BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

 DATED 29^th DAY OF NOVEMBER 2021

O R D E R

Smt.Shantha.P.K., Member

1. This is a complaint filed by the complainantsunder Section 12 of the Consumer Protection Act, 1986 praying for an order against Opposite Parties (herein after referred as OPs) to direct the OPs to refund the matured sum of Rs.3,50,000/- which was accrued totally to the complainant at the rate of 18% simple interest for the time progressed after maturity of the amount and also award the cost of the proceedings and to grant such other reliefs. 
2. The brief averments made in the complaint are as follows:

Complainant submits that he is a cardiac patient having undergone bypass surgery recently and OP No.1 is a company engaged in the business of collecting money under several investment plans such as Fixed Deposit (herein after referred as  FD) schemes from the public.  One such agent of the OP No.1 is Bajaj Capital Limited the OP No.2 and OP No.3 is the Head office of the OP No.2.  Complainant submits that OP No.2 approached him in the year 2013 and 2014 with regard to the FD scheme and other benefits available with the OP No.1 and its agent, claiming that the amount invested would be returned with high rate of interest upon maturity.  Subsequently, on persistent follow up by the agent, OP No.2, the complainant agreed to deposit in the policy.

Further complainant submits that he deposited Rs.2,00,000/- in the F.D bearing No.55009 on 19.12.2012 and another F.D. bearing No.70067 for Rs.1,50,000/- on 25.07.2013 for a period of 3 years, being promised an interest at the rate of 12.5% p.a. under the Non-Cumulative Scheme and the said F.Ds. matured on 18.12.2015 and 24.07.2016 respectively.  Upon maturity, the complainant sought from the OPs as promised as per the FDs stated above.  However, despite various attempts of establishing contact through telephone, the OPs neither responded or intimated about the status of the amount nor was the amount refunded.

Further complainant submits that he sent a legal notice to OPs on 12.07.2016 illustrating the unfair trade practice and deficiency in service, calling upon the OP No.1 to return the FD amount along with an additional interest at the rate of 18%, for the defaulting months after maturity  for which the OP No.3 has issued untenable reply on 30.07.2016 denying its liability towards the payment of the amount.  The act of non-payment of the amount shows unfair trade practice and deficiency of service on the part of OPs.  Further complainant submits that there are various such other defaults in the repayment of the matured deposited amounts to the other depositors by the OP No.1 showing their malicious intentions of amassing wealth of the pretext of investment.  Hence, this complaint is filed.    

3. Thereafter, complainant filed an application under Order VI Rule 17 R/w Section 151 CPC to carry out the amendment in para No.14(b) of complaint.  The said application is allowed by this Commission on 04.04.2017 and complainant is permitted to carry out the amendment and to furnish the amendment copy.
4. On receipt of the notice, OP No.1 did not appeared hence, placed exparte.  After OP No.1 placed exparte, OP No.1 sent its version through speed post but it is rejected by this Commission on 07.03.2017 for the reasons stated that without making necessary application for setting aside the exparte order, therefore the said version cannot be taken on record for consideration. 
5. On receipt of the notice, OP Nos.2 and 3 appeared through their advocate and filed their version.  But the same is rejected by this Commission on 07.03.2017 for the reasons stated as reads thus:-

OP Nos.2 and 3 have appeared in this case on 04.01.2017, but failed to file their version within 45 days, the time stipulated U/s 13(2)(a) of C.P.Act.  Despite knowing the fact that they have failed to file the version within time stipulated, OP Nos.2 and 3 did not file necessary application seeking permission to file version, assigning the reasons for the delay in filing the version.  As held in the judgement rendered by Hon’ble Supreme Court of India in case between New India Assurance Company Ltd., Vs Hilli Multipurpose Cold Storage Pvt. Ltd., (Civil Appeal Nos.10941-109421 of 2013) OP cannot be permitted to file version beyond permissible limit of 45 days.  The version is filed more than 60 days from the date of appearance.  Therefore, we are of the opinon that the version filed by OP Nos.2 and 3 liable to be rejected.  Accordingly, it is rejected.

After OP Nos.2 and 3 placed exparte, they preferred to set aside the order passed in this Commission in complaint No.1538 to 1545/2016 filed Revision Petitions before the Karnataka State Consumer Disputes Redressal Commission, Bengaluru in Revision Petition Nos.51 to 58/2017.  In the said Revision Petiton order has been passed on 18.07.2018 reads thus:-

The above Revision Petitoins are allowed on payment of cost of Rs.2,000/- in each case.  The District Forum is directed to take the version on record and also to decide other I.A. questioning maintainability on merits.

On the basis of this order, version filed by OP Nos.2 and 3 on 07.03.2017 are taken on record.    

5. In the version of OP No.2 and 3, they submits that complaint has been filed with a sole intention or objective to recover maturity amount of the FD along with accrued interest which was voluntarily and willingly deposited/invested by the complainant in OP No.1 company having its registered office Noida, Uttar Pradesh.  The present complaint is hopelessly barred and severally lacks in territorial jurisdiction.  Moreover, mentioning branch office of OP Nos.2 and 3 at Rajajinagar, Bengaluru will not create territorial jurisdiction for filing/proceeding present case.  It is noted that no interactions between complainant and OP Nos.2 and 3 ever took place at the said Bengaluru office.  The complainant has no cause of action, dispute, issue, grievance against the OP.  All dealings in respect to present case took place between complainant and OP No.1 only office at Noida, UP but not at Bengaluru.  It is pertinent to mention herein that as per the statutory provisions of the Companies Act, 1956 which has now been amended by the Act of 2013 and as per the statutory provision of Section 430 of the Companies Act, 2013 this Commission is not vested with the jurisdiction to entertain the present suit.  It is further submits that as per Section 430 of the Companies Act, 2013

No civil court shall have jurisdiction to entertain any suit or proceeding in resepct of any matter which the Tribunal or the Appellate Tribunal is empowered to – determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in resepct of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal.

In aditon to the mentioned above, it is hereby submitted that the OP No.1 has already approached the Hon’ble National Law Tribunal (NCLT), Allahabad for seeking extention of repayment to the deposits under Section 74(2) of the Companies Act, 1956.  It is crystal clear from the aforesaid proceedings that the Principal Company is admitting its dues towards the depositors.  Copy of the orders dated 28.09.2016 and 16.12.2016 are annexed herewith the present reply as Annexure R-2 and 3/A.  It is pertinent to mention here that OPs have discharged its duties and liabilities in the manner duly prescribed under the Companies Acceptance of Deposit Rules, 1975, which clearly states that a company raising funds by way of FD can appoint a broker for mobilizing the deposits.

Further it is submits that complainant is not a consumer as per the definitions under Section 2(d) of C.P.Act, 1986.  It is further submits that the provisions related to FD are governed by the Companies Act, 1956 and the Company Acceptance of Deposit Rules, 1975.  It submits that as per the provisions of Section 2(c) of the Company Acceptance and Deposit Rules, 1975, every depositor is a loaner to the company and the same is treated as an unsecured loan to the company.  It is further submits that as per Section 2(c) of the Company Acceptance of Deposit Rules, 1975 – “Depositor includes any person who has given a loan to a company”. Further it is submits that the C.P.Act, 1986 was enacted to protect the rights and interest of the person who are consumer.  In view of above settled provision of law that a loaner cannot be termed as a Consumer since he has not availed any services.  Hence, the present complaint is liable to be dismissed. 

