Andhra Pradesh

Chittoor-II at triputi

CC/38/2014

B.Govardhana Gupta, S/o. Late B. Radhakrishnaiah chetty, - Complainant(s)

Versus

Khazana Jewelry Private Limited,Rep. by its Branch Manager - Opp.Party(s)

Y.K. Malleswari Devi

29 Jun 2015

ORDER

Filing Date:06.08.2014

Order Date: 29.06.2015

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

CHITTOOR AT TIRUPATI

 

      PRESENT: Sri.M.Ramakrishnaiah, President ,

        Smt. T.Anitha, Member

 

MONDAY THE TWENTY NINTH DAY OF JUNE, TWO THOUSAND AND FIFTEEN

 

C.C.No.38/2014

 

Between

 

B.Govardhana Gupta,

S/o. late. B.Radhakrishnaiah Chetty,

D.No.18-1-503/A, B.J.R. Buildings,

Opp. to Income Tax Office,

K.T.Road,

Tirupati.                                                                                             … Complainant

 

 

And

 

1.         Khazana Jewelry Pvt. Ltd.,

            Rep. by its Manager,

            D.No.10-14-575, Opp. Municipal Office,

            V.V.Mahal Road,

            Tirupati – 517 501.

 

2.         Khazana Jewlry Pvt. Ltd.,

            Rep. by its Manager,

            Main office at 252/A, TTK Road,

            Alwarpet,

            Chennai – 600 018.                                                              …  Opposite parties.

 

 

            This complaint coming on before us for final hearing on 12.06.15 and upon perusing the complaint, written version and other relevant material papers on record and on hearing Y.K.Malleswari Devi, counsel for the complainant, and P.C.Murali Babu, counsel for the opposite parties, and  having stood over till this day for consideration, this Forum makes the following:-

 

ORDER

DELIVERYED BY SRI. M.RAMAKRISHNAIAH, PRESIDENT

ON BEHALF OF THE BENCH

 

            This complaint is filed under Section-12 of C.P.Act 1986, by the complainant for the following reliefs 1) to direct the opposite parties to pay Rs.2,777/- collected additionally from the complainant with interest at 24% p.a. from 05.05.2014, 2) to direct the opposite parties to pay Rs.2,000/- towards damages and 3) to direct the opposite parties to pay the costs of the complaint.

            2.  The averments of the complaint in brief are:-  that the complainant enrolled as a member on 14.02.2014 in Khazana Jewelry Shop of opposite parties at Tirupati, under scheme MS.No.11E1233, Golden Fruit, a gold purchase plan, which continues for a period of one year from February 2014 to February 2015. The complainant paid 3 monthly installments at Rs.5,000/- per month, totally paid a sum of Rs.15,000/-, it will be converted into equal grams of gold based on prevailing       22 carrots gold price enabling the members to purchase gold ornaments for the amount they paid without wastage i.e. wastage waiver / VA / making charges on accumulated gold weight. On 04.05.2014, complainant went to the shop of opposite parties to pay monthly installment, the management informed the complainant that the scheme is cancelled as per the directions of R.B.I. and asked the complainant to receive accumulated gold by way of ornaments for Rs.15,000/-, which is converted into accumulated gold of 5.292 grams. without any wastage and making charges. The complainant purchased two ear studs weighing 6.330 grams on 04.05.2014 itself under Tax Invoice No.11S13737 and paid Rs.5,600/- in addition to Rs.15,000/- towards cost of the excess gold of 1.038 grams over which management has to collect only Rs.493/- but collected Rs.3,270/- towards VAT for the entire 6.330 grams instead of collecting VAT on 1.038 grams. Therefore, the complainant is entitled for the balance amount of Rs.2,777/-. Hence the complaint.

