Chandigarh

StateCommission

CC/24/2021

Iqbal Singh - Complainant(s)

Versus

Aditya Birla - Opp.Party(s)

Mukul Goyal, Neha Gupta & Rajat Singh Adv.

14 Dec 2022

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T. CHANDIGARH

============

 

Consumer Complaint No.	:	CC/24/2021
Date  of  Institution	:	05/10/2021
Date   of   Decision	:	14/12/2022

 

 

 

 

 

Iqbal Singh S/o Sh. Dilbagh Singh Dhesi, Resident of House No.1556, Sector 36, Chandigarh.

…. Complainant

 

 

Vs.

 

 

1]     Aditya Birla Asset Management Company, One Indiabulls Centre, Tower 1, 17^th Floor, Jupiter Mill Compound, 841 S.B. Marg, Elphinstone Road, Mumbai, Maharashtra 400013, through its Authorized Officer.

 

2]     Aditya Birla Asset Management Company, 24-23, Ground Floor, Sector 22-C, Chandigarh – 160022, through its Authorized Officer.

 

3]     HDFC Bank, HDFC Private Banking Group, Plot No.28, Industrial Area, Phase-I, Chandigarh, through its Authorized Officer.

 

4]     Ms. Manvee Sandhu, Private Banker in HDFC Bank, HDFC Private Banking Group, Plot No.28, Industrial Area, Phase-I, Chandigarh, through its Authorized Officer.

…… Opposite Parties

 

 

BEFORE: JUSTICE RAJ SHEKHAR ATTRI    PRESIDENT

PADMA PANDEY                             MEMBER

                RAJESH K. ARYA                           MEMBER

                PREETINDER SINGH                      MEMBER

 

PRESENT	:	Ms.Neha Gupta, Advocate for Complainant (on V.C)
	:	None for Opposite Party No.1.
	:	Opposite Party No.2 ex-parte vide order dated 08.03.2022.
	:	Sh.A.P.S. Sehgal, Advocate for OPs No.3 & 4.

 

PER PADMA PANDEY, MEMBER

 

 

 

 

                In brief, the facts necessary for the disposal of the instant Consumer Complaint are, the Complainant was having a banking account with HDFC Bank (Opposite Party No.3). The HDFC Bank assigned a Private Bank (Opposite Party No.4) to the Complainant, who recommended him to invest in Real Estate Funds as it would yield fairly good returns @ 12-18% p.a. Believing on the aforesaid version, the Complainant signed an agreement with Aditya Birla Asset Management Co. for a Policy of Rs.1,00,00,000/- (Annexure C-1). The Complainant paid said amount in five equal installments of Rs.20,00,000/- each. The investment was having the lock in period of 6+3 years. After the completion of the fixed lock-in period Complainant was promised that he would get back an amount approx. Rs.3,00,00,000/- if there is no pre-term withdrawal from the account. After the completion of 9 years, Complainant approached the Aditya Birla Asset Management Co. multiple times for paying the full amount, but was paid only an amount of Rs.88,89,969/-. Thereafter, the Complainant requested the Opposite Parties a number to times to pay back the full amount, but to no avail. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the Opposite Parties, the Complainant has preferred the instant Consumer Complaint.

 

2.         Notice of the complaint was sent to Opposite Parties seeking their version of the case. However, nobody appeared on behalf of Opposite Party No.2 despite service, therefore, it was proceeded ex-parte on 08.03.2022.

