This complaint is coming on for final hearing before us in the presence of Sri J.Bheemasenarao, Advocate for the complainant and OP No.1 called absent, and D.Venkata rao, Advocate for the Opposite Party No.2 and having stood over for consideration, the Forum made the following:-
O R D E R
G.APPALA NAIDU, MEMBER
This complaint is filed U/s-12 of C.P.Act, 1986 seeking relief to direct the OP’s to inform the action taken to redeem the bonds bearing No.000950733 and 000950734 during the middle of maturity face value period of 31.03.2017 and to pay full maturity face value of Rs.1,00,000/- to the complainants after maturity of two bonds i.e. on 31.03.2017 with all benefits, to pay maturity face value of Rs.1,00,000/- with interest at 24% per annum from the date of bond i.e. 31.03.1992 till the date of payment if they redeem the bonds middle of maturity face value period of 31.03.2017, to pay Rs.25,000/- to the complainants towards compensation and to award costs of the case with such other reliefs under the circumstances of the case.
The 1st complainant is the husband of 2nd complainant and both the complainants deposited with the OP’s an amount of Rs.2,700/- under deep discount bond certificate bearing no.000950733 and another sum of Rs.2,700/- under deep discount bond bearing no.000950734 issued by OP’s on 31.03.1992. The complainants deposited the said amounts by way of D.D through S.B.I, Nellimarla branch and after receipt of the said amount only, the OP’s issued the above said two bonds in favour of the complainants which were to be matured by 31.03.2017. According to the terms and conditions of the said bonds the complainants can claim and are entitled to get Rs.5,700/- at the end of 5th year and at the end of 10th year Rs.12,000 and at the end of 15th year Rs.25,000/- and at the end of 20th year Rs.50,000/- but the complainants did not encash the said option till today. Either the complainants or the OP’s have no right to violate the terms and conditions comtemplated under the said bonds. Further the said terms and conditions are binding on the complainants and also the OP’s. OP’s have no right to redemption the said bonds early than the dates fixed by the OP’s.
The OP’s made the complainants to believe and also assured them that the OP’s will obey the terms and conditions of the said bond and pay all the benefits accordingly on the said bonds. The OP’s orally informed the complainants that they are going to redeem the captioned bonds early with 3.5% interest. In fact the OP’s have no such right to redeem the bonds, during middle of the maturity period, which is quite contrary to law.
The complainants further submits that they are in no way concerned with the loss or gain of OP’s but due to deficiency of service and with an evil intention to cause wrongful loss to the complainants and to have wrongful gain for the OP’s they are going to redeem the said bonds in the said period. If the OP’s resort to redemption of the bond in middle of the period of the maturity, the complainants will be put to great loss. The complainants have no intention or interest to accept the said proposal of proposed redemption of period of the said two bonds. Further there is no written intimation or any paper publication from the OP for their proposed redemption period. The complainants did not receive any letter dated 29.04.2009.
It is not mandatory for the complainants to surrender the said bonds and get the redemption money from the OP’s during the middle period of the said bonds and also the fact that the OP did not send any redemption application form to the complainant at any time. The OP’s have no legal right to put the option demanding the complainants to surrender the said bonds during the middle of the period. The complainants got issued legal notice to OP’s on 27.08.2012 stating all the above facts and demanded the OP’s to pay Rs.1,00,000/- with interest and compensation of Rs.25,000/- if the OP’s redeem the said bonds during the middle of the maturity period as the complainants will be put to irreparable loss. Further the OP’s having received the aforesaid notice got issued reply notice dated 20.12.2012 with all false and untenable allegations. The OP’s are liable to pay full maturity face value of Rs.1,00,000/- if they redeem the bonds in the middle of the period with interest at 24% per annum and the OP’s have no right to redeem face value of Rs.12,000/- and there is no such term in the said bonds. Hence this petition.
