Date of Filing: 11-09-2018
Date of Order:29-11-2019
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM – I, HYDERABAD
P r e s e n t
HON’BLE Sri P.VIJENDER, B.Sc. L.L.B., PRESIDENT
HON’BLE Sri K.RAM MOHAN, B.Sc. M.A L.L.B., MALE MEMBER
HON’BLE Smt. CH. LAKSHMI PRASANNA, B.Sc. LLM., LADY MEMBER
Friday, the 29th day of November, 2019
C.C.No.334 /2018
Between
Donupati Kishan Reddy,
S/o.Late Mohan Reddy,
Aged: 55 years, Occ: Business,
R/o.H.No.2-10-765,
Jyothinagar Locality of
Karimnagar City – 505002 ……Complainant
And
- Small Industries Development Bank of India (SIDBI)
Through its Manager, Hyderabad Branch,
#101, Hermitage office Complex, Saifabad,
Hill Fort Road, Adjacent to Haca bhavan,
Hyderabad – 500004
- Small Industries Development Bank of India (SIDBI)
Through its Asst.General Manager,
MSME Development Centre,
C-11, G-Block, Bandra-Kurla Complex,
Bandra (E), Mumbai – 400 051 ….Opposite Parties
Counsel for the complainant : M/s. Gopi Rajesh & Associates
Counsel for the opposite Parties : Mr. R.Venkateswar Rao
O R D E R
(By HON’BLE Smt. CH. LAKSHMI PRASANNA, B.Sc. LLM., LADY MEMBER)
The complaint was preferred under Sec.12read with Sec.2(i)(r) unfair trade practice of The Consumer Protection Act, 1986 alleging deficiency of service and unfair trade practice on the part of the Opposite Parties for redeeming the two SIDBI Deep Discount Bonds of Rs.2500 each of the complainant at the end of the ninth year without informing him. Hence, the complainant is seeking appropriate direction to the Opposite Party
a) To Pay a sum of Rs.1,00,000/- on each SIDBI Deep Discount Bonds bearing Certificate Nos.00226093 & 00226094 together Rs.2,00,000/- along with interest @18% p.a. from 1/2/2018 till the date of realization.
b) Pay the sum of Rs.1,00,000/- to the complainant towards compensation and mental agony and
c) To pay Rs.10,000/- towards cost of the proceedings.
The brief facts of the case are:-
1. The Complainant purchased two SIDBI Deep Discount Bonds of Rs.2500 each Certificate Nos.00226093 & 00226094 in the year 1993 from the Opposite Parties. As per the terms and conditions of the offer document dt.5/11/1992, both the Bond Holder and the Opposite Party shall have the option to encash/redeem the Bonds at the end of 5th/9th/12th/15th/20th year from 1/2/1993 for the deemed face value mentioned therein.
2. When the complainant applied for encashment/redemption of Bonds through his letter dt.19/1/2018 to the Opposite Parties, he came to know that the Opposite Party has exercised the call option on 1/2/2002 and redeemed the Bond without informing him. The complainant alleges that the Opposite Parties have unilaterally redeemed his Bonds and never informed him about the cancellation of the scheme. Aggrieved by the same, the Complainant got issued a legal notice dt.27/9/2017 to the Opposite Parties demanding the amount Rs.1,00,000/- payable as on 1/2/2018 under the said bonds, and in pursuance of the same, filed the present complaint.