            3.  Opposite party No.1 filed written version and the same was adopted by opposite party No.2, in which they have admitted the membership of the complainant in the Golden Fruit Scheme bearing MS No.11E1233 and also admitted that the complainant has paid 3 monthly installments @ Rs.5,000/- per month, totaling a sum of Rs.15,000/-. They further contended that on successful completion of the chosen tenure, Khazana Jewelers allows the members to buy ornaments with wastage waiver on accumulated gold weight up to 9% (12 - month plan), 15% (18 - month plan) and 18% (24-month plan), that Condition No.14 of terms and conditions clears the same version that value addition up to 9%, 15%, 18% will be waived on maturity of the plan / scheme, that the complainant paid 3 installments amounting to Rs.15,000/- in total, which accumulated to a gross weight of 5.292 grams of gold, at that juncture as per the directions of Ministry of Corporate Affairs, the gold saving schemes are closed. Therefore, the members are advised to purchase gold jewelry equivalent to the amount paid. On receiving the said information, the complainant came to opposite parties and purchased two ear studs weighing 3.070 grams and 3.260 grams respectively on 04.05.2014. As on 04.05.2014 the gold price is Rs.2,819/-, so it comes to a total of Rs.17,844.27/- that is 6.330 x 2819 = 17844.27/-, the VA of ear studs        (i & ii) is at 20% (0.61) + 17% (0.55). So, the value of 1.16% weight as on 04.05.2014 is Rs.3,270/-, total weight of studs + VA is Rs.21,114/-. The VAT applicable is 1% of the total amount of the purchase value. For the present complaint, it comes to Rs.211.14/-. The final value of the ear studs i & ii comes to Rs.21,325/- Therefore, the company has rightly calculated and collected the amount basing on the value of gold prevailing as on 04.05.2014. There is no either deficiency in service on the part of opposite parties or did not collect any amount more than the actual rate of gold + VA + VAT. There is no cause of action for the complaint. The complaint is filed for wrongful gain and prays the Forum to dismiss the complaint with costs.

            4.  The complainant and opposite parties filed their chief affidavits and written arguments respectively. Exs.A1 to A4 were marked for the complainant and Exs.B1 to B8 were marked for the opposite parties.

            5.  Now the points for consideration are:-

            (i).  Whether the opposite party has collected excess amount from the

        complainant as complained in the complaint?         

            (ii).  Whether the complainant is entitled to refund of Rs.2,777/- and

                    compensation of Rs.2,000/- as prayed for?

            (iii).  To what relief?

            6.  Point No.(i):-  to answer this point, we have to state that the complainant has claimed Rs.2,777/- from the opposite party, on the ground that the opposite party has collected the said amount in excess of the actual amount to be collected and mental agony for which complainant claimed Rs.2,000/-. As could be seen from the terms and conditions as well as the case of complainant and opposite parties, admittedly, the complainant is a member of ‘Golden Fruit’ i.e. gold purchase plan, whose number is MS.No.11E1233. That the complainant has joined / enrolled in the scheme on 14.02.2014. The plan of the scheme is for one year (12 months), conditions of the scheme is that the member has to pay Rs.5,000/- per month and after completion of the tenure, the member has to purchase the gold for the worth they have paid. Condition No.17 of Ex.B1contemplates as follows: No wastage / VA / making charges waiver shall be applicable on pre-closure of plan by the members and they will be entitled to take gold jewelry only for the amount they have paid. Condition No.14 runs as follows: Value addition up to 9% for 12-month plan, 15% for 18-month plan or 18% for 24-month plan shall be waived off for the weight accumulated at maturity. Condition No.15 shows that: if the member purchases gold jewelry more than the accumulated weight, he/she shall pay the gold rate plus the full value addition (VA) for the excess weight. As could be seen from complaint and written versions, the complainant has paid installments for 3 months @ Rs.5,000/- per month i.e. totally he paid a sum of Rs.15,000/-. Therefore, he is entitled to take the gold jewelry for the accumulated amount. The amount will be converted into gold. According to the pleadings and evidence of both parties, the amount paid by the complainant is Rs.15,000/-, which is converted into accumulated gold of 5.292grams, which further clarifies that the complainant is entitled to purchase the gold weighing 5.292grams for the amount he deposited.

