DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ERNAKULAM
Dated this the 30^th day of August 2024
                                                Filed On: 13/08/2021

PRESENT:

Shri. D.B. Binu                                                    President

Shri. V. Ramachandran                                         Member

Smt. Sreevidhia. T.N.                                           Member

C.C. No. 275/2021

COMPLAINANT

Narayanan M G, S/o Krishnan Gopalan, Melappattu House, Vengoor, Kidangoor P O, Ernakulam

(Rep. by Adv.K.S.Arundas #35, DD Oceana Mall, Near Taj Gate Way Hotel, Marine Drive, Ernakulam-682 031)

V/s

OPPOSITE PARTIES

1. Mr. Thomas Daniel, S/o T.T. Daniel, Managing Partner, Popular Finance, Mary Rani Popular Nidhi Limited, My Popular Marine Products LLP, Popular Dealers, 13/775, Popular Towers, Vakayar. P O, Konni, Pathanamthitta district, Pin-689698.
2. Smt Prabha Thomas, W/o. Thomas Daniel, Managing Partner, Mary Rani Popular Nidhi Limited, Popular Finance, Popular Marine Products, Popular Dealers, 13/775, Popular Towers, Vakayar. P O, Konni, Pathanamthitta district, Pin-689698.
3. Rinu Mariam Thomas, D/o Thomas Daniel, Managing Partner, Popular Finance, Mary Rani Popular Nidhi Limited, Popular Marine Products, Popular Dealers, 13/775, Popular Towers, Vakayar. P O, Konni, Pathanamthitta district, Pin-689698.
4. Riya Ann Thomas, D/o Thomas Daniel, Managing Partner, Popular Finance, Mary Rani Popular Nidhi Limited, Popular Marine Products, Popular Dealers, 13/775, Popular Towers, Vakayar. P O, Konni, Pathanamthitta district, Pin-689698.

FINAL ORDER

D.B. Binu, President:

1. A brief statement of facts of this complaint is as stated below:

The complainant filed a complaint against the opposite parties under Section 35 of the Consumer Protection Act, alleging deficiency in service and unfair trade practices. The complainant, attracted by an investment scheme advertised by the opposite parties, visited their Angamali branch in Ernakulam district. The scheme promised a high interest rate of 12% per annum on deposits, allegedly with the permission of the Reserve Bank of India. The opposite parties assured the complainant that the scheme was government-approved.

Based on these assurances, the complainant made several deposits totalling Rs. 6,00,000/- on various dates: Rs. 75,000/- on 09.02.2018, Rs. 75,000/- on 17.05.2018, Rs. 1,00,000/- on 12.06.2019, Rs. 50,000/- on 16.08.2019, and Rs. 2,00,000/- on 16.09.2019. The complainant was issued receipts, falsely stating that the investment was a "share in the partnership business" of the opposite parties. When questioned, the opposite parties claimed this was a mere formality to avoid legal issues and assured that it would not affect the promised interest.

Initially, some interest was credited to the complainant’s account as promised. However, the complainant later discovered that the opposite parties were operating without any government or Reserve Bank of India approval. Subsequently, the Kerala Police arrested the opposite parties for fraud and breach of trust, leading to the closure of their establishments. Since then, after being released on bail, the opposite parties have failed to return the complainant’s deposit or pay the promised interest.

The complainant seeks a refund of Rs. 6,00,000/- with 12% interest, Rs. 3,00,000/- as compensation for mental distress and unfair trade practices, and Rs. 25,000/- towards the advocate's fees. The complainant contends that this constitutes a clear case of fraud, breach of trust, and deficiency in service by the opposite parties.

2. Notice:

The Commission initially sent notices to the opposite parties, which were returned by the postal department with the endorsement "Left/located." In response, the complainant filed an Interlocutory Application (I.A) requesting that the notices be published in a newspaper. The Commission granted this request, and the notices were published in a newspaper on 18-06-2022. Despite the public circulation of these notices, the opposite parties failed to appear on the scheduled date. Consequently, the Commission declared the opposite party’s ex-parte due to their non-appearance.

3. Evidence:

The complainant submitted a proof affidavit along with five documents, marked as Exhibits A1 to A5.

•  Exhibit A1: Deposit Receipt dated 09.02.2018
• Exhibit A2: Deposit Receipt dated 17.05.2018
• Exhibit A3: Deposit Receipt dated 12.06.2019
• Exhibit A4: Deposit Receipt dated 22.08.2019
• Exhibit A5: Deposit Receipt dated 16.09.2019

4) Issues for Consideration

The main points to be analyzed in this case are as follows:

1. Whether the complaint is maintainable?
2. Whether there is any deficiency in service or unfair trade practice from the side of the opposite party?
3. If so, whether the complainant is entitled to any relief? iv) Costs of the proceedings, if any?

