Punjab

Ludhiana

CC/21/328

Rohit Sharma - Complainant(s)

Versus

IDBI - Opp.Party(s)

Sachin Vasudeva

20 Jan 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No: 328 dated 08.07.2021.                                                                 Date of decision: 20.01.2023  

1. Rohit Sharma aged 41 years son of Sh. Kailash Sharma, resident of House No.810/N, Prem Nagar, Civil Lines, Ludhiana.  
2. Kailash Sharma aged 68 years son of late Sh. Gautam Rishi, resident of House No.810/N, Prem Nagar, Civil Lines, Ludhiana                                                                                                              ..…Complainants

                                                Versus

1. I.D.B.I. (Industrial Development Bank of India), Head Office: IDBI Tower, WTC Complex, Cuffe Parade, Mumbai-400005.
2. I.D.B.I. Bank, Branch Office at First Floor, Janak Tower, College Road, Near Vijayanand Hospital, Ludhiana-141001.
3. M/s. KFIN Technologies Pvt. Ltd., Unit: IDBI Bonds Department, Selenium Tower B, Plot No.31-32, Financial District, Nanakramguda, Gachibowli Hyderbad-500032.                                                                                                                                                                            …..Opposite parties 

                   Complaint under Section 36 of Consumer Protection Act.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Sachin Vasudeva,, Advocate.

For OP1 and OP2          :         Sh. Gurpreet Singh, Advocate.

For OP3                         :         Exparte.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Briefly stated, the facts of the case are that in pursuance of advertisement  issued by opposite party No.1, on 18.03.1996, the complainants deposited a sum of Rs.5300/- with opposite party No.1 who issued “Promissory Note Deep Discount Bond” bearing Folio No.FDDB-0217139 and certificate No.00240969 to be matured after period of 25 years i.e. on 18.03.2021 with maturity value of Rs.2,00,000/-. On 18.03.2021, the complainants approached Industrial Development Bank of India, Carnival Complex, The Mall, Ludhiana to encash the above said deep discount bond certificate, but they shocked to note that no branch of the company exists at the sot and no address of company was available at the spot in spite of several enquiries. The complainants came to know that the above said branch office has been permanently closed by the company and has neither left any new address at the spot nor has intimated its new address to the complainants. After making efforts, the complainants came to know from official of Ludhiana Stock Exchange that Industrial Development Bank of India has been merged with IDBI having its office at Feroze Gandhi Market, Ludhiana. The complainant immediately approached the said branch and showed them the said bond but they showed their ignorance regarding the said bond by stating that IDBI Bank has no concern with the Deep Discount Bond Certificate issued by Industrial Bank of India. Then the complainants approached main branch i.e. opposite party No.2 and showed the above said bond but they also showed their ignorance by stating that they have no concern with said Deep Discount Bond Certificate. However, opposite party NO.2 directed the complainant to contract opposite party No.3 being their Registrar and Transfer agent through email for payment of the matured bonds. The complainants received email dated 24.04.2021 from opposite parties contents of which are reproduced as under:-

“With reference to your appended E-mail and subject matter, would like to bring to your notice that the below said bond certificate was purchased by you in the year 1996. In this connection, IDBI invited a call option to all investors by exercising its option to redeem the bonds (which was clearly mentioned on the face of the Bond Certificate) & further it is also communicated through letters and print media also in the year 2000. At the time of call option (i.e. on 1t August 2000) the redemption amount was 10000/- against the investment of Rs.5300/-  for each bond. Now present redemption vale including interest (i.e. saving bank interest only) will be around Rs.17000/- plus per each bond.”

The said email has been communicated by opposite party No.3 on behalf of opposite party No.1 and 2 only to deny the payment of Rs.2,00,000/-. The complainants had not received any notice in the year 2000 or afterwards as alleged in their emails at their residential address House No.810/N, Prem Nagar, Civil Lines, Ludhiana and the complainants were not aware of any such print media regarding redemption of above bond unilaterally in the year 2000 without informing the complainant. As such, the opposite parties are legally bound to pay the amount of Rs.2,00,000/- being matured value of the bond plus interest at the agreed rate w.e.f. 18.03.2021. Opposite party No.1 and 2 have not made the payment of maturity amount of Rs.2,00,000/- despite repeated requests and visits of the complainant and thus, the opposite parties have committed deficiency in service and unfair trade practice which has caused mental agony and harassment to the complainant. In the end, a prayer has been made to direct the opposite parties to pay maturity amount of Rs.2,000,000/- besides compensations of Rs.50,000/- and litigation expenses of Rs.20,000/-.

2.                Notice was sent to opposite party No.3 through registered post on 23.07.2021 but the same was not received back either served or unserved even after elapse of period of 30 days. As such, the opposite parties were proceeded against exparte vide order dated 12.10.2021.  

3.                Upon notice, opposite party No.1 and 2 appeared and filed joint written statement assailing the complaint by taking preliminary objections with regard to lack of jurisdiction, cause of action and limitation. However, the issuance of one IDBI Deep Discount Bond 1996-Flexi-I for an amount of Rs.5300/- was admitted. However, it has been claimed that the bond holder was to receive an amount of Rs.10,000/- on 01.08.2000, Rs.25,000/- on 01.12.2016, Rs.50,000/- on 01.09.2011 , Rs.1,00,000/- on 01.06.2016 and lastly an amount of Rs.2,00,000/- on 18.03.2021. According to the opposite parties, it is clearly mentioned in the offer document of the bond that the investor would have an option to withdraw the bond at any one time and the IDBI would have also an option to redeem the bond at the end of any five years from the date of allotment. In that event, the deemed face value of the bond would be given i.e. Rs.10,000/- at the end of five years, Rs.25,000/- at the end of 10 years, Rs.50,000/- at the end of 15 years, Rs.1,00,000/- at the end of 20 years and Rs.2,00,000/- at the end of 25 years. It is further pleaded by the opposite parties in the written statement that on 01.08.2000, the Chief General Manager of IDBI Bank exercised a call option in respect of three types of bonds including Deep Discount Bonds. It is further pleaded that prior to exercising the call off option, the opposite parties sent letters/notices to all the bond holders and notices in this regard were also got published in the leading newspapers in PAN India from time to time. The opposite parties further alleged that the complainants were also informed through letters/notices regarding the call off option on 01.08.2000 and in this regard entry was duly shown in UCP No.80451 sent in September 2000, BP JR No.212042 in May 2009 and registered letters were also issued to Rohit Sharma.

                   On merits, opposite party No.1 and 2 reiterated the crux of averments made in the preliminary objections and has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

4.                The complainants filed replication reiterating the facts mentioned in the complaint and controverted those mentioned in the written statement filed by opposite party No.1 and 2. However, the complainants submitted that they have deposited a sum of Rs.5300/- on 18.03.1996 with the opposite parties and they issued bond of the deposited money. No offer letter Ex. R1 was handed over to the complainants nor the same was got signed or read over the complainants. The complainants have not exercised the option to withdraw/redeem the bond as such the complainants are entitled to receive Rs.2,00,000/- on 18.03.2021. The complainants further alleged that they had neither received any letter dated 01.08.2000 issued by Chief General Manager nor the complainant refused to accept any notice. The complainants were not aware of any publication to this effect and were not at all aware of cal-off option exercised/availed by opposite party No.1 and 2. Even call-off option is outside the scope/terms and conditions mentioned in offer letter and bond delivered to complainants. Opposite party No.1 and 2 had annexed incomplete offer letter documents malafidely and pages of offer documents Ex. R1 are missing. Even the copies of publication in Ludhiana News papers annexed with written statement as Ex. R5 and Ex. R6 are dated 30.09.2011 and of the year 2009, so the question of issuing letter/notice dated 01.08.2000 through publication in newspaper does not arise at all.

5.                In support of their claim, the complainants tendered affidavit Ex. CA of complainant No.1 Sh. Rohit Sharma in which they reiterated the allegations and the claim of compensation as stated in the complaint. The complainants also tendered documents Ex. C1 is the copy of IDBI Deep Discount Bond, Ex. C2 is the copy of email dated 06.18.2021 and closed the evidence.

6.                On the other hand, counsel for opposite party No.1 and 2 tendered affidavit Ex. RA of Sh. Ajit Walia, Assistant General Manager of IDBI Bank Ltd., Civil Lines Branch, Ludhiana along with documents Ex. R1 is the copy of offer documents of IDBI Flexi Bonds, Ex. R2 to Ex. R33 are the newspaper items published in various newspapers, Ex. R34 to Ex. R36 are the record of dispatch, Ex. R37 to Ex. R41 are the copies of bills for advertisement in various newspapers, Ex. R42 is the copy of judgment dated 17.05.2022 passed by the Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh and closed the evidence.

7.                We have heard the arguments of the counsel for the parties and also gone through the complaint, replication, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties. We have also gone through the written arguments submitted by both parties.

8.                Un-disputably, the complainants had purchased Deep Discount Bond” bearing Folio No.FDDB-0217139 and certificate No.00240969 vide Ex. C1 with issue price of Rs.5300/- with a maturity of Rs.2,00,000/- after expiry of 25 years as on 18.03.2021. It was further stipulated that the holder of the bond shall have option to redeem the bond at any of the following dates of the deemed face value mentioned herein:-

At the end of five years             Rs.10,000/-

At the end of 10 years              Rs.25,000/-

At the end of 15 years              Rs.50,000/-

At the end of 20 years              Rs.1,00,000/-

At the end of 25 years              Rs.2,00,000/-

Further Ex. R1 is the offer document which at page 3 provides for principal terms of bond under heading of IDBI Deep Discount Bond which reads as under:-

IDBI Deep Discount Bond

IDBI Deep Discount Bond ’96 is issued at a deep discounted price of Rs.5,300/-. After the maturity period of 25 years, investors can redeem the Bond at its face value of Rs.2,00,000/-.

Key Terms

          Issue Price

          Rs.5,300/- per bond. The entire amount of Rs.5,300/- is payable on application.

          Maturity

25 years from the date of allotment. The date of allotment is deemed to be March 18, 1996. The date of maturity will, therefore, be March 18, 2021.

Early Redemption option

Investors also have the option to redeem the Deep Discount Bond before the maturity period on the following dates and get the amount indicated there against (which is the Deemed Face Value of the Bond at the time of redemption).

                    Early Redemption Option                              Amount Payable to investor

Date                            Period from date of allotment            (Deemed Face Value)

August 1, 2000            4 years and 4 months                          Rs.10,000

December 1, 2006       10 years and 8 months                                    Rs.25,000

September 1, 2011      15 years and 5 months                                    Rs.50,000

June 1, 2016                20 years and 2 months                                    Rs.1,00,000

Procedure for early redemption

Investors desirous of exercising the option to redeem the Deep Discount Bond on any of the above dates, should submit their requests to IDBI/Registrars in writing, along with the Bond certificate(s), duly discharged, at least one month before the relevant date. The bondholder will be entitled to receive the applicable deemed face value only if the request is received within the specified time.

Call Option

IDBI also reserves the right (Call Option) to redeem the Deep Discount Bond on the dates mentioned above. In that event, the Deemed Face Value of the Bond as per the table given above will be paid to the Bondholders.

The full maturity value of Rs.2,00,000/- shall be payable only if the Bondholder does not exercise the Early Redemption Option and IDBI does not exercise the Call Option to redeem the Bond. On the Bondholder receiving the amount as specified above on exercise of the Early Redemption Option/ Call Option at any time, the Bond shall stand fully discharged.

9.                It has been contended on behalf of the counsel for the complainant that the complainants have not exercised the option to withdraw/redeem the bond. The complainants were not served with any notice intimating the exercise of call of option by the opposite parties. They were not aware of the publication of any of such call of option in the news papers. Further the alleged UPC receipt Ex. R35 is undated while Ex. R36 dated 22.08.2013 has been issued from Hyderabad. So the question of issuing notice on or before 01.08.2000 through Ex. R35 or Ex. R36 to the complainants does not arise. As such, the complainants are entitled to the maturity amount of the deep discount bond.

10.              On the other hand, the counsel for the opposite parties has drawn the attention of this Commission towards the newspaper notices (Ex. R2 to Ex. R33) which shown to have been published and circulated in the area of Ludhiana, Chandigarh and Amritsar and contended that it cannot be said that notices were not published in the newspapers which were in circulation of that particular area.

11.              Perusal of published notices shows that these carry dates of publication starting from the year 2007 to 2011. The opposite parties have not placed any document which shows that before exercising call  option to redeem on 22.09.2000 vide letter Ex. R2, these call  option notices were published in the newspapers. Even the evidence adduced by the opposite parties is not sufficient to conclude that the notices were sent to the complainants by post before 22.09.2000. Publication of call option notices in the area surrounding of the place of residence of the complainants, were published in the year 2007 or thereafter. By that time, the amount payable to the investor (Deemed Face Value) of the bond as on December 1, 2006 was Rs.25,000/-. As such, in the given set of circumstances, it would be just and appropriate if the opposite parties are directed to pay a sum of Rs.25,000/-, being the Deemed Face Value of the bond as on 01.12.2006, to the complainant along with savings bank interest rate prevailing at that time till actual payment along with composite cost of Rs.15,000/-.

12.              As a result of above discussion, the complaint is partly allowed  with direction to the opposite parties to pay a sum of Rs.25,000/-, being face value of the bond as on 01.12.2006, to the complainant along with savings bank interest rate prevailing at that time till actual payment. The opposite parties shall further pay Rs.15,000/- (Rupees Fifteen Thousand only) to complainants compositely assessed as compensation and litigation expenses. Compliance of this order be made within 30 days from the date of receipt of copy of the orders. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

13.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

Monika Bhagat)           (Jaswinder Singh)                      (Sanjeev Batra)                          Member                            Member                                      President         

 

Announced in Open Commission.

Dated:20.01.2023.

Gobind Ram.

 

Rohit Sharma Vs IDBI                                                   CC/21/328

 

Present:       Sh. Sachin Vasudeva,  Advocate for complainants.

                   Sh. Gurpreet Singh Arora, Advocate for OP1 and OP2.

                   OP3 exparte.

 

                   Arguments heard. Vide separate detailed order of today, the complaint is partly allowed  with direction to the opposite parties to pay a sum of Rs.25,000/-, being face value of the bond as on 01.12.2006, to the complainant along with savings bank interest rate prevailing at that time till actual payment. The opposite parties shall further pay Rs.15,000/- (Rupees Fifteen Thousand only) to complainants compositely assessed as compensation and litigation expenses. Compliance of this order be made within 30 days from the date of receipt of copy of the orders. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

 

Monika Bhagat)           (Jaswinder Singh)                      (Sanjeev Batra)                          Member                            Member                                      President         

 

Announced in Open Commission.

Dated:20.01.2023.

Gobind Ram.