DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Complaint Case No :  206 OF 2011

Date  of  Institution  :   12.05.2011

Date   of   Decision  :   19.10.2011

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

                                                                                    ---Complainant

V E R S U S

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

2]       The IDBI Bank Ltd.,, SCO No. 54-55, Sector 8-C, Madhya Marg, Chandigarh.

---Opposite Parties

BEFORE:            SH.LAKSHMAN SHARMA                      PRESIDENT

                        SMT. MADHU MUTNEJA                    MEMBER

                        SH.JASWINDER SINGH SIDHU              MEMBER

Argued By:            Sh.Gaurav Bhardwaj, Adv. for the Complainant.

Sh.Jatin Kumar, Adv. for the OP.

PER MADHU MUTNEJA, MEMBER

1]             The instant complaint has been filed against the OPs, praying for payment of the maturity value of the Dee Discount Bonds, besides compensation.

                Briefly stated, the Complainant had purchased IDBI Deep Discount Bonds 1996 from the OPs. As per the Scheme, the Bonds were payable after a period of 25 years. Two Deep Discount Bond Certificates of Rs.5300/- each bearing Folio No. FDDB 1254899 and FDDB 1123061 were issued in the name of the Complainant. A sum of Rs.2,00,000/- was payable on June 1, 2016, being the date of maturity. The other options for early redemption were as under:- 

                The Complainant has alleged that she never exercised any redemption option. Hence, he was surprised to receive a letter dated 30.9.2010, vide which the OPs informed her that the bonds have been redeemed on 01.08.2000, after issuing individual redemption notices to all the bond holders, advising them to surrender the duly discharged bond certificate to Investor Service of India (ISIL), who were the Registrars, for release of the redemption proceeds of Rs.10,000/- per bond.

                No earlier notices have ever been received by the Complainant from the OPs. Hence, the Complainant has alleged that the act and conduct of the OPs by redeeming the bonds at an earlier date amounts to unfair trade practice and deficiency in service. The Complainant has expressed that he is fully entitled to a sum of Rs.50,000/- per bond.

                The Complainant served a legal notice upon the OPs to make payment of Rs.50,000/-, as the amount claimed by her was not being paid by them. He has, now, filed the instant complaint, claiming refund of Rs.50,000/- per bond, taking the redemption date as 01.09.2011, besides compensation and costs of litigation.

2]             After admission of the complaint, notices were sent to the OPs.

                The OPs in reply has taken the preliminary objection that the Complainant has not complied with any of the terms and conditions of the offer document and also not followed the advices given by Investor Services India Ltd., for redemption of the Bond. They have also taken the preliminary objection that the Complainant is not a consumer as per the CPA. Other objections taken by the OPs relate to the fact that IDBI reserves the right to redeem the Deep Discount Bonds at an earlier date, which fact was also stated on the face of the bond. The IDBI in terms of the offer document 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.  Individual notices to all bond holders were also sent through UPC.  The OPs have attached a certified true copy of the option letter 25.5.2000 and the UPC receipt issued by the postal authorities dated 30.5.2000, received by the Complainant at her registered address #1565, Sector 22-B, Chandigarh.  As the Complainant did not come forward to surrender the duly discharged bond certificates, the OP issued registered post reminders vide letters dated 29.4.2009 and 30.9.2000, requesting the Complainant to receive the redemption amount of Rs.10,000/- by submitting the duly discharged bond certificates. The Complainant has instead of surrendering the bond certificates, filed the present complaint.

                The OPs have contended that they are Public Sector Bank Company dealing with public money and that as per RBI guidelines on unclaimed deposits, the Complainant will 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. They have also prayed that the Complainant be directed to surrender the duly discharged original bond certificates along with Form 15G and PAN No., so that the payment can be made to her. 

                In para-wise reply, the OPs have reiterated the submissions made in the preliminary objections. They have specifically denied the allegations of the Complainant that the notice/ intimation was not received by him and also placed on record a copy of the receipt of the letter issued to him as Annexure to the reply.

                The OPs have specifically denied that the exercise of redemption option was available only to the holder of the bond and not to the OPs. IDBI also has the right to redeem the Deep Discount Bonds on the dates mentioned in the Bond Certificates. Hence, after exercise of the option by IDBI, the Complainant is not eligible for a sum of Rs.50,000/- per bond, as claimed by her, especially when the option had already been exercised in the year 2000, when the value of the Bond was Rs.10,000/- per Bond. However, keeping in view the RBI directions, the IDIBI is willing to pay interest @3.5% p.a. on quarterly compounded basis from the date of redemption to the date of payment.   

3]             Parties led evidence in support of their contentions.

4]             We have heard the learned counsel for the Parties.

5]             At the time of arguments, the ld. Counsel for OPs contended that they had informed the complainant about the redemption by publication as well as by UPC, therefore, the complainant could not now claim an enhanced amount of redemption  due to any deficiency on their part.  However, we are of the view that the letters were sent by U.P.C. This is an accepted mode of communication but Annexure III placed on record by the OPs is not clear to prove about the delivery of the letter to the recipient. There is no other proof on record to show that the redemption letter dated 25.5.2000 was actually delivered to the Complainant. Hence, the delivery of redemption notice to the Complainant and her awareness of the redemption remains ambiguous.

5]             At the same time, the demand of the complainant regarding payment on the redemption value as on September 1, 2011 i.e. Rs.50,000/- cannot be met since IDBI cannot go beyond the required norms and pay “her alone” as per the second date of redemption option demanded by him.

6]             In view of the above, we feel it will be appropriate if the OPs be directed to redeem the bond certificate of the complainant as per the redemption option dated 25.5.2000 and pay interest @3.5% on quarterly compounding basis on the redemption amount of Rs.10,000/- w.e.f. 25.5.2000 till the date of payment, as per RBI guidelines. This view has also been taken by the Hon’ble State Commission, U.T. Chandigarh in Appeal Case No. 371 of 2010, decided on 11.3.2011 in the case Akhlesh Aggarwal Versus Industrial Development Bank of India & Anr. We therefore, allow the complaint and direct the OPs 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.

                Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

19.10.2011

Sd/-

                                                           (LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(MADHU MUTNEJA)

MEMBER 

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER