Order-17.

Date-30/10/2015.

This is an application u/s.12 of the C.P. Act, 1986.

          Complainant by filing this complaint has submitted that OP3 is a company engaged in the business of providing financial services by issuing mutual funds.  The OP1 is the chairman of the OP3 and the OP2 is the Managing Director of the OP3.  The OP4 is an agent of the OP3 and facilitates investments on behalf of and for the OPs 1,2 and 3. 

          OP3 in its normal course issued the ICICI Prudential Mutual Fund to various individuals who had paid for the said purchase into the main corpus of the fund.  The OP4 had explained to the complainant that any investment into the corpus of the OP3 will have a better return in the long run and relying upon the report of the OP4 and also considering the advertisement complainant decided to invest into the corpus of the OP3 at a NAV price of Rs.40.6959 (INR) in the market in the month of June, 2009.  OP3 issued the ICICI Prudential Mutual fund at a NAV price of Rs.40.6959 (INR) in the market in the month of June, 2009.  Complainant as a good financial investor and reading the market prospect decided to purchase 1,192.130 units of ICICI Prudential Mutual Fund issued by the OP3 at a NAV price Rs.40.6959 (INR) bearing total value of Rs.2,45,000/- on June 29, 2009 and October 2009 of Rs.49,000/- each.

          In order to purchase the said fund complainant invested his hard earned money amounting to Rs.2,45,000/- from his savings account bearing no.628001510828 of the ICICI Bank Ltd., Hardat Rai, Howrah.  By issuing cheques bearing no.807216, 807213, 807215, 807214, 807217 and 807218 all of dated 22-07-2009 of equal amount of Rs.49,000/- each in the name of the OP3 and the same has been reflected in the bank statement of the complainant. 

          On receipt of the said cheque the OP3 duly encashed the said amount thereafter issued the folio no.4479547/30 wherein the opening balance as on 29-06-2009 amounts to Rs.49,000/- with a NAV price of Rs.40.6959 (INR).

          Complainant by purchasing the said funds has become the consumer of the financial services provided by the OP3 therefore comes under the definition of consumer as defined in the C.P. Act, 1986.

          Complainant purchased the funds as a long term investment as the same was issued by the OP3 who is well reputed financial institution therefore would deal with the money properly which would good return in future.  However, the complainant was in need of money so approached the OP3 and requested it for encashment of the Folio and return of the money invested with its normal appreciation.  But in utter surprise complainant was informed that there was zero unit in his account bearing folio no.4517249/26.  The complainant time and again checked and rechecked the status from the front desk of the OP3 and there is a clear instruction on the OP3 that the transaction would be done through Electronic Clearing System to the Savings Bank Account bearing No.62040394529 of the State Bank of Hyderabad, Howrah Branch, as stated above.  It is clearly stated that the said amount would be deposited in the said savings bank account and the statement of the folio clearly reflects the same.  In spite of specific instruction there is no deposit of money by the OP3 to the said account of the complainant and further the complainant was informed that there was some misappropriation by the employees of the fund as such the fund was transferred without any authorization and in violation of the instruction to some other persons.

          Statement of the Folio No.62040394529 of the State Bank of Hyderabad, Howrah Branch, of the complainant provided that on 01-12-2009 1.03.921 units of ICICI Prudential Mutual Fund with NAV and price statement further shows Purchase Appl. No.7510099 with the Balance Units showing 0.000.

          Complainant was further informed that the amount of Rs.2,45,000/- was duly received by the OP3 although the same was negligently transferred to some other persons account.  Complainant sent a letter datred 16-12-2014 stating the entire facts and seeking redressal from the OPs and same were received by the OPs but OPs sat idle without taking any proper step and to redress the claim of the complainant.

          OP on receipt of the said letter gave a reply wherein they have tried to put the burden on the complainant but in spite of instruction the amount was not reversed to the account of the complainant and in fact for negligent and deficient manner of service and also for adopting unfair practice complainant has suffered much and also lost financial benefits including his hard earned money for which complainant has filed this complaint for redressal.

