The apex consumer commission has upheld a three-year sentence awarded to partners of a non-banking financial firm which duped hundreds of depositors, saying there was deliberate non-compliance of the district forum's order to repay the money to the clients with interest.
The apex consumer commission has upheld a three-year sentence awarded to partners of a non-banking financial firm which duped hundreds of depositors, saying there was deliberate non-compliance of the district forum’s order to repay the money to the clients with interest. The National Consumer Disputes Redressal Forum, which gave the order on over 70 petitions filed by hundreds of depositors, dismissed the plea of Karnataka-based Chanakya Finance Corporation against the state commission and district forum’s orders sentencing its partners for failing to repay the depositors. According to the complaint filed, the complainants had deposited their money with the firm having eight partners. The firm, however, failed to pay the deposited amount with interest as promised, the complaint alleged.
The district forum, in its order, had directed the firm and its partners to pay to them their deposits with 12 per cent interest from the respective date of maturity of the deposits. Since the firm failed to comply with the directions, the depositors approached the forum and the partners of the firm were sentenced to undergo jail for a period of three years and pay a penalty of Rs 10,000 in each case for non-compliance. The firm approached the state commission from where they failed to get relief after which they moved the NCDRC. The NCDRC, while upholding the decision, said “that from the facts of the case, it is obvious that Judgment Debtors (the partners) started a non- banking finance corporation and they have duped hundreds of depositors.
“Not only this, they have failed to pay the awarded amounts to the depositors despite of directions of the district forum. From this it is clear that this is a clear case of deliberate non-compliance of the directions of the district forum,” an NCDRC bench headed by presiding member Ajit Bharihoke said. The commission also said that just because the movable and immovable properties of the accused firm and partners were attached, it cannot be said that the depositors could not initiate proceedings under the Consumer Protection Act.
A provision under the Act states that a person, who fails to comply with orders of district, state or national consumer commission, will be punished with a maximum sentence of three years and up to Rs 10,000 fine. “The fact remains that attachment order for the Judgment Debtors, was passed in the year 2014. Almost, three years have gone by but till date, the dues of the decree holders have not been paid and order under execution has not been complied with. “Therefore, the firm and its partners cannot be permitted to take shelter of attachment order passed about three years back,” the commission said.