DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ERNAKULAM

Dated this the 21^st day of March 2024.

                                                                   Filed on: 17.08.2021

PRESENT

Shri.D.B.Binu                                                                            President

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

C C NO.281/2021

COMPLAINANT

P.V Prasad, Paruthanpaarayil House, Vengoor, Kidangoor P O, Angamali, Ernakulam.

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

Vs

Opposite Parties

1. Mr. Thomas Daniel, S/o.T.T.Daniel, Managing Partner, Popular Finance, Popular Marine Products, Popular Dealers, 13/775 Popular Towers, Vakayar. P O, Konni, Pathanamthitta district, Pin-689698.

2. Smt Prabha Thomas, W / o Thomas Daniel, Managing Partner, 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, Popular Marine Products, Popular Dealers, 13/775 Popular Towers, Vakayar. P. O_{r} Konni, Pathanamthitta District, pin-689698.

4. Riya Ann Thomas, D/o. Thomas Daniel, Managing Partner, Popular Finance, Popular Marine Products, Popular Dealers, 13/775 Popular Towers, Vakayar. PO, Konni, Pathanamthitta District, pin-689698.

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, lodged under Section 35 of the Consumer Protection Act, 2019, articulates grievances against the opposite parties for their failure to adhere to promised financial agreements. The complaint asserts that the complainant qualifies as a consumer under Section 2(7) of the Consumer Protection Act 2019, having lodged a case against the opposite parties for the recovery of funds and damages due to unfair trade practices and service deficiencies.

The complainant, influenced by the opposite parties' advertising, visited their Ankamali branch. There, the staff confirmed their ability to accept deposits at a 12% annual interest rate, claiming authorization from the government and the Reserve Bank of India, with assurances of existing deposits from the public, including government employees.

Upon the deposit's maturity, the complainant's efforts to withdraw the funds were unsuccessful, discovering that the opposite parties had amassed and defrauded substantial public funds. This failure to refund the deposits constitutes a service deficiency and unfair trading.

The complainant submitted fixed deposit receipts totalling ₹9,00,000 as evidence, which were obtained through savings from a modest income, highlighting significant financial and emotional distress caused by the opposite parties' malpractices.

Therefore, it is requested that this Commission orders the opposite parties to return ₹9,00,000 with a 12% interest rate from the deposit date, plus ₹70,000 in damages and ₹30,000 for litigation and publication costs, to serve justice.

Top of Form

2) Notice

              The Commission dispatched notices to the opposite parties through registered post, which were returned by the postal service with the labels “Locked”. 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 18-06-2022. 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.

   3) . Evidence

             The complainant submitted an ex-parte proof affidavit along with three documents, marked as Exhibit-A-1 To A-3. The complainant also presented the original documents for verification, which the commission examined and compared with their copies. Following the procedure, the commission returned the original documents to the complainant as requested in the application.

• Exhibit-A-1: A copy of the Fixed Deposit Receipt no. 1020252000018 dated 09.07.2020, for ₹2,00,000 (Two Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.
• Exhibit-A-2: A copy of the Fixed Deposit Receipt no. 1020251700040 dated 15.09.2017, for ₹1,00,000 (One Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.
• Exhibit-A-3: A copy of the Receipt no. 1029991904918 dated 14.11.2019, for ₹1,00,000 (One Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.

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 copies of Fixed Deposit Receipt No. 1020252000018 dated 09.07.2020, for ₹2,00,000 (Two Lakh Rupees Only), and Fixed Deposit Receipt No. 1020251700040 dated 15.09.2017, for ₹1,00,000 (One Lakh Rupees Only), in addition to a Receipt No. 1029991904918 dated 14.11.2019, for ₹1,00,000 (One Lakh Rupees Only), all issued by the opposite parties to acknowledge deposits made by the complainant (Exhibits A-TO A-3). Hence, the complainant is a consumer as defined under the Consumer Protection Act, 2019, (Point No. i) goes against the opposite parties.

           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.

           We have heard Sri. K.S. Arundas, the learned counsel appearing for the complainant, submitted that the that the complainant qualifies as a consumer of the opposite parties according to Section 2(7) of the Consumer Protection Act 2019. A case has been initiated to seek reimbursement and damages due to the opposite parties' misconduct, including unfair trade practices and failure to provide the promised service. Prompted by advertisements, the complainant visited the opposite parties' office in Angamali, where they were assured of a 12% yearly interest rate on their deposit, backed by official permissions from both the government and the Reserve Bank of India, encouraging public deposits, including those from public servants. However, despite the deposit's maturity, the opposite parties have failed to return the funds, leading to the discovery that they have been misleading the public by withholding substantial amounts of money. This action is identified as both a service deficiency and an unfair trade practice, prompting the filing of the complaint. Despite notices being served, the opposite parties have wilfully avoided engagement with the commission, resulting in an ex parte decision against them.

            The complainant has provided the copies of Fixed Deposit Receipt No. 1020252000018 dated 09.07.2020, for ₹2,00,000 (Two Lakh Rupees Only), and Fixed Deposit Receipt No. 1020251700040 dated 15.09.2017, for ₹1,00,000 (One Lakh Rupees Only), in addition to a Receipt No. 1029991904918 dated 14.11.2019, for ₹1,00,000 (One Lakh Rupees Only). All issued by the opposite parties to acknowledge deposits made by the complainant (Exhibits A-TO A-3), emphasizing the significant financial and emotional toll due to the opposite parties' actions, accumulated through savings from a modest income. Consequently, the complainant seeks a directive for the repayment of the principal amount with interest, alongside compensation for damages and legal expenses, amounting to a fair resolution for the harm incurred.