          On the other hand OPs 1 to 3, ICICI Prudential Mutual Fund by filing written statement submitted that ICICI Mutual Fund issued units to investors who had paid for the said purchase into the main corpus of the fund along with valid application.  However, units in the fund are allotted to the investors on receipt of valid application and subject to realization of funds from such investors and OP3 on receipt of cheque from the complainant issued provisional units in favour of the complainant which were subject to realization of the funds but the cheque accompanied with the application form of the complainant was dishonoured and hence, by a letter dated 02-07-2009 OP3 communicated the complainant that complainant’s cheque along with its application was dishonoured and hence provisional units issued in favour of the complainant were reversed/cancelled.  But, after more than 5 years the complainant vide a letter dated 16-12-2014 addressing to the OP3 enquiring about his investment under folio no.4479547/30 and 4619420/33.  Against that letter of the complainant OP vide his letter dated 31-12-2014 informed the complainant that the investments made by the complainant under the said folio numbers were reversed due to non-realization of cheque amounts.  Further, vide said letter, the OP3 informed the complainant that the five cheques referred in the letter were received by the OP along with application in name of one Tanmoy Dey.

          In the instant matter, complainant’s cheque was dishonoured hence, no units were issued in the name of the complainant and now for that said matter, the complainant has filed the instant complaint against the OPs.  In the above circumstances, there is no scope to entertain the complaint of the complainant for refunding the said amount when the cheques in question with the application was dishonoured.  So, in the above circumstances, the complainant cannot get any benefit against the OP3 and OP3 never issued the units to the complainant.  The units were only issued provisionally and cancelled as the cheque issued with the application of the complainant was dishonoured by the complainant’s bank.  In the above circumstances, OP3 has prayed for dismissal of the case as same is vexatious one.

          OP4 by filing written statement submitted that no doubt complainant submitted application along with cheques that was duly registered in respect of the companies for investment in particular scheme benefit was properly deposited but the entire processing was done by the Mutual Fund Companies and the distributors.  As the answering OPs has no role in this regard and in fact there is no negligence and deficiency on the part of the OP4 but if any fault is detected in respect of that application and cheque and issuing of units it is the liability of the OP3 but not the OP4, OP4 acted as a facilitator on behalf of the complainant.  So, in the above circumstances, complaint against OP4 should be dismissed.

          Fact remains in this case OPs1,2 and 3 are ICICI Mutual Fund and Managing Director and Chairman and OP4 is the S.K.B. Security Ltd. but OP5 is SEBI against whom no relief is claimed and in fact, in this case on behalf of the OPs1,2 and 3 OP3 appeared and filed the bank statement and their written version and OP4 also filed their written version and accordingly relying upon the above facts and materials we shall have to consider whether the complainant is entitled to get any relief in the consumer disputes.

Decision with Reasons

After comprehensive study of the complaint and the written version and particularly the written version of the OP ICICI Prudential Mutual Fund and also the argument as advanced by the Ld. Lawyer for the OPs and further considering the written version of the OP4 the SKB Securities Ltd. through whom the complainant submitted application for purchasing units of ICICI Prudential Mutual Fund by depositing the cheque Nos.807213 to 807218 along with application for purchasing the units it is found that OP4 admitted that they deposited the application of the complainant along with said cheques and that was issued no doubt by the complainant but OP3 has submitted that said cheques were not along with application of the complainant but same were encashed against application for some other person and the cheques which were submitted against the application of the complainant were subsequently found not encashed as dishonoured.  So, no unit was allotted to the complainant for which the figure is found zero but all the cheques as referred by the complainant were received by the OP along with application in the name of Tanmoy Dey but it is admitted by the OP that the cheques which were issued by the complainant were encashed but it was tagged with the application of Tanmoy Dey for which allotment was made to Tanmoy Dey but the cheques which are actually with the complainant’s application was dishonoured for that reason provisional allotment of investment under folio no.4479547/30 and 4619420/33 were reversed as the cheques were not encashed.  Now, the question is how the application along with said cheques were subsequently detached from the application of the complainant and was tagged with one Tanmoy Dey and other.

          Most interesting factor is that admitted position is that application was accepted by the OP3, cheques issued by the complainant was received by the OP3 and same are admitted and provisional allotment vide investment No. under folio no. 4479547/30 and 4619420/33 were issued.  Then it is clear that OP4 deposited the application of the complainant along with the said 6 cheques amounting to Rs.49,000/- each to OP3.

          Anyhow, on behalf of the OPs1 to 3 Ld. Lawyer submitted that those cheques of the complainant was tagged with the application of Tanmoy Dey and some other cheques were tagged with the present complainant’s application but when the said cheques were dishonoured, automatically the said investment folios units were reversed so there was no negligence on the part of the OPs in this regard.