Written statement/counter filed by the OP no.2 denying the averments made by the complainants except those which are specifically admitted therein and puts the complainants to strict proof of the same. It is submitted that the IDBI deep discount bonds under IDBI Flexi bonds series-1992 issued by the OP under the offer document do not fall within the definition of goods or services as defined in C.P.Act as the aforesaid bonds applied for by the complainants deals with money only and the OP’s in connection with the issue of the said bonds do not render banking or financial service and as such the complaint does not fall within the definition of consumer dispute. Further till September, 30th 2004 the OP was a National Financial Institution governed by the IDBI Act, 1964 wholly owned by the Government of India and engaged in term lending and developmental activities in accordance with the government guidelines, policies and National priorities thus the OP was not in the field of providing commercial banking services to the public at large when the IDBI flexi bonds were offered for subscription by the public. The bonds were issued in the Forum of promissory notes on specific terms and conditions vide offer document. Hence the OP has not provided any service to the complainant nor has the complainant availed of any service from the OP. Therefore there is no deficiency in service on the part of OP. The complainant has also not adduced any evidence whatsoever of any fees paid for the alleged service provided and thus the complainant cannot be considered as consumer and therefore this complaint is not maintainable against the OP either in law or on facts and is liable to be dismissed on this ground alone.
It is further submitted that the complaint does not fall within the jurisdiction of the Hon’ble Forum since the OP’s registered office is situated at Mumbai and the bonds were issued from Mumbai and accordingly no cause of action arises/accrued to the complainant at Vizianagaram as per the judgement delivered by various courts, (the Hon’ble National Commission in Rajaram corn producers Punjab Limited Vs Surya Kanth nitin Gupta review petition No.88 of 1995 decided on 22.01.1996 and the judgmement of the apex court in Criminal Appeal Nos.1353-57 title H.V.Jayaram Vs ICICI and others decided on 15.12.1999). Therefore this complaint is liable to be dismissed on this ground alone.
More recently the Hon’ble Supreme Court as well as the Hon’ble National Commission in their judgements have held that the complainant cannot be allowed to file the complaint before any Forum as per his/her wishes and that the case should be filed at the place where the cause of action has arisen or the agreement has been entered into. In the present case none of the causes of action has arisen as described above. The complainants have hidden the material facts from the knowledge of this Hon’ble Forum and have presented a false and concocted story.
Coming to the facts of the case the IDBI made a public issue of 3 types of IDBI unsecured redeemable bonds, series-1, 1992 i.e. deep discount bonds–series-1, double option bonds-series-1, and regular return bonds-series-1, in January 1992 under the terms and conditions of the offer document. The complainant purchased 2 deep discount bonds-series-1 bearing nos-00950733 and 00950734 for a face value of Rs.2,700/- under folio no DD 0791007 in the name of Kolleru Kameswararao and his wife Kolleru vijayalakshmi respectively and the same were issued with condition of withdrawal/redemption to the bond holder and/or IDBI. Principal terms of IDBI deep discount bond (series-1) are given on page 3 of the offer document wherein it has been clearly stated that the investor has the option to withdraw and IDBI has to redeem the bond at the end of every 5 years from the date of allotment. Therefore as per the call option right IDBI redeem the deep discount bond series-1 of 1992 on one of the dates mentioned therein. One of such date was March 31, 2002 and IDBI was liable to pay a sum of Rs.12,000/- per bond to the invester if IDBI decided to exercise the call option. The full maturity of Rs.1,00,000/- was to be payable on 31st March, 2017 only when the bond holder did not exercise early redemption to the above and IDBI did not exercise the call option at any time. The public issue of IDBI deep discount bond-series-1, 1992 was launched as one of the instruments with a longer maturity period. However, keeping in mind the interest of investors against fluctuating lending rates, future fluctuating/fierce mark conditions, risks involved in financing projects, IDBI incorporated call option facility at the time of issue of bonds itself. It has been specifically mentioned in the application form/on the face of the bond certificate that IDBI also had the right to exercise call option as under:-
