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1281P

IN THE
LEARNED DISTRICT COURT
OF INDIANA
IN THE MATTER OF
MR. MEHTA AND OTHERS
PLAINTIFF
V.

FINANCE ADVISORS.COM AND OTHERS


DEFENDANT
CIVIL PETITION NO xxx/xxx/xxx
UNDER SECTION 6,9,15,19,20 OF CIVIL PROCEDURE CODE

MEMORIAL SUBMITTED ON THE BEHALF OF PLAINTIFF

TABLE OF CONTENT

TABLE OF CONTENT...........................................................................................................2
INDEX OF AUTHORITIES...................................................................................................4
STATEMENT OF JURISDICTION.......................................................................................5
STATEMENT OF FACTS.......................................................................................................6
ISSUES AT HAND...................................................................................................................7
SUMMARY OF ARGUMENTS.............................................................................................8
A.

THE ADVISER AND THE COMPANY ARE GUILTY OF FRAUD, DECEIT AND

CONSPIRACY...........................................................................................................................8
B.

THERE CAN BE A CLAIM OF VICARIOUS LIABILITY AGAINST THE DIRECTOR OF THE

COMPANY...............................................................................................................................8
C.

MR. MEHTA CAN BE DEEMED TO BE A CONSUMER FOR THE PURPOSES OF THE

AVAILING THE SAID SERVICES AND SEEK COMPENSATION UNDER THE CONSUMER
PROTECTION ACT, 1986..........................................................................................................8
D.

MR. MEHTA CANNOT BE SUED FOR THE TORT OF DEFAMATION?..............................8

ARGUMENT ADVANCED.....................................................................................................9
A.

THE ADVISER AND THE COMPANY ARE GUILTY OF FRAUD, DECEIT AND

CONSPIRACY...........................................................................................................................9

B.

1.

The Adviser And The Company Are Guilty Of Fraud And Deceit.............................9

2.

The Adviser And The Company Are Guilty Of Conspiracy......................................10


THERE CAN BE A CLAIM OF VICARIOUS LIABILITY AGAINST THE DIRECTOR OF THE

COMPANY.............................................................................................................................10

3
C.

MR. MEHTA CAN BE DEEMED TO BE A CONSUMER FOR THE PURPOSES OF THE

AVAILING THE SAID SERVICES AND SEEK COMPENSATION UNDER THE CONSUMER
PROTECTION ACT, 1986........................................................................................................11

D.

1.

Mr. Mehta Can Be Deemed As A Consumer............................................................11

2.

A Valid Complaint Has Been Filed By Mr. Mehta...................................................12

3.

He Can Seek Compensation.....................................................................................12


MR. MEHTA CANNOT BE SUED FOR THE TORT OF DEFAMATION?............................13

PRAYER.................................................................................................................................15

INDEX OF AUTHORITIES
CASES
(1889) 14 App Cas 337,374,376: 38 WR 33.----------------------------------------------------------9
M.pherson v. Daniels,(1829) 10 BC 263 (272)------------------------------------------------------13
Northey-Taylor v. Casey A.J. 2007 QB. 256 .--------------------------------------------------------11
Per Lord Brampton in Quinn v. Leathem, (1901) AC 495 (528).---------------------------------10
Raghunath Damodhar v. Janardhan Gopal, (1891) ILR 15 Bom 599---------------------------13
STATUTES
Section 14(1)(D) Of Consumer Protection Act Of 1986.------------------------------------------12
Section 499(1) of IPC-----------------------------------------------------------------------------------14
OTHER AUTHORITIES
Section 2(D)(I)Of Consumer Protection Act Of 1986.--------------------------------------------12
TREATISES
RATANLAL AND DHEERAJLAL, The Law Of Torts, 26th Edition, p. 374----------------------10
Vide LINDLEY, Vol. 1, p. 348.---------------------------------------------------------------------------11

STATEMENT OF JURISDICTION

The plaintiff in civil petition no xxx/xxx/xxx approaches the honorable Supreme court of
Atlantis under section 6,9,10,15,20 of Civil Procedure Code.

