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KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, THIRUVANANTHAPURAM
B. Sudheendra Kumar, President,
Ajith Kumar D., Judicial Member and
K.R. Radhakrishnan, Member
Mathew K. Cheriyan – Petitioner
versus
Liji Philip – Respondent
Revision Petition No.29 of 2025
(Against the Order dated 25th October 2023 in Appeal DC/559/CC/205/2022 of the District Consumer Disputes Redressal Commission Kollam)
Decided on 23.7.2025
Counsel for the Parties:
For the Petitioner: Sri. Mathew K. Cheriyan
For the Respondent:Jolly John, Advocate
IMPORTANT POINTS
(1) Transactions involving debentures involve element of service and security, which are protected under Consumer Law.
(2) When debentures are issued by a company and subscribed by any member of public, element of service is implied in the transaction.
Headnote:
Consumer Protection Act, 2019 – Section 2(7) – Non-Banking – Cumulative Investment Scheme – Partial payment of maturity amount – Convertible debentures are debentures that can be converted into equity of company – In case of non-convertible debentures, they cannot be converted into equity shares of company – Maturity amount has to be paid on attaining maturity period – Agreed interest is also to be paid – When debentures are issued by a company and subscribed by any member of public, element of service is implied in the transaction – In case interest or maturity amount is not paid to a subscriber of a debenture by company as promised, it amounts to deficiency as defined under S.2(11) of the Act – Non-payment of interest or maturity amount would amount to deficiency in service, making a debenture-holder a consumer as provided under Section 2(7) of Act – Transactions involving debentures involve element of service and security, which are protected under Consumer Law – District Commission was perfectly justified in holding that complainant would fall within ambit of consumer under Section 2(7) of Act – Complaint is perfectly maintainable before Consumer Commission – No reason to interfere with order passed by District Commission. (Paras 14, 15, 17, 18 and 19)
Result: Revision Petition dismissed.
ORDER
B. Sudheendra Kumar, President—The revision petitioner is the opposite party in C.C.No.205/2022 on the files of the District Consumer Disputes Redressal Commission, Kollam (for short, the ‘District Commission’).
2. The revision petitioner filed I.A.No.9A/2023 in C.C. No. 205/2022, challenging the maintainability of the complaint. The District Commission as per order dated 07.05.2025 dismissed I.A.No.9A/2023 holding that the complaint is maintainable.
3. The complainant invested an amount of Rs.5,00,000/- (Rupees Five Lakh only) on 21.12.2011 as redeemable non-convertible debenture issued by the opposite party, namely, M/s Kosamattom Finance Ltd., which is a Non-Banking Financial Company (NBFC), for a period of ten years under cumulative investment scheme. The maturity date of the said investment was 21.12.2021. The amount agreed to be paid on maturity was Rs.20 lakh. However, an amount of Rs.13,48,661/- (Rupees Thirteen Lakh Forty Eight Thousand Six Hundred and Sixty One only) alone was credited to the account of the complainant by the opposite party. The complainant demanded the balance amount of Rs.6,51,339/- (Rupees Six Lakh Fifty One Thousand Three Hundred and Thirty Nine Only). However, the opposite party did not respond to the said demand.
4. The notice was served on the opposite party. But, the opposite party did not incline to file any written version within the statutory period. Therefore, the opposite party was set ex-parte by the District Commission on 12.12.2022. The opposite party filed I.A.No.09/2023 on 16.01.2023 praying for setting aside the ex- parte order. I.A.No.09/2023 was dismissed by the District Commission. The opposite party also filed I.A.No.9A/2023 on 15.01.2023 praying for hearing the question of maintainability as a preliminary issue. I.A.No.9A/2023 was dismissed by the District Commission as per order dated 07.05.2025. In this revision petition, the opposite party challenges the order passed by the District Commission on I.A.No.9A/2023.
5. Heard both sides. Perused the records.
6. The revision petitioner has raised only two contentions in I.A.No.9A/2023. The first contention is that since the non-convertible debentures are not “goods”, the complainant cannot fall within the ambit of consumer as provided under Section 2(7) of the Consumer Protection Act, 2019 (‘the Act’ for short) and consequently, the present complaint is not maintainable. The second contention is with regard to the misjoinder of parties. The learned counsel for the revision petitioner has reiterated the said contentions in his argument.
7. It is not disputed that the opposite party did not file any version within the statutory period before the District Commission. Therefore, the only right the revision petitioner could exercise was to participate in the proceedings, cross-examine the complainant and the witnesses, if any, and advance argument before the District Commission on legal aspects as held by the Hon’ble Supreme Court in paragraph 18 in Kaushik Narsinhbhai Patel v. M/s. S.J.R. Prime Corporation Private Limited (2024 KHC 6386 : 2024 INSC 542 : AIR 2024 SC 3854). However, the District Commission considered and disposed of I.A. No.9A/2023 as a preliminary issue as directed by the High Court of Kerala in W.P.(C) No.7195/23.
8. The learned counsel for the revision petitioner has argued that since the non- convertible debentures are not “goods”, the complainant would not fall within the ambit of consumer as provided under Section 2(7) of the Act and consequently, the complaint filed by the complainant is not maintainable.
9. The Hon’ble Apex Court in R.D. Goyal and Another v. Reliance Industries Limited, reported in 2003 KHC 716 : 2003 (1) SCC 81 held that the debentures are not “goods” and it is simply an instrument of acknowledgement of debt by the company whereby the company undertakes to pay the amount covered by it and interest at fixed rate till the amount is repaid. From the above law laid down by the Hon’ble Apex Court, th