In case of withdrawal/redemption Deemed face value
March 31,1997 Rs. 5,700/-
March 31,2002 Rs. 12,000/-
March 31,2007 Rs. 25,000/-
March 31,2012 Rs. 50,000/-
March 31,2017 Rs.1,00,000/-
As per the offer document dated 15th January, 1992, IDBI had the right to exercise call option on 31.03.2002 and the same had been printed on the face of the bond to avoid any confusion/misrepresentation by the bond holders. Subsequent to the issue of the said bonds the lending rates started declining and was not commercially viable for IDBI bank to continue to pay higher interest on such bonds. Therefore IDBI decided to exercise the call option available on 31st March, 2002 and redeem the deep discount bond-series-1,1992 at maturity value of Rs.12,000/- per bond. Accordingly IDBI advised all the bond holders by publishing the notices in the leading newspapers in English and regional languages across India on 19th August,2001. Thereafter the OP sent individual call option notice dated 30th September,2001 under certificate of posting and requested all the registered bond holders including the complainant to surrender duly discharged bond certificate(S) to M/s investor services of India Limited, the Registrar and transfer agent on or before 31st December,2001 to enable the bond holders/complainant to receive redemption proceeds by 31st March, 2002.
It is also submitted that the call option notice was sent to the complainants registered address as per records at “Kolleru Kameswararao, LIC agent, Opp Sreenivasa Talkies, Nellimarla – 531217 Vizianagaram District. The name of the complainant was listed at serial No-853821. The copy of application No.B-4714302, the call option notice is dated 30th September,2001 and the certified true copy of list of bond holders which included the name of the complainant is at serial No.853821 to whom the letter of call option was dispatched through under certificate of posting (UCP) on 30th September,2001 for both the folios separately. Further submitted that the Hon’ble Forum may please observe from call option notice dated 30th September,2001 that the OP has clearly indicated therein that “No interest will be payable on the bonds beyond 31st March, 2002 i.e. call option date to avoid any confusion/misrepresentation by bond holders and make them available redemption proceeds by 31st March, 2002. The OP also published a reminder notice in all leading newspapers in English and Regional languages across India on 07.10.2002 requesting all the bond holders to surrender the duly discharged original bonds and obtain the redemption amount. Further, the OP published notices, after every six months in leading newspapers inter/alia stating that IDBI had issued number of Deep discount bonds under various Flexi Bonds schemes during 1992 to 1999 redeemable over a period of 15 years to 30 years. Subsequently in accordance with the terms set out in offer document of the respective bond issues, IDBI had redeemed these bonds early by exercising call option on various dates and also advertisements published in newspapers across the country during the period 2006- 2011.
Inspite of all these notices, terms and conditions, the bond holders including complainant did not choose to surrender the duly discharged bond certificate as stated in the aforesaid notice, once again OP issued reminder letter dated 29th April, 2009 through registered post. The name of the complainant is Kolleru Kameswararao was at serial No.94908 and copy of bulk of registered post is dated 29.04.2009. Instead of surrendering the bond certificates, the complainant served a legal notice dated 27th August,2012 through his advocate but however OP also issued a detailed reply on 11th September, 2012.
It was clearly stated in the offer document “The bond holder must get his name registered with IDBI if he decides to exercise early redemption option or if IDBI decides to exercise the call option, the bonds will be redeemed only on the surrender of the duly discharged bonds/certificates by the registered bond holders.” Despite the call option exercised by IDBI and intimation through various letters and publication of the notices regarding the call option given to bond holder, the duly discharged bond not surrendered for redemption by the complainant. Thus the complainant is himself responsible for non- receipt of the redemption amount on time.
