Chandigarh

DF-II

CC/676/2018

Supreet - Complainant(s)

Versus

IDBI Bank Ltd. - Opp.Party(s)

Adityajit Singh Chadha Adv.

28 Aug 2019

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	676 of 2018
Date  of  Institution	:	29.11.2018
Date   of   Decision	:	28.08.2019

 

 

 

 

Supreet D/o Sh.Gurnam Singh resident of Kothi No.38, Sector 10-A, Chandigarh.    

             ……..Complainant

 

Versus

 

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

 

2]  M/s IDBI Bank Ltd., SCO No.54-55, Sector 8-C, Madhya Marg, Chandigarh through its General Manager.

 

………. Opposite Parties

 

 

BEFORE:  SH.RAJAN DEWAN            PRESIDENT

SMT.PRITI MALHOTRA        MEMBER

            SH.RAVINDER SINGH         MEMBER

 

For Complainant      :    Sh.Adityajit Singh Chadha, Advocate

For Opposite Party   :    Sh.Sahil Singla, Advocate

 

 

PER RAVINDER SINGH, MEMBER

 

         Briefly stated, the complainant purchased Deep Discount Bond (Series 1) No.0094650 from Opposite Parties on 31.3.1992 at an issue price of Rs.2700/- having face value of Rs.1,00,000/- (Ann.C-1). The said Bond was to mature after a period of 25 years and the OPs was to pay the maturity value of Rs.1 lacs.  It is averred that the Deep Discount Bond held by complainant matured on 31.3.2017. However, the Opposite Parties on 17.6.2017 deposited an amount of Rs.19,179/- in the account of complainant with Punjab & Sindh bank through NEFT against the said Deep Discount Bond.  It is stated that when the complainant approached Opposite Party No.2 about less payment, it was told that the bank had decided to redeem the bond pre-maturely by exercising call option right.  The complainant also sent a legal notice to OPs in this regard, but to no avail. Hence, this complaint.

 

2]       The OPs have filed joint reply and while admitting the factual matrix of the case, submitted that the complainant was minor and guardian was Sh.Gurnam Singh at the time when Deep Discount Bonds in question was purchased from OPs (Ann.R-1) on 31.3.1992.  It is submitted that the IDBI invited a call option to all the investors by exercising its option to redeem the bonds and it was communicated through letters and print media also in the year 2001.  It is stated that at the time of Call Option, the redemption amount was Rs.12,000/- against the investment of Rs.2700/- with interest. It is stated that all the bondholders were duly informed by publishing the Call Option Notice dated 10.8.2001 in leading newspapers across the country in lieu of individual notices to the bondholders and the said notice as published 7 months prior to the redemption of the bond on 31.3.2002 i.e. after 10 years period.  It is stated that upon verifying the bond on 14.6.2017, the Opposite Parties credited the amount of Rs.19,179/- in the account of complainant.  Pleading no deficiency in service and denying other allegations, the Opposite Parties have prayed for dismissal of the complaint.

 

4]       Parties led evidence in support of their contentions.

 

5]       We have heard the ld.Counsel for the parties and perused the entire evidence on record.

 

6]       The complainant invested Rs.2700/- in Deep Discount Bond (Series-I) and was issued one Bond Regd. Folio No.DD00076678, Certificate No.00094650 on 31.3.1992 by Industrial Development Bank of India (IDBI) (Ann.C-1).  The Bond in the form of Promissory Note, after maturity on 31.3.2017, was holding its face value of Rs.1,00,000/- payable to the holder of Bond.

 

7]       The contentions raised by the OPs that while exercising their powers as per terms & conditions laid down in the said Promissory Note dated 31.3.1992, they have opted to redeem the bond in the year 2001 and as such liable to pay only redemption amount of Rs.12,000/- with interest thereon @3.5% i.e. a total of Rs.19,179/- against the said bond to the complainant, is totally untenable and not permissible under law of equity and fair play.  The investment in Bonds culminate into a contract between the investor and the company.  Any Company, party to the contract, cannot unilaterally do any action to nullify the beneficial effect of the contract, accruing to the investor.  The OPs herein cannot whimsically backtrack from its commitment and make the promissory note as redundant prejudicial to the interest of investor.  

 

8]       The Opposite Parties could not compel any holder of bond to redeem or surrender the bond against his will before the maturity date as laid down in the Promissory Note itself.  It is the discretion of the bond holder to prematurely redeem the bonds or to wait for its maturity.  The OPs/IDBI cannot thrust upon its indiscriminate decision to redeem the bond upon the bondholder.

 

9]       The contentious issues involved in this complaint, has already been considered by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petiton No.2975 of 2008 – IDBI Bank Limited and Anr. Vs. T.K.Nagarathna, decided on 13.8.2008 and held that:-

“6. 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 revolution. 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 the newspapers to locate such advertisements. Hence the Bank cannot escape its liability by merely publishing something in a newspaper.”

 

10]              The Hon’ble State Consumer Disputes Redressal Commission, UT, Chandigarh in Appeal No.130 of 2018 – M/s IDBI Bank Ltd. & Anr. Vs. Prit Pal Kaur & Anr., decided on 17.12.2018, while dismissing the appeal preferred by IDBI Bank, upheld the order of District Forum regarding liability of IDBI to pay the maturity amount of the bond on its due date of maturity. 

 

11]      The Opposite Parties has failed to produce on record any document or evidence to substantiate the fact of delivery of any letter to the complainant in the year 2001 or any show cause notice before redemption of bond in question prematurely.

 

12]      Keeping into consideration the facts & circumstances of the case, as discussed in the preceding paragraphs, the complainant is fully entitled for Rs.One Lakh i.e. the maturity value/amount of the bond on the date of maturity i.e. 31.3.2017. The withholding of full maturity amount of the bond by the Opposite Parties despite its maturity on 31.3.2017 amounts to unfair trade practice.  The complaint as such is allowed with directions to the Opposite Parties to pay balance amount of Rs.80821/- (i.e. 100000-19179/- already paid by NEFT on 17.6.2017) to the complainant as due on 31.3.2017, within a period of 30 days from the date of receipt of copy of this order.  The complainant shall return the Bond Certificate and sign/execute the requisite documents in favour of IDBI/OPs, as per their requirement.

         The copy of this order be forwarded to the parties free of cost as per rules.

Announced

28^TH August, 2019                 

                             Sd/-            

(RAJAN DEWAN)

PRESIDENT

 

Sd/-

                                                           (PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER