IN THE CONSUMER DISPUTES REDRESSAL  COMMISSION, KOLLAM

Dated this the    30^th      Day of  September  2021

  Present: -  Sri. E.M.Muhammed Ibrahim, B.A, LL.M. President

       Smt.S.Sandhya Rani, Bsc, L.L.B,Member

                   Sri.Stanly Harold, B.A.LLB, Member

                                                    CC.50/18

Mrs. Sangeetha Madhu                                               :           Complainant

W/o Madhu Balakrishnan

Krishna, Punnathala

Kollam.

Represented by Power of Attorney Holder

Mr.R.Sasi

S/o Raghavan

Sreejith Bhavan, Mathilil P.O,Kollam.

[By Adv.G.Bimal Raj&Adv.Mohan Raj]

V/s

1. M/s Muthoot Finance Ltd.                              :           Opposite parties

         Muthoot Chambers

       Banarji road, Kochi-682018

       Represented by Managing Director

         Mr.Thomas John

2. Mr.Thomas John

       Managing Director

      M/s Muthoot Finance Ltd.

      Muthoot Chambers

       Banarji Road, Kochi-682018.

3. Mr.Thomas Muthoot

        Executive Director

      M/s. Muthoot Finance Ltd.

      Muthoot Chambers

      Banarji Road, Kochi-682018.

4. Mr.A.P.Kurian

        Director

      M/s. Muthoot Finance Ltd.

       Muthoot Chambers

        Banarji Road, Kochi-682018

5. Branch Manager

       Main Branch

       M/s Muthoot Finance Ltd.

       Muthoot Chambers

        Banarji Road, Kochi-682018.

         [By Adv.George Varghese]

FINAL   ORDER

E.M.MUHAMMED IBRAHIM , B.A, LL.M, President

                This is a case based on a complaint filed under Section 12 of the Consumer Protection Act 1986 by one R.Sasi, the Power of attorney holder of   Mrs.Sangeetha  Madhu.

The averments in the complaint in short are as follows:-

          The 1^st opposite party is a financial institution engaged in banking sector.  The 2^nd opposite party is the Managing Director of the 1^st opposite party.  3^rd and 4^th opposite parties are Executive Director and Director of the 1^st opposite party.  Opposite parties 2 to 4 are  managing the policy decisions and controlling the day to day affairs of the 1^st opposite party firm.  As per the advertisement made by the 1^st opposite party regarding the doubling bond, the complainant invested amounts with 1^st opposite party.  At the time of investing the amount, 5^th opposite party the Manager of the branch of the 1^st opposite party made the complainant to believe that the amount deposited will be doubled on the date of maturity without any deduction.  Accordingly the complainant has made 3 deposits on 09.01.2012 and all the 3 deposits will mature on 09.07.2012.   The complainant has invested 3 lakhs rupees as per certificate number 0016/648 with a maturity value of Rs.6,24,000/-.   Another amount of Rs.8 lakhs was invested on the same day  as per certificate Number 0016/649, with a maturity value of Rs.16,64,000.  Yet another investment was made on same day for an amount of Rs.24 lakhs and obtained certificate number 0016/650,  the maturity amount is Rs.49,92,000/-.  When the amount is matured, the fact of maturity was not intimated by the 5^th opposite party to the complainant.  The reasons stated by the opposite parties is that it was a computer error.  Then the complainant has given a written request on 19.07.17 to get the details of the maturity amount and requested them to give the interest for the amount that the opposite parties has held even after the date of maturity.  On 22.07.2017 5^th opposite party has given a reply letter to the complainant giving the details of the amount to be given to the complainant.  Surprisingly the complainant came to know that in addition to TDS amount, an interest on TDS was also deducted from the maturity amount.  Hence the amount which was assured was not given to the complainant which is a violation of the promise and an unfair trade practice.  As per the letter an amount of Rs.7868/- was deducted in the head interest on TDS is for of  Bond No.16/648 and an amount of Rs.20,981/- was deducted for the maturity amount covered by certificate No.16/649 and Rs.62,943/- was deducted on the head interest on TDS for the doubling bond No.16/650.  Even though the offered amount was not given back, as a law abiding citizen the complainant was ready to pay TDS in favour of the Bond.  But in no way the opposite partied have a right to deduct the interest on TDS paid from the complainant.  The opposite partied has thus violated the promise and this will come under the purview of deficiency in service and unfair trade practice.  An amount of Rs.91,792/- was unlawfully deducted by the opposite parties from the complainant.  On enquiry the complainant came to know that as per the internal circular No.054/2012 dated 09.03.2012 of the Chief General Manager of the 1^st opposite party firm,  interest will not be charged for the TDS amount.  There is no reasonable excuse for the opposite parties to charge interest on TDS amount from the complainant.  Due to the unlawful acts of the opposite parties the complainant has lost Rs.91,792/- which was deducted from the maturity amount as interest on TDS apart from the amount deducted as TDS.  The acts of the all opposite partied on behalf of the 1^st opposite party is in violation of the promise given to the complainant and an unfair trade practice and deficiency in service.  The complainant is entitled to get the amount of Rs.91,792/- with interest from 24.08.2017 the date on which the balance amount was given to the complainant.