The OP being a public sector banking company, dealing with public money would like to state that as per the terms and conditions of the bonds, the bond holders are not eligible to receive any interest after the date of call option i.e. 31st March,2002. However, IDBI has taken a decision keeping in view of the RBI direction, to pay interest at the rate of 3.5% per annum on quarterly compounded basis from the date of redemption on the redemption value of unclaimed bonds. Hence the OP is ready and willing to pay to the complainant redemption amount of Rs.12,000/- together with interest thereon at the rate of 3.5% per annum on quarterly compounded basis from 30-04-2001 on receipt of duly discharged bond from him and this policy decision was reiterated by the then Hon’ble Finance Minister in parliament on 14.07.2009 and this policy decision was also upheld by the Hon’ble High Court of Gujarath in their judgement delivered on 04.11.2009 in special Civil application No.4908 of 2009 Vinaben balakrishna Trivedi Vs IDBI. Apart from many consumer Fora, the Hon’ble Maharastra state consumer disputes redressal commission has also endorsed the decision taken by the Bank vide order dated 28.06.2011 in the 1st appeal No.A/11/251(arisen out of the order dated 13.01.2011 in case No.10/225 District Consumer Forum kolhapur) IDBI Bank limited (as appeallant) Vs Rohan Rajendra/Mali (as respondents) who were bond holder of deep discount bond series-1, 1992.
It is further submitted that 97% of the investors have already surrendered their bonds and got their due amounts on the basis of the individual notices and the Wide publicity of the said redemption and more over the appellant had already exercised call option on 31st march 2002 and made it known to complainant-bond holder well before the redemption date to surrender the duly discharged bond certificate in his possession and to receive the redemption warrant for the deemed face value of Rs.12,000/- (net of TDS as the case may be) from Registrar and Transfer agent i.e. investor services of India Ltd at his registered residence address given in the bond application form by the complainant. However the same was never got returned undelivered to the sender by the postal authorities.
The complainant filed the complaint on non-genuine, Malafide and fradulant manner and on frivolous and deceptive grounds on which no cause of action arises and hence complaint may be dismissed on this ground. Further the complaint is time barred and not maintainable since the period of two years as the consumer act is to be reckoned from the date of cause of action and in the present case on hand, the bonds were to be redeemed on 31.03.2002 and the complaint if any is to be filed on or before 31.03.2004. But this complaint is filed after 8 years from the date of call option exercised by the bank and from the date of redemption of bonds to be done by the complainant is apparently time barred. In this connection reference is made to judgement of Hon’ble Rajastan State Commission delivered on 11.11.2005 in the appeal no.1518/05 filed by Smt.Roop Kanwar Jain Vs IDBI.
In view of all the above submissions and references the OP prays the Hon’ble Forum to dismiss the complaint with costs as they are not liable to pay any amount to the complainant more than Rs.12,000/- towards redemption amount as there is no deficiency in service.
Complainant filed evidence affidavit and also brief written arguments, the OP’s filed counter/Chief affidavit/evidence affidavit and brief written arguments respectively.
Exhibits A1 to A5 marked on behalf of the complainants and exhibits B1 to B20 are marked on behalf of the OP’s.
Exhibit A1 is the Xerox copy of deep discount bond bearing certificate No.00950733. Exhibit A2 is the Xerox copy of deep discount bond certificate bearing No.00950734. Exhibit A3 is the copy of legal notice dated 27.08.2012. Exhibit A4 is the reply from IDBI Bank to the advocate of the complainant dated 12.09.2012. Exhibit A5 is the letter dated 11.09.2012 of IDBI Bank addressed to the advocate of the complainant.
Exhibit B1 is the extract of judgement dated 22.01.1996 pronounced by the Hon’ble National Commission in the matter of Rajaram corn producers Punjab Ltd Vs Suryakanth Nitin Gupta (HUF) and others. Exhibit B2 is the copy of offer document of IDBI. Exhibit B3 is the call option notice published by IDBI. Exhibit B4 is the copy of application made by the complainants to IDBI. Exhibit B5 is regarding exercising of call option dated 30.09.2001 of IDBI. Exhibit B6 is the copy of notice sent on 30.09.2001. Exhibit B7 is the copy of advertisement regarding redemption. Exhibit B8 is the notice of IDBI bank published in newspaper. Exhibit B9 is also notice of IDBI bank published in newspaper. Exhibit B10 is also the notice of IDBI bank published in newspaper. Exhibit B11 is also notice of IDBI bank published in newspaper. Exhibit B12 is also notice of IDBI bank published in newspaper. Exhibit B13 is also notice of IDBI bank published in newspaper. Exhibit B14 is also notice of IDBI bank published in newspaper. Exhibit B15 is also notice of IDBI bank published in newspaper. Exhibit B16 is the copy of reminder of IDBI bank. Exhibit B17 is copy of letter dated 11.09.2012 addressed by IDBI bank to the advocate of complainant. Exhibit B18 is copy of the statement made by the then Finance Minister in parliament. Exhibit B19 is copy of the judgement of Hon’ble High Court of Gujarath delivered on 04.11.2009. Exhibit B20 is the copy of the order of the Hon’ble State Commission of Maharastra.
Heard arguments and posted for orders. The orders are as follows:-
The counsel for both the parties advanced their arguments by reiterating what they have stated in the complaint, counter, evidence affidavits and brief written arguments respectively.
Perused the material available on record.
It is evident from the deep discount bond-series-1 that the holders of this bond/IDBI shall have the option to encash/redeem the bond only at the end of every 5 years from 31st March,1992 and for the deemed face value mentioned below:-
(a) At the end of 5 years for Rs.5,700/-
(b) At the end of 10 years for Rs.12,000/-
(c) At the end of 15 years for Rs.25,000/-
(d) At the end of 20 years for Rs.50,000/-
(e) As on March 31st 2017 the sum of Rs.1,00,000 for the issue price of Rs.2,700/-
It is also a fact that the bond holders Sri Kolluru Kameswararao and Kolluru Vijayalaxmi have obtained two certificates in respect of the above bonds bearing no.00950733 and 00950734 having registered folio No.DD, 00791007.
In reply to the notice dated 27th August,2012 issued by the Advocate of the complainant to IDBI it was stated by IDBI that the captioned deep discount bonds series-1 were allotted to Kolluru Kameswararao and Smt.Kolluru Vijayalakshmi on 31st March, 1992, in accordance with the terms and conditions of the bond issue stipulated in the offer document dated 15th January,1992 and since the said bonds were for a very long period i.e. 25 years, significant rise or fall in the rate of interest due to changes in market conditions/Government policies during this period were inevitable and hence the provision of early redemption by way of call and put option was stipulated in the above mentioned offer document with a view to safeguarding the interest of the issuer as well as the holders of these bonds. Accordingly IDBI as the issuer had the call option and the holders of these bonds had the put option which could be exercised by either of them on specified dates. The dates fixed for exercising call or put option at certain intervals were specified in the offer document/application forms, as well as indicated clearly on the bond certificate and no interest was payable under the scheme after exercises of the options. Further it was mandatory for the issuer i.e. the IDBI Bank to redeem the bonds on the specified dates if the put option was exercised by any of the bond holders and upon receipt of the duly discharged bond certificates, pay to the bond holders the applicable redemption money for the specified date.
Likewise it was also mandatory for the bond holders to surrender the duly discharged bond certificates and get the redemption money applicable for that specified date if the call option was exercised by the issuer i.e. IDBI.
With a view to effecting early closure of the captioned high cost bonds, IDBI decided to withdraw and redeem these bonds on 31st March,2002 (i.e. the 2nd call option date) by exercising the call option at the deemed face value of Rs.12,000/- per bond.
Therefore IDBI published the call option notice (CON) in all the leading newspapers across the country and also sent one common call option notice (CON) dated 30th September, 2001 enclosing therewith redemption application form (RAF) individually to all the bond holders under certificate of posting whereby the bond holders were advised to surrender, sufficiently in advance (preferably by 31st December,2001), the duly discharged bond certificates to IDBI/investor services of India Limited the registrars, so that the redemption proceeds could be sent to the rightful holder of the bonds in time after processing the redemption request.
Subsequently also IDBI issued reminder notices through leading newspapers periodically but those who did not respond to the IDBI request to surrender the bond and obtain the early redemption money IDBI then sent individual letter dated 29th April 2009 to all such bond holders including the complainant who failed to surrender the duly discharged bond certificate which was binding obligation and necessary to make payment of the deemed face value. Thus using accepted norms and practices IDBI did its best to inform all the bond holders regarding exercise of its call option and made payment of deemed face value of Rs.12,000/- to the bond holders who had responded to the said call option notice and surrendered the duly discharged bonds to IDBI/investor services of India Limited.
In the offer document it was stipulated that IDBI shall not be bound to pay any additional interest or damages or compensation on the bonds redeemed by exercising the call option but however in accordance with the guidelines issued by RBI in respect of unclaimed deposits, as also keeping in view the interest of the esteemed bond holders, the Bank decided to pay additional interest at savings bank rate (quarterly compounding basis) from the date of the call option i.e. 31st march, 2002 to the date of payment of deemed face value of the bond (i.e. Rs.12,000/- per bond) (savings rate upto 2nd May 2011 @ 3.5% per annum and from 3rd May,2011 @ 4% per annum). Therefore IDBI strongly pleads that It has not committed any breach of contract and also there is no deficiency in its service and accordingly not liable to pay any further amount to the complainant under the scheme and they stand/fully discharged and extinguished of any liability in respect of the bond held by the complainant under the above mentioned folio. Also IDBI requested the complainant to forward the following documents for further needful action.
1) Request letter duly signed by the 1st bond holder specifying his/her
complete postal address and bank account details.
2) Original bond certificate discharged by all the bond holders by
affixing 1 rupee revenue stamp on the riverse side of the bond
certificate and be signed by all the bond holders.
3) Self attested copy of PAN of the 1st bond holder.
4) In case of non applicability of TDS to submit the prescribed form i.e.
15G/15H in duplicate further stated that without PAN form 15G/15H
will not be considered and tax will be deducted at higher rate as
notified by Government of India.
The main contention of the complainant is that either the complainants or the OP’s have no right to violate the terms and conditions comtemplated under deep discount bond series and the OP’s have also no right to redeem the said bonds earlier than the dates fixed by the OP’s as the said two bonds are to be matured only by 31.03.2017 and therefore the OP’s have to obey the terms and conditions and pay all the benefits accordingly. The other contention raised by the complainant is that they did not receive any call option letters from the OP’s and the amount collected from the complainant are with IDBI who enjoyed the same and they did not keep the said amount in any suspense account or FDR. The OP’s being banking Institution should return the same to the complainants. As they did not do so, it amounts to deficiency in service and dereliction of duties thus making the IDBI bank liable to pay compensation and also costs.
Whereas the OP’s while advancing arguments in support of their contention have quoted the following citations:-
1) The judgement dated 22.01.1996 pronounced by the National Commission relating to the matter between Rajaram corn producers Punjab Limited Vs Suryakant Nitin Gupta (HUF) and others in the review petition No.88 of 1995 as reported in I (1996) CPJ 233 (NC) held that.
“When a company goes public and various applicants from different places apply for shares it does not mean that the cause of action will accrue to the applicants at the places they reside or are expected to receive the share certificates. The applications for the shares will be deemed to have been accepted at the place where the company has its registered office or from where the shares are to be dispatched. Post office will be deemed to be acting as agent for shareholders for delivery of shares to them”.
2) In another reference in IV (2009) CPJ 40 SC it was stated that if any cause of action is occurred at branch office of main office, based on that branch office the complainant cannot file a case in a Forum which has jurisdiction over the branch office place.
