FINAL ORDER/JUDGMENT 

SMT. SAHANA AHMED BASU, MEMBER

            The present consumer complaint has been filed by the complainant against the OPs seeking refund of principal amount of Rs. 10,00,906/- along with interest @ 16.05 % per annum against debentures, compensation of Rs. 3,00,000/- and litigation cost of Rs. 50,000/-.

            The brief facts as set out in the complaint are that the OP-1 Kravey Wealth Management allured the complainant to invest money to their financial product for better returns than existing options in fixed income like Bank Fixed Deposit and Bonds. Being satisfied of the investment return and promotional advertisement, complainant invested Rs. 10,00,906/- to the OP-3 Kravey Capital Ltd. The OP-3 vide letter dated 15.01.2015 confirmed allotment of 98 numbers of Debentures of OP-5 Prabhu Dayal Memorial Religious & Educational Association (PDMREA) and also issued Debenture Transfer Certificate being certificate Nos. 1 to 98, Distinctive Nos. 1687 to 1784, Folio No. 1 to 1687 for a period of 04 years with effect from 09.03.2015 and its maturity date is 08.03.2019. An Agreement was executed between the complainant and OP-3. In terms of the said agreement, the OP-5 was bound to pay quarterly interest @ 16.05% per annum over the principal amount. The OPs also promised to refund the principal amount on quarterly basis after expiry of 24^th/27^th/30^th/33^rd/36^th/39^th/42th/45^th & 48^th months. Despite that the OPs miserably failed to pay quarterly interest of Rs. 39,322/- for 16 quarter total amounting to Rs. 6,29,160/- to the complainant though the OPs were bound to pay such amount in terms of the agreement. Alleging deficiency in service and unfair trade practices on the part of the OPs, the complainant has filed the present  consumer complaint.

            OPs 3 & 4 have filed their WV and have denied the contents of the complaint. It is stated that the OP-5 being an Educational Trust and issued Unlisted Unrated Secured Redeemable Non Convertible Debentures by way of Private Placement. OP-5 appointed OP-6 Milestone Trust ship Services Pvt. Ltd. as a trustee in respect of said Non-convertible Debentures against a Debenture Trustee Agreement dated 18.12.2014 in which the answering OP-3 participated as a Debenture Holders Representative. In terms of the said agreement, the OP-5 is liable to repay the principal amount of Non Convertible Debentures to the Debentures Holders on its due date along with agreed interest. The answering OP-3 acted as a facilitator between the Debenture Holders and the Trustees. Complainant is fully aware of the Non Convertible Debentures agreement. The answering OPs never provide any service to the complainant. The answering OP-3 never influenced the complainant to provide guaranteed income schemes. On the contrary, the complainant himself expressed his interest to invest money in Non Convertible Debentures issued by OP-5. The answering OPs never promised to refund the principal amount to the complainant as alleged. Complainant is not a consumer under the answering OPs. There is no deficiency in service and unfair trade practice on their part. Answering OPs have prayed for dismissal of the consumer complaint with exemplary costs.

            The complaint case is proceeded ex parte against OPs 1, 5 and 6 as they remained absent though served with notice and failed to appear before this commission to defend the complaint or to adduce any evidence. Hence, so far as evidence of complainant as against OPs 1, 4 & 5 is concerned is remained undisputed. It is pertinent to mention here that the name of OP-2 Mr. Abhijit Bhave, CEO Kravy Wealth Management has been expunged vide order dated 07.09.2022.

            In order to substantiate his case and claim, complainant has filed E/chief supported by an affidavit and also relied the documents annexed with the complaint petition. OPs 3 & 4 also filed their E/chief supported by an affidavit and relied the documents annexed with it.

            We have heard the counsel for both the parties and perused through the material on record. To avoid repetition of discussion it will just and proper to mention undisputed facts.  Admittedly, the OP-1 Karvy Wealth Management, Kolkata vide letter dated  24.12.2014 offered the complainant in the high yield fixed income space secured Non-Convertible Debentures (NCDs) of Haryana based Educational Society named Prabhu  Dayal Memorial Religious & Educational Association (herein after referred to as OP-5). There is no dispute that in the letter dated 24.12.2014, it has been mentioned that return of investment will be @ 16.05 % per annum for the tenure of 48 months, principal repayment will be started after 24 months and interest will be payable quarterly.

Relying upon the assurance of OP-1, complainant invested Rs. 10,00,906/- by issuing two account payee cheques bearing Nos. 003917 & 006705 both dated 31.12.2014 drawn on ICICI Bank Santoshpur Branch, Kolkata and Axis Bank Ltd. Crawford Market Branch, Mumbai in favour of OP-3 Karvy Capital Ltd. along with a cancelled  cheque  leaf. It is not in dispute that OP-3 vide letter dated 15.01.2015 confirmed allotment of 98 numbers of Debentures of OP-5 and issued Debenture Transfer certificate being No. 1-98, distinctive Nos. 1687 to 1784, Regd.  Folio Nos. 1-1687 dated 09.03.2015 in favour of the complainant.