 

3.         Opposite Party No.1 filed its written statement, inter alia, admitting the basic facts of the case. It has been pleaded that investment in the unit of the fund involves a significant risk, which was duly explained to the Complainant, who showed his interest to the investment in the fund. A Placement Memorandum was issued to the Complainant and he agreed to invest a sum of Rs.1,00,00,000/- in the fund and accordingly, executed the Contribution Agreement. The projection contained in the Memorandum were based on certain assumption and that the same should not be considered as a guaranteed accurate information since the actual event are difficult to predict and are beyond the fund control.  Further, per Class-A Contribution Agreement, the parties have agreed to resolve all differences by mutual discussion, failing which by arbitration and until the arbitrator proceedings are complete, they shall not take the dispute to a court of law. It has been asserted that the contribution made by the complainant does not amount to a fixed deposit bearing a fixed return in the form of interest. The fund never made any assurance or guaranteed any specific returns to the prospective investors which in any event is prohibited by SEBI. In fact, the Opposite Parties have distributed the valid proceeds of the fund to the complainant as per account statement and thus the prayer made in the complaint is untenable as the contribution made by the Complainant was subject to risks and expenses as enunciated and agreed between the parties as per aforesaid Class-A Contribution Agreement executed among them. Pleading that there was no deficiency in service or unfair trade practice on its part, a prayer has been made for dismissal of the complaint.

 

4.         Opposite Party No.3 & 4 in their separate reply admitted the factual matrix of the case. It has been pleaded that on being showcased investment options, the Complainant opted for “Aditya Birla Real Estate Fund”, the returns whereof are subject to market risks and fluctuations. The Complainant was never assured guaranteed fixed returns on investment since the performance of such funds are entirely dependent on the market and the terms of the same are a privity of contract between the Complainant and Opposite Parties No.1 & 2. Pleading that there was no deficiency in service or unfair trade practice on their part, a prayer has been made for dismissal of the complaint.

 

5.         Parties led evidence by way of affidavits and documents.

 

6.         We have heard the learned counsel for the contesting parties and gone through the record of the case, including the written arguments advanced.

 

7.         After scanning of record, including written arguments, our findings are as under:-

 

8.         It is evident from the record that the Complainant, on the recommendation of the Opposite Parties No.3 & 4, chose to invest in the real estate funds with the Aditya Birla Asset Management Company, on the assurance that the said invest would produce at least 12-18% return per annum. The Complainant invested Rs.1,00,00,000/- in five equal instalments of Rs.20,000/- each which had a lock-in period of 6 + 3 years, whereafter, the Complainant was promised the return of Rs.3,00,00,000/- in case there is no pre-term withdrawal from the account. 

 

9.         Admittedly, there is no denial of the fact that the Complainant paid an amount of Rs.1,00,00,000/- in five instalments to the Opposite Party. The initial amount was paid on 12.11.2010 and the fifth instalment of Rs.20,00,000/- was paid on 03.01.2015. It is the case of the Complainant that after the completion of 6 years, the Aditya Birla Asset Management Company instead of allowing the withdrawal of full amount (total principal amount + interest), unilaterally extended the term of policy by 3 years, which blocked the opportunity of the Complainant to withdraw the amount, thereby causing huge financial loss. The Complainant has alleged that when after the completion of 9 years, he approached the Aditya Birla Asset Management Company for withdrawal of the amount alongwith interest, it was informed that since the Company had suffered huge losses in real estate, they are not inclined to pay the interest. Even the Complainant was not paid the principal amount of what he had paid i.e. Rs.1,00,00,000/-. Instead of Rs.1,00,00,000/- the Complainant was paid only a sum of Rs.88,89,969/-.    

 

10.         The Opposite Party No.1 had stated that its intention was to market the aforesaid Scheme the Fund published a document setting out certain details and objective of the Scheme propounded by them. Opposite Party No.1 has taken a plea that a disclaimer clause was there which clearly cautioned the prospective investor that the investor should carefully review the documents of the fund before his/her decision to invest. Further, Opposite Party No.1 had also taken a plea that investment in the units of the Fund involves significant risks and that the use of any information set out in the document was at the risk of the investor himself/herself. The Opposite Party No.1 heavily relied on two documents in support of their claim i.e. Private Placement Memorandum (Placement Memorandum) and Class ‘A’ Contribution Agreement (Contribution Agreement), which mentioned about risk factors involved in such type of investments and further, return on the investments were based on certain projections which should not be considered as a guaranteed accurate information. 

