Order No. 20

Date-21/06/2018.

         SHRI RABIDEB MUKHOPADHYAY, MEMBER

            The Complainants deposited their hard earned money to the OP-1’s office in respect of Fixed Deposit Scheme through OPs 2 and 3, agents of OP-1. The Complainants’ FD certificates are as follows.

          Complainants submitted their FD (original certificates) to the Office of the OPs duly received in the year 2014. Complainants stated that till the date of maturity in August, 2014 the OP-1 paid interest as per certificate but they stopped payment from September, 2014.  They also failed to pay principal amount till date in spite of repeated requests over phone. The total principal amount of Rs.1,30,000/- and total interest due for one year of Rs.15,600/- and for 2 years a sum of Rs.15,200 X 2 = Rs.31,200/-.

            The Complainants are the consumers under the provisions of CP Act, 1986 and the OPs are bound to pay principal amount with interest till the date of payment along with payment of compensation a sum of Rs.50,000/- due to unfair trade practice on the part of the OPs and the OPs 2 and 3 are also liable to pay compensation for mis-selling and misleading the Complainants. Due to nonpayment of legitimate claim by OPs, Complainants are suffering huge monetary loss and mental agony. At this stage Complainants pray before this Forum, to direct the OP.1 to pay a sum of Rs.1,30,000/- (Principal amount) with 12 percent interest from the date of September, 2014 till date of payment,  to direct the OP-1 to pay compensation of Rs..50,000/- for unfair trade practice and OPs 2 and 3 to pay a sum of Rs.30,000/- and Litigation cost of Rs.20,000/-

Written version has been filed by OPs.2 and 3.

            OPs 2 & 3 in their Written Version stated that the instant complaint case is false, motivated, concocted, harrasive and liable to be rejected and stated that all the allegations leveled against the answering OPs 2 and 3 are categorically denied and disputed, save and except those which are herein admitted. OP3 Alfresco Capital Makets Pvt. Ltd. is a duly registered  Company at 2C Mahindra Road, Gr. floor, Paddapukur, Bhowanipur, Kolkata – 700 025 and is dealing  in investment management of Government Securities and Bonds, Fixed Deposits of Public Sector Undertakings and Private Companies having high performance and credit ratings. The OP3 is empanelled with Public Sector undertakings and Private Companies and acts merely as an Authorized Agent for the said companies for investment mobilization for a limited period of time.

            The job portfolio is to assist probable investors, providing necessary application forms and literatures of investments of the various companies and providing necessary services against which OP3 is paid certain brokerage/commission by the various companies. It is categorically stated by the OPs 2 and 3 that there is no consideration paid by the investors for the services rendered and hence cannot be deemed to ‘Service’ for any investors under the provisions of section 2(1)(o) of the Consumer Protection Act, 1986. The Complainant in or about August, 2011 being satisfied with the credentials of Unitech Ltd. (OP-1) expressed interest to invest in the Fixed deposit .

            The answering OP3 merely assisted the Complainants to complete documentation formalities to the investment that too by their personal choice and motive of earning profits from the FDs, there is no scope or occasion to mislead. It is just a contractual relation with Complainants and Unitech Ltd. The OPs 2 and 3 cannot be made and held liable to any amount as compensation as there is no relation of Consumer and Service availed for consideration and service by and between the complainants and the answering OPs 2 and 3 in as much as there is no averment whatsoever made by the Complainants in the entire complaint establishing ‘Consumer. and ‘Service Provider’ and deficiency of service as defined under section 2 in the CP Act, 1986.

            The Complainants have admitted the relation of the OPs 2 and 3 as agent of OP-1 Company and hence the Complainants are estopped from making any monetary claim of compensation for deficiency of service, if any, by the OP-1 i.e. Unitech Ltd. It is clear that the Complainants have admitted that they have enjoyed interest from August, 2011 till August, 2014 as per Certificates, there is no complaint of unfair trade practice or misleading and mis-selling by the OPs 2 and 3 then how it is intriguing the OPs 2 and 3 have been implicated in the instant complaint after a lapse of 6 years.

            It is categorically denied and disputed that there was any unfair trade practice on the part of the answering OP-2 and 3 or that there was any mis-selling and misleading the Complainants as alleged. It is categorically stated that there exists no relation between the Complainants and the answering OPs of ‘Consumer’ ‘Service for consideration’ ‘Service’ under the provision of CP Act., 1986. The answering OP3 was only acting as agent of the OP-1 regarding formalities of investment. As such there is no deficiency of service or unfair trade practice as alleged by the complainants. Hence, complaint against the answering OP 2 and 3 being baseless and frivolous requires to be rejected in limine with costs.

