DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM

       Dated this the 23^rd day of January, 2024.                                                                                             

                           Filed on: 27/12/2021

PRESENT

Shri.D.B.Binu                                                                          President

Shri.V.Ramachandran                                                              Member Smt.Sreevidhia.T.N                                                              Member

C.C. No. 514/2021

COMPLAINANTS

1. Sheila Paul, aged 71 years, W/o. Late. Paul John Eraly, Residing at 8 B/2, Taylors Road, Behind Tower Block, Kilpauk, Chennai-600010.
2. Tina Susan, aged 42 years, D/o. Late. Paul John Eraly, Residing at 8 B/2, Taylors Road, Behind Tower Block, Kilpauk, Chennai-600010, Rep. by her POA Mrs. Sheila Paul.

(Rep. by Adv. Jagan Abraham M. George, Jaison Antony, M/s. J&J Associates, Empire Building, Near High Court, Opp. Central Police Station, Ernakulam 682018)

Vs

THE OPPOSITE PARTIES

1. Popular Traders, Kaloor Branch, Banerji Road, Kaloor, Ernakulam - 682017, having registered office at 13/577, Popular Tower, Vakayar P.O., Konni, Pathanamthitta - 689698, Rep. by its Managing Partner Thomas Daniel @ Roy.
2. Popular Finance, Kaloor Branch, Banerji Road, Kaloor, Ernakulam - 682017, Having registered office at 13/577, Popular Tower, Vakayar P.O., Konni, Pathanamthitta - 689698, Represented by its Director Prabha Thomas.
3. Prabha Thomas, age not known to the complainant, W/o. Thomas Daniel, Indikattil House, Vakyar, Konni, Pathanamthitta-689698.
4. Thomas Daniel @ Roy, age not known to the complainant, S/o. Late T.K. Daniel, Designated Partner of Popular Finance, Indikattil House, Vakyar, Konni, Pathanamthitta-689698.
5. Ria Ann Thomas, age not known to the complainant, D/o. Thomas Daniel, Designated Partner of Popular Finance, Indikattil House, Vakyar, Konni, Pathanamthitta-689698.
6. Marykutty, W/o. Late T.K. Daniel, Chairperson, age not known to the complainant, Popular Finance, Head Office, Popular Towers, Vakayar, Pathanamthitta - 689 698.
7. Sam Mathew, Branch Manager, Ernakulam & Kottayam, Popular Finance Pvt. Ltd., Kaloor Branch Banarji Road, Kaloor, Ernakulam-682017.
8. Saju, Assistant Manager, Popular Finance Pvt. Ltd., Kaloor Branch, Ernakulam, Residing at Thuthikadathin House, Paraparambu Road, Desabhimani Junction, Kaloor P.O., Kochi-682017.
9. Susan Abraham, Staff/accountant, Popular Finance Pvt. Ltd., Kaloor Branch, Ernakulam, Residing at Thuthikadathin House, Paraparambu Road, Desabhimani Junction, Kaloor P.O., Kochi-682017.

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 complainants, a widow and her daughter residing in Chennai, Tamil Nadu, have accused several parties (O.P.s) of deficiency of service and unfair trade practice. The O.P.s include partnership firms or private limited companies, their managing partners/directors, and employees at a specific branch in Kaloor, Ernakulam.

The complaint revolves around fixed deposits made by the complainants with the O.P.s, who allegedly misrepresented themselves as a non-banking finance company authorized to accept deposits, offering 12% annual interest. The complainants deposited sums of Rs. 2,80,000 and Rs. 2,00,000 on specific dates with maturity dates set for a year later. Initially, the complainants received the promised interest, but payments ceased thereafter.

Upon inquiry and following alarming news about the O.P.s' financial troubles, the complainants found the branch closed and learned about the closure of the head office too. Subsequently, some of the accused attempted to flee the country but were taken into custody for allegedly swindling money from others as well.

A complaint was lodged with the local police, and the complainants argue that the O.P.s, by their actions, have committed fraud, leading to a deficiency of service and unfair trade practice. They also allege that the O.P.s diverted the funds to other companies where they held directorial positions.

                 They also seek an interim attachment of the O.P.s' properties to prevent disposal and secure repayment. The cause of action for the complaint is based on various dates related to the deposits, the maturity of the fixed deposits, and the discovery of the O.P.s' financial issues and property disposal plans.

The complainants request the commission to order the O.P.s to repay the total fixed deposit amount of Rs. 4,80,000, along with accrued interest. This includes interest at 12% per annum for Rs. 2,80,000 from April 2020 to December 2021, totaling Rs. 58,800, and for Rs. 2,00,000 from August 2020 to December 2021, totaling Rs. 34,000, resulting in a total of Rs. 5,72,800. They also seek future interest at 12% per annum on the principal sum of Rs. 4,80,000 from the date of complaint until the realization of the amount. Additionally, the complainants ask for compensation of Rs. 50,000 for the loss, hardship, and mental agony caused by the O.P.s' actions, and another Rs. 50,000 towards the costs incurred due to the deficiency of service and unfair trade practices committed by the O.P.s.

2) Notice

      The Commission dispatched notices to the opposite parties through registered post, which were returned by the postal service with the labels “Locked” and “No such Addressee.” In response, the complainant filed an Interlocutory Application (I.A) for the notices to be published in a newspaper. The Commission approved this application, leading to the publication of the notices in a newspaper on 09-12-2022. Despite the notices being publicly circulated, the opposite parties did not present themselves on the scheduled date. Their non-appearance led the Commission to declare them ex-parte. Furthermore, as the opposite parties neither provided any security nor showed sufficient cause, the attachment order stated in I.A.No.59/2022 was made absolute.

3) . Evidence

          The complainants had filed an ex-parte proof affidavit and 5 documents that were marked as Exhibits-A-1 to A 5. The complainant was examined as PW-1

Exhibit A1: The Power of Attorney dated 14-04-2021.

Exhibit A2: The Original Receipt No. 0575315. This document serves as evidence for the deposit of Rs.2,80,000 made by the complainants. It is a fixed deposit receipt dated 05-10-2019, issued to the complainants by the Opposite Party (O.P.).

Exhibit A3: The Original Receipt No. 0581625. This receipt confirms the deposit of Rs.2,00,000 by the complainants. It is another fixed deposit receipt, dated 06-05-2020, also issued to the complainants by the O.P.

Exhibit A4: A true copy of the First Information Report (FIR) No.0793. This FIR was filed at the Ernakulam Town North Police Station and is dated 10-11-2020. It relates to the complaint filed by the complainants against the O.P. regarding the issues in dispute.

Exhibit A5: The Original receipt issued by Sun Advertising and Media dated 09-12-2022.

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 complainants ?

iii)     If so, whether the complainants are 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 original Receipts that confirm the deposits by the Complainants (Exhibits A-2, A-3).  The receipts evidencing payment to the opposite parties Hence, the complainants are a consumer as defined under the Consumer Protection Act, 2019.

                         The complainants 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 fulfill their obligation to return the money, resulting in a deficiency in the service provided to the complainants. The complainants request the commission to order the O.P.s to repay the deposited amount with interest and compensation for the loss, hardship, and mental agony caused, alongside costs for deficiency of service and unfair trade practice.

                                  We have carefully listened to the arguments presented by Sri Jagan Abraham M. George, the learned counsel representing the complainants. The counsel presents a series of points to support the complaint against the Opposite Parties (O.P.s) for deficiency of service and unfair trade practices regarding fixed deposit amounts and interest not returned to the complainants. The arguments are as follows:

1. Nature of Complaint: The complaint is based on the O.P.s not returning the fixed deposit amount and its interest, implicating deficiency of service and unfair trade practices.
2. Complainants' Background: Complainant No. 1, a widow and senior citizen residing in Chennai, Tamil Nadu, and her daughter (complainant No. 2) are the aggrieved parties. Complainant No. 1 has the authority to file the complaint on behalf of complainant No. 2, as per the Power of Attorney, produced as Exhibit A.
3. Identification of Opposite Parties: The first and second O.P.s are described as either partnership firms or private limited companies, with O.P.s 3 to 6 being key managerial personnel. The seventh to ninth O.P.s are the staff of the O.P.'s branch in Kaloor, Ernakulam, where the deposits were made.

The deposits are detailed in Exhibits A-1 & A-2. The deposits, made based on the O.P.s' assurance of 12% annual interest, include Rs 2,80,000 (as per Exhibit A-2) and Rs 2,00,000 (as per Exhibit A-3), with agreed repayment terms upon maturity.

4. Issue of Non-Payment of Interest: The complainants initially received interest as promised but ceased to receive any from April 2020 onwards for the deposit detailed in Exhibit A-2, and from August 2020 for the deposit in Exhibit A-3.
5. Closure of Branch and Police Complaint: Following news of the O.P.'s financial issues, the complainants discovered the branch's closure and filed a police complaint (Exhibit A-4).
6. Allegations of Fraud and Misconduct: The complainants assert that the O.P.s' actions were fraudulent, including diverting funds to companies where the O.P.s 3 to 6 are directors. This, they argue, constitutes a clear case of deficiency of service and unfair trade practices.
7. Legal Proceedings and Attachments: An attachment petition was approved, leading to a conditional attachment order. Despite notices, the O.P.s did not respond or furnish security, resulting in an ex-parte decision and absolute attachment as per I.A. No. 59/2022. The costs incurred for paper publication to inform the O.P.s about the case, amounting to Rs.7,904/-, are documented in Exhibit A-5.

The complainants, through their counsel, request the commission to acknowledge the arguments and evidence presented, including Exhibits A-1 to A-5, and grant relief as sought in the complaint.

                              The evidence presented included an ex-parte proof affidavit filed by the complainants, and it was unchallenged by the opposite parties. Therefore, the complainants' claims were considered credible and supported by the evidence. Therefore, the complainants request 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 against the opposite parties. The Hon’ble National Commission held a similar stance in its order dated 2017 (4) CPR page 590 (NC).

                                  In a similar circumstance, the Hon’ble National Commission upheld the decision of the District Commission in the case Aftab Islam v. Gofrain Molla & 13 Ors. (IV (2023) CPJ 163 (NC)) and held that:

“8. This was also an admission on the part of the revisionist in the objection before the District Forum, which raises not only a serious doubt but also confirms that the revisionist and his associates were clearly involved in the transactions that was the basis of the claim in the complaint and which reflected large scale fraud defraying of investors genuine deposits in an unsecured and irresponsible way.”

                       We have carefully heard the submission made at length by the learned Counsel representing the complainants and have also considered the entire evidence on record.

                                The complainants have approached this Commission under Section 35 of the Consumer Protection Act, 2019, alleging deficiency in service and unfair trade practices by the opposite parties.

1. Maintainability of the Complaint: The complainants, as consumers under Section 2(7) of the Consumer Protection Act, 2019, have rightfully approached the Commission. The receipts (Exhibits A-2 and A-3) confirm the financial transactions, establishing the consumer-provider relationship between the complainants and the opposite parties.
2. Deficiency in Service and Unfair Trade Practice: The evidence, including the FIR (Exhibit A-4) and the non-return of fixed deposit amounts, establishes a clear case of deficiency in service and unfair trade practice by the opposite parties. The complainants' reliance on the promise of 12% annual interest, only to find the branch closed and learn about the O.P.s' financial troubles, further aggravates the situation.
3. Legal Analysis and Observations: The non-appearance of the opposite parties despite due notice, and their failure to file a written version, is considered an admission of the allegations. Similar to the case of Aftab Islam v. Gofrain Molla & 13 Ors. (IV (2023) CPJ 163 (NC)), the non-response of the O.P.s confirms their involvement in fraudulent activities and deficiency in service.
4. Liability of the Opposite Parties: The O.P.s, by their actions and inactions, have incurred liability to compensate the complainants. The Commission finds the opposite parties liable for the deficiency in service, unfair trade practices, and consequent damages suffered by the complainants.
5. Costs of Proceedings: Since the O.P.s failed to respond to the notices, furnish security, or appear before the Commission, they are liable for the costs of the proceedings, including the expenses incurred for the publication of notices in 'Kerala Kaumudi' daily (Exhibit A-5). The costs of proceedings, including the costs incurred for public notice, are to be borne by the opposite parties.

                          In conclusion, the complaint is maintainable, and the opposite parties are found to have engaged in unfair trade practices and deficient services.

                       This case poignantly highlights the urgency of enforcing robust consumer protection measures and raising awareness, regardless of the general education levels in a region. The increasing prevalence of financial fraud, a scourge in modern society, disproportionately impacts the most vulnerable, causing extensive harm. The complainants in this case suffered considerable detriment due to the deceitful practices and subpar services of the opposite parties, justifying the need for appropriate compensation. Financial fraudulence, indifferent to educational or socioeconomic status, is an escalating menace, inflicting deep financial and emotional wounds on victims. It also represents a blatant violation of established consumer rights laws. Individuals or entities engaging in such unscrupulous and illegal behaviour must be brought to justice and subjected to strict legal repercussions.Top of Form

          We determine that issue numbers (I) to (IV) are resolved in the complainants' favour due to the significant service deficiency on the part of the opposite parties. Consequently, the complainants have endured considerable inconvenience, mental distress, hardships, and financial losses as a result of the negligence 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 complainants.

Hence the prayer is partly allowed as follows:

1. The Opposite Parties shall reimburse the complainants a sum of ₹4,80,000 (Rupees Four Lakh Eighty Thousand) as the total deposited amount. This sum consists of two separate deposits: ₹2,80,000 and ₹2,00,000, as evidenced by Exhibits A-2 and A-3, respectively.
2. The Opposite Parties shall pay ₹1,50,000 (Rupees One Lakh Fifty Thousand) to the complainants as compensation. This amount is awarded for the deficiency in service and unfair trade practices, as well as for the mental agony and physical hardships endured by the complainants.
3. The Opposite Parties shall also pay the complainants ₹25,000/- (Rupees Twenty-Five Thousand) towards the cost of the proceedings.

 The Opposite Parties are jointly and severally liable for the above directions, which shall be complied with within 30 days from the receipt of a copy of this order. Failing this, the amounts specified in Points I and II shall accrue interest at 9% per annum from the dates of deposit of the amount until fully realized.

Pronounced in the Open Commission on this the 23^rd day of January, 2024.

Sd/-                     

D.B.Binu, President

Sd/-  

V. Ramachandran, Member

Sd/-

Sreevidhia.T.N, Member

Forwarded/By Order

Assistant Registrar  

Appendix

Complainant’s evidence

Exhibit A1: The Power of Attorney dated 14-04-2021.

Exhibit A2: The Original Receipt No. 0575315. This document serves as evidence for the deposit of Rs.2,80,000 made by the complainants. It is a fixed deposit receipt dated 05-10-2019, issued to the complainants by the Opposite Party (O.P.).

Exhibit A3: The Original Receipt No. 0581625. This receipt confirms the deposit of Rs.2,00,000 by the complainants. It is another fixed deposit receipt, dated 06-05-2020, also issued to the complainants by the O.P.

Exhibit A4: A true copy of the First Information Report (FIR) No.0793. This FIR was filed at the Ernakulam Town North Police Station and is dated 10-11-2020. It relates to the complaint filed by the complainants against the O.P. regarding the issues in dispute.

Exhibit A5: The Original receipt issued by Sun Advertising and Media dated 09-12-2022.

Opposite party’s evidence

Nil

Despatch date:

By hand:     By post                                                               

kp/

CC No. 514/2021

Order Date: 23/01/2024