Mangaluru

Proprietor’s children not liable to repay deposits: forum

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Dakshina Kannada District Consumer Disputes Redressal Forum has dismissed a suit filed by a city-based couple asking for compensation of their losses by the children of deceased proprietor of a finance firm.

In a case that throws light on the issue of safety of investments in private proprietorship firms, the Dakshina Kannada District Consumer Disputes Redressal Forum has dismissed a suit filed by a city-based couple asking for compensation of their losses by the children of deceased proprietor of a finance firm.

B. Ramesh Baliga and Poornima Baliga of Mangalore University Quarters had opened fixed deposits totalling to Rs. 1.71 lakh in their and daughter Chaithra Baliga’s name in Kshama Finance based at Kallare village in Puttur taluk between 1999 and 2003 with maturity value being double the investment with interest rate being 12 per cent.

When they approached the firm for payment of maturity value in 2008, the opposite parties postponed payment under one or the other pretext, complainants said. The proprietor died on June 18, 2009, leaving his two children — son Rithersh Rao, a resident of Uganda, East Africa, and daughter Kshama of Chrukunnu, Kannur. His wife had predeceased him.

The couple argued that liability of repayment was now on the legal heirs who they said had inherited the assets left behind by firm’s proprietor and continued the same business in the same name. Mr. Rithersh Rao said there was no direct consumer relationship between him and the complainants as he had no role in the business of his father. He contended that he and his sister were not partners of the finance firm and not personally liable to the debt left behind by their father. Besides the complaint was filed two years after the date of maturity. The forum said in its recent order that the children of the proprietor were liable for the debt left behind by their father only to the extent of the assets left behind by him. But the complainants had not produced any material evidence before the Forum to show that Umanath Rao had left behind any assets. In the absence of the same, the complaint against his children was not maintainable. It said the complainants were at liberty to recover their fixed deposit amount from the assets of the deceased if any and not otherwise.

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Printable version | Dec 12, 2019 8:29:57 AM | https://www.thehindu.com/news/cities/Mangalore/proprietors-children-not-liable-to-repay-deposits-forum/article3661354.ece

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