FIRST APPEAL NO. 6 OF 2005
Ka Bank Nongkyndong Ri Khasi Jaintia,
Police Bazar,
Shillong.
………Appellant / Complainant
Vs
1. Bank of Baroda,
H.O. Mandvi
Baroda 390005
2. The Assistant General Manager,
Karvy Consultant Ltd
‘Karvy House’, Banjara Hills,
Hyderabad 540034
3. Central Bank of India,
Execution and Trustee Department,
Jahangir Wadia Building,
51, MG Road Fort,
Bombay 400023
4. Bank of Baroda,
Shillong Branch,
Pulinbehari Road, Police Bazar
Shillong.
.…….. Respondents / Opposite parties
Date of hearing 07.12.2013
Date of judgment 14.12.2013
Whether to be reported Yes
JUDGMENT & ORDER (CAV)
Per Mr. Justice P. K. Musahary (Retd), President
1. This is the complainant’s appeal challenging the judgment and order dated 03.05.2005 passed in Consumer Case No. 2 of 2004 by the learned District Consumer Disputes Redressal Forum, East Khasi Hills Shillong (District Forum in short), whereby his complaint was dismissed holding that there was no deficiency in service in any way by the opposite parties.
2. The facts, in short, relevant for the purpose of disposal of this appeal are that the appellant as a rural bank sponsored by the State Bank of India, invested a sum of Rs. 2.50 crores in the Bank of Baroda (respondent no. 1) on 09.02.1996 and 19.02.1996 through its Shillong branch (respondent no. 4) and w.e.f 18.03.1996 became a holder of 5000 number of Bank of Baroda Unsecured Redeemable Bonds (Fixed and Floating Rate) of Rs. 5000/- each. These were for a term of 7(seven) years, repayable on 18.03.2003. As per the terms & conditions of the Bonds, in the event the bank exercised its right to call up all the Bonds earlier but not before 18.03.2001 the Bond holders would be given at least three months advance notice through a public notice published in least in one all India English daily newspaper and a regional language daily newspaper at each of the local zonal office centers of the bank. The Bank of Baroda called up the Bonds on 18.03.2001 but it is alleged that the respondents/opposite parties failed to give prior notice to the appellant/complainant and also failed to publish the notice of exercising the call options of their Bonds as required under the terms & conditions of the Bond and as a result the appellant/complainant could not send their Bonds before the date fixed for, and was, thereby, deprived of the interest amount for the period from 18.03.2001 i.e., the date of exercising call option till the date the amount was actually credited to its account on 12.07.2001. As the said claim was denied the appellant filed the above complaint before the learned District Forum claiming Rs. 14,02,191.78 only including interest, compensation etc which was dismissed on contest vide judgment and order which is under challenge.
3. We have heard Mrs. P.D.B. Baruah, learned counsel for the appellant and Mr. S.C. Shyam, learned senior counsel for the respondents. We have also carefully gone through and considered the pleadings of the parties.
4. The basic facts that the appellant/complainant invested money and that it was holding Bonds are not in dispute. The only dispute as could be gathered from the pleadings of the parties is that the respondents/opposite parties failed to publish the notice of exercising call option in one of the regional newspapers as required under the terms and conditions of the Bonds and did not give any prior intimation to the Appellant and due to such failure the appellant could not send their Bonds before the due date which resulted into deprivation of the legitimately entitled interest amounts accrued from the Bonds from 18.03.2001 to 12.07.2001.
5. There is no dispute that the notice of exercising call options was published in some National Newspapers. However, as regards publication of notice in regional newspaper, the respondents/opposite parties have stated that the said notice was published in ‘Sambad Bhubaneswar’, a widely circulated regional newspaper published from Bhubaneswar and, therefore, the requirement of publishing the notice in a regional newspaper has been fulfilled. The appellant/complainant refused to accept this position saying that ‘Sambad Bhubaneswar’ newspaper published from Bhubaneswar, capital of Odisha, is not a regional newspaper in so far as the parties to the litigation/dispute are concerned. As against this contention the respondent Bank of Baroda in its written arguments submitted that the public notice was issued in accordance with the terms and conditions which were accepted by the appellant, through the “Indian Express, The Financial Express, Sambad Bhubaneswar and The Ananda Bazar Patrika published from Kolkata, the zonal office of the bank”. In the written argument it is also submitted that besides publication of notices in the newspaper, “notices were sent to all the Bond holders by registered post vide letter dated 21.05.2001 with the categorical intimation that no interest shall be payable beyond the cut-off date of 17.03.2001, on account of the failure on your (Bond holder’s) part to claim redemption of Bonds and interest from the bank during the stipulated period”. The respondents asserted that the appellant, inspite of being so informed, failed to claim and submit their redemption petition within the prescribed period and as such, the respondents are not liable to pay interest beyond the cut off date i.e. 17.03.2001.
