(SPECIAL BENCH) STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, CHANDIGARH Consumer Complaint No.101 of 2018 Date of Institution : 12.02.2018 Date of Reserve : 19.11.2018 Date of Decision : 17.12.2018
1. Jasbeer Kaur, daughter of Captain Phuman Singh (widow of Jaswinder Singh), resident of Village Hansala, Post Office Durala, District Kurukshetra.
2. Baljot Singh, son of Jaswinder Singh, resident of Village Hansala, Post Office Durala, District Kurukshetra through his natural guardian/mother Jasbeer Kaur, daughter of Captain Phuman Singh, (widow of Jaswinder Singh), resident of Village Hansala, Post Office Durala, District Kurukshetra. .Complainants Versus
1. Kim Infrastructure & Developers Limited, Registered and Corporate Office at 1307, Hemkunt House, 6-Rajindera Place, New Delhi through its Managing Director/ Authorized Signatory.
2. Kim Future Vision Services Ltd., at present Office at 1307, 1311-A, 6, Hemkunt House, Rajindera Place, New Delhi through its Managing Director. Second Address : 909, Vishal Tower, District Center, Janak Puri, New Delhi.
3. Kim Infrastructure & Developers Limited, having its Branch Office at 227, City Centre, Near Guru Nanak Bhawan, Amritsar, Punjab, through its Branch Manager.
4. Kim Future Vision Services Ltd./ Kim Infrastructure & Developers Limited, Gurudwara Dukh Niwaran Sahib, Market Branch Office, Patiala through its Branch Manager. Consumer Complaint No 101 of 2018
5. Ravinder Singh Sidhu, Managing Director, Kim Infrastructure & Developers Limited, having its Branch Office at 227 City Centre, Near Guru Nanak Bhawan, Amritsar, Punjab. Second Address: Flat No.503, ATS Golf Meadows Prelude, Barwala Road, Dera Bassi, District Mohali, Punjab.
6. Kawaljeet Singh, Director, Kim Infrastructure & Developers Ltd., having its Branch Office at 227 City Centre, Near Guru Nanak Bhawan, Amritsar, Punjab. Second Address : S/o Harnam Singh, Village and Post Office Chhajalwaddi, Near Taangra G.T. Road, Amritsar, Punjab.
7. Palwinder Singh, Director, Kim Infrastructure & Developers Limited, having its Branch Office at 227 City Centre, Near Guru Nanak Bhawan, Amritsar, Punjab.
8. Sanjit Sikdar, Director, Kim Infrastructure & Developers Limited, having its Branch Office at 227 City Centre, Near Guru Nanak Bhawan, Amritsar, Punjab. .Opposite Parties Consumer Complaint under Section 17 of the Consumer Protection Act, 1986. Quorum:- Mr. Rajinder Kumar Goyal, Presiding Member Present:- For the complainants : Ms.Ruchi Sekhri, Advocate For opposite parties No.1,3,5,7 &8: Sh.Tarun Seth, Advocate For opposite parties No.2&4 : None For opposite parties No.6 : Sh.Aayush Arora, Advocate RAJINDER KUMAR GOYAL, MEMBER : The complainants have filed this complaint, under Section 17(1)(a)(i) of the Consumer Protection Act 1986, (in short, the Act), for issuance of the following directions to the opposite parties:
i) to make the payment of maturity amount o `40,00,000/- (i.e. `20,00,000/- each against receipt) along with 18% interest per annum from 08.09.2017 till date of actual payment; Consumer Complaint No 101 of 2018 ii) to pay `5,00,000/- on account of compensation; iii) to pay `33,000/- as litigation expenses; iv) Any other relief which this Commission may deem proper in the facts and circumstances of the case. Facts of the Complaint
2. Brief facts as stated in the complaint are that complainant No.1 is the mother of complainant No.2 who is a minor. The husband of complainant No.1 was murdered in Dubai and complainants had received money as part-compensation being legal heirs. Complainant No.1 for the welfare of herself and her minor son wanted to invest the aforesaid money. Opposite party No.1 came into contact of complainant No.1 and stated that they had one of the best scheme for investment and if the complainants would invest more than `10 lacs, the money would be doubled within 6.3 years. Accordingly, the complainant no.1 invested the money in her name and her minor son
i.e complainant No.2 and paid `20,00,000/- to opposite party No.1 through opposite party No.2 at Branch Office at Patiala. Thereafter, a a lumpsum payment receipt of `10,00,000/- was issued to complainant No.1 bearing Sr. No.0108F0000028 dated 09.06.2011, with date of completion mentioned as 08.09.2017. Second receipt bearing No.0108F0000029 was issued on 09.06.2011 in the name of the complainant No.2 with date of completion was 08.09.2017. Opposite party No.1 had also secured the amount of complainant No.1 by allotting 10,000 sq. yards in both the aforesaid receipts. On maturity, complainant No.1 visited the branch office of opposite parties No.1 & 2 and deposited both the original receipts with the Consumer Complaint No 101 of 2018 employee of opposite party No.2, who further issued a receipt No.30501 on 08.09.2017 to complainant No.1 on receiving the original documents from her. Complainant No.1 made repeated requests for maturity amount but opposite parties did not give any heed to the requests. Thereafter, a legal notice on 10.01.2018 was served upon the opposite parties but no reply was given. This act and conduct of the opposite parties is deficient in service and unfair trade practice. Hence, the complaint. Defence of the parties
3. Upon notice, the opposite parties appeared and filed their written statements separately.
4. Opposite parties No.1, 3, 5, 7 & 8 filed their joint written statement and took preliminary objections that the company is engaged in the business of real estate i.e. sale and purchase of land, building under various schemes like develop lands, residential flats, roads, buildings, colonizers and erection work since September, 2005. The complainant No.1 herself agreed to invest the amount for herself and for her child. Further, it was agreed that the land will be allotted to both the complainants of 10,000 sq. yards to each complainant and receipt of `10 lacs was issued in both the names. There is nowhere mentioned that the complainants would get the double of the invested amount within 6.3 years. Opposite party No.1 always complied with the terms and conditions agreed between the parties and accordingly already issued an allotment letter in the name of both the complainants within the prescribed period i.e. on 20.02.2018. The complaint has been filed by the complainants with Consumer Complaint No 101 of 2018 mala fide intention just to grab the money from opposite party No.1. As per clause 20 of the application form, the allotment of the land to the customers shall be at the sole discretion of the company. This Commission has no jurisdiction to entertain the present complaint. As per the clause 36 of the application form clearly reveals that in case of any dispute between the parties the matter will be referred to the Arbitrator and further as per Clause 37 of the application form the jurisdiction will be at Delhi. On merits, other similar please as raised in preliminary objections, were reiterated and denying other allegations of the complainants, it was prayed that the complaint be dismissed, with costs.
5. Opposite parties No. 2 & 4 filed its separate written statement taking preliminary objections that the complainants have no locus standi against opposite parties No.2 & 4. Opposite parties No. 2 & 4 is neither have any contract or relationship with the complainants as is apparent from the complaint that the alleged investment was made on 09.06.2011 by the complainants only with the opposite party - company which is a separate legal entity and came into existence / incorporated on 30.04.2012 and the contact in question came into existence on 09.06.2011. The complainants have not placed any document on record which proves any relationship of consumer with answering opposite parties. Opposite parties No.2 & 4 do not have any product/ services to offer to any retail individual. Opposite parties No.2 & 4 company is a service provider company which provide back office operational support services for its clients companies and acts only as a third part facilitator centre and has no liability or Consumer Complaint No 101 of 2018 relationship with the complainants. The complaint filed by the complainants is frivolous, farfetched and not maintainable and without any merits. The complainants do not fall within the definition of consumers as per Consumer Protection Act, 1986. The complaint is erroneously filed against opposite parties No.2 & 4 and shows malaise intention of the complainants. The answering opposite parties had also cleared the position by way of reply dated 05.02.2018 of legal notice. On merits, the averments as mentioned in the preliminary objections have been reiterated. There is no deficiency in service or unfair trade practice on the part of opposite parties No.2 & 4 and prayed that the complaint be dismissed with costs.
