Holding UTI accountable for non-delivery of cheques of maturity amount to its unit-holders, the Supreme Court has upheld the orders of various consumer forums for payment of around Rs 3.35 crore (Rs 33.5 million) to 1,600 customers, whose cheques were fraudulently intercepted.
Upholding the orders of the consumer forums, including the National Consumer Disputes Redressal Commission, that 'there was negligence on the part of the UTI,' a Bench comprising Justice S N Variava and Justice A R Lakshmanan dismissed the appeal against the orders.
Rejecting UTI's contention that there was no deficiency of service or negligence on its part, the court agreed with the District Consumer Forum rulings that UTI was bound to pay the amount to the unit-holders.
The forums had held that post offices were agents of the UTI and therefore the loss had to be borne by the mutual fund.
It was observed by the forums that UTI unit-holders were entitled to receive money, as the mutual fund had not paid the money to them.
The verdict came against the backdrop of complaints of unit holders alleging non-receipt of cheques towards payment of the maturity amount of the units purchased or towards the repurchased value.
FIRs were lodged and during the investigation, it was found that the cheques were intercepted and encashed by opening new accounts at banks/post offices in the name of unit holders. Only small amounts were left in these accounts.