Points for Discussion

1. Whether the complainants are consumers under the OPs;
2. Whether the OPs are deficient in rendering proper service to the complainant;
3. Whether the complainants deserve relief.

Decision with Reasons

1. Perused copies of 4FDRs and letter dated 19/07/2014 of OP3 sending the original FDRs discharged by the investor after maturity, to OP-1.
2. It is clear that the OP1 paid monthly interest to the complainants but did not pay the principal amounts on various dates of maturity in August, 2014.

This is in violation of promises expressed by the OP-1 at column 6 of the Fixed deposit Receipts.Such violation of promises prejudiced the complainants and made them financially suffer. For such breach of promises OP1 and its agents (OPs2 and 3) are deficient.

3. The complainants submitted the original FDRs to OPs 2 & 3, which, in turn, sent the same to OP-1, as revealed from letter dated 19/07/2014 issued by OP3 to OP1 for making the payments. 

But no action has been taken from the end of OP-1 and no payment has been made yet.

4. As appears from records, a petition challenging the maintainability of the complaint was filed OPs 2 & 3 and it was disposed of vide order 11 dated 11/10/2018.

OP-1did not attend the proceedings and did not file WV and the case ran ex parte against OP-1 as revealed from order 9 dated 01/12/2017.

5. It is noteworthy that OPs 2 & 3 mentioned in their WV that they are empaneled with companies, private and public sector organizations to act as authorized Agent (WV Para-3) for investment mobilization.  At WV Para – 5, it is stated that no consideration has been paid by the complainant to them and such service cannot be deemed as ‘service’ as termed u/s 2(1) (o) of the C.P Act.

In response to this, it may be stated that OPs 2 & 3 acted on behalf of the OP-1.As per rule of Torts, when Agent acts on behalf of the Principal, the Principal has vicarious liability under the Deeper Pocket Theory. The liability is determined jointly and severally.

6. Moreover, the investor/ complainants knew only the Agents (OP-2 & 3) and not the OP -1 and being convinced by the Agents, they invested the money.  So, for deficiency of OP, OPs 2 and 3 cannot shirk off liability.  Apart from this, it is noteworthy that from the invested money, Agents got a percentage from the OP-1(as agreed in WV by OPs 2 and 3) and the same may be treated as consideration paid by the investor/complainants, if OPs- 2 & 3 are treated apart from OP-1.
7. All activities rendered by OPs 2 & 3 till sending of the original FDRs to OP-1 for payment of principal amounts, are treated as ‘service’ in terms of section 2 (1) (o) of the Act.
8. The complainants filed some extracts from TNN updated 12^th April, 2017 reporting, inter alia, that MDs of OP1 were sent to custody for cheating and fraud in FD Scheme and (under latest comment) OP1 had neither RBI license to collect money as FD nor permit to invest it in other properties. 
9. The case is, therefore, maintainable against OPs 2 & 3 also.

The complainants paid consideration as soon as they invested the money against grant of FDRs.So, complainants are consumers under the OPs in terms of section 2 (1) (d) (ii) of the C.P. Act.

The OPs failed to pay back the principal amounts to the complainants on the date of maturity, even today.So, they are deficient in rendering promised service, in terms of section 2(1) (g) read with section 2(1) (o) of the Act.

So, the complainants deserve relief.

10. During final argument OPs 2 and 3 were absent but subsequently Ld. Advocate for OPs 2 and 3 appeared and stated cause of delay.  He also filed a petition seeking time to file BNA.  He was verbally allowed but till today OPs 2 and 3 did not file any BNA.
11. The complainants demanded interest  at the rate of12 percent from Sept., 2014 also but that was contractual rate which ended in August, 2014.  We may consider usual rate  at the rate of8 percent to compensate delayed payment of principal amounts.

In the circumstances of above analysis, we are constrained to pass

ORDER

That the complaint be and the same is allowed on contest against OPs 2 & 3 in terms of section 13(2)(b)(i) and ex parte against OP-1 in terms of section 13 (2) (b) (ii) of the C.P Act, 1986;

That OP-1 is directed to refund the principal amount of Rs.130000/- to the complainants within 30 days from the date of this order.

That all the OPs (OP-1, OP-2 & 3) are jointly and severally directed to pay interest  at the rate of 8 percent on Rs.1,30,000/- with effect from (averaged date) 15/08/2014 till date of actual payment to compensate financial loss, Rs.5000/- as compensation for physical harassment and mental agony and Rs.5000/- as litigation cost to the complainants within 30 days from the date of this order.

That on non-compliance of above orders by the OPs within the stipulated time, the complainant shall have the liberty to put the orders into execution in terms of Section 27 of the Act ibid.

Let copies of the order be handed over to the parties when applied for.