6. Opposite party No.6 in its reply took preliminary objections that the complaint is not maintainable qua opposite party No.6 and has been wrongly impleaded in the present complaint. Opposite party No.6 never dealt with the complainants in any manner at any point of time, neither he is known to the complainants. On merits, all the averments of the complaint made by the complainants have been denied. Finally prayed to dismiss the complaint with costs. Evidence of the Parties
7. To prove their claim, complainant No.1 filed her affidavit as Ex.CA along with documents as Ex.C-1 to Ex.C-9.
8. Opposite parties No.1, 3, 5, 7 and 8 tendered in evidence the affidavit of Sh.Ravinder Singh Sidhu, Director of opposite party No.1 as Ex.OP5/A along with documents as Ex.OP-5/1 to Ex.OP5/4. Consumer Complaint No 101 of 2018
9. Opposite parties No.2 & 4 tendered in evidence the affidavit of Simaratjit Singh Rahi, Authorized Representative as Ex.OP2&4/A along with document Ex.OP2&4/1 to Ex.OP2&4/3.
10. Opposite party No.6 tendered in evidence the affidavit of Kanwaljeet Singh as Ex.OP6/A along with documents as Ex.OP6/1.
11. I have heard learned counsel for the parties and have gone through the record carefully. Contentions of the Parties
12. Learned counsel for the complainants vehemently contended that complainant No.1 for the welfare of herself and her minor son invested the money with the opposite parties on the assurance that the amount would be doubled in 6.3 years. The complainants invested total amount of `20,00,000/- i.e. `10,00,000/- in her name and `10,00,000/- in the name of her minor son to which lumpsum receipts were issued to her. On maturity, complainant No.1 demanded the due amount but they put off the matter on one pretext of the other. As per orders of SEBI, Ex.C-9, the opposite parties have already been directed to wind up the plans (schemes) floated by them which are in the nature of CIS and refund the money collected under the said schemes with return which are due to the investors as per terms of the offer. Also vide a separate order their appeal for seeking registration of the scheme floated by the opposite parties under SEBI (CIS) Registration 1999 has been rejected. As such, the opposite parties have not been approved by any authority to collect money from investors. Despite many requests and reminders no amount has Consumer Complaint No 101 of 2018 been given which amounts to deficiency in service and unfair trade practice on the part of the opposite parties.
13. Per contra, learned counsel for opposite parties No. 1, 3, 5, 7 & 8 contended that this Commission has no jurisdiction to entertain the present complaint. Clause 36 of the application form clearly reveals that in case of any dispute between the parties the matter will be referred to the arbitrator and further as per Clause 37 of the application form the jurisdiction will be Courts at Delhi. The complainant no.1 herself agreed to invest the amount for herself and her child. The opposite parties allotted land of 10,000 sq. yards to each complainant and receipts of `10 lacs each were issued in both the names. The opposite parties never promised to complainants for making the amount double. Opposite party No.1 always complied with the terms and conditions agreed between the parties and accordingly already issued an allotment letter in the names of both the complainants within the prescribed period i.e. on 20.02.2018. Finally prayed to dismiss the complaint.