 

11.         Significantly, the Opposite Party No.2 did not appear to contest the claim of the Complainant and preferred to proceed against ex-parte. This act of the Opposite Party No.2 draws an adverse inference against it. The non-appearance of the Opposite Party No.2 shows that it has nothing to say in its defence against the allegations made by the Complainant. Therefore, the assertions of the complainant go unrebutted and uncontroverted.

 

12.         However, this Commission is not impressed with the stand taken by Opposite Party No.1, in as much as, the same is very flimsy and does not stand the aforesaid averments by Opposite Party No.1 that the Complainant is himself responsible for investing in a fund which has eminent risk factors. We observe that the initial term of the fund was 6 years commencing from 01.09.2010 and the Complainant was not allowed to withdraw his funds at the end of six years, but was advised to retain the investment for another period of 3 years in accordance with the terms of the Placement Memorandum. Finally, the fund was liquidated on 31.08.2019, but to the utter surprise & dismay of the Complainant, the Opposite Parties No.1 & 2 did not even pay back the principal amount of Rs.1,00,00,000/- invested by the Complainant, leave alone the interest. 

 

13.         Admittedly, since the Opposite Parties No.3 & 4 acted just as a referral agent for Opposite Parties No.1 & 2 and the investment & return on investments are entirely dependent on the market and the terms of the same are a privity of contract between the Complainant and Opposite Parties No.1 & 2, in our opinion, no case is made out against Opposite Parties No.3 & 4 and the present Complaint qua them deserves to be dismissed.  

 

14.         In the present circumstances, it is established beyond all reasonable doubts that the complaint of the Complainant is genuine and the Opposite Parties No.1 & 2 have certainly and definitely indulged into unfair trade practice as they ought to have initiated steps to redress the grievance of the Complainant promptly, which they miserably failed to do. At any rate, the Opposite Parties No.1 & 2 even did not bother to redress the grievance of the Complainant, despite having approached for the same by the Complainant time & again, which to our mind not only amounts to deficiency in service, but is a grave malpractice under the Consumer Protection Act.

 

15.         In the light of above discussion, this consumer complaint deserves to succeed. The same is accordingly partly allowed.  Opposite Parties No.1 & 2 are, jointly and severally, directed as under:-

[a]    To pay the balance principal amount of Rs.11,10,031/-  to the Complainant, along with interest @7% p.a. from 01.09.2010 (i.e. commencement of the term of the fund), till the date of payment, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount shall carry 3% penal interest i.e. 10% p.a. (7% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.

[b]    To pay interest @ 7% p.a. to the Complainant on Rs.88,89,969/-, from the date of commencement of the term of the fund i.e. 01.09.2010, till the date of liquidation of the fund i.e. 31.08.2019, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount shall carry 3% penal interest i.e. 10% p.a. (7% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.

[c]    To pay an amount of Rs.50,000/- to the Complainant as lumpsum compensation and cost of litigation, within a period of 30 days from the date of receipt of a certified copy of the order, failing which, the said amount of Rs.50,000/-, shall carry interest @9% p.a. from the date of institution of this complaint, till realization.

The Complaint against Opposite Parties No.3 & 4 fails and is accordingly dismissed with no order as to costs.

 

16.         Certified copies of this order, be sent to the parties, free of charge.

 

17.         The file be consigned to Record Room, after completion.

Pronounced

14^th December, 2022                                                                        

Sd/-

                                                (RAJ SHEKHAR ATTRI)

PRESIDENT

 

 

Sd/-

                                                        (PADMA PANDEY)

MEMBER

 

 

Sd/-

                                                        (RAJESH K. ARYA)

MEMBER

 

 

 

Sd/-

                                                        (PREETINDER SINGH)

MEMBER

 

“Dutt”