CONSUMER DISPUTES REDRESSAL COMMISSION

MAHARASHTRA STATE, MUMBAI



CONSUMER COMPLAINT NO.81/2009 Date of filing : 02/05/2009

Date of order: 16/07/2009

1. Mr.Dilipkumar V.Lakhi &

2. Mr.Chirag D.Lakhi

both R/o.1101/02 Petit towers

August Kranti marg,

Mumbai 400 036 ………….Complainant

V/s.

1. Kotak Investment Advisors Ltd.

3rd floor, Bakhtawar, 229

Nariman point,

Mumbai 400 021

2. Kotak Mahindra Trusteeship Services Ltd.

5th floor, Bakhtawar, 229

Nariman point,

Mumbai 400 021

3. Mr.Nitin Deshmukh

Head of Kotak Investment Advisors Ltd.

13th floor, Bakhtawar, 229

Nariman point,

Mumbai 400 021

4. Mr.Jaideep Hansraj

Executive Vice President & Head of

Wealth Management division of

Kotak Investment Advisors Ltd.

13th floor, Bakhtawar, 229

Nariman point, Mumbai 400 021

5. Mr.Ketan Patel

Vice President, Wealth Management

Kotak Investment Advisors Ltd.

13th floor, Bakhtawar, 229

Nariman point, Mumbai 400 021

6. Shagoofa Rashid Khan

Head-Legal Department

Kotak Investment Advisors Ltd.

13th floor, Bakhtawar, 229

Nariman point, Mumbai 400 021 ………….Opposite parties



Corum: Mr.S.R.Khanzode, Hon’ble Presiding Judicial Member

Smt.S.P.Lale, Hon’ble Member

Present: Ms.M.D.S.Sinh-Advocate for the complainant

: ORAL ORDER:

Per Mr.S.R.Khanzode, Hon’ble Presiding Judicial Member



1. Heard Ms.M.D.S.Sinh-Advocate for the complainant at length. Perused the complaint and the accompanying papers. This complaint is pressed as far as complainant no.1- Mr.Dilipkumar V.Lakhi & complainant no.2- Mr.Chirag D. Lakhi.

2. O.P. has floated one Kotak India Growth Fund-II and satisfied with the presentation thereof through one Ms.Priyanka Shah in the month of December 2007, these complainants, amongst others, agreed to be contributed to the said fund and entered into tri party agreement known as ‘Kotak India Growth Fund-II Contribution Agreement’, which was executed between Kotak Mahindra Trusteeship Services Ltd. (As the ‘Trustee’) and Kotak Investment Advisors Ltd. (As ‘Investment Manager’) and the complainants (As ‘Contributors’) and the management of the fund is to be carried out as per the Agreement referred above. According to complainants, due to some demands, they induced a mis-trust about the managers of the fund and therefore, narrating certain grievances, they perhaps stopped further contributing to the fund as per demand by the managers of the Fund. They claimed further that their grievances are genuine. They fear loss if they go on contributing further and have also simultaneously fear that if they do not contribute, they will be declared as defaulters and had to face consequences accordingly. Therefore, they have filed this consumer complaint with the following reliefs:-

“a. For refund without any deductions whatsoever of the entire 3% draw down contributed by the complainants, in the following manner-

i. Complainant nos.1 and 2 – Rs.54 lakhs

b. For interest calculated @ 18% p.a. on the 3% draw down amounts stated in cause (i) above payable from the date of the Contribution Agreement, i.e.28th March 2008, till date of payment /realization;

c. In the alternative, for directions allowing the said amount of Rs.91.5 lakhs to continue in the fund, without further draw downs issued to the complainants, till such time as the investment is divested and paid back to the complainants pro rata;

d. Pending the hearing and final disposal of the above Complaint, the opposite parties be restrained by an order of injunction from declaring the complainants “Defaulting Contributors” within meaning of clause 6 of the Contribution Agreement;

e. Pending the hearing and final disposal of the above complaint, the 1st draw down of 3% amounting to Rs.91.5 lakhs be deposited in the Hon’ble Forum forthwith;

f. Pending the hearing and final disposal of the Complaint, in the alternative, for an order that the opposite parties maintain status quo on the aggregate amount of Rs.91.5 lakhs and the 3% draw down amounts remain the names of and are held by the respective complaints;

g. For interim and ad-interim reliefs in terms of prayers (iv) and (v) above

h. For costs of this complainant and

i. For such other and further orders as the nature and the circumstances of the case may require.”

3. Contribution Agreement referred above, which is attached as Annexure 3. Clause no.7 of said Agreement deals with Profits and Distribution. Clause no.8 speaks about Termination. Clause no.11 defines Limitation on Liability, while clause no.12 mentions about the Conflict of interest. Miscellaneous clause 13.1 also deals with the case of any conflict between interruption of the provisions of this Agreement and the Indenture and in that case provisions of Indenture are to prevail.

4. After carefully considering all these aspects, first we find that there is no element of ‘service’ defined under section 2(1)(o) of Consumer Protection Act, 1986 (Herein after referred as “Act”). Contributors under the Agreement are equal partners and had to play a definite role in raising the fund. Management of the fund is also defined and controlled accordingly. Contributors were to get the relief in terms of profit as regulated by the Agreement.

5. As far as refund of contribution made claimed per paragraph 40-a, supra, that will arise only after termination and as regulated by the Agreement. It has nothing to do with any kind of deficiency in service under the Act.

6. Coming to alternative relief claimed per para 40(c), supra, it also relates to and covering management of the fund and nothing to do with any service hired. Consumer Fora cannot grant relief directing to do and not to do something and they have to act only within the parameters of section 14 of the Act.

7. Relief claimed in para 40(d) to (g), supra, relates to interim relief which should not arise in the instant case when the complaint itself is not entertainable. Relief claimed as per para 4(h), supra, is for costs. It will not arise at all. In para 40(i) general relief is claimed.

8. Furthermore, for the sake of argument, even if we assume that such nature of dispute is a consumer dispute as is entertainable in Consumer Fora, still looking to the complicated questions of transactions and the various issues involved, not only about the complainants but covering the other contributors also, and the one related to proper management of the fund which is the collective responsibility as defined in the Agreement. Therefore summary nature jurisdiction of the Consumer Fora cannot be invoked in such type of cases. For this reason also complaint cannot be entertained.

9. For the reasons stated above, we find complaint is not entertainable, we hold accordingly and pass following order:-

ORDER

Complaint stands rejected.





(S.P.Lale) (S.R.Khanzode)

Member Presiding Judicial Member