STATEMENT OF FACTS

I
Mr. Mehta, the plaintiff avails the service of the online business website The Finance
Advisor.com to buy shares of the Reliance Oil Company. Mr. Mehta approached the online
company for the advice and purpose of purchasing the shares. However Mr. Mehta suffered
losses and he demanded compensation from the online website company and he accused the
said advisor of being incompetent and taking kickbacks.
II
After some time, Mr. Mehta while in a restaurant saw one of the directory of the online
company and made defamatory statements following which he gathered together people who
had lost substantial amounts in share trading and held a press conference where he alleged
that the online website company was incompetent and should be shut down.

ISSUES AT HAND

1. WHETHER THE SAID ADVISOR AND THE COMPANY BE HELD GUILTY OF


THE TORT OF CONSPIRACY, FRAUD AND DECEIT?
2. WHETHER MR. MEHTA BE DEEMED A CONSUMER FOR THE PURPOSES OF
THE AVAILING THE SAID SERVICES AND SEEK COMPENSATION UNDER THE
CONSUMER PROTECTION ACT, 1986 ALSO?
3. WHETHER MR. MEHTA CAN BE SUED FOR THE TORT OF DEFAMATIO
4. WHETHER THERE CAN BE A CLAIM OF VICARIOUS LIABILITY AGAINST
THE DIRECTORS OF THE COMPANY?

SUMMARY OF ARGUMENTS

A. THE ADVISER AND THE COMPANY ARE GUILTY OF FRAUD, DECEIT AND
CONSPIRACY.
They are guilty of fraud and deceit because they conspired to befool prospective customer by
giving them false promise of guaranteed promise wherein they made this false claim even
though they were aware of the fact they are incompetent and guaranteed profits are imposible
to predict.
B. THERE CAN BE A CLAIM OF VICARIOUS LIABILITY AGAINST THE DIRECTOR OF
THE COMPANY.
The director of the company would be vicariously liable because they were the one who
issued the order to publish such misleading advertisement and they were also aware of the
incompetence of their employees. Hence they would be vicariously lieable for the act of its
employee
C. MR. MEHTA CAN BE DEEMED TO BE A CONSUMER FOR THE PURPOSES OF
THE AVAILING THE SAID SERVICES AND SEEK COMPENSATION UNDER THE
CONSUMER PROTECTION ACT, 1986
Under the Consumer protection act Mr. Mehta has a valid claim of unfair trade practice and
deficiency of service, he is also a valid customer under the act.
D. MR. MEHTA CANNOT BE SUED FOR THE TORT OF DEFAMATION?

Mr. Mehta cannot be sued for defamation because he made a true statement and also because
he had a bona fide believe behind the issuing of the statement.

ARGUMENT ADVANCED

A THE ADVISER AND THE COMPANY ARE GUILTY OF FRAUD, DECEIT AND
CONSPIRACY.
1.

THE ADVISER AND THE COMPANY ARE GUILTY OF FRAUD AND DECEIT.

In Derry v. Peek,1 Lord Herschell laid down that in order to sustain an action of deceit, there
must be a proof of fraud. Secondly, fraud is proved when it is shown a false representation
has been made knowingly, or without belief in its truth, or recklessly, whether it be true or
false and it was intended or calculated to induce the plaintiff or a third person to act upon it
and which the plaintiff or the third person acts on and suffers damages. In the present case,
the company in their advertisement promised guaranteed profits to its customer 2, it is a well
known fact that there is no way that a financial advising company can in any way guarantee
the result of the movement of the stock market as it is not under anyones control. The
maximum such a company can do is make presumptions on the issue and advise its customers
on it, but here the company is making claims that they can guarantee profits to the customers,
hence it can be very easily concluded that the company made a statement that they know
wasnt true and didnt have any honest believe that they can guarantee profits every time and
at the very least made such a statement recklessly. Such a statement in an advertisement was
made to induce people to pay them money, which happened in the present case wherein Me.
Mehta Mr. Mehta took assistance of The Finance Advisor.com after placing his reliance upon

1 (1889) 14 App Cas 337,374,376: 38 WR 33.