14. Learned counsel for opposite party No.6 argued that opposite party No.6 is not a Director of opposite party No.1, therefore, the complaint is not maintainable qua opposite party No.6 and has wrongly impleaded in the present complaint and prayed to dismiss the complaint with costs. Consideration of the Contentions
15. I have given my thoughtful consideration to the respective contentions raised by learned counsel for the parties. Consumer Complaint No 101 of 2018
16. Opposite parties No. 1, 3, 5, 7 & 8 in their written statement raised an objection that clause 36 of the application form clearly reveals that in case of any dispute between the parties the matter will be referred to an arbitrator. The application form placed at Ex.OP-5/3 is a blank form and cannot be considered as document executed between the parties.
17. However, in this regard, it is relevant to mention that the Larger Bench of the Honble National Commission, vide order dated 13.07.2017, passed in Consumer Complaint No.701 of 2015 titled as Aftab Singh Versus EMAAR MGF Land Limited & Anr. held that an Arbitration Clause in the afore-stated kind of Agreements between the complainant and the builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section
8 of the Arbitration Act. The Civil Appeal No.(s) 23512-23513 of 2017 (M/s EMAAR MGF Land Limited & Anr. Vs. Aftab Singh) filed against the said order of the Honble National Commission has also recently been dismissed by the Apex Court, vide order dated 13.02.2018. Consequently, the existence of an Arbitration Clause is not a bar to resolution of this dispute by this Commission. Accordingly, the said objection of the opposite parties is rejected.
18. Opposite parties No.1, 3, 5, 7 & 8 took another objection that as per Clause 37 of the application form this Commission has no jurisdiction to entertain the present complaint and the jurisdiction will be in Delhi only. According to Section 17 of the Act, a consumer complaint can be filed by the complainant before State Consumer Disputes Redressal Commission within the territorial jurisdiction, Consumer Complaint No 101 of 2018 whereof, a part of cause of action arise to him/her or the opposite party or each of the opposite parties, where there are more than one, at the time of institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain. In the instant case, the branch office where the complainant invested the amount is situated in Patiala i.e. within the jurisdiction of the State of Punjab and this Commission. Therefore, the submission of opposite parties No.1,3,5, 7 & 8 in this regard being devoid of merit, must fail and the same stands rejected.
19. Now on merits, admittedly as per evidence Ex.C-1 & 2 & Ex.OP-5/2 on record the complainants deposited `10,00,000/- each vide lump sum payment receipts/ Agreement No.0108F0000028 & 0108F0000029 respectively with opposite party No.4 which is Patiala Branch of opposite party No.1. However, the payment receipt was issued by Amritsar Branch of opposite party No.1 with the following details on each receipt: Agreement No.0108F0000028 & 0108F0000029 Date of Acceptance : 09.06.2011 Terms of agreement : 6.3 years Date of Completion : 08.09.2017 Received Amount : `10,00,000/- Minimum Realisable Value : `20,00,000/- No. of Units : 10,000 sq. yards.
20. There is no further explanation to the number of units as 10000 sq. yards for what it stands. The complainants on completion of the term of agreement i.e. on 08.09.2017 approached the branch Consumer Complaint No 101 of 2018 office of opposite party No.2 at Patiala and deposited original certificates of said agreements which were duly received by the office of opposite party No.2 as per receipt No.30501, Ex.C-3. The opposite parties instead of payment of minimum realisable value of `20,00,000/- for each agreement, sent two letters of allotment on 20.02.2018 vide Ex.OP-5/4, the relevant part of the same is reproduced as below: It is indeed our pleasure to inform you that the Unit booked by you via the aforementioned Application Form and provisionally allotted to you is now being finalized subject to the terms and conditions as stated in the Application and further mentioned in Annexure A as attached. Properties details of Allotment, Measuring 10000 sq. feets at Halka No.5 Khasra No.1326/1, 1326/6, 1326/7, 1326/8, VIL SARORA, BLOCK- TILDA, DISTT.-RAIPUR (CHHATISGARH)
21. No Application Form & Annexure A as specified in the above letter has been placed on record by the opposite parties instead the opposite parties have placed a blank Application/ Registration Form Ex.OP-5/3, which cannot be considered as a document executed between the parties.
