DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the 24th day of July 2023
Filed on: 22.07.2023
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C No. 302/2020
COMPLAINANT
Suja R Varma, aged 46 years, A1, Vint Pearl Apartment, Pavamkulangara, Choorakkad, Tripunithura, PIN 682301
VS
OPPOSITE PARTIES
1. M/s Popular Traders, Regd. Office: Popular Towers, Vakayar P.O, Konni Pathanamthitta, Kerala, India, Pin: 689698; Rep. by its Managing Partner Thomas Daniel
2. Thomas Daniel, aged not known, S/o T.K.Daniel, Managing Partner of M/s Popular Traders Popular Towers, VakayarP.O,Konni, Pathanamthitta, Kerala - 689 698
3. Smt. Prabha Thomas, W/o Thomas Daniel, Partner, M/s Popular Traders, Indikkattil, Vakayar P.O., Konni, Pathanamthitta, Kerala - 689 698.
4. Smt. Ria Ann Thomas, D/o Thomas Daniel, Partner, M/s Popular Traders, Indikkattil, Vakayar P.O., Konni, Pathanamthitta, Kerala-689 698.
5. Smt. Rinu Mariam Thomas, D/o Thomas Daniel, Partner,
M/s Popular Traders, Indikkattil, Vakayar P.O., Konni, Pathanamthitta, Kerala - 689 698.
(Addl. OPS 3 to 5 were impleded as per order in IA 2/2021 dated 29/1/2)
F I N A L O R D E R
D.B. Binu, President.
1. A brief statement of facts of this complaint is as stated below:
The complaint was filed under Section 35 of the Consumer Protection Act, 2019. The brief facts, as averred in the complaint, are that the first opposite party is engaged in financial business, accepting money and lending money against gold ornaments. The second opposite party is the managing partner of the first opposite party and its authorized officer. The company advertised itself as a Non-Banking Financial Company with permission from the Reserve Bank of India to collect deposits and offer 12% interest per annum.
The complainant was attracted to the offer and, under the introduction of the branch manager of the first opposite party, deposited Rs. 4,25,000/- with a maturity date of 12 months, which was later renewed until 3/5/2021.
However, contrary to the promise, the opposite parties chronically defaulted in paying the agreed interest. The complainant's request for premature closure was declined, and the opposite parties have not paid the deposited amount with accrued interest. The complainant later discovered several criminal complaints against the opposite parties for cheating and misappropriation of public deposits, and the second opposite party was arrested.
Further investigation revealed that the first opposite party had no permission from the Reserve Bank of India to collect deposits. The complainant alleges unfair trade practices and deficiency in service on the part of the opposite parties, as their practice was deceptive in providing services. The branch office of the company in Tripunithura is now closed without prior notice to the complainant.
The complainant seeks compensation for the injury suffered and a refund of Rs. 4,25,000/- with 12% interest per annum from the date of deposit till realization. The counsel prays for the Hon'ble Forum to direct the opposite parties to pay compensation of Rs. 5,00,000/-, in addition to the deposited amount, along with interest and Rs. 25,000/- as the cost of the proceedings.
2) Notice
The notices to the opposite parties were sent by the commission through the Superintendent of Prisons at Sub Jail Mavelikara and Attakulagara. However, despite accepting the notices, the opposite parties were absent, and as a result, they are set ex-parte.
3) . Evidence
The complainant had filed an ex-parte proof affidavit and 2 documents that were marked as Exhibits-A-1 and A-2.
Exhibit 1: Copy of the receipt No.0149157 issued by the opposite party acknowledging the receipt of deposit of Rs. 1,25,000/-.
Exhibit 2: Copy of the receipt No.0150121 issued by the opposite party acknowledging the receipt of deposit of Rs. 3,00,000/-.
4) The main points to be analysed in this case are as follows:
i) Whether the complaint is maintainable or not?
ii) Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant?
iii) If so, whether the complainant is entitled to get any relief from the side of the opposite party?
iv) Costs of the proceedings if any?
5) The issues mentioned above are considered together and are answered as follows:
In the present case in hand, as per Section 2(7) of the Consumer Protection Act, 2019, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment. The complainant produced Copies of the receipts issued by the opposite parties acknowledging the receipt of deposit. The receipts evidencing payment to the opposite parties (Exhibits A-1 and A-2). Hence, the complainant is a consumer as defined under the Consumer Protection Act, 2019.
The complainant filed the above case seeking compensation for the deficiency in service caused by the opposite party’s failure to refund the deposited amount. The complainant alleges that the opposite party did not fulfil their obligation to return the money, resulting in a deficiency in the service provided to the complainant.
The learned counsel for the complainant submitted that she deposited Rs. 4,25,000/- with the first opposite party (OP1) managed by the second opposite party (OP2), and other OPs are shareholders of OP1. The deposit was made based on the offer and introduction by the Branch Manager of OP1, who claimed that the company had permission from the Reserve Bank of India to collect deposits and offer 12% interest per annum.