          After proper consideration of the entire materials as produced by the OP it is found that the cheques issued by the complainant was encashed by the OP3 but that was accounted against the application form of one Tanmoy Dey and cheques of Sandip Khan were accounted against application of the complainant.  Then it is clear that entire fault was on the part of the office of the OP3.  Fact remains in the written version OP has not stated anything how such an incident happened.  Moreover in the application form of the complainant branch details of the cheque is noted that is Hardat Rai, Howrah Branch of ICICI Bank and cheque of the complainant is found of ICICI Bank of Hardat Rai Branch of Howrah.  But the cheques which were accounted against the application of the complainant was not of the ICICI Bank but same of State Bank of Hyderabad and other branches and further it is found that these 6 cheques of complainant for a sum of Rs.49,000/- each was tagged with the application of Tanmoy Dey.  Further from the document of the OP it is clear that there are certain staff of the OP3 who managed to change the cheques against the complainant application and some other persons cheques were tagged with the complainant and by manipulation and issued such investment folios in favour of Tanmoy Dey and his wife Krishna Dey etc. and peculiar factor is that staff of the OP managed to convert the different cheques of different applicants by cross-fixing with other applications and entire fraud was made by the ICICI Prudential Mutual Fund Authorities and truth is that application was filed by the applicant, cheque was submitted by the applicant and same were of Howrah ICICI Branch but some other cheques were tagged with the application of the complainant that is completely manipulated by the staff of the ICICI Prudential Mutual Fund for which in their written version OP is silent about the mis-fixing the cheques of the other persons with complainant’s application but admitted position is that the complainant’s cheque was encashed by OP3 but admitted position is that after receipt of the application along with those 6 cheques of the complainant as per application/folio no. 4479547/30 was allotted but about interchange of cheques has not been explained.  Not only that only to discharge the liability of the OP3, OP3 has submitted no unit has been issued finally when the complainant’s cheques were dishonoured but there was no question of dishonouring the cheque because OP4 the SKB security has confirmed that the application of the complainant and his cheques are duly submitted to the ICICI Prudential Mutual Fund and same were received and thereafter manipulation has been made by the OP3’s office and subsequently unit was reversed and that is that fault on the part of the OP3.

          In fact, OP3 has failed to discharge their liabilities and to satisfy this forum by any means why the cheques of the complainant along with the application of the complainant was somehow and otherwise tagged with other person application.  In fact, at the time of argument OP3 tried to convince that upto November 14, 2010 they used to accept third party cheque against any application but in this case such a question does not arise in view of the fact that complainant filed application along with cheques.  Said cheques are admittedly encashed by the OP3, application was also accepted.  Thereafter, on investment, folio number with units were issued and subsequent to that in the office of the OP3 the cheques of the complainant were tagged with Tanmoy Dey’s application and some other cheques were tagged with the complainant’s application and by that way they adopted unfair trade practice and OP3 has deceived the complainant from getting his benefits even after deposit of Rs.2,45,000/-.  Admittedly said cheque was encashed by the OP and application was received by the OP3.  So, it is the liability of the complainant to refund the said amount of Rs.2,45,000/- along with NAV value that approximately 80 without any fault.  Moreover, after considering the written statement it is undisputed fact that OP3 admitted about the receipt of application along with cheques and issued such investment under folio no. 4479547/30 and 4619420/33 when that is the fact then OPs1 to 3 cannot deny their liabilities about payment of the entire amount along with NAV value of the present days.  Further after considering the written version of the OP3 it is clear that entire processing was done by the staff of the companies of OP3 and OP3 being satisfied after receipt of cheques and application issued such investment folio number with unit number to the complainant and truth is that reversal of the allotted folio were made by the OP3 after manipulation of the entire process and by removing the cheques of the complainant from his application and collecting some other cheques of some other person and thereafter reverse was made and all that was done at OP’s office which is no doubt an unfair trade practice and it is practiced by their officers and staff. 

          At the time of argument Ld. Law for the OP raised one point that complainant has invested money for so many units one after another so, complainant was not a consumer under C.P. Act.  Most interesting factor is that such an argument on behalf of the OP3’s Ld. Lawyer is nothing but an edgeless attempt and that is the common practice of the ICICI Bank, ICICI Prudential authority or ICICI insurance company but in most of the cases ICICI Companies whether mutual fund unit or bank or insurance company have been continuously manipulating the documents of the customers during process and are pleading before the Forum that they have received some other cheques admitting the receipt of the cheque issued by the particular consumer along with the application of some other person has been manipulated and cheques of some other person’s are tagged.  In this case it is ultimately admitted by the OP’s Ld. Lawyer that such a manipulation has been made by Tanmoy Dey that means that Tanmoy Dey had access in processing the application of the applicant in the office of the OP3.  Truth is that previously this Tanmoy Dey was an employee of OP4 but when he has been discharged by the OP4 he took shelter in the office of the OP3 and manipulated those cheques and managed to purchase huge numbers of units by manipulating cheques by valid depositors and that is evident from the documents of the OP3.  OP3’s Ld. Lawyer asked about their statement in which it is found many other persons cheques were similarly encashed along with application of Tanmoy Dey but what step has been taken by the OP3 against that when OP3’s Ld. Lawyer submitted that the matter has been reported and it is under investigation but no police case has been started.

           Moreover in the application form the Bank details is given by the complainant and as per said bank details it is found that complainant never gave any bank details of bank cheques of any other bank except ICICI Bank.  But all those cheques of the complainant were tagged with the applications of Tanmoy Dey and admitted position is that said Tanmoy Dey was an employee of OP4 and he left the job of OP4 on 12-09-2007.  So, under any circumstances, Tanmoy Dey had no scope to interfere with the administration of OP4.  But in the present case from the statement of the OP it is clear that OPs1 to 3 and their office staff managed to convert the valid cheques of the complainant including other purchasers of the mutual fund in the name of Tanmoy Dey and in such a manner Tanmoy Dey and his wife managed to open 30 numbers mutual fund and no doubt in this regard OPs 1 to 3 have failed to give any believable and reasonable explanation of the conversation of the cheques in the name of other unknown applicants namely Krishna Dey and Tanmoy Dey and further from that said statement it is found that all the cheques were issued by complainant was deposited against the application of Tanmoy Dey and in similar manner complainant’s brother’s cheque issued by Sujit Khan was also converted in the name of the wife of Tanmoy Dey that is Krishna Dey and considering the page 70 and 71 of the annexure of the OP it is clear that manipulation, fraud had been practiced by the staff of the OPs1 to 3 and they no doubt issued units in favour of the complainant’s account provisionally and subsequently, complainant’s cheques were removed from the application of the complainant.  Thereafter, it was tagged with the application of so called fraudster Tanmoy Dey and his wife Krishna Dey.  No such document is produced by the OPs1 to 3 that manipulation was done by OP4 and OPs1 to 3 have tried to say that Tanmoy Dey did all such fraud act but truth is that Tanmoy Dey left the service of the OP4 long back in the year 2007 and the present applications and purchase by the complainant was in the month of June, 2009 so, when, Tanmoy Dey was not in the office of the OP.  Considering all the above facts and also the written version of the OPs 1 to 3 we have gathered that practically all the cheques of the complainant were removed from the application of the complainant and so, tagged with the application with the so called person Tanmoy Dey by the office of the OPs 1 to 3 and no doubt it has been manipulated by the staff of the OPs 1 to 3 and now, they are trying to shift their fraud activities upon the OP4 but that has not been proved but after careful consideration of the materials on record it is found that OP3 has admitted that they have encashed the cheques issued by the complainant.  They also received the application of the complainant for purchasing such units they issued provisional folio no.4479547/30 and 4619420/33.  Then there is no other alternative but to hold that complainant is a good consumer, his application and cheques were encashed by the OPs1 to 3 and they received the application of the complainant for purchasing units of the OPs1 to 3 and reversal was made subsequently by manipulation of the said cheques with the application of so called fraudster Tanmoy Dey and his wife Krishna Dey and about this manipulation OPs 1 to 3 are silent and story of dishonour of cheque of the complainant is completely false and fabricated but after considering the written version we have gathered that OPs 1 to 3 have no doubt submitted before this Forum a dishonest defence stating that the cheque issued by the complainant is dishonoured by the complainant’s bank is completely a false story but from the document of the OPs it is found that all the cheques were honoured and that is ultimately admitted by the OPs but anyhow OPs 1 to 3 failed to prove that how the cheques of some other persons were tagged with the application of Tanmoy Dey and his wife and in this regard there is no explanation, no believable evidence for what reason such a manipulation was made by the staff of the OPs 1 to 3.  In this context we want to say that already Hon’ble Supreme Court in so many judgment has confirmed that if any manipulation or fraud is practiced by the Bank or any financial institutions and for which any consumer is found deceived in that case it is the duty of the said financial institution or the bank or the mutual fund authority to refund the amount with interest and for the very practice of the bank or financial institution and mutual fund company there is no necessity for complainant to proceed against them before the Criminal Court but Consumer Forum is the best place where the consumer may get such relief when fraud practice has been adopted by any financial institution or the bank or the mutual fund company.

          On overall evaluation of the entire materials on record and also considering the facts and circumstances and materials and documents as produced by the OPs we are confirmed that complainant was deceived by the OPs 1 to 3 and they adopted unfair trade practice and manipulated the complainant’s cheque with the application of such a fraudster Tanmoy Dey and ultimately cancelled the units of the complainant, so, the plea or the defence of the OP that cheques of the complainant was dishonoured for which the application was cancelled and units were reversed is completely a false and fabricated story and only to save their skin and to save their face in dealing with such unfair trade practice they have taken such defence and that is not the first case but in some other cases also ICICI Bank, ICICI Prudential Life Insurance, ICICI Mutual Fund adopted same defence and in all the cases they lost.  No doubt already against these OPs 1 to 3 some other cases are pending before this Forum on the same ground and no doubt after consulting the records of the OPs1 to 3 it is apparent that the ICICI Bank, Prudential Mutual Fund, somehow or otherwise adopted that fellow Tanmoy Dey for the purpose of their business and with the help of that fellow these OPs1 to 3 manipulated the cheques of the complainant and diverted it in the name of Tanmoy Dey and by adopting such unfair practice get huge money from Tanmoy Dey and somehow or other wise misused the fund of the public at random and their documents also support that at least in 30 cases such sort of mal practice, unfair practice was practiced by the OPs1 to 3 and all those customers (consumers) were deceived by the OP and ultimately the units were credited in the name of Tanmoy Dey, a Hench man of OP1 to 3.

          After handling so many cases of the ICICI Bank,ICICI Prudential Life Insurance and ICICI Mutual fund we have gathered that this company has been deceiving the public at large in different ways and they have appointed some terminated staff OF different securities, companies for the purpose of running this business and practically in West Bengal ICICI Group (Bank, Mutual Fund and Insurance Company) have been deceiving the public at large day to day but there is no preventive measure against such unfair trade practice and no doubt in the present case complainant is deceived by the OPs 1 to 3.  Not only that they have adopted the unfair practice and fraud practice as adopted by them the complainant is no doubt deceived and at the same time for the negligent and deficient manner of service and deceitful manner of service on the part of the OPs1 to 3 is well proved for which the complainant is entitled to get such relief and invariably OPs 1 to 3 shall have to refund the entire amount against such encashed cheques that is a total sum of Rs.2,45,000/- and along with 9 percent interest over the same with effect from October, 2009 and till full payment to the complainant and further for adopting unfair trade practice and for manipulatinf the documents by the OPs1 to 3 and their staff and further for deceiving the complainant, complainant is entitled to get compensation of Rs.25,000/- from the OPs1 to 3.

          At the same time for practicing fraud and for adopting unfair trade practice OPs 1 to 3 shall have to pay penal damages to the extent of Rs.50,000/- which shall have deposited to this Forum and same is imposed to check such sort of unfair trade practice in dealing such trade by OP3.

In the result, the complaint succeeds.

Hence,

Ordered

That the case be and the same is allowed on contest with a cost of Rs.10,000/- against the OPs     1 to 3 and same is dismissed on contest against the OP4 without any cost and ex parte against the OP5 without any cost.

          OPs 1 to 3 is hereby directed to refund a sum of Rs.2,45,000/- along with 9 percent interest over the same with effect from October, 2009 and till its full payment and it must be paid within one month from the date of this order.

          For adopting unfair trade practice and for deceiving the complainant in such a manner and also for practicing such a fraud and adopting manipulation in changing the cheque of the complainant in the name of Tanmoy Dey OPs 1 to 3 shall have to give compensation of Rs.25,000/- to the complainant.

At the same time for adopting unfair trade practice and for practicing unfair trade practice and for adopting a fraud and for manipulating the cheques of the complainant for purchasing the units in the name of Tanmoy Dey by the staff of the OPs 1 to 3 and further for deceiving the complainant and to take such sort of activities in the field of mutual market OPs1 to 3 shall have to pay penal damages of Rs.50,000/- to this Forum and it is imposed to control such sort of activities in future.

          OPs 1 to 3 jointly and severally are hereby directed to comply the order very strictly within one month from the date of this order failing which for non-compliance of the Forum’s order, penal interest shall be assessed  at the rate ofRs.300/- per day till full satisfaction of the decree and if it is collected it shall be deposited to this Forum.

Even if it is found that OP is reluctant to comply the order in that case penal action u/s.25 read with Section 27 of the C.P. Act shall be started against them for which further penalty and fine shall be imposed.