CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi-110016.
Case No.254/2014
Smt. Mamta Gupta
W/o Sh. Lenin Gupta
R/o B-4/38, First Floor,
Safdarjung Enclave,
New Delhi-110029 ……Complainant
Versus
1. Kotak Mahindra Bank
through its General Manager
A-1/24, Safdarjung Enclave
New Delhi-110029.
2. Kotak Mahindra Bank
Regd. Office-27 BKC, C-27,
G Block, Bandra Kurla Complex,
Bandra (E), Mumbai-400051 ……Opposite Parties
Date of Institution : 03.07.14 Date of Order : 28.10.15
Coram:
Sh. N.K. Goel, President
Ms. Naina Bakshi, Member
O R D E R
Briefly stated, the case of the Complainant is that the OP officials called the Complainant over phone and visited her home to suggest investment in SBI bond funds. OP advised her to not invest in fixed deposit but to purchase SBI bonds. She purchased SBI funds for Rs.3 lakh on 06.11.12 and Rs.6 lakh in June 2013 vide folio No.13579901 from OP as a broker with assurance that she was to get benefit of 12% per annum. OP assured her to open investment account for on line management of funds for which the Complainant signed the form 3 times (in Nov. 2012 and June 2013) and she provided all the documents including original PAN card and required photocopies to the OP but the investment account was never opened by the OP. In the month of June 2013, she visited the OP and inquired about the benefits for investing in bonds and on assurances of the OP to get good benefits, she invested Rs.6 lakhs for SBI funds on the same folio and the OP had taken the signature of the Complainant on some blank forms. OP assured her that the suggested SBI funds were not market linked and were free from fluctuations. The OP also assured her that she can get her money anytime with good returns by paying 1% exit load. But no other information or booklet was provided to her. She was never told that her money could even decrease in amount. She was not given any address, phone no. or email for these SBI funds, so she was totally dependent upon the OP. On 15.07.13 she received copy of the statement of her SBI funds in which her funds was less than previous value and she enquired from the OP through phone about the same and the OP assured that the same would increase within few days. After about 10 days she read in news that bond funds would fall further, hence, she decided to redeem her SBI funds, she went to bank branch but no one attended her. After many personal visits and attempts to meet bank officers, on 15.08.13, OP finally agreed for redemption and the Complainant got Rs.34516/- less from her capital value. She reported the matter to the CCE by email, who only forwarded her complaint to concerned bank branch of OP where they closed her complaint without any clarification. When she talked to the Branch Manager of OP he was rude and misbehaved with her and also told her that the bank officials were not responsible if her funds falls as it depends on market condition but the same was not told to her earlier and deliberately hidden at the time of investment. She made a written complaint to OP on 10.03.2014 but she did not receive any response or reply till date. Due to deficiency in service on the part of OP as the Complainant is the consumer of OP, she suffered loss of Rs.34,500/- in her capital and Rs.18,000/- as FD interest of Rs.3 lakhs for nine months and Rs.40,000/- for mental harassment, agony as well as other losses. Hence, Complainant pleading deficiency in service and unfair trade practice on the part the OP has prayed as under:-
- To direct the OP to pay Rs.52,500/- alongwith compensation of Rs.40,000/- as mental pain and agony undergone by the Complainant and also costs of this complaint.
In the written statement OP has inter-alia stated that the Complainant invested Rs.3 lakhs in SBI Dynamic Bond Fund on November 6, 2012 vide cheque No.000006 from her Saving Account No.01750120020500 maintained with OP No.2. When her said investment showed good results, in June 2013 the Complainant approached OP and expressed a desire to invest again in mutual funds. The relationship manager showed her the recommended list and the Complainant opted for SBI Mutual fund Magnum Income Fund. In the application forms filled in by the Complainant for both the above referred schemes the Complainant had herself inter alia signed the declaration that she had read and understood the contents of the Scheme Information Documents/contents of the offer documents and the details of the scheme. The schemes information document/offer documents of the above referred schemes clearly list out the risks involved in investment in such mutual funds which inter-alia states the following:-
- Mutual funds and securities investment are subject to market risks and there is no assurance or guarantee that the fund’s objective will be achieved.
- As the price/value/interest rates of the securities in which the scheme invests fluctuates, the value of your investment in the scheme may go up or down.
- Past performance of the sponsor/AMC/Mutual Fund or its affiliates does not guarantee the future performance of the scheme (s) of the Mutual Fund.
- The NAV of the Schemes’ Unit may be affected by change in the general market conditions, factors and forces affecting capital markets in particular, level of interest rates, various market related factors and trading volumes.
- The present scheme is not a guarantee or assured return scheme.
OP has further stated that the Complainant requested in the month of July- August 2013 to redeem her investments from the mutual fund scheme. One of the officials informed her that due to fluctuations in the market she would not be able to recover her initial investment amount if she chooses to redeem her investment at that time and would suffer losses and being a long term investor she should hold her account but she redeemed her investment and suffered losses. Being market linked investments which were managed by SBI mutual funds, there is no nothing in control of the parties to avert such a situation except to inform the Complainant to refrain from redeeming her investment at that point when the investment shows losses. She was also actively participating in the trade of shares and security and as such cannot now claim that she was not aware of implications of trading/dealing with market linked investment, instruments/schemes including the mutual fund schemes. When they spoke with her she refused to listen and insisted that she will bear the losses. She filed a complaint before the Banking Ombudsman and the complaint was disposed vide order dated 11.02.14. OP has requested that as the complaint is baseless and frivolous, it deserves outright rejection.
Complainant has filed rejoinder to the written statement submitted by the OP wherein averments made in the written statement have been denied but not in specific words. It is admitted that she had bought few shares but suffered losses.
Complainant has filed her own affidavit in evidence while affidavit of Sh. Jyotiram Choudhury, Senior Manager (Legal) has been filed in evidence on behalf of the OP.
Written arguments have been filed on behalf of the parties. We have heard the arguments on behalf of the parties and have also gone through the file very carefully.
We straightway come to the question, whether refusal to pay full amount invested in the mutual funds to the Complainant by the OPs was justified. If so, whether the Complainant is not entitled to any relief?
It is not in dispute that Complainant had invested Rs.3 lakhs in 2012 and Rs.6 lakhs in 2013 with the OP in mutual fund. She entered into a speculative transaction which is subject matter to the market risks. The Consumer Protection Act is not for entertaining or compensating speculative transaction or losses. She took a risk in entering into an contract for investing her money in mutual funds. [UTI Vs Sabitri Devi Agarwal – II (2000) CPJ 4 (NC)]. She had admittedly signed the mutual fund papers containing the conditions. She should be presumed to have knowledge of the pros and cons of dealing with the mutual funds. Under the circumstance the present complaint is without any legal basis and is meritless. Accordingly, the same is hereby dismissed. Parties are left to bear their own costs.
Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations. Thereafter file be consigned to record room.
Announced on 28.10.15.
(NAINA BAKSHI) (N.K. GOEL) MEMBER PRESIDENT
28.10.2015
Present – None
Vide our separate order of even date pronounced, the complaint is dismissed. Let the file be consigned to record room
(NAINA BAKSHI) (N. K. GOEL) MEMBER PRESIDENT