3) In another reference in III (2010) CPJ 42 the Hon’ble State Commission of Himachal Pradesh it was stated that press releases and news items published on behalf of OP’s are merely invitation of offer and that advertisement and press releases will not create any territorial jurisdiction in favour of the complainant which also supports that the complainant is not entitled to file complaint in this Forum.
In view of the above findings it is clear that this Forum has no jurisdiction to entertain the complaint since the related operations i.e. invitation of offer, approval and issuance of deep discount bonds in IDBI Flexi Bonds series-1 (1992) were conducted at their registered office at Mumbai.
The Hon’ble High Court of Gujarat at Ahmedabad in the special civil application No.4908 of 2009 between Vinaben Balkrishna Trivedi and 2-petitioners Vs IDBI and 2-respondents in its oral order dated 04.11.2009 in respect of deep discount bond series-1, it was held that as per the policy decision arrived at by the respondent Bank the petitioners have become entitled to simple interest @ 3.5% per annum for the period commencing from 01.04.2002 ending on 17.03.2009 which lends support to the stand taken by IDBI.
The Hon’ble State Commission of Maharashtra at Mumbai in First Appeal No.A/11/251 (arisen out of order dated 13.01.2011 in case No.10/225 of district Kolhapur) between IDBI Bank Ltd., Vs Rohan Rajendhra/Mali and Rajendra Mahadev Mali pronounced on 28th june,2011 relating to deep discount bond floated by IDBI, it was held that IDBI had to pay Rs.12,000/- towards series-1 of the bond held by the original complainant alongwith interest at 3.5% per annum with effect from 01.04.2002 till its payment and rest of the reliefs claimed by the respondents stands rejected which also lends support to the policy decision taken by IDBI.
It is further evident from the offer document of IDBI in respect of the deep discount bond series-1 that the deep discount price of the bond at Rs.2,700/- will stand enhanced to a value of Rs.1,00,000/- at the end of 25 years in the manner aforesaid only if the investor/IDBI does not exercise the option to withdraw/redeem the bond in the middle. On the investor receiving the amount as specified above in respect of the bond on exercise of the option at any one time, the liability of IDBI under such bond will stand extinguish fully and this condition is reflected on page-3 of the offer Document.
On page 6 of the offer Document it was further mentioned that in the event of IDBI deciding to redeem the deep discount bonds at the end of any of the five year periods, it will announce its intention to do so in one English and one Hindi daily newspaper and also communicate to all the registered holders of such bonds atleast 6 months prior to the date of redemption.
As seen from the said annexures provided by the OP’s there is no deviation from the terms and conditions announced by the IDBI Bank. Since they complied with the parameters specified while sending intimations to the bond holders including the complainant and also publishing in leading newspapers both in English and Hindi, there is no deficiency in service or negligence on the part of the OP’s.
The following are the important issues/vital points to be reckoned while arriving at final decision.
1) There is no consumer relationship since these services/goods does not come in the definition of goods/services as defined in the C.P.Act, since the complainants have only invested in deep discount bonds series-1 which is an investment and also the fact that the bond is in the form of promissory note as evident from the face of bonds.
2) There is no jurisdiction for this Forum since the OP’s registered office is situated at Mumbai from where it has issued invitation for subscription of the aforesaid bonds and also issued the bonds from that place only.
3) The bank is governed by IDBI Act 1964 wholly owned by Government of India and all guidelines and policies are of national priority issued by Government of India from time to time and Bank is dealing with public money and as per conditions of bond the complainants are not entitled to receive interest after the date of call option i.e. 31.03.2002. However they are allowing 3.5% interest per annum on quarterly compounding basis from the date of redemption on unclaimed bonds as announced by the then Finance Minister in parliament on 14.07.2009 and upheld by the Hon’ble High Court of Gujarat on 04.11.2009.
4) Complaint is time barred since it is filed after 8 years from the date of exercising call option and publishing the same in various newspapers.