2 Proposition, Line 9.

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widespread advertisements by the company and because of which he suffered heavy
damages.3
Hence it can be clearly seen that all the requirement of Deceit and fraud are fulfilled and it is
very much evident from the principle laid down on fraud and deceit and and from the facts of
the case that the advisers of the company were guilty of Fraud and Deceit.
2.

THE ADVISER AND THE COMPANY ARE GUILTY OF CONSPIRACY.

A conspiracy is an unlawful combination of two or more person to do something which is


contrary to law, or to do that which is harmfull toward another person. 4 If there is a
combination of persons whose purpose is to harm another person, there is conspiracy. 5 In the
present case it has been already established that the advisor of the company were doing an
unlawful act by defrauding their customer and taking money from them under false pretext, it
can be seen from the facts of the case that the entire company of The Finance Advisor.com
was involved in process of duping customers to believe that they can provide guaranteed
profits to them, or they all at least worked under the company knowing the fact that they
cannot guarantee profits to its customer, even though they claim to do so. Hence it can be
seen that more than one person was involved in the act of fooling customer to believe that
they can provide guaranteed profits and taking their money unlawfully, hence the company is
also liable for conspiracy.

3 Proposition, Line 22.


4 Per Lord Brampton in Quinn v. Leathem, (1901) AC 495 (528).
5 RATANLAL AND DHEERAJLAL, The Law Of Torts, 26th Edition, p. 374

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E. THERE CAN BE A CLAIM OF VICARIOUS LIABILITY AGAINST THE DIRECTOR OF
THE COMPANY.
Liability of a wrongful act arises of an act done by another person if there exist a relation
entailing responsibility for wrong done by that person. A relation between a company and its
employee and between a director and its employee is one such relation. 6 Stock brokers are
agents who suggest people to buy shares on their business acumen but if they go wrong
liability will arise. There is certain standard by which a broker has to work and such standards
have been imposed on a stockbroker by bodies such as the Association of Chartered Institute
of Stockbrokers, the Investment Dealers Association and the Canadian Security Institute etc.
Broker found in violation of these standards can be held liable. Brokerage firms for that
matter can also be held vicariously liable.7
In the present case, first of all, the advisor is liable because he did not maintain the standard
that is required to be before advising someone, second he is also liable for the act of
fraudulently making the customer believe that they can guarantee profits. Directors of a
company are liable for any tort which they themselves may commit or direct their employees
to commit, although it may be for the benefit of the company.8 Here the director of a
company is the one who approved such advertisement and he was the one who directed his
employees to tell customers that they can guarantee profits, hence he would be liable for the
acts of his employees.

6 Id, p. 146
7 Northey-Taylor v. Casey A.J. 2007 QB. 256 .
8 Vide LINDLEY, Vol. 1, p. 348.

4
F. MR. MEHTA CAN BE DEEMED TO BE A CONSUMER FOR THE PURPOSES OF
THE AVAILING THE SAID SERVICES AND SEEK COMPENSATION UNDER THE
CONSUMER PROTECTION ACT, 1986
1

MR. MEHTA CAN BE DEEMED AS A CONSUMER

Section 2(d) of the Consumer Protection Act says that consumer means any person
who hires or avails of any services for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment, and includes any
beneficiary of such services other than the person who hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or under any system of
deferred payment, when such services are availed of with the approval of the first mentioned
person.9 In the present case Mr. Mehta hire a service, which was the subscription of advise
to buy stock market shares from finance advisor.com for a consideration which would be the
on the payment of a fee that was debited from his accounts after he decided to invest in
Reliable Oil Co. upon their advice. Hence Mr. Mehta can be deemed to be a customer under
Consumer Protection Act 1986.
3.