6. In the impugned judgment and order the learned District Forum has made no discussion on this point except a short observation “it is evidently clear that public notice in a National Daily (Indian Express and Financial Express, Ananda Bazar Patrika) and Sambad Bhubaneswar (Regional Daily) have been issued at least three months before the exercise of call option. The newspaper also originates from the same headquarter as the zonal office, therefore, there is no dispute that steps have been taken by the opposite parties in this respect…..” This observation has no bearing with the real situation on the face of places of office shown against each opposite party. A close look at the array of parties to the complaint would clarify the position. The respondent opposite party no. 1, Bank of Baroda has its head office at Mandvi, Baroda and central office at Mumbai. It has also a branch at Police Bazaar, Shillong which has been impleaded as opposite party no. 4. Nowhere in the written statement have the Opposite parties stated that the Bank of Baroda has a regional office at Bhubaneswar from where the newspaper Sambad Bhubaneswar is published. None of the opposite parties is located in Bhubaneswar. The appellant/complainant bank is located in Shillong. In this regard, in his oral argument Mr. S C Shyam learned counsel seriously contended that the respondent bank has a zonal office at Kolkata covering the entire north eastern states, West Bengal and Odisha, and since the ‘Sambad Bhubaneswar’ is published from Bhubaneswar which published the redemption notice, has obviously fulfilled the requirement of publication of notice in one of the regional languages of the place where the zonal office was situated. As submitted by Mr. Shyam, the respondent bank, no doubt has a regional office at Guwahati, but, if the condition is to be construed strictly, it would not necessarily mean that the redemption notice, should be published in one of the regional languages like Assamese, Bengali, Khasi etc. In so far as Kolkata zone is concerned, ‘Sambad Bhubaneswar’ is a newspaper published in one of the zonal languages and as argued by the appellant, there is nothing wrong in publishing the notice in ‘Sambad Bhubaneswar’. We fail to understand how the ‘Sambad Bhubaneswar’ having no circulation in the North Eastern states could be treated as a regional newspaper in respect of parties or people who do not read the newspaper in Oriya language. We also fail to understand how the notice published in the local newspaper from Bhubaneswar would serve the purpose of publication of call option notice to inform the parties concerned, particularly the appellant bank located at Shillong. We are not prepared to accept the ‘Sambad Bhubaneswar’ as a regional language newspaper in Oriya language for the purpose of this case. The purpose of publishing the call option notice is to inform the public effectively through local print media. The opposite party no. 1 should have published the notice in a local or regional newspaper preferably in local language so as to fulfill the spirit of the requirement under the terms and conditions of the Bonds as prescribed by the Bank of Baroda (opposite party no. 1). There is, therefore, non-compliance of the terms and conditions of the Bonds by the opposite party no. 1 who issued the unsecured redemption Bonds in favour of the appellant/complainant.
7. Further the opposite party no. 2 in paragraph 20 & 21 of its show cause reply stated that it had forwarded the interest warrants to the complainant’s address on 15.06.2001 by speed post and the complainant received the said warrant on 18.06.2001. The warrant dated 19.03.2001 was valid up to 18.06.2001, yet the said warrant was dishonoured by the opposite party bank before expiry of the validity period. No reason has been given or furnished for dishonouring the interest warrant before expiry of the validity period. The opposite party no. 2, however, stated in paragraph 26 of the written statement as under-
26. “We replied by our letter dated 18.04.2002 that no interest would be paid by the bank as per the Call Notice from redemption date and onwards, since the notice has been given The Indian Express and The Financial Express and the regional language newspapers three months prior to the due date”.
8. We have in the foregoing discussion rejected the respondent’s claim that by publishing the notice in the ‘Sambad Bhubaneswar’ the respondent’s have complied with the requirement of publication of notice in regional language newspaper. For the same reason the above averments made in paragraph 26 of the written statement would hold no water to improve the respondent’s position in their favour.
9. Issue no. 2 is about the question of limitation. At the appellate stage it is too late to consider the issue of limitation and maintainability of the dispute in the consumer court. The learned District Forum has dealt with the said issues and decided them with well laid reasons which are acceptable to us. The decision on limitation and maintainability points calls for no interference. All issues framed by the learned District Forum stand decided in the affirmative in favour of the appellant/complainant. In the result, the impugned judgment and order dated 03.05.2005 is liable to be set aside. It is accordingly quashed and set aside. The respondent/opposite party no 1 & 2 are directed to pay to the Appellant interest @ 9% p.a. on the value of the Bonds from 18.03.2001 (i.e. the date of redemption of the Bonds) upto today, within a period of 2 (two) months from this date, failing which there will be a further interest of @12% p.a. on the aforesaid amount till payment is made in full.
