Delhi

StateCommission

A/274/2016

FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PVT. LTD - Complainant(s)

Versus

AIR VICE MARSHALL J.S KUMAR & ORS - Opp.Party(s)

GARVESH KABRA

13 Aug 2018

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments : 13.08.2018

Date of Decision :  20.08.2018

FIRST APPEAL NO.274/2016

In the matter of:

 

Franklin Templeton Asset Management (India) Pvt. Ltd.

Through its Manager,

12^th and 13^th Floor, Indiabulls Finance Centre,

Tower-2, Elphinstone (W),

Mumbai-400013.

Maharashtra                                                                                                  .........Appellant

 

Versus

 

1. Air Vice Marshall J.S. Kumar,

AVSM, VSM (Retd.)……….Respondent No.1

 

2. Mrs. Sapna Kumar,

W/o. AVM J.S. Kumar

 

Both R/o.

            D-143, Saket, New Delhi-110017.                            ……….Respondent No.2

 

3. Citi Bank N.A.,

Jeevan Bharti Building,

3.  

New Delhi-110001.……….Respondent No.3

                                                                

CORAM

Hon’ble Sh. O. P. Gupta, Member (Judicial)

Hon’ble Sh. Anil Srivastava, Member

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                                                                                  Yes/No

2.      To be referred to the reporter or not?                                                                                                                                                  Yes/No

Shri O.P. Gupta, Member (Judicial)

JUDGEMENT

 

1.         Feeling aggrieved by order dated 18.02.15 passed by District Forum-VI in CC No.1282/10, OP-2 has preferred the present appeal. Delay in filing appeal was condoned vide order dated 18.02.15.

2.         The order is quite laconic. Reader does not get to know what were the facts, what was the controversy. So we had gone through the complaint before arriving at any conclusion.

3.         The case of respondent nos.1 and 2 herein / complainants before the District Forum was that respondent no.3 herein/ OP-2 before the District Forum Introduced the complainants to appellants and induced them to invest money. The complainants invested Rs.5 lakhs in Franklin Templeton Private Equity Strategy Policy. OP-1 took signature of complainants on blank forms for investment of Rs.5 lakhs. OPs did not sent copy of agreement despite repeated reminders, it was only on 10.10.08 after much persuasion that OP-1 senD copy of agreement dated 30.05.08. In first week of November, 2008 when complainant received a copy of said agreement, they were shocked to note that OP sent draw down notice dated 27.10.08 demanding Rs.7.5 lakhs. It revealed that complainants were mislaid, OPs have surreptitiously written figure of Rs.50 lakhs instead of Rs.5 lakhs promised to be invested by complainant. The OPs did not respond at this grievance of the complainant, rather they threatened to forfeit the entire amount paid by the complainant and cancel the agreement. Hence the complaint was filed for directing OP-1 to refund Rs.5 lakhs with interest @24% per annum. Rs.5 lakhs for deficiency in service, mis-representation and adopting unfair trade practice.

 

4.         OP-2/ appellant was proceeded exparte by the District Forum on 22.03.12.

 

5.         District Forum found that it was a patent case of no consensus ad idem for Rs.50 lakhs. It found OP guilty of deficiency in issuing a demand notice for commitment of Rs.50 lakhs. It found that OP should have returned Rs.5 lakhs forthwith. Accordingly OP-2/ appellant was directed to refund return Rs.5 lakhs with interest @9% per annum till date of deposit till realization. Compensation for harassment and deficiency including litigation expenses was also allowed.

 

6.         We have gone through the material on record and heard the argument. The appellants have not challenged notice served from District Forum and has not assigned any reasons as to why it did not appear before the District Forum and did not file the written statement.

7.         The only defense of appellant as contained in the memorandum of appeal is that complainant agreed for Rs.50 lakhs  capital commitment as against minimum capital commitment  of Rs.40 lakhs. Appellants vide letter dated 29.12.08 offered to reduce the investment from Rs.50 lakhs to Rs.40 lakhs. The complainant deposited Rs.5 lakhs being 10% of the capital commitment.

 

8.         We have perused the copy of agreement placed at pages-22 to 49 which shows that signature of the complainants have been obtained in a circle on the upper portion of page 2 to 4.  The circle at bottom of page-24 with a sign of cross mark has been left blank. Signature at page-40,41,42,43,44,45,46,47,48,49 have been obtained against in portion encircled. On the top of page-24. Encircled portion contains that signature of investigator were to be obtained. The same indicate that signatures of the complainants were obtained on blank form in a hurry. They were not allowed to read even the contents of the form otherwise they would have known the place, they were to put signatures. In that event there were no need of putting the sign mark or cross on which the complainants were to sign.

 

9.         As per clause 1.3 of agreement at page 24, the minimum capital commitment was described in Annexure-A which is at page-40. The same shows figure of Rs.40 lakhs against column no.V if that is so, it is not clear as to from where appellants have alleged that complainant agreed to invest Rs.50 lakhs.

 

10.       In fact the appellants have tried to create confusion by writing Rs.50 lakhs at one place and Rs.40 lakhs at another place by trying to show that agreed amount of investment was Rs.50 lakhs  but minimum capital commitment was Rs.40 lakhs. The figure of Rs.50 lakhs does not find place in the agreement.

 

11.       Still further it may be mentioned that clause VI of Annexure-A page-40 shows that initial capital contribution was 10% of the capital commitment. If clause V and clause VI are read together, complainant should have contributed Rs.4 lakhs only. That is not the case of any of the party. Undisputedly the complainant contributed Rs.5 lakhs. Thus the entire agreement is hotchpotch and lend support to the plea of complainant that their signatures were obtained on blank form.

12.       It is true that clause 7.1 (c ) of the agreement at page-29 lays down that in case of default pursuant to draw down notice, the OP could at its discretion, forfeit without compensation all sums paid by the client under this agreement. But said clause is not enforceable. The appellant must show that they suffered any loss due to non contributions by complainant, how much that loss was. Otherwise it becomes the penalty which is unsustainable in law.

 

13.       What follows from the above discussion is that appellant should have refunded the amount of Rs.5 lakhs alongwith interest @9% from date of deposit till date of refund. At the most portion of the impugned order allowing compensation of Rs.50,000/- for harassment and deficiency including litigation expenses can be set aside.

 

14.       Accordingly the impugned order is modified to the extent that appellants are directed to refund Rs.5 lakhs along with interest @9% per annum  from 22.03.08 till the date of deposit of FDR by the appellant in this Commission, in compliance of order dated 12.07.16. Out of the said amount, the FDR deposited along with interest accrued there upon be returned to respondent no.1 and 2. The appellants would pay amount of interest from 22.03.08 till 03.08.16 within a period of 45 days from receipt of copy of this order.

 

15.       Copy of the order be sent to both the parties free of cost.

16.       One copy of the order be sent to District Forum for information.

17.       File be consigned to record room.

 

 

(ANIL SRIVASTAVA)                       (O.P. GUPTA)

MEMBER                                         MEMBER (JUDICIAL)