PRESENT: SRI P.V. NAGESWARA RAO, M.A., LL.M., PRESIDENT

 

Tuesday, 4^th November 2008

 

Sammeta Sashidar, aged 34 years, Teacher,

Z.P.H School, Adavikammapalli Village, Sambepalli Mandal,

Kadapa Dist, R/o D.No. 7/209-B, NGO’s colony,

Kadapa District.                                                                    ….. Complainant.

Vs.

 

1)  M/s Unit Trust of India, UTI Towers, “G” Block,

2) M/s Karvy Computersshare Pvt. Ltd.,

3) UTI Mutual Fund, UTI financial Centre, Sairam Towers,

4)   A. Nagaraja Rao, Indian & Foreign Mutual Fund Adviser,

 

This complaint coming on this day for final hearing on 3-11-2008 in the presence of complainant as in person and Sri A.V.S. Chandra Reddy, Chief Representative for R1 to R3 and R4 as in person and upon perusing the material papers on record, the Forum made the following:-

 

1. Complaint filed under section 12 of the Consumer Protection Act.

 

2. The brief facts of the complaint are as follows:- The 1^st Respondent is doing Mutual Fund Business in India, the 2^nd respondent is the registrar of R1, the 3^rd Respondent is the branch office under R1 and the 4^th Respondent is the agent for the Mutual Fund Business. The complainant purchased UTI-Auto sector fund dividend plan-Re-Investment units through R4 from R3 intern from the unit trust of India (R1) for a sum of Rs.5000-00 on 17/04/2006 under old A/c.No.2931441251 and folio No-11021346091. He also purchased UTI-Master Value Fund-Dividend Plan-Re-Investment units from the unit trust of India for a sum of Rs.5000-00 on 26/04/2006, under A/c No.2931441252 and Folio No.51039172473 and the certificates were issued by R2. As the unit rate of the scheme UTI-Auto sector Fund Dividend Plan was below the purchased net asset value and as the UTI-Infrastructure fund was profitable and beneficial, he offered the unit trust of India to switch over his above said units under two schemes on 02/01/2008 through R4 in to UTI-Infrastructure fund and submitted all the relevant applications and obtained the acknowledgements from R3. As he was in urgent need of money,                   he approached R3 in the last week of January-2008 and offered to sale his total units under UTI-Infrastructure fund. For that he demanded R3 about his certificates under UTI-Infrastructure fund. On that the R3 replied that it takes further time to receive his certificates under switch over scheme. In the month of January/February-2008 the unit rate under UTI-Infrastructure fund was profitable. Again he approached R3 in the 1^st and 3^rd week of February -2008,even then he replied that due to mistake, the above said units are not switched-over in to UTI-Infrastructure fund so far and under taken to complete the process within few days. Inspite of repeated oral demands R3 did not respond properly and was giving evasive replies in a negligent and challenging manner. Then he sent an e-mail to R1 regarding the above subject. On that R1 contacted him through mobile and promised to complete his  above said process within few days and will assist at any point of time, but in vain. Subsequently, he sent an e-mail for both R1 and R2 with regards to the above subject, but no reply was given so for. He further submit that, due to mistake in switching over his units under two schemes into UTI-Infrastructure fund which approximately worth about Rs.13,500(units purchased value 10,000 + approximate dividend for the above said units ) by the Respondents  I II and III as the NAV of the UTI-Infrastructure fund was high in the month of February-2008 and he offered to sale his units at the highest NAV, and Respondents  1,2 and 3 were not able to issue certificates for the same. He sustained loss about Rs.5000-00.Apart from the monitory loss, he used to approach the Respondents  I and II through correspondence and R3 in person several times from his place of employment which is at a distance of 75 km from Kadapa by obtaining leave and suffered mental agony. He prayed this Hon’ble District Forum be pleased to direct the Respondents  I, II and III. 1) To issue the witched over certificates into UTI-Infrastructure fund, 2)To pay a sum of Rs. 5000-00 towards loss from the unit sales in appropriate time, 3)To pay a sum of Rs .5000-00 towards the mental agony, expenditure and loss of leave and time and 4)To pay a sum of Rs.1500-00 towards the cost of this petition.

3. Respondents  1 to 3 filed a counter denying the averments that the first opposite party is the head office at Mumbai. The second opposite party is the Registrar and Transfer Agent appointed by the first opposite party for all its schemes and plans including UTI Infrastructure Fund and UTI Master Value Fund. The Third Opposite party is the Branch Office of UTI Mutual Fund at kadapa. R1 to R3 are one and the same for the purpose of deciding the complaint.   This complaint has been filed by the complainant alleging deficiency of service on the part of the opposite parties in not receiving the statement of account under UTI infrastructure fund and thereby directing the opposite parties to pay Rs.5000/- towards the loss from the sale of units, to pay Rs.5000/- towards compensation and to pay Rs.1500/- towards costs to the complainant. Except those that are specifically and expressly admitted herein, all other allegations in the complaint are denied as false. The third party as per the information received from the second opposite party submits that the allegations of the complainant that he has not received the statement of account  in time is not correct. On verification of the data it is observed that the units were allotted under UTI Infrastructure Fund as early as on 02/01/2008 and the corresponding statement of account was dispatched to the recorded address of the complainant. The claim of the complainant for difference in NAV is not maintainable as the same is speculative in nature. It is within the knowledge of the complainant that the investments under Mutual Funds and Securities are subject to market risks as the NAVs of the units issued under the scheme may grow up or down depending on the factors and forces affecting the capital market service.  The question of paying loss from the unit sales does not araise as the units of the complainant are outstanding as on date and the complainant has not made any formal request for sale of units. Thus whatever loss the complainant has alleged to have sustained is only notional and not real. The complainant is trying to take advantage of the fluctuation in the NAV. assuming that the NAV has gone up as on this date, the complainant would not have complained about non-receipt of SOA.   The Agencies under Consumer Protection Act have been established in order to adjudicate the genuine claims of the complainant and not the speculative ones. Hence the claim of the complainant for Rs.11500/- is not maintainable and the same is liable to be dismissed.

