DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the day of 21st day of July 2023.
Filed on: 12/10/2020
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C No. 305/2020
COMPLAINANT
Suja R Varma, A1, Vint Pearl Apartment, Pavamkulangara,Choorakkad, Tripunithura, PIN 682301
(Adv.Raja Raja Varma, RR Varma & Associates, 1st Floor, Gourinandanam”, VRRA-5, vayanasala Road, Chithrapuzh, Tripunithura, Ernakulam-682 309)
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 27/2021 doted 25/1/2) COMPLAINT FILED UNDER SECTION 35 OF THE CONSUMER PROTECTION ACT 2019)
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 1st Opposite Party, a partnership firm managed by the 2nd opposite party, accepted money from the public by offering 12% interest per annum. The complainant, attracted by the offer and influenced by the Branch Manager of the 1st Opposite Party acting under the instruction of the 2nd opposite party, deposited Rs. 2,00,000/- on 20/5/2020 for a 12-month period.
However, despite the promise, the opposite parties failed to pay the agreed interest and declined the complainant's request for premature closure. Upon further investigation, the complainant discovered that criminal complaints had been registered against the opposite parties for cheating, breach of trust, fraud, and misappropriation of funds from the public, including the complainant. The 2nd opposite party was arrested for these offenses. It was also revealed that the opposite party had no permission to collect deposits from the public.
The complainant contends that the opposite parties engaged in unfair trade practices and deficient services, deceiving and enriching themselves with the money of others. The Tripunithura Branch office of the company, where the complainant made the deposit, was closed without prior notice.
The complainant seeks compensation of Rs. 2,00,000/- for the injury suffered and a refund of the deposited amount with interest, along with a cost of Rs. 25,000/-.
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 1 document that were marked as Exhibits-A-1.
Exhibit 1: Copy of the receipt No. 0588908 dated. 26/06/2020 issued by the opposite party acknowledging deposit.
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-1). 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 fulfill 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 she had deposited Rs. 2,00,000/- with OP1, managed by 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 acted under the instruction of OP2. The company claimed to be a Non-Banking Financial Company authorized by the Reserve Bank of India to collect deposits from the public at 12% interest per year. However, the opposite parties failed to pay the agreed interest, and requests for premature closure were declined.
It was later discovered that several criminal complaints had been registered against OPs for cheating and misappropriating deposits and OP2 to OP5 were arrested in connection with these offenses. Further investigation revealed that the company had no permission to collect deposits from the public as claimed. The complainant alleges unfair trade practices, deficiency in service, and deceptive behaviour by the opposite parties. Notice was served to the OPs through the respective prisons, but they were absent during the proceedings.
The evidence presented includes an ex-parte proof affidavit filed by the complainant, and it is claimed that the OPs did not challenge the complainant's claims. Therefore, the complainant requests the forum 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 understanding of complex transactions.
We find the issue Nos. (i) to (iv) are also 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.200000/- (Rupees Two lakh) to the complainant along with interest @9.5% from the date of deposit (ie., 20.06.2020) to the and till the date of realization of the amount.
- The Opposite Parties shall pay Rs 1,00,000- 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 above-mentioned directions shall be complied with by Opposite Parties on receipt of a copy of this order failing which interest @ 9.5% from the date of receipt of a copy of this order shall be paid the opposite parties to the complainant in the ordered vide (2) above. Needless to say that the amount ordered vide (1) shall attract interest @9.5% from 20.06.2020 till the date of realization.
Pronounced in the Open Commission on this the 21st 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. 0588908 dated. 26/06/2020 issued by the opposite party acknowledging deposit.