          Opposite parties 1 to 5 filed a joint version admitting that the complainant has invested amount with 1^st opposite party.  But it was not in response to the advertisement made by the 1^st opposite party which never advertised regarding the doubling bond.  The 5^th opposite party who is the Branch Manager of the 1^st opposite party has never made any representation to the complainant.   The amount deposited will be doubled on the date of maturity without any deduction.  But the 5^th opposite party explained the complainant all the terms and conditions especially with regard to TDS and its refund with interest.  The opposite party never made any advertisement nor influenced any customer to deposit the amount.  The complainant never requested to close or to redeem the matured amount due to the reasons that in the receipt itself it is mentioned the maturity amount.  Hence it is not necessary to inform the complainant.  The 5^th opposite party has given a reply letter to the complainant indicating the details of amount given to the complainant.  In view of the small misunderstanding that for all the amount deposited with the 1^st opposite party is legally deposited.  TDS amount will be paid to the Government by the company for the said amount.  The company is paying to the Government without deducting from the deposited amount from the companies fund.  Thereby a small interest is charged for the said amount.  The said fact was explained to the complainant and she agreed for that.  Hence there is no violation of the promise.  The competitive fighters of other financial company may be inducted the complainant to wreck vengeance by the enemical financial companies and the complainant might have become a tool in the hands of the enemies of the opposite parties.  There is no deficiency in service on the part of  any of the opposite parties.  There is no violation of promise or any unfair trade practice.  For the last 70 years the 1^st opposite party is conducting business in the financial filed and never acted illegally against anybody and it is not necessary also.  At the time of deposit itself it was not explained to the complainant and she had agreed for and the company deducted interest.  It does not amount to unfair trade practice as defined in the Consumer Act.  The interest for the TDS amount is deducted  as per the terms of the complainant.  The 1^st opposite party is acting up on the direction of RBI and never done illegal act with anybody.  The complainant is not entitled to any relief as prayed for.  There is no cause of action for the complainant and alleged cause of action is artificially created and no nexus for the same. 

          In view of the above pleadings the points that arise for consideration are:-

1.  Whether there is any deficiency in service or any unfair trade practice on the part of the opposite parties?
2. Whether the complainant is entitled to get the relief sought for ?
3. Relief and costs.

Evidence on the side of the complainant consists of the oral evidence of PW1&Ext.A1 to A9 documents.  Evidence on the side of the opposite party consists of the oral evidence of DW1 and Ext.D1&D2 series documents.  Counsel for the complainant filed notes of argument but the counsel for the opposite parties not filed notes of argument.  Though sufficient opportunity was granted.  Heard both sides.

Point no.1&2

          For avoiding repetition of discussion of materials these 2 points are considered together.  The following are the admitted facts in this case.  The complainant invested Rs. 35 lakhs on 3 times  on 09.07.2012.  The 1^st investment is for Rs.3,00,000/-  as per certificate No.0016/648 with a maturity value of Rs.6,24,000/-.  The 2^nd investment is Rs.8,00,000/- as per  certificate No.0016/649 with a maturity value of Rs.16,64,000/- and the 3^rd investment made on the same day is Rs.24,00,000/-  vide certificate No.0016/650.  The maturity value of which is Rs. 49,92,000/-.  When the investment matured that fact was not intimated to the complainant.  Written request of the complainant dated 19.07.2017 is also admitted.  It is also an admitted fact that on 29.07.2012 the 5^th opposite party given a reply stating the details of the amount to be given to the complainant.  Accordingly the opposite party has deducted TDS with interest of TDS from the maturity amount.  As a result of the deduction of TDS and interest on TDS the amount assured has not given to the complainant which according to the complainant is violation of the promise and hence an unfair trade practice.  It is further alleged by the complainant that altogether an amount of Rs.91792/- has been deducted unlawfully by the opposite parties from the matured amount of the complainant and thereby committed deficiency in service and unfair trade practice.

          Now we shall consider whether the opposite parties are entitled to deduct TDS and interest of TDS from the matured amount due to the complainant in respect of the above 3 investments and whether the complainant is entitled to get the amount shown in 3 investments certificates received while making investment.  Ext.P1 to P3 are the above investment certificates.  Originally the complainant has got marked the photocopy of the above 3 investment certificate as P1 to P3.  Subsequently the learned counsel for the complainant has produced the original of the same.  On perusal of the above certificate it is seen that Ext.P1 to P3 are fully paid up subordinate debt certificate issued in the name of the original complainant Sangeetha Madhu.  Ext.P1 would indicate that the complainant has purchased 300 units of fully paid up subordinate debt issued by the 1^st opposite party Muthoot Finance Ltd.  each bond is worth Rs.1000/-.  Therefore total face value of Ext.P1 bond is Rs.3,00,000/- and the redemption value shown is Rs.6,24,000/-.  The maturity period is 66 months from 09.01.2012.  Accordingly it is redeemable on 09.07.2017.  The bond would further assured that maturity value per subordinate debt is Rs.2080/- per thousand rupees Bond.  In other words when Ext.P1 bond is redeemed after 66 months on 09.07.2017 the complainant is entitled to get Rs.6024000/-( 300x2080).  But it is stated in Ext.P1 certificate that the complainant is entitled to redeem the bond subject to the Memorandum & Articles of Association of the company and the financial covenant and conditions herein after set out which are deemed to be part of the certificate for all practical purposes.