Also it is to be noted that an Agreement was executed between the complainant and OP-3. In terms of the said agreement, the OP-5 Prabhu Dayal Memorial Religious & Educational Association is duty bound towards the complainant and it is prima-facie trust upon OP-5 to pay interest @ 16.05% per annum quarterly over the principal investment amount. OP-5 is bound to refund the principal amount on a quarterly basis in a staggered after 24 months i.e 24th/27^th/30^th/33^rd/36^th/39^th/42^nd/45^th & 48^th. OP-6 Milestone Trustship Services Pvt. Ltd. is the Debenture Trustee & Encrow Agent of OP-5. Expiry of debentures period the principal amount and interest has not been transferred to the bank account of the complainant through ECS/RTGS despite providing bank details. Finally, the OPs 5 and 6 did not refund the principal amount and interest of the debentures to the bank account of the complainant.

The contesting OPs 3 & 4  mainly raised objection that the OP-5 is the recipient of the subscription amount and agreed to repay the principal amount with interest to the Debenture Holders on due date as provided in the agreement dated 18.12.2014. It is not disputed that OP-3 being the Debenture Holder Representative acted as a facilitator between the Debenture Holders and the Trustees. OP-1 had informed the complainant about the investment opportunity and provided complete information about Non Convertible Debentures (NCDs). The complainant is fully aware of the entire Non-convertible Debentures arrangement.

In para-9 of the complaint petition, complainant himself admitted that the OP-5 is duty bound towards the complainant to repay the principal amount along with interest @ 16.05 % per annum. Non Convertible Debentures were transferred to the complainant . Thus, the OPs 3 & 4 are not bound to pay principal amount and agreed interest thereon. They were just intermediary between the complainant No. 1 and OP-5. Hence, the objection raised by the OPs 3 and 4 is acceptable. In the facts and circumstances of the case, we are of the opinion that there is no unfair trade practice on the part of the OPs 1, 3 and 4 for rendering services. However, it is made clear that OPs 3 & 4 being intermediatory shall provide all necessary assistance for getting the non convertible debentures amount and interest paid to the complainant.

It is pertinent to note that despite service of notice of the complaint, OPs 5 & 6 did not put in appearance nor filed WV in response to the complaint.  As the OPs 5 & 6 has failed to controvert the allegations in the complaint by filing WV, the allegations in the complaint are deemed to have been admitted as correct. It is well settled that the allegation made in the complaint, if not denied is deemed to be admitted as correct. The complainant in his affidavit and documents annexed with complaint petition did support his case against the OPs 5 & 6. Therefore, it cannot be said that the complainant has failed to prove deficiency in service and unfair trade practice i.e. non -payment of principal of debentures amounts and agreed interest @ 16.05% per annum quarterly. 

OP-6 being the trustee of OP-5 did not refund the debentures value along with interest @ 16.05 per annum quarterly to the complainant after its maturity as committed by them. Irresponsible and negligent act of OPs 5 and 6 amounts to deficiency in their service. Complainant is entitled to adequate compensation of his sufferings mental agony and financial loss caused by conduct of OPs 5 and 6 in dragging him to this litigation seeking relief.

 Had the OPs 5 & 6 refund the invested amount in debentures along with agreed interest within the time stipulated for this purpose, the complainant would have not come to the commission. He has been deprived on account of default committed by the OPs 5 & 6. Complainant invested his hard earned money to the OP-5 with a promise to get high interest.

Based on the foregoing discussion, we find merit of the instant consumer case. Accordingly,  the consumer complaint is allowed in part and following directions are issued:-  

1. OPs 5 & 6 are jointly and severally directed  to pay Rs. 10,00,906/- (Rupees ten lacs nine hundred six) only under Non Convertible Debentures being certificate Nos. 1 to 98, Distinctive Nos. 1687 to  1784 and registered Folio Nos. 1 to 1687  to the complainant along with interest @ 16.05% per annum quarterly from 09.03.2015 till realization.

2. OPs 5 & 6 are jointly and severally directed to pay Rs. 50,000/- (Rupees fifty thousand) only as compensation for the mental agony and harassment suffered by the complainant and Rs. 10,000/- (Rupees ten thousand) only as litigation expenses.

3. OPs 3 & 4 being the intermediary shall provide all necessary assistance for getting the Non Convertible Debentures claim along with interest paid to the complainant;

4. Compliance of the order shall be made by OPs 5 and 6 within a period of 45 days of the receipt of certified copy of the order.

The complaint could not be decided within the stipulated period due to heavy pendency of cases and also due to pandemic of covid-19.  Copy of the judgment be supplied to the parties free of cost as per CP Act. Upload the judgment on the website of this Commission for perusal of the parties.