….….. Opposite Parties
Complaint Under the Consumer Protection Act.
Before: Dr. Harveen Bhardwaj (President)
Smt. Jyotsna (Member)
Sh. Jaswant Singh Dhillon (Member)
Present: Sh. A. K. Gupta, Adv. Counsel for the Complainant.
None for the OPs.
Order
Dr. Harveen Bhardwaj (President)
1. This complaint has been filed by the complainant, wherein alleged that the OP No.1 & 2 were running an MLM (Multi Level Marketing) company under the name and style of M/s. OLS Whizz Pvt. Ltd. (popularly known as Whizz Power) i.e. OP No.3 which is duly registered with the Companies Act, 2013 having CIN No.U74900PB2015PTC039870. The company was doing the business of direct selling of consumer durable products such as electronics, FMCG, suiting and home appliances products. The OP No.3 is duly registered with the Department of Consumer Affairs under Ministry of Consumer Affairs, Food & Public Distribution, Government of India. The OPs have allured a large number of persons by of advertizing through handbills, sales promotion booklets, lectures etc. to buy gold in installments and win rewards by introducing more customers in the form of members in their company. The modus oprendi of the OPS is to allure the general public to purchase gold by way of eleven advance monthly installments of Rs.2,000.00 to Rs.5,000.00 each and the company will in turn give the gold equivalent to 12 months installments with the option to receive cash of the equivalent value (popularly known as Gold Kitty Scheme). For alluring the general public the accused used to offer costly gifts and foreign tours to the buyers/investors who start a particular number of Gold Kitties. In order to win the faith of general public, the OPs used to show and advertise that their company is duly registered by the Registrar of Companies and is also an ISO certified Company, having all sort of government authorization including authorization from the Ministry of Consumer Affairs, to run the aforesaid scheme of Gold Kitties. Under the allurement of OPs, the complainant himself has paid/invested Rs.4,40,000.00 for purchasing gold vide 11 receipts through his relative namely Barkha Kanojia. However, on completion of advance EMI's, the OPs instead of delivering gold or paying the maturity proceeds of Rs.4,80,000.00 (ie. amount equivalent to 12 EMIs) by way of cash, just showed the maturity amount in the form of Digital Wallet on their website www.olswhizz.com and www.whizzpower.com. However, the said digital wallet was just an eye wash as it could not be used for any purpose except for paying future EMIs of company's Schemes. Thus the complainant was forced to re-pay his maturity proceeds to the OPS by way of new Gold Kitty. Ultimately, on 14-07-2020 the OPs No.1 & 2 fled away by closing all their business operations and without returning the amount received by them on account of Gold Kitties. So, being victim of deceptive practice at the hands of OP, a large number of customers lodged a police complaint against the OPs. On the basis of which an FIR No.199 dated:17.07.2020 under sections 406, 420, 120-B IPC has been registered against the OPs No. 1 & 2 at PS Division No.7, Jalandhar, in which OPs No. 1 & 2 were arrested and are presently confined in judicial custody. It is to be noted here that the OPs used to issue only one collective receipt against the cash received by them on account of various Gold Kitties IDs of a single purchaser. Later on the amount so collected was bifurcated and adjusted/posted against each separate Gold Kitty ID regarding which SMS were sent as acknowledgement of receipt of EMIs. Previously a soft copy thereof was available on the aforesaid website of OPs under head 'Print Receipt' and can be checked by the investors by log-in through their respective ID and password provided by the OPs. But the OPs with the mala-fide intention to eliminate the evidences blocked the access of their aforesaid website which saves all the sales related data regarding amount paid by purchasers of gold in the form of advance EMIs. In this way, the OPs by adopting unfair and deceptive practices for causing the complainant and his relatives to purchase gold from their company by paying advance EMIs. The OPs No.1 & 2 are the real beneficiaries in the present case who employed deceptive practices at the cost of complainant under the shield of corporate veil. As such, in the present case, the corporate veil is ought to be lifted so that the real beneficiaries be made answerable before the court of law. The OPs have caused the complainant huge financial losses apart from great deal of mental agony and suffering. It also amounts to unfair trade practices and deceptive trade practices as enshrined under section 2(47) of CPA for which all the OP's are liable jointly and severally and as such, necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OPs be directed to pay a compensation of Rs.4,80,000/- i.e. the maturity amount of the complainant alongwith interest. Further OPs be directed to pay a compensation for causing mental tension and harassment to the complainant and for cost of legal proceedings.
2. Notice of the complaint was given to the OPs, who filed reply and contested the complaint by taking preliminary objections that the present complaint is not maintainable as the complainant does not fit into the definition of consumer and hence he cannot file any petition under Consumer Protection Act. It is further averred that the complainant have got no direct relation with the company/opposite parties as he never deposited or had been a member of the said company at any point of time. The complainant did not deposit the amount as alleged by him with the opposite parties at any point of time. It is further averred that all the documents are forged and fabricated. The present complainant has been filed just to harass the OPs. On merits, the factum with regard to doing the business of direct selling of consumer durable products such as electronics, FMCG, suiting and home appliances products by the OPs is admitted and it is also admitted that the OP No.3 is duly registered with the Department of Consumer Affairs under Ministry of Consumer Affairs, Food & Public Distribution, Government of India, but the other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.