          In financial covenance and condition No.2(4) it is stated that Income Tax and appropriate rates will be deducted at source according to the provisions of law in force at the time of  payment unless prescribed documentary evidence like Form 15 C/H is submitted.  If the payment towards GDS is not made by the investor annually the TDS amount along with interest @ 1.25% p.a will be deducted from the maturity value.  But Ext.P8 circular issued by the corporate office of the Muthoot Finance Ltd. to all zonal/regional heads including Branch Managers in its circular No.054/2012 dated 09.03.2012, it is stated how to deduct TDS without actual payment of interest.  In case of accrued interest there is no physical payment hence direct recovery is not possible.  So TDS applicable shall be debited to the parties account using TDS entry option in other modules in Muthoot Soft.  It is further stated that interest will not be charged on these accounts(Reference Circular No.72/2010).  Lien should be marked on the respective bonds and TDS amount should be recovered at the time of actual payment of interest or on maturity whichever is earlier.  The above direction in the circular is admittedly applicable to the opposite parties since it was issued by Muthoot Finance Ltd. Corporate Office, Cochin.  The above clause in the circular would clearly bars charging of interest on TDS.  Therefore the condition No.2,4 stipulated overleaf of Ext.P1 subordinate debt certificate stands nullified.  The same is the position with regard to Ext.P2&P3 subordinate debt certificate.  Therefore it is clear that levying of  interest on TDS is not in accordance with the terms and conditions of Ext.P1 to P3 subordinate bond certificate.  Therefore there is deficiency in service and unfair trade practice on the part of the opposite parties.

          In view of the materials available on record it is clear that due to the levying on TDS on interest due of the above 3 bonds the complainant has sustained loss of Rs.91792/- and the complainant is entitled to get back the said amount with interest from 24.08.2017 on which the balance amount was given to the complainant.  It is also brought out in evidence that due to the misfeasance and malfeasance of the opposite partied the complainant has sustained mental agony apart from financial loss and therefore the complainant is also entitled to get compensation and costs of the proceedings.  The points answered accordingly.

Point No.3

          In the result complaint stands allowed directing the opposite parties No.1 to 5 to pay Rs.91792/- along with interest @ 10% p.a from 24.08.2017 onwards till the date of payment.  The opposite parties are further directed to pay compensation to  the tune of Rs.25000/- with interest @ 10% p.a from the date of complaint till realization to the complainant.  Opposite parties are further directed to pay costs Rs.5000/- to the complainant.

          Opposite parties are directed to comply with the above directions within 45 days from the date of receipt of a copy of this order failing which the complainant is at liberty to recover the above amount with interest @ 12% p.a except for costs from opposite party No.1 to 5 jointly and severally and from their assets.

Dictated to the Confidential Assistant  Smt. Deepa.S transcribed and typed by her corrected by me and pronounced in the  Open Commission this the  30^th   day of  September   2021.

E.M.Muhammed Ibrahim:Sd/-

            S.Sandhya Rani:Sd/-

           Stanly Harold:Sd/-

           Forwarded/by Order

            Senior Superintendent

INDEX  

Witnesses Examined for the Complainant:-

PW1    :R.Sasi

Documents marked for the  complainant

Ext.A1            :   Subordinated debt certificate No.0016/648

Ext.A2            :   Subordinated debt certificate No.0016/649

Ext.A3           :   Subordinated debt certificate No.0016/650

Ext.A4           :   Copy of  letter dated 19.07.21 issued by Sangeetha Madhu

Ext.A5            :  Reply letter of the Manager Muthoot Finance Ltd., Kollam main branch.

Ext.A6            : Letter dated 22.07.2017 of the Manager, Muthoot Finance Ltd., Kollam main branch

Ext.A7            :   Copy of Letter dated 24.07.2017 addressed to the Regional Manager, Muthoot Finance Ltd. Kollam main branch.

Ext.A8            :   Copy of  Muthoot Finance Ltd. circular dated 09.03.2012.

Ext.A9            :    Power of attorney  dated 24.02.2018

Witnesses Examined for the opposite party:-

DW1   :   Mathew .P.John

Documents marked for opposite party:-

Ext.D1 series   :  Form 16-(A) and TDS of 2014-15,2015-16,2016-17,2017-18,2018-19.

Ext.D1            : Power of attorney dated 04.05.2019

E.M.Muhammed Ibrahim:Sd/-

           S.Sandhya Rani:Sd/-

           Stanly Harold:Sd/-

          Forwarded/by Order

          Senior Superintendent