DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ERNAKULAM

Dated this the 12^th day of March, 2024.

                                                                   Filed on: 13/08/2021

PRESENT

Shri.D.B.Binu                                                                          President

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

C.C. No 273/2021

COMPLAINANT

Simi Sivadas, W/o Abhilash Syam, Smitha Bhavan, Mekkad, Thuruthussery, Nedumbassery, Ernakulam.

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

Vs

Opposite Parties

1. 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. 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., 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. P.O., 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 was filed under Section 35 of the Consumer Protection Act, 2019. The complaint outlines that the complainant, a consumer of the opposite parties as defined under Section 2(7) of the Consumer Protection Act 2019, has filed a case seeking the return of money and compensation due to unfair trade practices and service deficiency by the opposite parties. The complaint states that after being enticed by an advertisement, the complainant visited the opposite parties' office in Angamali and was assured of a 12% annual interest rate on deposits, with claims of proper licensing by the government and the Reserve Bank of India. The complainant deposited amounts totaling INR 225,000 but upon maturity, the opposite parties failed to return the money, constituting a breach of trust and unfair trade practice. Despite issuing notice, the opposite parties did not respond or appear before the commission, leading to an ex parte decision. The complaint seeks the return of the principal amount with 12% interest from December 16, 2019, along with INR 100,000 in compensation and the litigation and publication costs, citing severe mental and monetary loss suffered by the complainant.

2) Notice

The Commission dispatched notices to the opposite parties through registered post, which were returned by the postal service with the labels “Door 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 complainants submitted an ex-parte proof affidavit along with five documents, marked as Exhibits-A-1 to A-2. They 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 receipt dated 16.12.2019, for ₹1,00,000 (One Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.
• Exhibit-A-2: A copy of the receipt dated 11.01.2020, for ₹1,25,000 (One Lakh Twenty-Five Thousand 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 the receipts issued by the opposite parties. The receipts evidencing payment to the opposite parties (Exhibits A-1 and A-2). 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 complaint originated from an advertisement by the opposite parties, leading the complainant to deposit money at a 12% annual interest rate after visiting their Angamali office, under the impression that the opposite parties were duly licensed to accept public deposits. However, upon maturity, the opposite parties failed to return the deposited sums, thereby engaging in deceitful practices by collecting and withholding large amounts of public money. Despite notices issued by the commission, the opposite parties did not respond or present any defense, prompting an ex parte ruling. The complainant, recognized as a consumer under Section 2(7) of the Consumer Protection Act 2019, has brought forth a case against the opposite parties for the return of funds and compensation due to unfair trade practices and service deficiency. The complainant, having saved the deposit amounts from a modest income, suffered significant mental and financial distress. Consequently, the commission is requested to order the opposite parties to refund INR 225,000 with 12% interest from December 16, 2019, and pay compensation and costs amounting to INR 130,000 for the complainant's losses and legal expenses.

The evidence presented included an ex-parte proof affidavit filed by the complainant, and it was unchallenged by the opposite parties. Therefore, the complainant's claims were considered credible and supported by the evidence. Therefore, the complainant requests 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 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 receipts (Exhibit A-1 and A-2) 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 importance of strong consumer protection laws and raising public awareness to combat financial fraud, which has become a prevalent issue in modern society. The financial scams disproportionately harm the most vulnerable individuals, causing substantial financial and emotional distress. In the highlighted case, the complainant suffered significant losses due to fraud and poor service from the opposite parties, illustrating the urgent need for appropriate compensation. The financial fraud affects people regardless of their educational or socio-economic status, violating consumer rights laws. Those who engage in such deceitful and unlawful practices must face stringent legal consequences and be held accountable for their actions.

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:

1. The Opposite Parties shall reimburse the complainant ₹2,25,000 (Rupees Two Lakh Twenty-Five Thousand Only) as the total deposited amount, as evidenced by Exhibits A-1 and A-2 (the fixed deposit receipts).
2. The Opposite Parties shall pay ₹75,000 (Rupees   Seventy-Five Thousand Only) to the complainant 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 complainant.
3. The Opposite Parties shall also pay the complainant ₹25,000 (Rupees Twenty-Five Thousand Only) towards the cost of the proceedings.

                   The Opposite Parties are jointly and severally liable for the above directions, which shall be complied with within 45 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 end of the 45^th day compliance period until fully realized.

Pronounced in the Open Commission on this the 12^th day of March, 2024

Sd/-

D.B.Binu, President

V.Ramachandran, Member

Sd/-

Sreevidhia.T.N, Member

Forwarded/by Order

Assistant Registrar

APPENDIX

COMPLAINANT EVIDENCE

Exhibit-A-1: A copy of the receipt dated 16.12.2019, for ₹1,00,000 (One Lakh Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.

Exhibit-A-2: A copy of the receipt dated 11.01.2020, for ₹1,25,000 (One Lakh Twenty-Five Thousand Rupees Only), issued by the opposite parties acknowledging the deposit made by the complainant.

OPPOSITE PARTY’S EVIDENCE

Nil

Despatch date:

By hand:     By post                                                  

kp/

CC No. 273/2021

Order Date: 12/03/2024