4. R4 filed a counter stating that the complainant approached him and requested for switchover the schemes invested in UTI Auto Sector Fund and UTI Master Value Fund into infrastructure fund vide his Application Nos.1731474 & 1731473 & Transaction Slips under my ARN Code 26345 and the application submitted in UTI Mutual Fund office on 2^nd January 2008 and the UTI Mutual Fund, Nagarajapet, Kadapa gave Acknowledgements and the same Acknowledgements were handed over to the  Complainant. The UTI Mutual Fund, Kadapa and the Registrars must issue Account Statement nor any reply or any correspondence to the Complainant on these  schemes which were  switchover on 02-01-2008.  He is only  Advisor and he has  done his duty by  presenting the said documents in time and requested the UTI Office, Nagarajupet, Kadapa for  further action. It is the duty of R2 and R3 to issue the Account Statement on Net Asset Value (NAV) price to the Complainant etc.

5. On the basis of the above pleadings the following points are settled for determination. 

i.                   Whether the complainant is entitled for the relief as prayed for?

ii.                 To what relief?

6. On behalf of the complainant Ex. A1 to A4 were marked. No documents were marked on behalf of the Respondents.    Oral arguments were heard from both sides. 

7. Point No. 1 Ex. A1 is the Xerox copy of statement of account in the name of the complainant one for I.D. No. 293144125 (UTI – ASF Income) and another for I.D. No. 293144125 (UTI – Master value Fund). Ex. A2 are four acknowledgements bearing Nos. 1731473, 0195992, 0195324 and 1781474, dt.2-1-2008 issued by R3. Ex. A3 is the Xerox copy of legal notice, E-mail of the complainant addressed to R2. Ex. A4 is the employer’s certificate, dt. Nil issued by Head Master, Z.P.H. School, Adavikammapalli Village in favour of the complainant. 

8. As could be seen from the documentary evidence R1 to R3 are one and same, whereas R4 is mutual fund advisor. The Respondents  1 to 3 contended that on verification of the data it is observed that the units were allotted under UTI – Infrastructure Fund on 2-1-2008 i.e. on the same day of submitting switch over application to the Respondents  by the complainant and the connected statement of account was also dispatched to the given address of the complainant.   They further contended that the question of paying loss from the unit sales does not arise as the units of the complainant are outstanding as on date and the complainant has not made any request for sale of units, as such the alleged loss expressed by the complainant appear to be notional and not original in nature. Being  an educated man it must be within his knowledge that the investments under mutual fund and securities are subject to market risks as the NAV’s of the units issued under the claim may shoot up or down depending on the factors affecting the capital market service. In view of these circumstances and facts the claim of the complainant i.e. Rs. 5,000/- towards loss from the sale units, Rs. 5,000/- towards compensation and Rs. 1,500/- towards costs deserves no consideration.  

9. Point No. 2. In the result, the complaint is allowed. Directing the respondent Nos. 1 to 3 jointly and severally to take steps and to issue statement of account and switched over certificates in to UTI – Infrastructure Fund to the complainant within 30 days from the date of receipt of this order. The case against R4 is dismissed without costs. The rest of the claim is dismissed. 

Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open Forum, this the 4^th November 2008

 

 

Witnesses examined.

For Complainant    :       NIL                                            For Respondent :     NIL

Exhibits marked for Complainant : -  

 

Ex. A1         X/c of statement of account in the name of the complainant one for

I.D. No. 293144125 (UTI – ASF Income) and another for I.D. No. 293144125 (UTI – Master value Fund). 

Ex. A2        Four acknowledgements bearing Nos. 1731473, 0195992, 0195324

and 1781474, dt. 2-1-2008 issued by R3.

Ex. A3         X/c of legal notice, E-mail of the complainant addressed to R2. 

Ex. A4         Employer’s certificate, dt. Nil issued by Head Master, Z.P.H. School,

                   Adavikammapalli Village in favour of the complainant. 

 

Exhibits marked for Respodnents : -         NIL

 

 

 

 

1) Sammeta Sashidar, aged 34 years, Teacher,

2) Sri A.V.S Chandra Reddy, Code No. S009, CR UTI MF, Kadapa.

3) A. Nagaraja Rao, Indian & Foreign Mutual Fund Adviser,

 

2) Copy was dispatched on      :

3) Copy of delivered to parties :