It further submits that in present transaction in question, the Ops merely acted as a Broker/conduit or facilitator only, who merely on the instructions/directions or request of the complainant transmitted FD application Form(s) along with account payee cheques to OP No.1 company and not otherwise.  It is also an undisputed or undeniable fact that the present issue dispute in question, if any, is pertaining or related to FDR which in fact acted as a Bi-lateral-contract/agreement or understanding between the executing parties.  After execution of said contract a contractual obligation/relationship was created, wherein the complainant as an FDR Holder/Investor acted as 1^st Party and OP No.1 as principal/the invested company acted as a 2^nd Party. On the other hand merely stood as Stranger to said transaction/contract. It is not out of place to mention that in present transaction in question the complainant and OP No.1 not only acted as two separate companies, but also two separate legal entities, duly incorporated under the provisions of the Companies Act, 1956.  The said fact clearly stipulates that there is no Master-servant/principal agent/partner relationship ever existed between the OP No.1 company as since inception both the said entities/companies/Ops acted on Principal to Principal basis.

It further submits that no consideration was forwarded by the complainant to the OPs which prima-facie makes it crystal clear that the complainant is not a Consumer under the benevolent provisions of the Section 2(d) C.P.Act, 1986.  That the transactional documents create estoppels upon the complainant to file the present complaint before this Commisison.  It is a matter of record that the OP No.1 accepting the invested amount and sending FDR/certificate from Delhi office, it clearly proves that the territorial jurisdiction invoked by complainant at Bengaluru is false, frivolous and vexatious in nature. The complainant in present complaint has intentionally not narrated or concealed jurisdictional compentency clause, hence in other words it means that the complainant has not approached this Commission with clear hands and acted against the principles of justice, equity and good conscience. 

Further it submits that complainant personally visited Bengaluru branch office with an intention or objective to avail/invest in a FD Scheme.  It is only after going through several policies/FD schemes, as offered by various principal companies, the complainant voluntarily and willingly opted/selected FD scheme of OP No.1 company and complainant not only read the terms and conditions but also duly filled, signed, executed and submitted application form as well invested amount as consideration favouring OP No.1 only. Further OP Nos.2 and 3 submits that it as a broker always and every time acted under the instructions/directions/sweet will/request and up to the satisfaction of the complainant and not otherwise, as allged in the complaint.  Moreover, it is once again pertinent to mention that it is not the role and responsibility of OP Nos.2 and 3 to refund/repay FD amount to the complainant, as the same is sole prerogative of OP No.1 only.  It is to be noted that against the above said investment, OP Nos.2 and 3 also issued an acknowledgement receipt to the complainant, thereby informing and also explaining its limited role and liability.  The relevant extract of the said receipt are as under:-

We are pleased to acknowledge receipt of your above investment(s)/fresh deposit(s)…….. for onward transmission to the concerned company(ies).

At your instance we are acting only as a broker/facilitator in this transaction

You agree not to hold us responsible/liable legally or otherwise for the repayment of your investment/payment of interest by the principal company of your choice in which you have decided to make the investment.

The aforesaid fact clearly proves that the complainant since inception was very much aware about true and actual role of OP Nos.2 and 3, which is limited to the extent of Broker only.  However, despite deemed knowledge its name has been intentionally/unnecessary impleaded/dragged into present vexatious litigation. It is also pertinent to mention that the OP Nos.2 and 3 every time provided/acted/given satisfactory and complete services to the complainant.  Moreover, after receipt of original FD certificate, the role and responsibility of OP Nos.2 and 3 as a broker gets over or completed.  Hence, after discharging, completion or receipt of the said satisfactory services, the complainant later on cannot blame OP Nos.2 and 3 for deficiency in service.  In consonance to the above stated facts and submissions, the present complaint is liable for dismissal under Section2 Clause (1) (c) (iii) of C.P.Act, 1986. Moreover the reliefs as claimed and alleged by the complainant is neither claimable nor maintainable against it.  In light to the said fact the present complaint is liable for dismissal for want of cause of action against the OP Nos.2 and 3.