5) Complainants did not comply with the terms and conditions of offer document and also not followed any advise of Investor Services India Ltd, Registrar of transfer agent and also not submitted duly discharged bonds. Inspite of publication in all leading newspapers and regional languages across India on on 19.08.2001 and also individual call option notice dated 30.09.2001 under certificate of posting and reminder notice published on 07.10.2002 in all leading newspapers and regional languages.
6) The OP i.e. IDBI keeping in view the high cost bonds, fluctuating lending rates, future fluctuating/fierce market conditions, risks involved in financing projects had incorporated call option facility at the time of issue of bonds itself and accordingly it has the right to exercise the said option.
7) The said issue of bonds being investment in nature for future benefits (long term) does not refer to banking or financial service. Further investment in bonds does not come in the definition of goods or hiring of services and hence the contention of the complainant that there is deficiency of service is to be rejected on the further ground that no fees was paid for the service if any.
8) Thus the OP IDBI was not in field of providing commercial banking services to the public at large when deep discount bond series-1 was issued for public subscription. Further the said bonds were issued in the form of promissory note on the specific terms and conditions vide offer Document.
As it is clearly established that there is no deficiency in service or negligence on the part of the OP’s i.e. IDBI the contentions raised by the complainant in the complaint are liable to be rejected straight away.
In view of all the discussions, citations, related issues touched supra, we are of the considered opinion that the complaint is liable to be dismissed.
In the result, the complaint is dismissed but under the circumstances without costs. However the complainants are at liberty to approach the appropriate Forum/Court for redressal of their grievances.
Dictated to the Steno, transcribed by him, corrected by me and pronounced by us in the open Forum, this the 26th day of February, 2014.
Member President
C.C.No.07/2013
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For complainant:- For opposite parties:-
PW 1. RW 1.
DOCUMENTS MARKED
For complainant:-
Ex.A-1 is the Xerox copy of deep discount bond bearing certificate
No.00950733.
Ex.A-2 is the Xerox copy of deep discount bond certifacte bearing
No.00950734.
Ex.A-3 is the Xerox copy of Legal Notice, dated 27.08.2012.
Ex.A-4 is the reply from IDBI Bank to the Advocate of the complainant,
dated 12.09.2012.
Ex.A-5 is the letter dated 11.09.2012 of IDBI bank addressed to the
advocate of the complainant.
For OP:-
Ex.B-1 is the accident of judgement dated 22.01.1996 pronounced by
the Hon’ble National Commission in the matter of Rajaram corn
producers Punjab Ltd Vs Suryaanth Nitin Gupta (HUF) and others.
Ex.B-2 is the copy of offered document of IDBI.
Ex.B-3 is the call option notice published by IDBI.
Ex.B-4 is the copy of application made by the complainants to IDBI.
EX.B-5 is the regarding exercising of call option dated 30.09.2001 of
IDBI.
Ex.B-6 is the copy of notice sent on 30.09.2001.
Ex.B-7 is the copy of advertisement regarding redemption.
Ex.B-8 is the notice of IDBI bank published in newspaper.
Ex.B-9 is also notice of IDBI bank published in newspaper.
Ex.B-10 is also the notice of IDBI bank published in newspaper.
Ex.B-11 is also notice of IDBI bank published in newspaper.
Ex.B-12 is also notice of IDBI bank published in newspaper.
Ex.B-13 is also notice of IDBI bank published in newspaper.
Ex.B-14 is also notice of IDBI bank published in newspaper.
Ex.B-15 is also notice of IDBI bank published in newspaper.
Ex.B-16 is the copy of reminder of IDBI bank.
Ex.B-17 is the copy of letter dated 11.09.2012 addressed by IDBI
bank to the Advocate of complainant.
Ex.B-18 is the copy of the statement made by the then Finance
Minister in parliament.
Ex.B-19 is the copy of the judgement of Hon’ble High Court of Gujarat
delivered on 04.11.2009.
Ex.B-20 is the copy of the order of the Hon’ble State Commission of
Maharastra.
President
Member President
