one or more consumers, where there are numerous consumers
having the same interest; or
(vi) in case of death of a consumer, his legal heir or legal representative;
or
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(vii) in case of a consumer being a minor, his parent or legal guardian.
(7) “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 service 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 service
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 service for any commercial purpose.
Explanation.–For the purposes of this clause,–
(a) the expression “commercial purpose” does not include use by a
person of goods bought and used by him exclusively for the purpose of
earning his livelihood, by means of self-employment;
(b) the expressions “buys any goods” and “hires or avails any
services” includes offline or online transactions through electronic means
or by teleshopping or direct selling or multi-level marketing;
11)”deficiency” means any fault, imperfection, shortcoming or
inadequacy in the quality, nature and manner of performance which
is required to be maintained by or under any law for the time being in
force or has been undertaken to be performed by a person in pursuance
of a contract or otherwise in relation to any service and includes–
(i) any act of negligence or omission or commission by such person
which causes loss or injury to the consumer; and
(ii) deliberate withholding of relevant information by such person to the
consumer;”
20. Chit fund activities, including managing subscription money, conducting
auctions and releasing bid amounts, falls under the definition of “service”
under the consumer protection Act. Subscribers to a chit fund company are
considered consumers and the chit fund companies are considered service
providers under the consumer protection act. Consequently, disputes
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regarding deficiency in service such as delays in paying the bid amount,
failure to return deposits, or unfair trade practices, can be brought before
consumer courts. The Supreme Court has consistently ruled that consumer
court jurisdiction is not generally barred by the existence of other legal
remedies, affirming that the consumer protection act provides additional
special remedies.
21. In view of the above, since the petitioner‟s company is related to chit
fund business and the unofficial respondents have invested some amounts in
the company, the petitioner‟s company can be called as a service provider
and the unofficial respondents are the consumers. As the petitioner‟s
company has not returned the money to the unofficial respondents, it can be
said that there is deficiency in service and the unofficial respondents have
rightly approached the consumer forum and the 2nd respondent has rightly
passed an award. Hence, this court finds no reason to interfere with the award
passed by the 2nd respondent herein and the writ petition is devoid of merits
and liable to be dismissed.
Accordingly, the I.A.No.1/2024 and the writ petition are dismissed. No
costs.
Miscellaneous applications, pending if any, shall stand closed.
RAVI CHEEMALAPATI, J
BRS