3. Rejoinder to the written statement filed by the complainant, whereby reasserted the entire facts as narrated in the complaint and denied the allegations raised in the written statement.
4. In order to prove the case of the complainant, the counsel for the complainant tendered into evidence affidavit of the complainant Ex.CA alongwith some documents Ex.C-1 to Ex.C-3.
5. On the other hand, the OPs have not produced any affidavit or documents except written statement.
6. We have heard the learned counsel for the complainant only as none has appeared on behalf of the OPs since last so many dates and have also gone through the case file as well as written arguments submitted by the counsel for the complainant very minutely.
7. The complainant has alleged that the OPs No.1 & 2 were running the Multi Level Marketing Company under the name and style of M/s OLS Whizz Pvt. Ltd. i.e. OP No.3 and it is a registered company. He has produced on record Ex.C-1, which is the proforma for registration of the company/OP No.3 with the Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution, Government of India. This shows that the company was a registered company. Ex.C-2 is the advertisement published by the OP No.3 for the promotion of their business i.e. to allure the general public to purchase gold by way of 11 advance monthly installments of Rs.2000/- to Rs.5000/- each. Perusal of Ex.C-2 shows that it has been advertised by the OP No.3 that the gold is affordable for everyone and list of prizes to be given has also been given in OP No.2 in Ex.C-2. The amount of installments has also been mentioned and there is a reference of income and reward program also in Ex.C-2. This document shows that the OP No.3 has covered almost every aspect to allure the consumer to be attracted towards them and to purchase the gold. The complainant also fell prey to the allurement and made the payment to the OPs for purchasing gold. He had invested Rs.4,40,000/- as per pleading and receipts of payment.
8. The contention of the OPs is that the complaint is not maintainable as the complainant has never deposited any amount with the OPs. This contention of the OP is not tenable. Perusal of the receipts Ex.C-3, which is consisting of 11 receipts of Rs.40,000/- each made by the complainant, clearly show that the payment has been made by the complainant through his relative. This shows that he has given the amount to the OPs, but in return got nothing as allured by the OPs in Ex.C-2. The OPs filed application for dismissal of the complaint on the ground that FIR has already been registered against the present OPs, therefore this complaint is not maintainable and the same was dismissed by the Commission vide order dated 22.06.2021 with the observation that the registration of a criminal case is no ground for dismissal of the complaint. So, this defence is not of any benefit to the OPs.
9. The OPs has alleged that the complainant has alleged in the complaint that the fraud has been committed by the OPs and on the basis of the fraud, the present complaint has been filed, which is not maintainable as per the provisions of Consumer Protection Act. This contention is not tenable as the complainant in his complaint has nowhere stated that the OP has committed fraud rather it has been alleged that the OPs have adopted unfair and deceptive practice for causing the complainant and his relatives to purchase gold from their company by paying advance EMIs. For committing fraud, separate FIR has already been registered against the OP. It has been alleged that the OPs have adopted unfair trade practice by not returning the amount to the complainant rather forcing the complainant to repay their maturity proceeds to the OPs by way of New Gold Kitty. All deceptive practice, which is very much maintainable as per the Section-2 (47) of Consumer Protection Act, which reads as under:-
“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, which includes false representations, false publications of any advertisement, giving misleading facts, selling sub-standard products etc.
The complainant has specifically alleged that the OP No.3 was doing the business of direct selling of consumer durable products such as electronics, FMCG, suiting and home appliances products. This is covered under Section 2 (13) of Consumer Protection Act. The publication of advertisement Ex.C-2 for alluring the general public by adopting unfair trade and deceptive practice is very much covered u/s 2 (47) of Consumer Protection Act. The complainant has not produced on record any document to show that after maturity of EMI the proceeds as alleged of Rs.4,80,000/- was to be returned. So, after considering the overall circumstances, there is clear cut deficiency in service and unfair trade and deceptive practice on the part of the OPs and thus, the complainant is entitled for the relief of regarding Rs.4,40,000/-.
10. In the light of above detailed discussion, the complaint of the complainant is partly allowed and OPs are directed to pay Rs.4,40,000/- alongwith interest @ 6% per annum from the date of filing complaint till its realization. Further, OPs are directed to pay a Rs.10,000/- as compensation for causing mental tension and harassment to the complainant and Rs.5000/- as litigation expenses. The entire compliance be made within 45 days from the date of receipt of the copy of order. This complaint could not be decided within stipulated time frame due to rush of work.
11. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.
Dated Jaswant Singh Dhillon Jyotsna Dr. Harveen Bhardwaj
23.01.2023 Member Member President