10. Appeal is allowed with above directions. The LCR be returned along with a copy of this judgment and order.
Per - Mr. Ramesh Bawri, Senior Member
11. While in respectful agreement with the Hon’ble President, I would add here that the Respondents have clearly stated in para 16 of their show cause to the complaint petition before the learned District Forum that “The notices of call option have been forwarded by registered post on 06.02.2001 to all the Bondholders whose names appeared in our books as on the record dated 30.11.2000.” This has been denied by the Appellants in their Rejoinder vide para 15. Now, besides the fact that this by itself shows that the Respondents were aware of the practical necessity of informing each Bondholder about the premature redemption, strangely no evidence was led by the Respondents to prove that the notice of call option had in fact been sent by registered post on 06.02.2001 as claimed. This vital fact was totally overlooked by the learned District Forum and there is no discussion in this regard in the impugned order.
12. Secondly, the Respondents have failed to show under which Zonal Office of the Bank does Shillong indeed fall and further show that the State of Orissa falls under such Zonal Office, so as to convince us that Oriya is a regional language pertaining to that Zonal Office. As far as we can see, Orissa does not even fall within the Eastern Zonal Office of the Bank which covers North East India.
13. Next, even though the terms and conditions of the Bonds speak about prior publication in a National English Daily and a Regional Language Daily Newspaper, a pragmatic view has to be taken about the entire matter. The Bonds were for a term of 7 (seven) years, with the option of being called up at the end of 5(five) years. Every Bondholder could not be expected to read every National English daily and Regional language daily everyday of these remaining 2(two) years, that too not knowing which such newspapers the notice would be published in. There must be at least 30 leading English Dailies circulating in the Eastern Zone of the Respondent Bank if not more, that too with multiple editions each. Similarly, there would be at least 30 leading Regional language dailies published in the Zone. Altogether these would perhaps add up to 100 newspapers. It would be a herculean and nigh impossible task (we are even tempted to call it a ludicrous task) for a Bond Holder to first collect all these papers, not knowing in which one the Respondent Bank would decide to publish its notice of call up, and then to go through each page every day for two years as the notice could have been published any day starting from the end of the 5th year till the 7th, not to mention the fact that they would need to employ several translators to decipher the various regional languages. Therefore, in our considered opinion, the clause relating to the manner of giving notice regarding call up of the Bonds is inconsistent with the main purpose, object and substantive terms of the contract. It is arbitrary, onerous, oppressive, unfair, and opposed to the principles of equity. In this view of the matter,the only effective notice that the Appellants received was the one dated 21.05.2001 and it could not have known about the call up or sent in the Bond certificates prior to receipt of the said notice.
14. We recall here that, albeit while dealing with an exclusion clause in an Insurance Policy, the Hon’ble Supreme Court in Skandia Insurance Co. Ltd vs Kokilaben Chandravadan (AIR 1987 SC 1184) quoted with approval Glynn v. Margetson & Co. (1893) A.C. 351 at 357 where Lord Halsbury L.C. stated "It seems to me that in construing this document, which is a contract of carriage between the parties, one must be in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard..... as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract."
15. The said clause contained in the Bonds regarding notice through publication in newspapers must therefore be read down and notionally severed from the terms and rejected. In the result, we are of the view that it was necessary for the Respondent to serve an individual notice to the Appellant giving intimation about premature call up of the Bonds held by them and service of such notice has not been proved.
16. Yet further, when the Appellant failed to respond and redeem the Bonds on 18.3.2001, at least then the Respondent should have contacted the Appellant if it was fair in its dealings. They chose not to do so and reminded the Appellant only on 21.05.2001 after a long gap of over two months, thereby retaining the money for so long.
17. In any event, technicalities apart, it cannot be disputed that from 18.03.2001 upto 12.07.2001 the entire sum of Rs. 2.50 crores was lying with the Respondent and being utilized by them. Hence, in any view of the matter, payment of interest on the same at 9% p.a., even if not at the higher rate applicable to the Bonds, would only be fair and just and would result in no real loss to the Respondents. Otherwise, it would only mean unjust enrichment of the Respondents at the cost of the Appellants merely based on technicalities, which cannot be encouraged. The further interest that we have awarded from 12.07.2001 up till this day is obviously by way of compensation to the Appellants for the delay in getting their interest from 18.03.2001 to 12.07.2001 and for the harassment caused to them.
