STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Gita Kumar, w/o Sh. Devinder Kumar, r/o H.No.1565, Sector 22-B, Chandigarh.

……Appellant

              V e r s u s

1. IDBI Bank Ltd., IDBI Tower, WTC Complex, Cuff Parade, Mumbai – 400005, through its Manager.

2. IDBI Bank Ltd., SCO - 54-55, Sector 8-C, Madhya Marg, Chandigarh.

              ....Respondents

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:    JUSTICE SHAM SUNDER, PRESIDENT.

                   MRS. NEENA SANDHU, MEMBER.

                   SH.JAGROOP SINGH MAHAL, MEMBER

Argued by:  Sh.Sourabh Bindra, Advocate for the appellant.

                    Sh.Jatin Kumar, Advocate for the respondent

PER  JUSTICE SHAM SUNDER, PRESIDENT

1.           This appeal is directed, against the order dated 19.10.2011, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), for enhancement of the amount awarded. Vide the aforesaid order, the District Forum accepted the complaint, and directed the Opposite Parties, as under:-

“(i)   To redeem the duly discharge original bonds of complainant taking the first option date i.e. 25.5.2000 with face value of Rs.10,000/- along with interest @3.5% p.a. quarterly compounding basis w.e.f. 25.5.2000 till the date of payment.

(ii)   To pay the complainant a sum Rs.7000/- as cost of litigation.

This order be complied with within 45 days from the date the Complainant returns the duly signed Deep Discount Bonds to the OPs, failing which the OPs shall jointly and severally pay the aforesaid decreed amount of bonds along with interest @9% per annum from the date of order till the date of realization besides the cost of litigation”.

2.             The facts, in brief, are that the complainant purchased IDBI Deep Discount Bonds 1996, from the Opposite Parties. According to this scheme, the Bonds were payable after a period of 25 years. Two IDBI Deep Discount Bonds Certificates of the face value of Rs.5,300/- each, bearing Folio No. FDDB 1254899 and FDDB 1123061, were issued, in the name of the complainant. A sum of Rs.2,00,000/-, in respect of both the bonds, aforesaid, was payable on June 1, 2016, being the date of maturity. The option of early redemption of the bonds, could be exercised on August 1, 2000, December 1, 2006, September 1, 2011 and June 1, 2016, by any of the parties. It was stated  that the complainant never exercised an early redemption call option. It was further stated that she (complainant),  was surprised to receive a letter dated 30.9.2010, vide which the Opposite Parties, informed her, that the aforesaid bonds had been redeemed on 01.08.2000, after issuing individual notices, to all the bond holders, for , exercising  call option of early redemption and advising them to surrender the duly discharged bond certificate(s), to the Investor Services of India Ltd.,(ISIL), who were the Registrars, for release of the redemption proceeds of Rs.10,000/- per bond. It was further stated that no earlier notices, were received by the complainant, from the Opposite Parties. It was further stated that the act and conduct of the Opposite Parties in redeeming the bonds, w.e.f. 01.08.2000,  without any prior notice to the complainant, for exercising her option, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. It was further stated that the complainant was entitled to a sum of Rs.50,000/-, per bond,  from 01.09.2011, the next date mentioned in the bonds, for redemption after the receipt of  intimation for the first time by her on 30.09.2010. It was further stated that a legal notice was served upon the Opposite Parties, as the amount claimed by the complainant, was not paid/refunded, taking the date of redemption as 01.09.2011, but to no avail. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed.

3.             The Opposite Parties, in their written version, pleaded that the complainant had not complied with the terms and conditions of the offer document. It was  stated that the complainant had not followed the advices, given by Investor Services India Ltd., for redemption of the Bonds w.e.f. 01.08.2000. It was further stated that the complainant, did not fall within the definition of a consumer, as per the Act. It was further stated that the IDBI, reserved the right to exercise call option, for early redemption of the Deep Discount Bonds, on a particular date, which fact was also mentioned on the face of the same (bonds). It was further stated that, in terms of the offer document, the IDBI,  had decided to exercise its right of call option on 25.5.2000,  and advised all the bond holders, by publishing the notices, in the leading newspapers in English and Regional languages across India. It was further stated that the individual notices, to all the bond holders, were also sent through UPC.  It was further stated that after receipt of the notice, the complainant, did not come forward to surrender, the duly discharged bond certificates. It was further stated that the Opposite Parties, issued registered post reminders, vide letters dated 29.4.2009 and 30.9.2010, requesting the complainant,  to receive the redemption amount of Rs.10,000/, by submitting the duly discharged bond certificates. It was further stated that the Opposite Parties are Public Sector Banking Company, dealing with the public money. It was further stated that, according to the RBI guidelines, on unclaimed deposits, the complainant was to be paid additional interest @3.5% p.a., on quarterly compounding basis, on the maturity amount of Rs.10,000/-, from the date of exercise of call option i.e. August 1, 2000, till the date of payment, on surrender of the duly discharged original bond certificates.  It was further stated that the complainant, instead of surrendering the duly discharged original bond certificates, filed this complaint. The remaining averments, were denied, being wrong.

4.             The Parties led evidence, in support of their case.

5.             After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

6.             Feeling aggrieved, the instant appeal, for  the enhancement of amount awarded, was filed by the appellant/complainant.

