DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the 7th day of September, 2023.
Filed on: 23/10/2020
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C. No 343/2020
Between
COMPLAINANT
Josephine Paulinose, Wo Dr. V.T. Paulinose, 5/662, Pattany House Kalamassery. P.O.. Aluva, Ernakulam, PIN-883 104.
(Rep. by Adv. George Cherian Karippaparambil, Karippaprambil Associates, HB 48, Panampilly Nagar, Kochi 682036.)
VS
OPPOSITE PARTIES
- M/s Popular Finance, Registered office No. 13/577, Popular Tower Vakayar P.O., Konni, Pathanamthitta, Kerala - 689 698.Rep. by its Partner Smt. Prabha Thomas, W/o Thomas Daniel.
- Prabha Thomas, W/o Thomas Daniel, Partner, M/s Popular Finance, Indikkattil, Vakayar P.O., Konni, Pathanamthitta, Kerala - 689 698.
- Thomas Daniel, Partner, M/s Popular Finance, Indikkattil, Vakayar PO.,Konni, Pathanamthitta, Kerala - 689 698.
- Ria Ann Thomas, D/o Thomas Daniel, Partner, M/s Popular Finance, Indikkattil, Vakayar P.O., Konni, Pathanamthitta, Kerala - 689 698.
- Rinu Mariam Thomas, D/o Thomas Daniel, Partner, M/s Popular Finance, Indikkattil, Vakayar P.O., Konni, Pathanamthitta, Kerala - 689 698.
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 complainant is a senior citizen who had deposited Rs. 2,00,000/- with a non-banking financial company called M/s Popular Finance. This company is involved in various financial activities, including gold loans, recurring deposits, chitty, and foreign exchange. The complainant was attracted to the company through advertisements in print and visual media and deposited her husband's retirement benefits with the company in 2016, with a promised interest rate of 12% per annum.
The deposit was renewed in December 2018, and the complainant received interest payments regularly until January 2020. However, the company began defaulting on interest payments despite promises and requests from the complainant. The complainant's request for premature closure of the deposit was also declined. Later, it came to light that the company, along with its partners, had been involved in misappropriation of deposits from the public. The partners of the company were arrested by the police in connection with the misappropriation.
The complainant filed a complaint with the police and then with this Commission, claiming that the company had engaged in unfair trade practices, unfair contracts, and deficiency in services. The complainant alleged that the company had induced her to deposit her retirement benefits based on misleading advertisements, falsely claiming permission from the Reserve Bank of India. The complainant further accused the company of siphoning off funds from depositors and investing them in real estate in India and abroad.
As a result of the company's actions, the complainant sought compensation of Rs. 3,00,000/- along with 12% interest from February 1, 2020, for mental agony, losses, and damages. The complainant also requested the Commission to order the company to pay Rs. 1,00,000/- as the cost of the legal proceedings.
The complainant's prayer to the Commission includes: a) Directing the company to pay Rs. 3,00,000/- with 12% interest from February 1, 2020, as compensation for mental agony, losses, and damages due to unfair practices and negligence. b) Directing the company to pay Rs. 1,00,000/- as the cost of the legal proceedings.
2) Notice
The notices to the opposite parties were sent by the commission through the Superintendent of Sub Jail Mavelikara and the Superintendent of Women Prison, Attakkulagara 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 a proof affidavit and 3 documents that were marked as Exhibits-A-1- to A-3.
Exhibit A1: True copy of the misleading advertisement issued by the opposite parties
Exhibit A2: True copy of the fixed deposit receipt dated 27.12.2018 for Rs. 2,00,000/-
Exhibit A3: True copy of the complaint dated 07/09/2020 before the Sub Inspector of Police, South Kalamassery.
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 copy of receipt issued by the opposite parties. The receipt evidencing payment to the opposite parties (Exhibits 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 the opposite parties 2 to 5 have misappropriated significant sums of money from numerous depositors, collected through Popular Finance's 269 branches all over India. They funnelled these funds under the names of Popular Finance, Popular Traders, Mary Rani Trading LLP, and other sister concerns of M/s Popular Finance. These ill-gotten funds were then invested in real estate both within India and abroad.
The first opposite party operates as a partnership firm, functioning as a Non-Banking Financial institution. Opposite parties 2 to 5 are partners responsible for managing the firm's day-to-day activities. The firm is engaged in various financial services, including providing gold loans, accepting recurring deposits, offering chitty schemes, and conducting foreign exchange operations. Furthermore, the opposite parties also amassed public funds through short-term fixed deposits, facilitated by entities such as M/s Popular Traders and M/s Mary Rani Trading LLP, sister concerns of M/s Popular Finance. These funds were used by Popular Finance for extending gold loans to the public.