A VALID COMPLAINT HAS BEEN FILED BY MR. MEHTA

A complaint under he consumer protection act must contain allegations that the services hired
or availed of or agreed to be hired or availed of by a consumer suffer from deficiency in any
respect or an allegation of an unfair trade practice. 10 In the present case, the service hired by
Mr. Mehta suffered from deficiency because proper standard as has been prescribed by the
Association of Chartered Institute of Stockbrokers, the Investment Dealers Association and
the Canadian Security Institute etc. were not followed before giving the advice to buy stocks
to Mr. Mehta, hence he can file a complain of deficiency of service. He can also file a
9 Section 2(D)(I)Of Consumer Protection Act Of 1986.
10 Section 2(1)(C) Of Consumer Protection Act Of 1986.

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complain on the basis of the fact that the company was following unfair trade practice by
fooling customers to believe that they can guarantee profits and under the pretext of which
Mr. Mehta subscribed to the companys services. Hence a complain can legally be filed by
Mr. Mehta.
4.

HE CAN SEEK COMPENSATION.

Under the Consumer Protection Act Of 1986, a consumer can seek compensation and
damages if he suffers loses because of an act of a company which was malicious or negligent
in nature.11 Hence Mr. Mehta can legally claim damages and compensation under the
Consumer Protection Act Of 1986.
G. MR. MEHTA CANNOT BE SUED FOR THE TORT OF DEFAMATION?
The Truth of defamatory word is a complete defense to an action of libel or slander though it
is not so in a criminal trial 12. Truth is an answer to the action, not because it negatives the
charge of malice but because it shows that the plaintiff is not entitled to recover the damages.
For the law will not permit a man to recover damages in respect of an injury to a character
which he either does not or ought not to possess.13
In the present case, Mr. Mehta in a press conference along with 50 other such aggrieved
parties stated that The Advisor is incompetent and should be shut down as they were
involved in kickbacks. And the company was involved in duping the customers and
misleading them by way of false advertisements. Such a statement can be construed as a
defamatory statement against the financeadvisor.com as it injures the reputation of the
company and affects its trade and business. However Mr. Mehta should not be held liable for
11 Section 14(1)(D) Of Consumer Protection Act Of 1986.
12 Raghunath Damodhar v. Janardhan Gopal, (1891) ILR 15 Bom 599
13 M.pherson v. Daniels,(1829) 10 BC 263 (272)

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the tort of defamation as he can validly avail the defense of truth. The fact that 50 people lost
substantial amount of money by acting upon the advice given by the advisors of finance
adivor.com shows the incompetence of the advisors which are employed by the finance
advisor.com as such high rate of failure is an unusual event in this field and Mr. Mehta was
also true about the fact that they give false advertisement to dupe in customers.
Mr. Mehta can also take the defense of fair comments because he honestly believes that the
advisors of the finance advisor.com were involved in kick back because that is the only
explanation for the advisors intentionally misleading so many people and hence made a bona
fide comment regarding the same in public interest as a warning for the public not get fooled
by the false claims and advertisements of the website. Such a comment will have the defense
of fair comment. In India truth even if defamatory in nature published in lights of public
interest is a valid defense even in criminal defamation cases 14. Hence Mr. Mehta cannot be
libel for defamation because he made a true statement with an honest believe.

14 Section 499(1) of IPC

PRAYER
Wherefore in the light of facts stated, issues raised, arguments advanced and authorities cited,
it is most humbly and respectfully prayed before the Honourable High Court, that it may be
pleased to:Hold defendant vicariously liable for deceit, award compensation
And pass any other order in favour of the Petitioner which this Court may so deem fit in the
ends of equity, justice and good conscience.
All of which is most humbly and respectfully submitted.
Place: Indiana
Date: April 1st, 2016

Counsel No. 1281