T.S. SAWHNEY Vs. INDIAN BANK MUTUAL FUND

JUDGEMENT

(1.) THE petitioners before this Court invested in Ind Navratna Equity Growth Scheme of the respondent Indian Bank Mutual Fund by purchasing 80,000 units for Rs.8.00 lakh under its Equity Growth Scheme, 1994. The case of the petitioners is that the respondent had assured them double of the investment in five (5) years and three times the investment in ten (10) years. According to them when the Scheme matured on 30.6.1999 they sought disbursement of the assured redemption amount, but, instead of being paid double amount invested by them they were informed that payment would be made to them at the market rates prevailing at that time, which, in fact, was much below the amount assured to the petitioners.

(2.) BEING aggrieved on account of the failure of the respondent to pay the aforesaid amount, the petitioners filed a complaint before the State Commission claiming that they had clearly stated in the offer document that the Navratna Scheme was subject to market risk and they had not assured any pre specified rate of return to the petitioners. The complaint was, therefore, rejected by the State Commission. Being aggrieved, the petitioners filed an appeal before the National Consumer Disputes Redressal Commission (for short ,,the National Commission) being First Appeal Nos.240 244/2007. The said appeal were dismissed vide order dated 12.12.2012. The petitioner filed a review petition seeking review of the aforesaid order. The review petition was also dismissed by the National Commission vide order dated 19.1.2013. Being aggrieved the petitioners are before this Court seeking the following reliefs:

(3.) IT would, thus, be seen that not only the State Commission but also the National Commission decided against the petitioners on merits and return a finding that the respondent Mutual Fund had not assured any particular return to the petitioners. The investment in mutual funds by its very nature carries certain risks which are inherent in such investments. The amount collected by mutual funds is invested primarily in the share market and if the equity market goes up, the value of the investment increases, whereas in case the market goes down the investment made in the mutual fund schemes also goes down. The person who invests in mutual fund is made aware of such risks which are inherent in investments in the equity market whether such investment is made directly or through a mutual fund. If the market goes down he can blame only his luck, and not the mutual fund. In any case, the State Commission found that no assurance was given by the respondent Ind Bank Mutual Fund to pay double the invested amount after five (5) years from the date of investment when the scheme was to mature. In the absence of any such assurance, there was no contract between the parties for payment of double the invested amount to the petitioners. Consequently, the petitioners were entitled only to such amount as would be the net value of their investment at the time the mutual fund units matured. The view taken by the State Commission and reaffirmed by the National Commission is unquestionable and there is no scope for any interference by this Court in exercise of writ jurisdiction under Article 226 of the Constitution of India.