3. As per the Written submissions of the Opposite Parties, the terms and conditions of the SIDBI Bonds Offer Document dt. 5/11/1992 clearly mentioned that both the Bond Holder and the Opposite Party shall have the option to encash/redeem the Bonds at the end of 5th/9th/12th/15th/20th year from 1/2/1993 for the deemed face value mentioned therein. Hence, the Call Option exercised by the Opposite Parties on 1/2/2002 redeeming the Bonds at the end of the ninth year was in accordance with the terms and conditions of the Deep Discount Bond Series and informed the Complainant along with several Bond Holders, six months prior to the date of redemption through letters dt.24/7/2001 addressed to their registered address available with SIDBI. In addition to the correspondence regarding the decision to exercise the call option and closure of the Bonds was given to all the Bond Holders through letters dt.30/9/2016, 9/5/2005, 3/7/2006, 5/3/2009, the Opposite Party got issued Redemption Reminders ( Call Option Notice) in leading News Papers i.e Deccan Chronicle/Hyderabad and Times of India on 1/7/2001. As the complainant has not responded even after the public notice, the Opposite Parties exercised the call option and redeemed the two Deep Discount Bonds of the Complainant worth Rs.9,600/- at the end of 9th year and after Tax Deduction Rs.8,876/- only is the redemption amount payable to the Complainant and hence no interest is payable on the said redemption amount. Contending that the present complaint is misconstrued, false and frivolous and liable to be dismissed as there is neither deficiency of service or unfair trade practice on their part, the Opposite Party holds the Complainant liable for causing wrongful loss to the reputed and esteemed organization and hence deserves to be dismissed with costs.
4. Based on the facts and material brought on record, and written submissions of both the parties, the following points have emerged or consideration:
i) Whether the complainant could make out the case of deficiency of service and unfair trade practice on the part of the Opposite parties?
ii) Whether the complainant is entitled for the claim/compensation made in the complaint and to what relief?
5. Point No.1: It is pertinent to mention that the terms and conditions of the SIDBI Bonds Offer Document dt. 5/11/1992 clearly mentioned that both the Bond Holder and the Opposite Party shall have the option to encash/redeem the Bonds at the end of 5th/9th/12th/15th/20th year from 1/2/1993 for the deemed face value mentioned therein. As the Opposite Party exercised its option to redeem on 1/2/2002, after giving adequate notice to the complainant through letters and public notice of redemption through Newspapers. And accordingly the redemption amount to the Complainant at the end of the 9th year i.e as on 1/2/2002 as per the Bond is Rs.9,600/- and after tax deduction the net-amount of Rs.8,876/- only is payable on the two redeemed Deep Discount Bonds of the Complainant. Hence, the complainant’s allegation that the Opposite party unilaterally redeemed the SIDBI Bonds is baseless and held against him.
It is not out of context to note that being a bond-holder, does not fall under the category of 'consumer'. In this regard, following decisions is worth mentioning:
The Hon'ble Supreme Court in R.D. Goyal&Anr Vs. Reliance Industries Ltd., (2003) 1 SCC 81 observed as under:
"Debentures, as ordinarily understood, in our considered view, would not come within the purview of definition of goods as it is simply an instrument of acknowledgement of debt by the company whereby it undertakes to pay the amount covered by it and till then it undertakes further to pay interest thereon to the debenture-holders. we find that Redeemable Non-convertible Debentures do not come under the purview of Consumer Protection Act as goods so defined therein.”
6. Point No.2 In view of the above findings of this Forum, the complainant is not entitled for any of the claims and hence the complaint is dismissed with no costs.
7. Point No.3: In the result, the complaint is dismissed with no costs.
Dictated to steno, transcribed and typed by her, pronounced by us on this the 29th day of November , 2019
LADYMEMBER MALEMEMBER PRESIDENT
APPENDIX OF EVIDENCE
Exs. filed on behalf of the Complainant:
Ex.A1- Deep Discount bond
Ex.A2- Deep Discount bond
Ex.A3-acknowledgment of original bonds
Ex.A4-legal notice dt.27-02-2018
Ex.A5- reply legal notice dt.27-03-2018
Exs. filed on behalf of the Opposite party
Ex.B1- closure of SIDBI Reminder dt.9-05-2005
Ex.B2- exercise of call option SIDBI Deep discount dt.24-7-2001
Ex.B3-Closure of SIDBI (3rd Reminder) of Deep Discount bonds
Ex.B4-Closure of SIDBI Deep Discount Bonds, Reminder for redemption amount
Ex.B5- offer documents of Deep discount bonds series –I of SIDBI
Ex.B6- call option notice dt.1-7-2001
Ex.B7- call option notice dt.1-7-2001
Ex.B8- call option notice dt.2-7-2001
Ex
LADYMEMBER MALEMEMBER PRESIDENT