7.             We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully. 

8.             Admittedly, IDBI Deep Discount Bonds 1996 Annexures C-1 with the issue price of Rs.5,300/-, for a value of  Rs.1,00,000/-, and        Annexures C-2 with the issue price of  Rs.5,300/-,  for a value of  Rs.1,00,000/-, were purchased by the complainant. It is also not disputed, that any of the parties, could exercise the right of redemption of the Deep Discount Bonds, on four dates i.e. August 1, 2000, December 1, 2006, September 1, 2011 and June 1, 2016, after giving due intimation, in writing, in advance, to the opposite, in this regard.  In the instant case, according to the Opposite Parties, they exercised the call option, for redemption of the bonds on August 1, 2000, at Rs.10,000/- and communicated to all the bond holders, including the complainant,  individually, at their addresses recorded with them, by issuance of a call option notice dated 25.05.2000, through UPC, as also by publishing the same, in the leading newspapers  in English and Regional languages, across India. In the first instance, it is to be seen, as to whether, individual notice through UPC, was sent to the complainant, at the correct address or not. No doubt, sending of the notice through UPC, could be accepted, as a valid mode of communication. However, in the list, which is attached with Annexure VI, at one place there is no mention of the number of the Sector, but only the house number of the complainant is mentioned. No tangible evidence, was produced, by the Opposite Parties, to prove that call option letter was addressed to the complainant, at her  correct  address,   and   she received the same, before 1.08.2000.  The onus lay, upon the Opposite Parties, to prove the delivery of letter of intimation, regarding exercise of call option of  redemption from a particular date, by producing some acceptable evidence. They, however,   failed to do so. It, thus,  could be very well said that no intimation, through UPC, at the correct address, was received by the complainant, that the Opposite Parties had exercised their option of redemption of the bonds w.e.f. 01.08.2000.  The District Forum, was right in holding so, in para no.4 of its order. Since, no intimation regarding the exercise of call option for redemption of the bonds, was received by the complainant through UPC, she could not be said to be bound by the same.

9.             Now, coming to the second mode of communication i.e. publication, in the leading newspapers, in English and Regional languages, across India, regarding the date of exercise of call option, for redemption of the bonds, by the Opposite Parties, it  may be stated here, that the same could not be accepted, to be a valid intimation. In a similar situation, the Hon`ble National Consumer Disputes Redressal Commission, in IDBI Bank Limited & Anr. Vs. T.K.Nagarathna,  2009(1)CLT 108, held that the bank could not escape its liability, by merely publishing an advertisement, in the newspaper. The contention of the petitioner that the call option was communicated through UPC, was rejected, in the absence of any acknowledgment. The observations of the Hon`ble National Consumer Disputes Redressal Commission, are reproduced as under:-

“The contention of the petitioner`s counsel that Bank has published an advertisement in the newspaper about its intention to exercise the call back option does not carry weight in the days of electronic evolution. In today`s world television is found in almost every urban house. Complainant is a resident of Chitradurga, a District Headquarters and very few people have time to read all pages of all newspapers to locate such advertisement. Hence the bank cannot escape its liability by merely publishing something in a newspaper. It is not the case of the petitioner Bank that it had paid the amount alongwith interest accrued to the complainant on 31.03.2002. The money had remained with the Bank, which has an opportunity cost. Further, though the amount involved in this case is very small, the mighty Bank has chosen to litigate up to the level of the National Commission retaining the amount with it of a small investor”.

10.           Since, as stated above,  the Opposite Parties, failed to prove the service of individual notice, upon the complainant about their exercise of call option, for redemption of the bonds, w.e.f 01.08.2000,  they could not escape  liability, by merely publishing an advertisement in the leading newspapers. The complainant was not bound by the date of option i.e. 01.08.2000, notice of which was allegedly sent/published on 25.05.2000. The Opposite Parties, by not proving the service of notice, about their exercise of call option, for redemption of the bonds w.e.f. 01.08.2000,  upon the complainant, were grossly deficient in rendering proper service.

11.           The next question, that arises, for consideration, is, as to when  intimation was received by the complainant, for the first time. Annexure C-3, is the letter dated 30.09.2010, which was addressed to the complainant, at her correct address. It was, on receipt of this letter, that the complainant came to know, that the Opposite Parties, had exercised the call option of redemption of the bonds at her back w.e.f. 01.08.2000. After the receipt of the aforesaid notice,  the next date of exercise of option by the complainant or by the Opposite Parties, for redemption was 01.09.2011, as per the terms and conditions, printed on the IDBI Deep Discount Bonds, Annexure C-1 and C-2. Under these circumstances, the complainant was required to be awarded the amount, taking that the option was exercised on 01.09.2011. The District Forum, in our considered opinion, was completely wrong, in holding, that the date of redemption should be considered as 25.05.2000, and the complainant was entitled to a sum of Rs.10,000/-, per bond, alongwith interest from that date.  In our considered opinion, the complainant was entitled to a sum of Rs.50,000/-, per bond,  alongwith interest etc. w.e.f. 01.09.2011.

12.           No other point, was urged, by the Counsel for the parties.

13.           For the reasons recorded above, the appeal is partly accepted, with no order as to costs, and the order of the District Forum is modified, in the following manner:-

i)                  The respondents/opposite parties are directed to redeem the duly discharged original bonds of the complainant taking the date of option as 01.09.2011, with face value of Rs.50,000/-, per bond,  along with interest @3.5% p.a. quarterly compounding basis w.e.f. 01.09.2011, till realization, instead of Rs.10,000/-, for each bond alongwith interest awarded by the District Forum.

ii)                 The cost of Rs.7,000/- awarded by the District Forum, shall remain intact.

iii)               The order shall be complied with, by the respondents/opposite parties, within 45 days, from the date the appellant/complainant returns the duly signed Deep Discount Bonds to them (respondents/opposite parties), failing which they shall be jointly and severally liable to pay the aforesaid payable amount of bonds, alongwith interest @9% P.A., from the date of the instant order, till realization, besides payment of costs awarded by the District Forum.

14.           Certified Copies of this order be sent to the parties, free of charge.

15.           The file be consigned to Record Room, after completion

Pronounced.

February 9, 2012

Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

Rg