The complainant was drawn in by video advertisements in print and visual media, leading her to deposit her husband's retirement benefits with the opposite parties. She initially invested Rs. 2,00,000/- for one year in 2016 with M/s Popular Finance, receiving a promised interest rate of 12% per annum. Upon maturity on 27.12.2018, she renewed the deposit, with interest payments continuing at 12% until January 2020. However, during the renewal of the fixed deposits, the Kaloor branch of the first opposite party, allegedly influenced by opposite parties 2 to 5, diverted the complainant's deposit to her share in Mary Rani Trading LLP without her consent or awareness.
The complainant received interest as agreed until January 2020, after which the opposite parties consistently defaulted on payments despite her numerous requests. Additionally, the complainant discovered that multiple complaints had been filed against the opposite parties for mishandling public deposits. Subsequently, opposite parties 2 to 5 were arrested due to these allegations. Further investigation revealed that the opposite parties lacked permission to accept deposits from the public. The complainant argued that misleading advertisements claiming approval from the Reserve Bank of India constituted unfair, restrictive trade practices, and negligence on the part of the opposite parties.
As a result, the complainant sought a refund of the deposited amount along with accrued interest and compensation, holding all opposite parties jointly and severally liable. Despite the absence of a response from the opposite parties, the complainant filed a proof affidavit, marked as Exhibits A1 to A3, on 20.01.2022. These exhibits include misleading advertisements (Exhibit A1), a true copy of the fixed deposit receipt for Rs. 2 Lakhs (Exhibit A2), and a true copy of the complaint submitted to the Sub-Inspector of Police, South Kalamassery (Exhibit A3). These exhibits collectively establish the complainant's consumer relationship as a depositor with the opposite parties, reinforcing her claim for relief.
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).
The opposite parties had inadequately performed the service as contracted with the complainant and hence there is a deficiency in service, negligence, and failure on the part of the opposite party in failing to provide the Complainant desired service which in turn has caused mental agony and hardship, and financial loss, to the Complainant. The aforesaid acts of the opposite party would stand to show their callous attitude, utter negligence, and deficiency of service, for which they are solely answerable.
The opposite parties are liable to compensate the complainant for deficiency in rendering service and also for immense physical harassment and mental agony.
The complainant alleged that the opposite parties engaged in unfair trade practices by misleadingly inducing her to deposit her retirement benefits based on advertisements and claims of permission from the Reserve Bank of India. Additionally, the complainant stated that the opposite parties defaulted on interest payments, declined premature closure of the deposit, and were involved in misappropriation of public funds.
The evidence presented by the complainant, including misleading advertisements (Exhibit A1), the fixed deposit receipt (Exhibit A2), and a complaint to the police (Exhibit A3), clearly establishes the complainant's consumer relationship with the opposite parties. The absence of any response or contestation from the opposite parties further strengthens the complainant's case.
Upon careful consideration of the facts, evidence, and arguments presented, it is evident that the opposite parties have indeed engaged in unfair trade practices, deficient services, and negligence, resulting in financial losses, mental agony, and hardship for the complainant. The opposite parties' conscious failure to respond to the allegations further confirms their liability.
In conclusion, the Commission finds the complainant's claims to be substantiated by evidence and applicable laws. The opposite parties' actions clearly constituted unfair practices, deficient services, and negligence.
This case underscores the significance of consumer protection and awareness, even in regions with high literacy rates like Kerala. The complainant's decision to deposit her retirement benefits was influenced by advertisements and assurances of authorization from the Reserve Bank of India. The ramifications of financial fraud can be especially devastating for marginalized segments of our population. The deceptive tactics employed by the opposite parties and their inadequate services have inflicted substantial detriment upon the complainant, warranting just compensation.
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 parties. 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 Rs. 2,00,000/- being the deposited amount along with the interest @9.5% from the dates of deposits till the date of realization.
- The Opposite Parties shall pay 50,000/- as compensation for the mental agony, loss, and damages suffered by the complainant due to the unfair trade practice, deficiency in their service, and negligence on the part of the opposite parties.
- The Opposite Parties shall also pay the complainant Rs. 25,000/- 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) shall attract interest from 01/01/2020 and amount ordered vide (II) shall attract interest from the date of orders till the date of realisation.
Pronounced in the Open Commission on this the 7th day of September, 2023
Sd/-
D.B.Binu, President
Sd/-
V.Ramachandran, Member
Sd/-
Sreevidhia T.N., Member
Forwarded/by Order
Assistant Registrar Order
Appendix
Complainant’s evidence
Exhibit A1: True copy of the misleading advertisement issued by the opposite parties
Exhibit A2: True copy of the fixed deposit receipt dated 27.12.2018 for Rs. 2,00,000/-
Exhibit A3: True copy of the complaint dated 07/09/2020 before the Sub Inspector of Police, South Kalamassery.
Opposite party’s evidence
Nil
Despatch date:
By hand: By post
kp/
CC No. 343/2019
Order Date: 07/09/2023