22. Now the issue to be decide is whether the complainants are entitled for payment of `20,00,000/- as minimum realizable value for each agreement receipt after date of completion i.e. 08.09.2017 or entitled to allotment of 10000 sq.ft. property as per letter of allotment.
23. As per Ex.C-9, the complainant has placed an order of Securities Appellate Tribunal, Mumbai decided on 11.04.2018, wherein two appeals i.e. 126 of 2015 and No.314 of 2015 filed by the Consumer Complaint No 101 of 2018 opposite parties before the Tribunal have been dismissed. A brief of facts of appeals as explained in the order of the Tribunal are as below:- In a PIL, the Honble Madhya Pradesh High Court based on a CBI report passed an order on 13.07.2012 directing various authorities including SEBI to take appropriate action against companies mentioned therein accordance with the law including the opposite parties i.e. Kim Infrastructure & Developers Ltd.
24. During investigation by Securities and Exchange Board of India (in short SEBI), an order was passed by the Whole Time Member (in short WTM) of SEBI on 08.12.2014, wherein the opposite parties were directed to wind up the plans (schemes) floated by them which are in the nature of CIS and refund the money collected under the said schemes with returns which are due to the investors as per term of offer. The opposite parties filed Appeal No.126 of 2015 to challenge the order passed by WTM of SEBI before the Tribunal which was dismissed. Appeal No.314 of 2015 was filed to challenge the order passed by Chairman of SEBI on 17.04.2015 vide which application made by the opposite parties seeking registration of the scheme floated by the opposite parties under the SEBI (CIS) Registration 1999 was rejected. Again the appeal filed by the opposite parties was dismissed.
25. During arguments the counsel for opposite parties No.1, 3,5,7 & 8 admitted that the investments was taken under CIS scheme and was asked to place any approval/ Authority/ Registration with Govt. Agency to collect money from investors, but he replied that at the Consumer Complaint No 101 of 2018 moment there is no document available. Neither any document has been placed on record.
26. From the above discussion, it is clear that the opposite parties have no registration/approval to collect money under such schemes. Also SEBI on 08.12.2014 directed to the opposite parties to wind up the schemes/ plans floated by them and to refund the money collected under the said schemes with returns which are due to the investors as per term of offer. Therefore, as per terms of offer minimum realisable value was `20,00,000/- for each lump sum payment receipt /agreement due on 08.09.2017 is to be paid by the opposite parties to the complainants as per directions of SEBI and not 10000 sq.ft. property as per letter of allotment.
27. During arguments, learned counsel for opposite party No.6 was asked whether opposite party No.6 was Director of opposite party No.1 at the time of making investment, he did not denied the same. As per Certificate of Incorporation, Ex.OP2&4/1, issued by Registrar of Companies, National Capital Territory of Delhi and Haryana, M/s Kim Future Vision Services Ltd. came into existence on 30.04.2012. However, original documents were received by M/s Kim Future Vision and Services Limited at Patiala on 08.09.2017, Ex.C-3 from the complainants depicting a relationship with the complainants.
28. There is a deficiency and unfair trade practice on the part of the opposite parties, firstly by collecting investments from complainants without any approval of the scheme / plan from the concerned authorities and secondly not refunding the due amount as Consumer Complaint No 101 of 2018 per terms of offer. All the opposite parties are jointly and severally responsible for the same.
29. Sequel to the above, the complaint is allowed and following directions are given to opposite parties:
i) to pay `40,00,000/- as maturity amount (`20,00,000/- lacs against each receipt vide agreement No. 0108F0000028 & 0108F0000029 along with interest at the rate of 8% per annum with effect from 09.09.2017 till realization. ii) to pay `50,000/- on account of harassment and mental agony as well as as litigation expenses.
30. The compliance of this shall be made within 30 days of the receipt of the certified copy of the order. (RAJINDER KUMAR GOYAL) PRESIDING MEMBER December 17, 2018 parmod