D.o.F: 13/1/09 D.o.O:12/3/2010IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD CC.No. 5/2009 Dated this, the 12th day of March 2010. PRESENT: SRI.K.T.SIDHIQ : PRESIDENT SMT.P.RAMADEVI : MEMBER SMT.P.P.SYAMALADEVI : MEMBER H.Subrahmania Bhat, S/o Late H.Madhava Bhat, R/at Madhavam, Nittadukkam, : Complainant Near Durga Higher Secondary School, Kanhangad. - Chairman,Unit Trust of India
UTI Towers, Bandra Kurla Complex, Bandra(E) Mumbai-400051. 2. The Regional Manager, UTI,Southern Regional Office, UTI House-29 : Opposite parties Rajaji Salai, Chennai 600001. - The Branch Manager,
UTI, 28/700, West Pallithanam Bldgs. Karunakara Nambiar Road,Trichur –680020 ORDER SRI.K.T.SIDHIQ: PRESIDENT: Bereft of unnecessaries, the case of the complainant Sri.H.Subramania Bhat is that the opposite parties arbitrarily and unilaterally modified the scheme of Senior Citizens Unit Plan(SCUP) Tantamounting to its abrogation. Thereby he is deprived of the benefits envisaged in the plan and sustained loss, hardships and mental agony. Hence the complaint claiming Rs.1600,732 as compensation and cost of Rs.5000/-. 2. According to opposite parties, the Senior Citizens Unit Plan was formulated based on certain assumptions about the rate of return of premium to be paid for buying the insurance cover etc was not fully consistent with SEBI(MF) Regulations. Hence the matter was taken up with Govt. of India and govt. approved termination of SCUP. Further SCUP was formulated based on long standing expenses and the interest rate on the debt funds prevailing at that time and it was concluded that the benefits to be given under the SCUP to investors was a possibility. However due to radical transformation in the economic sceneries and the globalization of the economy the assumptions made for the earnings of the SCUP got affected impacting the earning potential and viability of the SCUP. The decline in interest rates in the financial sector also added its contribution. Due to these reasons SCU Plan has been terminated giving certain options who is below 58 years as on the date of termination of SCUP ie 18/2/08. The complainant being the holder of 1400 units of SCU Plan was entitled for a Net Asset Value of Rs.54926.20 on redemption of the units. Alternatively those were terminated from the benefits of SCUP were option provided with an option to alternate insurance product of NIAC at a premium which is 30% less than those generally offered by NIAC with certain relaxations regarding exclusion of diseases with no health check up. But he did not opt it. According to opposite parties, the SCUP has been terminated in the interest of unit holders. The opposite party being a statutory body came into force as per the provisions of Unit Trust of India Act 1963 and Sec.21 of the Act empowers the Board of Trustees of UTI to frame a scheme. The clause XXX of the said scheme provides for termination of the scheme at the discretion of Trust, clause XXX1 says that the scheme and the amendments there to are binding on each member. The SCUP scheme was terminated since it was inevitable. The complainant has not submitted his option for exercising his option to receive the repurchase value of his units of SCUP scheme inspite of public notice on 8/1/2008. Therefore there is no deficiency in service on the part of opposite parties. 3. Complainant filed proof affidavit in support of his claim and Exts.A1 to A9 marked. The Branch Manager of Oriental Insurance Co.Ltd Kasaragod was examined as PW2. On the side of opposite parties Exts.B1 to B4 marked. Both sides heard, documents perused. 4. The points to decided in this case are: - Whether the termination of SCUP scheme amounts to deficiency in service?
- Whether the complainant is entitled to the reliefs prayed for?
- Reliefs & costs.
5. Point No.1; The learned counsel for complainant Sri.K.G.Anil vehementally argued that the unilateral and arbitrary termination of the SCU Plan scheme amounts to deficiency in service and the opposite parties are not entitled for statutory protection for their deficiency in service. He also submitted that if the termination of such a scheme was by an institution in the private sector, then the position would have been changed and they would have been charged with deficiency of service. 6. On the other hand Sri.Unnikrishnan , the learned counsel for opposite parties relying on Exts. B1 to B4 has submitted that the issue involved in the matter has already been settled by a number of decisions by the consumer Fora and Consumer Commissions of other states. The counsel invited our attention to the decision of the Hon’ble Karnataka State Consumer Disputes Redressal Commission in the case of Unit Trust of India vs. Amitabh Goel in Appeal No.1572/2008 and 1671/2008 in which the Karnataka State Commission has held that the Board of Trustees due to any financial crisis and in the interest of the investors terminated the scheme then it cannot be said that there is any deficiency in service since it is done in exercise its power under clause XXX of the scheme framed and floated by virtue of the power conferred u/s 21 of the UTI Act. 7. As against this contention Sri.K.G.Anil pointed out to Sec.23 of the Unit Trust of India(Transfer of undertaking and repeal )Act 2002 as per which the applications of other laws are not barred. According to him, the statutory protection given under section 21 , the UTI Act is no more available since it is repealed. Therefore in view of Sec.3 of the Consumer Protection Act, the matter requires a re-consideration. 8. We see some substance force in this submission. The opposite parties reiterated in version that the SCUP scheme was terminated since the continuation of the scheme would lead to an erosion of its corpus. So if a member who has no fear about his capital erosion should have been given an option either to continue in the scheme or to redeem his SCUP units at the prevailing N.A.V. instead of fixing an age bar arbitrarily. But as argued by the counsel for the complainant the termination was unilateral and arbitrary. Further opposite parties have no case that the complainant at any time said that he did not want to continue with the scheme. Especially when opposite party has a case that 85% of the investors were yet to be eligible for health benefits under the SCUP even after the scheme is terminated. Sri.K.G.Anil further submitted that the complainant is not against the termination of SCUP scheme and fighting against the termination would be a futile attempt and therefore the complaint is for compensation. Therefore, we hold that the termination of SCUP unilaterally without giving any option to the members including the complainant either to continue or discontinue in the SCUP scheme amounts to deficiency in service. 9. Reliefs and Costs.: The case of the complainant is that the unilateral and arbitrary termination of SCUP scheme caused him much loss hardships and mental agony. The opposite parties are therefore liable to compensate the complainant. But the claim of the complainant for Rs.1600732/- is rather imaginative and exemplary and based on some assumptions. The said amount is not allowable . He is only entitled for reasonable compensation. In addition to that he is also liable to receive the redeemable value of the units hold ie Rs.54926/-. In the result, the complaint is partly allowed and opposite parties are directed to pay Rs.54926/- to the complainant with interest @9% per annum from the date of complaint along with a compensation Rs.25,000/- and cost of Rs.3000/- Time for compliance is 30 days from the date of receipt of copy of this order. Sd/ Sd/ Sd/ MEMBER MEMBER PRESIDENT Exts: A1-Membership certificate A2-Identity card and log book A3-Termination of UTI SCUP Scheme A424/4/08- letter issued byOP to PW1 A5-do- A6-26/12/08-letter issued byOP1 to PW1 A7-Mediclaim insurance policy A8-Statement of Account A9-Account statement B1- Photocopy of Gazette B2-copy of Memorandum of understanding B3-23/7/07-copy of letter B4-26-12-07 copy of letter PW1-H.Subramanya Bhat- Complainant PW2- T.P.Lakshmanan-witness of complainant Sd/ Sd/ Sd/ MEMBER MEMBER PRESIDENT eva/ /Forwarded by Order/ SENIOR SUPERINTENDENT
......................K.T.Sidhiq
......................P.P.Shymaladevi
......................P.Ramadevi | | 