            7.  The scheme is closed / cancelled by the company / opposite party as per the directions of the Ministry of Corporate Affairs, but not at the instance of the complainant, emphasis applied. The complainant has purchased two ear studs weighing about 6.330grams, so according to Condition No.15, as shown in Ex.B1, the complainant has to pay the cost of the gold purchased excessively only + VA and VAT for the excess amount or the value of excess quantity of gold only i.e. towards the gold purchased extra. But it appears that the opposite party has collected the VA (value addition) and VAT for the entire gold weighing 6.330grams. According to the opposite parties, the prevailing value of the gold as on 04.05.2014 is Rs.2,819/- per gram, which totally comes to Rs.17,844.27/-, the VA claimed over the total gold weighing 6.330grams is at 20% + 17% on each item of gold i.e. the complainant purchased 2 ear studs, one is weighing about 3.070grams and another item of gold is 3.260grams. The opposite party has collected value addition for items i & ii at 20%, which comes to 0.61 + 0.55 i.e. for 17% = 1.16% of weight of the items. According to Condition No.14 of Ex.B1, if the plan for 12 months VA shall be up to 9%, if the plan is for 18 months VA shall be 15%, if the plan is for 24 months VA shall be 18%, whereas opposite party has collected Value Addition (VA) at 20% so far as the gold purchased by the complainant, which is against the terms and conditions of Exs.B1 and B2 also. Condition No.15 specifies that the VA will be collected only for the excess weight of gold purchased by the complainant. The excess weight of the gold, so purchased by the complainant is only 1.038grms, but unfortunately the opposite party has collected VA at 20% for the entire 6.330grams weight of the gold, thus the opposite party has did mischief without deducting the total weight of gold accumulated to the amount already paid by the complainant i.e. 5.292grams out of 6.330grams of gold. It is against the terms and conditions under Ex.B1. Another mischief that was done by the opposite party is, it has collected 20% VA for the entire 6.330grams of gold, which is beyond the terms and conditions of Ex.B1, that too the opposite party has collected the said VA (Value Addition) for entire 6.330grams of gold instead of collecting VA only on 1.038grams.

            8.  The opposite parties, it seems only to promote their business, making false representations and misleading advertisements to the effect that 9%, 15% and 18% Value Addition shall be “Waived Off”. Under Condition Nos.14 and 17 of Ex.B1, opposite party further specifies No Wastage / VA / making charges waiver shall be applicable on pre-closure of plan by the members and they will be entitled to take gold jewelry only for the amount they have paid. The word “Waived off” and the word “No Wastage / VA / making charges waiver shall be applicable” seems to one and the same, “waived” means give-up or stop or go away or loose etc. whereas “off” means nothing informed, claimed, stop, go away etc. If both the words ‘waived’ and ‘off’ were written as a single word, it gives a negative meaning. If the opposite parties are specifically intended to waive the percentage of VA over the gold ornaments purchased or the amounts accumulated, they need not add the word ‘off’ to the word ‘waived’. Even otherwise if the word ‘waived off’ is considered as a single word and reflects a positive meaning, the opposite party has to deduct the percentage of VA at 9%, 15% or 18% as the case may be, as per the terms and conditions referred in Ex.B1, but the opposite party has claimed 20% of VA in addition to 1% of VAT, thus in both the ways, they have cheated the members of the scheme.

            9.  It is not the members pre-closed the scheme at their own accord, but it is the opposite party which closed the scheme. In the terms and conditions there is no specific mentioning what to do and what will be applicable if the opposite party / company itself closed the scheme on any reasons. It is also another thing to exploit the consumers / members of the scheme. So in both the ways, the opposite party did wrong and adopted unfair trade practice as contemplated under Section-2(i)(r) of the C.P.Act. 

“the word unfair trade practice means:-        a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely: (1)  the practice of making any statement, whether orally or in writing or by visible representation which, - (i)  falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model; (ii)  falsely represents that the services are of a particular standard, quality or grade; (iii)  falsely represents any re-built, second-hand, renovated, re-conditioned or old goods as new goods; (iv)  represents that the goods or services have sponsorship, approval performance, characteristics, accessories, uses or benefits which such goods or services do not have; (v)  represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have; (vi)  makes a false misleading representation concerning the need for, or the usefulness of, any goods or services; (vii)  gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof: Provided that materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made; gives false or misleading facts disparaging the goods, services or trade of another person etc.

 

            10.  The opposite party mis-representing the public with a view to promote their business. They are contending that they will not claim any wastage or making charges over the gold purchased, to the equal quantity of gold converted in respect of money paid in the scheme, Value Addition will be waived-off at 9%, 15% and 18%, but collecting the Value Addition at 20% from the customers / members / consumers. So, one way they are attracting the public by saying that they will waived-off wastage, value addition and making charges but on the other hand they are collecting more than the percentage they expected to be waived and taxing the members, is nothing but misleading the public for the purpose of promoting their business. In order to curb the said trade practice much less unfair trade practice, the Consumer Protection Act 1986 was came into existence to protect the rights of consumers.

            11.  Inspite of specific questions asked by the Forum, the opposite party failed to produce any documents to prove that the value of gold per gram was at Rs.2,819/- as on 04.05.2014. According to Ex.B5, the opposite party has claimed Rs.1719.59/- on item No.1 of the ear stud and also claimed Rs.1550.45/-  on item No.2 ear stud, without deducting the converted gold worth Rs.15,000/- out of 6.330grams of gold. As per Condition No.17 of Ex.B1, they have to collect the actual weight of the gold purchased extra i.e. beyond the worth of Rs.15,000/- or the weight of gold 1.038grams. The actual gold over which the opposite party is expected to claim its cost, VA and VAT is only 1.038grams, but by adopting unfair trade practice, the opposite party has collected the VA (Value Addition) at 20% and VAT at 1% on total weight of gold i.e. 6.330grams. What is this Value Addition? and where it derived from? apart from VAT. Thus there is justification in the claim of the complainant. This type of trade practice / unfair trade practice shall be curtailed in the society, in order to implement the Act in proper prospective. Accordingly this point is answered.

            12. Point No.(ii):-  In view of the above detailed discussion, we are of the opinion that the complainant is entitled to refund of amount claimed at Rs.2,777/- and also he is entitled to a sum of Rs.2,000/- as claimed towards mental agony caused to the complainant by the opposite party, apart from it, since the opposite parties have adopted unfair trade practice and by giving misleading advertisements under Clause Nos.14 to 17 and claiming more VA than that of the percentage prescribed under Exs.B1 and B2 and taxing the public / consumers, who enrolled as members in the said scheme under the guise that they will be benefited by enrolling themselves as members of the scheme and they will be given an opportunity to purchase gold on accumulated amounts they paid. For this type of misleading advertisements and unfair trade practice, we are of the opinion that the opposite party has to pay another sum of Rs.10,000/- to the complainant on the ground that the opposite party not only misleading the member / complainant / consumer but also abruptly closed the scheme on its own or otherwise but not at the instance of the complainant or any of its members, as such the opposite parties have to bear the responsibility for the closure of the scheme and ought not have  collected the said V.A, manufacturing charges and VAT on 1.038grams of gold also, and the complaint is to be allowed accordingly.