It further submits that para No.4 in the complaint are strictly denied that OP Nos.2 and 3 are agent of the FD company as alleged and the said OPs are acted as a broker to the present transaction.  That in reply to the contents of the para No.5, it is strictly denied that the OP Nos.2 and 3 approached with regard to the FD scheme and neither have propagated itself as the agents of OP No.1 as alleged.  It is pertinent to mention that the complainant is a regular investor and after knowing the financial stability of the FD company have invested to procure better returns and as a regular investors, the complainant has always been aware of the role/liability of the OP Nos.2 and 3 as a broker only.  In reply to the contents of para No.6 it is strictly and out rightly denied that OP Nos.2 and 3 is an agend of FD company (OP No.1) and have used business tactics or used sugary talks to persuade the complainant to invest with the said FD company.  It is further submitted that the complainant being a regular investor and a well aware senior citizen could not be fooled by any person to invest its money which the complainant has saved for its rainy days.  In reply to the contents of the para No.8 it is strictly and vehemently denied that any telephonic conversations were made with the OP Nos.2 and 3 as alleged.  Hence, the complainant shall be put to strict proof for the same.  In reply to the contents of the para No.9 it is prima-facie submitted by the complainant that he has specifically pointed out in the complaint that the deficiency of service and unfair trade practice adopted by the FD company – OP No.1 and have asked the OP No.1 to pay the maturity amount along with the interest.  The said submissions clearly shows that they are fully aware of the fact that the FD amount due along with interest is the role and responsibility of the FD company and not of the OP Nos.2 and 3. Hence, prays for delete the address of OP Nos.2 and 3 from the array of parties, frame preliminary issue (s) in respect to maintainability of present complaint, adjudicate the said preliminary issue (s) prior commencing proceedings of present complaint, dismiss present complaint under Section 2(d) R/w Section 11 of 26 of C.P.Act.   

6. The OP No.2 and 3 have filed I.A. under Section 11 of C.P.Act, 1986 R/w Section 430 of Companies Act, 2013 on 03.02.2017 for which this Commisison has ordered to consider the said I.A. at the time of final disposal of this complaint.
7. The rejoinder reply filed by complainant on 27.02.2019. The Complainant has filed affidavit evidence on his behalf and produced documents which are marked as Ex.A.1 to Ex.A.7.  The OP Nos.2 and 3 also filed affidavit evidence and produced documents which are marked as Ex.B.1 to Ex.B.4. Written arguments filed by OP Nos.2 and 3. Heard the learned counsel for complainant.

    8. The points that arises for our consideration are:

  9. Our answer to the above points:

REASONS

      10. Point No.1:  OP Nos.2 and 3 by way of filing version and by also filing an application under Section 11 of C.P.Act, R/w Section 430 Companies Act, 2013 pleaded to dismiss the complaint under Section 11(2)(c) of the C.P.Act. This Commission passed an order to consider this application along with main complaint. In the application, the provision is invoked only Section 11 of the C.P.Act, 1986 and Section 430 of the Companies Act, 2013.  But in the prayer claim is restricted under Section 11(2)(c) of C.P.Act which relates to cause of action.  But any how if the application is consider, OP Nos.2 and 3 stick up for the territorial jurisdiction of this Commission as well as cause of action.  Under the C.P.Act, 1986 the complainant can file the complaint in any one of the branch office.  This complaint is filed before this Commission showing the branch office is located at Bangalore i.e. OP No.2 and New Delhi i.e. OP No.3.  When the branch office of OP No.2 funcioning at Bengaluru, present complaint filed by the complainant is maintainable.  With regard to the cause of action is concerned, since the complainant is residing at Bengaluru, OP No.2 branch office is also located at Bengaluru, hence, there is cause of action for the complainant to file this complaint at Bengaluru.  Accordingly, we come to conclusion that application filed by OP No.2 and 3 is liable to be dismissed. 

        11. Point No.2:- At the first instance this Commission is of the opinion to discuss with regard to the liability of the OP Nos.2 and 3 to satisfy the claim of the complainant.