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 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 complainant and have also considered the entire evidence on record.

             In the matter before this Consumer Commission, the complainant has brought forth allegations of deficiency in service and unfair trade practices against the opposite parties, as per the provisions of the Consumer Protection Act. The complainant's grievances include the non-refund of fixed deposits promised at an interest rate of 12% per annum, alongside claims for compensation for the unfair practices and additional costs incurred.

            Upon thorough examination of the facts presented, the legal framework under the Consumer Protection Act, 2019, and relevant case laws, this Commission finds substantial merit in the complainant's allegations. As defined under Section 2(7) of the Act, a consumer is anyone who engages in transactions for goods or services for a consideration, which unequivocally applies to the complainant's situation.

           The evidence, notably the fixed deposit receipt (Exhibit A-1) and the un responded notices sent to the opposite parties, corroborates the complainant's claim of having entered into a financial agreement with the opposite parties based on specific terms, which were subsequently not honoured.

1. Deficiency in Service and Negligence

The refusal or failure to refund the deposit amounts upon maturity, as alleged, constitutes a clear deficiency in service and negligence on the part of the opposite parties. This is further compounded by their failure to appear before this Commission despite due notice, leading to their declaration as ex parte.

                Relevant jurisprudence, such as the case of Aftab Islam v. Gofrain Molla & 13 Ors. (IV (2023) CPJ 163 (NC)), underlines the liability of service providers to fulfil their obligations and the consequences of engaging in deceptive practices. In that context, the non-return of deposits, as agreed, significantly undermines consumer trust and violates the principles of fair-trade practices as stipulated in the Consumer Protection Act.

     This Commission notes the complainant's reliance on the promises made by the opposite parties, the financial and emotional distress suffered as a result, and the clear evidence presented. The Commission further observes the opposite parties' disregard for legal proceedings and consumer rights, indicating an implicit admission of the allegations made against them.

2. Liability of the Opposite Parties

Based on the evidence and the legal framework, the opposite parties are found liable for the deficiency in service and engaging in unfair trade practices. Their failure to contest the claims or present any counter-evidence further solidifies this conclusion.

          Upon the agreed deposit maturity, the complainant's efforts to withdraw the funds were unsuccessful, revealing that the opposite parties had not only failed to return the money but had also engaged in fraudulent activities by collecting large sums from the public. This action, or lack thereof, constitutes both a service deficiency and unfair trade practice, prompting the filing of the current complaint.

           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.

          The complaint stresses the crucial importance of the implementation of strict consumer protection laws and heightened public awareness to combat the pervasive issue of financial fraud, which particularly impacts the most vulnerable communities, causing considerable emotional and financial turmoil. Through a highlighted case, it illustrates the profound consequences of fraudulent practices and inadequate service, advocating for fair restitution for victims. It asserts that financial scams affect individuals across various backgrounds and constitute a direct infringement of consumer rights. The vigorous legal measures against perpetrators, highlighting the necessity for significant penalties and accountability to uphold consumer protection. It underscores the pivotal role of legal frameworks and enforcement in safeguarding consumer interests.      

          We determine that issue numbers (I) to (IV) are resolved in the complainant's favour due to the significant service deficiency and the unfair trade practices 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:

I. The Opposite Parties are hereby ordered to refund the complainant a sum of ₹9,00,000 (Rupees Nine Lakh Only), representing the principal amount of the three deposits, as substantiated by Exhibit A-1 to A-3. (the fixed deposit receipts).

II. The Opposite Parties are directed to compensate the complainant with ₹70,000 (Rupees Seventy Thousand Only) for the service deficiency, unfair trade practices, and the consequent mental distress and hardship suffered by the complainant.

III. The Opposite Parties shall further compensate the complainant with ₹25,000 (Rupees Twenty-Five Thousand Only) to cover the costs incurred during these proceedings.

The Opposite Parties are jointly and severally liable for the fulfilment of the above orders, which must be executed within 45 days from the date of receiving this order. Should there be a failure to comply within the stipulated period, the amounts detailed in Points (i) and (ii) will accrue interest at an annual rate of 9%, commencing from the day following the conclusion of the aforementioned 45-day period, and continuing until such time as the entire amount due is satisfactorily discharged.

Pronounced in the Open Commission on this 21^st day of March 2024.

Sd/-                      

D.B.Binu, President

Sd/-

V.Ramachandran, Member

Sd/-

                                                                             Sreevidhia.T.N, Member

Forwarded by Order

Assistant Registrar

Forwarded/by Order

Assistant Registrar

Appendix

• Exhibit-A-1: A copy of the Fixed Deposit Receipt no. 1020252000018 dated 09.07.2020, for ₹2,00,000 (Two Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.
• Exhibit-A-2: A copy of the Fixed Deposit Receipt no. 1020251700040 dated 15.09.2017, for ₹1,00,000 (One Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.

Exhibit-A-3: A copy of the Receipt no. 1029991904918 dated 14.11.2019, for ₹1,00,000 (One Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant

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