            13.  Point No.(iii):-  In view of our discussion on points 1 and 2, and on the following reasons:- 1) the opposite parties have not waived the wastage / VA / manufacturing charges as per Clauses 14 to 17 of Ex.B1, 2) they have claimed VA @20% on the total cost of the gold ornaments (6.330) instead of excess quantity of gold (1.038grams), 3) they have not deducted / exempted Rs.15,000/- from the total cost of the gold while claiming VA, as per terms of the scheme and 4) the opposite parties, thus resorted to unfair trade practice. In the facts and circumstances of the case, we deem it proper to impose Rs.10,000/- towards damages to meet the ends of justice and object of the Act, we are of the opinion that the complaint is to be allowed enabling the complainant to collect the amount paid excessively and another amount of Rs.2,000/- towards mental agony caused to him by the opposite party and also to recover a sum of Rs.10,000/- towards compensation for misleading and adopting unfair trade practice by the opposite party and the complaint is to be allowed accordingly.

            In the result, the complaint is allowed directing the opposite parties to pay back a sum of Rs.2,777/- (Rupees two thousand seven hundred and seventy seven only) collected from the complainant in excess of amount actually to be collected from the complainant, opposite parties also directed to pay Rs.2,000/- (Rupees two thousand only) towards mental agony caused to the complainant by the opposite parties and opposite parties also directed to pay Rs.10,000/- (Rupees ten thousand only) to the complainant towards compensation for adopting unfair trade practice and giving misleading advertisements to promote the business of the opposite parties in the public. The opposite parties further directed to comply with the orders within six (6) weeks from the date of receipt of copy of this orders, failing which, the total amount of Rs.14,777/- shall carry interest at 9% p.a. from the date of complaint, till realization.            

Typed to dictation by the stenographer, corrected by me and pronounced in the Open Forum this the 29^th day of June, 2015.   

 

      Sd/-                                                                                                                       Sd/-                                                                

Lady Member                                                                                                      President

 

 

APPENDIX OF EVIDENCE

Witnesses Examined on behalf of Complainant.

 

PW-1: B.Govardhana Gupta (Chief Affidavit filed).

 

Witnesses Examined on behalf of Opposite Party.

 

RW-1:  K.Jagannatham (Chief Affidavit filed).

 

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT

 

Exhibits (Ex.A)	Description of Documents
	Cash payment receipts (Original) towards payment of installments (3 in Nos.). Dt: 14.12.2014, 06.03.2014 and 18.04.2014.
	Tax invoice (Original) No.11SI3737. Dt: 04.05.2014.
	Office copy of the legal notice issued by the complainant to the Opposite Parties along with postal receipts. Dt: 28.05.2014.
	Acknowledgements of the Opposite Parties 1 and 2. Dt: 22.07.2014.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTYs

 

Exhibits   (Ex.B)	Description of Documents
1.	A photo copy with attestation of Document (Enrollment Form) filed on behalf of the Opposite Party No.1. Dt: 04.05.2014.
2.	A photo copy with attestation of Document (Terms and Conditions) filed on behalf of the Opposite Party No.1.
3.	A photo copy with attestation of Document filed on behalf of the Opposite Party No.1.
4.	A photo copy with attestation of Bill Vouchers filed on behalf of the Opposite Party No.1. Dt: 04.05.2014 (Sales Estimation)
5.	A photo copy with attestation of Bill Voucher filed on behalf of the Opposite Party No.1. Dt: 04.05.2014(11SI-3737-Tax Invoice)
6.	A photo copy with attestation of document i.e., Registration certificate of Establishment Document filed on behalf of the Opposite Parties 1 and 2. Dt: 19.06.2007.
7.	A photo copy with attestation of Document i.e., Value Added Tax Registration Certificate given by Khazana Jewellery Pvt., Ltd. filed on behalf of the Opposite Party No.1 and 2. Dt: 21.08.2014.
8.	A photo copy with attestation of Document i.e., Renewal of Certification Marks Licence No.CM/L-6710667 on behalf of the Opposite Party No.1 and 2. Dt: 27.08.2013

 

                                                                                                                                                                                                                                                                                     Sd/-

                                                                                                                President

 

// TRUE COPY //

// BY ORDER //

 

 

Head Clerk/Sheristadar,

              Dist. Consumer Forum-II, Tirupati.

 

 

  Copies to:-   1. The Complainant.

                        2. The opposite parties.