Contrary to the promise, the opposite parties defaulted in paying the agreed interest. Several criminal complaints were registered against the opposite parties for misappropriation and fraud. It was revealed that OP1 had no permission from the Reserve Bank of India to collect deposits.
The complainant alleges unfair trade practices and deficiency in service on the part of the opposite parties, as their practice was deceptive in providing services. The branch office of the company in Tripunithura is now closed without prior notice to the complainant.
The complainant seeks disbursement of the agreed interest and principal amount, compensation for mental agony, and a refund of Rs. 4,25,000/- with 12% interest per annum from the date of deposit till realization.
In conclusion, the counsel prays for the commission to direct the opposite parties to pay the due amount and compensation for the suffered injury.
The evidence presented included an ex-parte proof affidavit filed by the complainant, and it was unchallenged by the opposite parties. Therefore, the complainant's claims were considered credible and supported by the evidence. Therefore, the complainant requests the commission to grant the relief sought, including compensation for mental agony and unfair trade practices.
The opposite parties’ conscious failure to file their written version in spite of having received the Commission’s notice to that effect amounts to an admission of the allegations levelled against them. Here, the case of the complainant stands unchallenged by the opposite parties. We have no reason to disbelieve the words of the complainant as against the opposite parties. The Hon’ble National Commission held a similar stance in its order dated 2017 (4) CPR page 590 (NC).
In the matter of the complaint filed against the 1st Opposite Party, a partnership firm managed by the 2nd opposite party, the main grievance of the complainant is the deficiency in service caused by the opposite party's failure to refund the deposited amount. It has been alleged that the opposite party accepted money from the public by offering 12% interest per annum, but failed to pay the agreed interest and declined the complainant's request for premature closure. Additionally, it was discovered that the opposite parties had no permission to collect deposits from the public, and criminal complaints had been registered against them for cheating and misappropriation of funds, including the complainant's deposit.
The opposite parties, despite being served with the notice, did not challenge the allegations made by the complainant. This conscious failure to file their written version is considered an admission of the allegations against them. As per legal precedent, this stance of the opposite parties is not credible, and we have no reason to disbelieve the complainant's claims in this matter.
Considering the evidence, the complainant's unchallenged contentions, and the serious deficiency in service caused by the opposite parties, we find the issues in favour of the complainant. The opposite parties' actions amount to unfair trade practices and deficient services, deceiving and enriching themselves with the complainant's money and that of the public.
In conclusion, the complaint is deemed maintainable, and the opposite party is found to have engaged in unfair trade practices and deficient services.
Financial frauds in a fully literate state are a serious concern and demand urgent attention. These scams can cause substantial harm to individuals, the economy, and public trust in the financial system. Surprisingly, even educated individuals are falling prey to these scams, emphasizing the necessity for better awareness and consumer protection measures. Fraudsters exploit vulnerabilities, financial stress, and the desire for quick gains to deceive victims. The poor and vulnerable suffer the most as they are desperate for financial solutions and lack an understanding of complex transactions.
We find the issue Nos. (I) to (IV) are found in favour of the complainant for the serious deficiency in service that happened on the side of the opposite party. Naturally, the complainant had suffered a lot of inconvenience, mental agony, hardships, financial loss, etc. due to the negligence on the part of the opposite parties.
In view of the above facts and circumstances of the case, we are of the opinion that the opposite parties are liable to compensate the complainant.
Hence the prayer is partly allowed as follows:
- The Opposite Parties shall refund of Rs. 4,25,000/- towards the de posited amount along with the interest @9.5% from the date of deposit 30.05.2019 till the date of realization.
- The Opposite Parties shall pay Rs 2,00,000/- /- towards compensation for the deficiency of service committed by the opposite parties, and for the mental agony and physical hardships sustained by the complainant.
- The Opposite Parties shall also pay the complainant Rs. 5000/- towards the cost of the proceedings.
The Opposite Parties be jointly and severally liable for the above-mentioned directions which shall be complied with by the Opposite Parties within 30 days from the date of the receipt of a copy of this order failing which the amount ordered vide (i) and (ii) above shall attract interest @9.5% from the date of deposit 30.05.2019 till the date of realization.
Pronounced in the Open Commission on this 24th day of July 2023.
Sd/-
D.B.Binu, President
Sd/-
V.Ramachandran, Member
Sd/-
Sreevidhia.T.N, Member
Forwarded/by Order
Assistant Registrar
Appendix
Complainant’s Evidence
Exhibit 1: Copy of the receipt No.0149157 issued by the opposite party acknowledging the receipt of deposit of Rs. 1,25,000/-.
Exhibit 2: Copy of the receipt No.0150121 issued by the opposite party acknowledging the receipt of deposit of Rs. 3,00,000/-.