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 parties did not fulfil their obligation to return the money, resulting in a deficiency in the service provided to the complainant. The complainant 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.

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.”

This is in line with precedents set in similar cases, such as the decision by the Hon’ble National Commission in the case of Aftab Islam v. Gofrain Molla & 13 Ors. (IV (2023) CPJ 163 (NC)), where non-appearance and failure to contest the allegations were viewed as admissions of the charges.

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

i) Maintainability of the Complaint

In the present case, according to Section 2(7) of the Consumer Protection Act, 2019, a consumer is defined as a person who buys goods or hires/avails services for a consideration that is paid, promised, partly paid and partly promised, or under a system of deferred payment. The complainant has provided Deposit Receipts (Exhibit A1 to A5) as evidence of payment. Therefore, the complainant qualifies as a consumer under the Consumer Protection Act, 2019.

ii) Deficiency in Service and Negligence:

The complainant has alleged that the opposite parties, by promising a 12% per annum return on deposits and then failing to return the principal amount or the promised interest, engaged in unfair trade practices and demonstrated a clear deficiency in service. The opposite parties further misled the complainant by issuing receipts falsely indicating that the investment was a share in their partnership business, which was later clarified as a strategy to avoid legal complications.

The complainant’s allegations are supported by the evidence presented, including the deposit receipts (Exhibits A1 to A5) and the subsequent failure of the opposite parties to fulfill their obligations. The opposite parties’ non-appearance before the Commission, despite being duly notified, constitutes an admission of the allegations against them. This conduct amounts to gross negligence and a manifest indifference to the financial security of the complainant.

The Commission finds that there was indeed a deficiency in service and unfair trade practices by the opposite parties towards the complainant.

iii) Liability of the Opposite Parties:

Given the evidence on record and the established deficiency in service, the opposite parties are liable to compensate the complainant. The complainant is entitled to a refund of the deposited amount along with 12% interest per annum, as initially promised by the opposite parties. Additionally, considering the mental distress and financial hardship suffered by the complainant due to the fraudulent actions of the opposite parties, the complainant is entitled to compensation for the same.

iv) . Compensation and Relief

The opposite parties are directed to refund the deposited amount to the complainant with interest at the rate of 12% per annum from the date of deposit till the date of payment and compensation for mental distress and unfair trade practices.

Considering the facts and circumstances of the case, the opposite parties are liable for the costs of the proceedings.

The Opposite Parties have not only neglected their duty to reimburse the deposit amount with the due interest but have also exhibited a consistent pattern of conduct that constitutes gross negligence and a manifest indifference to the financial security of the complainants. The corroborative evidence tendered by the complainants, particularly the fixed deposit receipts, lends substantial credence to their claims.

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

This case highlights the deep and pervasive impact of financial fraud on the lives of ordinary people, often leaving them in a state of distress and vulnerability. The complainants, trusting in the promises made by the Opposite Parties, were misled and suffered significant losses, both financially and emotionally. This situation serves as a poignant reminder that, regardless of one’s education or socio-economic status, anyone can fall prey to deceitful schemes. The pain and uncertainty faced by the complainants are not just a matter of legal concern but a human one, calling for empathy, justice, and the need to hold those responsible accountable. It is a stark reminder of the importance of safeguarding consumer rights and ensuring that those who exploit others for financial gain are met with the full force of the law.

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 complainant has 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 complainant.

Hence the prayer is partly allowed as follows:

1. The Opposite Parties are directed to reimburse ₹6,00,000/- (Rupees Six Lakh Only) to the complainant, representing the total deposited amount as evidenced by Exhibits A-1 to A-5 (the fixed deposit receipts).
2. The Opposite Parties shall pay ₹75,000/- (Rupees Seventy-Five Thousand Only) to the complainant as compensation for the deficiency in service, unfair trade practices, and the mental agony and physical hardships endured by the complainant.
3. The Opposite Parties shall also pay ₹25,000/- (Rupees Twenty-Five Thousand Only) towards the cost of the proceedings.

The Opposite Parties are jointly and severally liable for the fulfilment of the above orders. These orders must be executed within 45 days from the date of receiving this order. Failure to comply with the payment orders under Points I and II will result in an interest rate of 9% per annum from the date of filing the complaint (13.08.2021) until the date of full payment realization.

Pronounced in the Open Commission this the 30^th day of August, 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: Deposit Receipt dated 09.02.2018
• Exhibit A2: Deposit Receipt dated 17.05.2018
• Exhibit A3: Deposit Receipt dated 12.06.2019
• Exhibit A4: Deposit Receipt dated 22.08.2019
• Exhibit A5: Deposit Receipt dated 16.09.2019

Opposite party’s Exhibits

Nil

Despatch date:

By hand:     By post                                                       

kp/                                                              CC No. 275/2021

Order Date: 30/08/2024