        12. OP Nos.2 and 3 by way of filing version specifically pleaded that they are the brokers and no liability is to be fastened on them.  In this context, OP No.2 place the reliance on several judgements in their written arguments at para 36.  Out of the said judgements at para No.36 (f) to (j) are directly on the point to through the light on the contention taken by the OP Nos.2 and 3 reads thus:-

(f) Bajaj Capital Ltd., Versus Sushil Suri, Chairman, MD, Morepen Laboratories and others – Appeal No.481 of 2005- Union Territory Consumer Disputes Redressal Commission, Chandigarh.  Enclosed herewith as Annexure F (Colly).  The relevant extracts of the judgment is enumerated hereunder:-

There was no allegation against the appellant of any deficiency of the part of appellant.  We are of the view after collecting money from the complainant and having remitted to same to M/s Morepen Laboratories Ltd., which in due course issue the fixed deposit receipt to the complainant.  The job of the appellant was over and further service was to be rendered by the appellant.  It was held that M/s Bajaj Capital Ltd., was not liable only the M/s Morepen Laboratories Ltd.,. was liable to pay the amount.

(g) M/s Bajaj Capital and Investiment Centre Ltd., Vs. Peeyush Sharma and Others – Appeal Case No.171 of 1998 – Consumer Disputes Redressal Commission, Chandigarh.  Enclosed herewith as Annexure – G (Colly).

(h) Bajaj Capital and Investment Centre Ltd., Versus Veena Sharma and Another, 2000 (CT-2) – GJK – 0902- SCUTC – Union Territory Consumer Disputes Redressal Commission, Chandigarh.  Enclosed herewith as Annexure – H (Colly).  The relevant extracts of the judgment is enumerated hereunder:

The role of the appellant was only to accept deposit for and on behalf of the Mc Dawell Krest Finance Ltd., in this appeal and to remit the amount to the company for being deposited, the appellant incurred to liability for the payment of maturity value and interest thereon as the amount duly deposit with Mc Doweli Krest Finance Ltd. It was held that M/s Bajaj Capital and Investment Centre Ltd., is not held liable for maturity value with interest thereon and course of Rs.250/-.

1. Bajaj Capital Limited Vs. Brig. Retd., Jasbir Singh and Anr. Before State Consumer Disputes Redressal Commisison, Union Territory, Chandigarh.  Enclosed herewith as Annexure I (Colly) The relevant extract of the judgment is enumerated hereunder:-

We have gone through the evidence on record as well as the impugned order and have heard the contentions of the parties.  Admittedly, the appellant is only a broker.  Also admittedly, no payment or consideration had been paid by the complainant to this OP for rendering service.  It is also an admitted fact that the money invested through the appellant had been paid to OP No.1 who accordingly issued FDR’s in question and does not deny its liability to pay the matured amount.  In this view of the matter, we find merit in the contention of the appellant that he is not a service provider as defined in the Consumer Protection Act, 1986 as no consideration had been paid to it.  Furthermore, it is admitted that as far as the service relating to putting the money in the FDR was concerned, the same had been properly done by the appellant and admittedly there is no deficiency in service in the same.  In this view of the matter, we are of the clear view that the learned District Forum erred in holding OP’s jointly and severally responsible for making good the loss of the complainant and in this view of the matter, the impugned order needs to be modified.

Consequently, the appeal is allowed and the impugned order is modified to the extent that the complaint against the appellant/OP No.2 is dismissed and it succeeds only against OP No.1.

(j) Bajaj Capital Ltd., Vs. Arti Kawadia and Ors. Before State Consumer Disputes Redressal Commisison, Jaipur, Rajasthan.  Enclosed herewith as Annexue –J (Colly).  The relevant extract of the judgment is enumerated hereunder:

Further taking into consideration that the appellant is only to broker and taking into consideration that no payment or consideration had been paid by the complainant respondents Nos.1 and 2 to the appellant and further taking into consideration that the money invested through the brokership of the appellant had been paid to respondent Nos.3 and 4 who had accordingly issued the FDR in favour of the complainant.  Respondent Nos.1 and 2, this Commisison is of the view that the appellant is not a service provider as defined in the Consumer Protection Act, 1986 as no consideration had been paid to its and thus we are of the clear view that the District Forum had erred in holding the appellant jointly and severally liable along with respondent Nos.3 and 4 and the impugned order deserves to be quashed and set aside so far as the appellant is concerned.

Consequently, the appeal filed by the appellant is allowed in the manner that the appellant would not be held jointly and severally liable in any manner along with respondent Nos.3 and 4 and the complaint filed by respondent Nos.1 and 2 against the appellant is dismissed and to that extent the impugned order dated 20.10.2008 passed by the District Forum, Udaipur is modified and rest order is maintained.

        13. In the light of the decisions cited supra, we come to conclusion that OP Nos.2 and 3 are only the brokers/agents of the OP No.1 and no liability can be fastened on them.  Hence, OP Nos.2 and 3 are  exorbitant in fasting the liability on them. 

        14. With regard to the claim of the complainant for refund of the matured sum of Rs. Rs.2,00,000/- in the F.D bearing No.55009 on 19.12.2012 and another F.D. bearing No.70067 for Rs.1,50,000/- on 25.07.2013 for a period of 3 years, being promised an interest at the rate of 12.5% p.a. under the Non-Cumulative Scheme and the said F.Ds. matured on 18.12.2015 and 24.07.2016 respectively  Though the maturity date has been already over, but the OP No.1 by one or the other pretest post-poning the refund of the F.D. amount with accrued interest thereon.  Once the F.D. is matured, it is the bouden duty of the OP No.1 only refund of the said F.D. with accrued interest thereon.  But in the instant case, OP No.1 did not do so itself amounts to deficiency of service much less unfair trade practice on the part of OP No.1.

15. OP Nos.2 and 3 while filing the joint version taken the specific contention that matter has been ceased by NCLT.  In this context, from 2019 onards, the status of the case pending before the NCLT is not made available.  Further, this Commission has no legal impediment to proceed with the matter under Section 32 of Old C.P.Act, 1986 and also by virtue of Section 100 of New C.P.Act, 2019.  At this stage, this Commission has no other go except to direct the OP No.1 to refund a total FD amount of Rs.3,50,000/- i.e. Rs.2,00,000/- from 19.12.2012 till realization and another F.D. for Rs.1,50,000/- from 25.07.2013 together with interest at the rate of 12.50% p.a. respectively till realization with litigation costs of Rs.5,000/-.  Accordingly, Point No.2 is answered partly in the Affirmative.
16. Point No.3:  In the result, we pass the following:

ORDER

1. The complaint filed by the complainant u/s.12 of the Consumer Protection Act, 1986 is allowed in part.
2. OP No.1 is directed to pay the total F.D. amount of Rs.3,50,000/- (Rupees three lakhs fifty thousand only) with accrued rate of interest 12.50% from the date of deposits  till realization with litigation cost of Rs.5,000/- to the complainant.
3. OP No.1 shall comply this order within six weeks from the date of receipt of the order, failing which the complainants are at liberty to take steps as per Law.
4. The claim against the OP Nos.2 and 3 are dismissed.
5. The I.A. filed by OP Nos.2 and 3 under Section 11 of C.P.Act R/w Section 430 Companies Act, 2013 is dismissed.
6. Furnish free copy of this order to both the parties.

 Dictated to the Stenographer and pronounced in the Open Commission on this 29^h day of November 2021).

List of documents produced by the complainant which are marked as Ex.A.1 to Ex.A.7 are as follows:-

List of documents produced by the OP Nos.2 and 3 are marked as Ex.B.1 to Ex.B.4 as follows:-