Date of Complaint : 13/11/2014

                                  Date of Disposal: 17/12/2015

IN THE KODAGU DISTRICT CONSUMER DISPUTES REDRESSAL FORUM MADIKERI

JUDGEMENT BY SRI. V.A. PATIL,PRESIDENT

O R D E R

      In the top noted case the complainant filed this complaint against the OP, alleging the deficiency of service, under section 12 of the Consumer Protection Act 1986.

        The brief facts leading to this complaint are as follows;

1. That the father of the complainant had invested a sum of Rs.2,700/- in Deep Discount Bond, IDBI Suvidha Fixed Deposit Schemeof the OP Bank, in the name of the complainant on 31/03/1992.The OP Bank issued the certificate to that effect, bearing No.00725094, under register Folio No. DD 00605836.In the said bond it is mentioned that “The IDBI does here by promise to pay to H.E. Darshan (minor) U/G H.R. Eswarachandra or order on demand at the Head Office of IDBI @Bombay on March 31^st 2017 the sum of Rs.1,00,000/- (Rupees one lakh only) being the face value of the bond here in contained for value received.Further the OP Bank has agreed “that the holder of this bond/IDBI shall have the option to encash/ redeem the bond only at the end of every five years from 31/03/1992 and for the deemed face value mentioned below.

    

     Now 22 years have completed and the complainant intends to encash the bond.  Hence, the complainant has written two letters to the OP on 18/02/2014 and on 02/04/2014 and demanded the OP for the payment of the bond value.  But the OP neither replied nor made the payment.

1. Hence alleging the deficiency the service of the OP, the complainant has approached this Forum praying for the direction to the OP to pay Rs.50,000/-( Rupees fifty only)the value as on end of 20 years being the amount due to him under the said Deep Discount Bond, with interest at the rate of 12% p.a. and cost and such other reliefs as this Fora deems fit, along with the compensation.

    

2. After the service of the notice the OP appeared through its council and filed the objections and denied their liability stating that the complainant has not complied with any of the terms and conditions of the offer document dated 15/01/1992 and not followed any of the advises of the Investor Services India Ltd (R & T agent) for encash of Bond and not submitted the duly discharged bond to R &Tagent.The said bonds do not fall within the definition of “goods or services” and this complainant does not fall within the definition of “consumer dispute”.Further it says that the bonds were issued in the form of promissory notes on specific terms and conditions, and this OP has not extended/ provided any service to the complainant nor has the complainant availed of any service from the OP.Therefore, there has been no deficiency in service by the OP.

    

3. Further the OP admits the issuance of the bond with some terms and conditions and according to the said terms and conditions, the OP decided to exercise its

    

   right of redemption call option on 31/03/2002, and advised all the bond holders by publishing the notice in the leading newspaper in English and regional languages across India on 19/08/2001.  The said call-option notice was dispatched to the complainant to his registered address, with the clear indication that “No interest will be payable on the bonds beyond 31/03/2002”.  Further the OP submits that they have published the reminder call option notice at the regular intervals of six months, giving the details of bonds redeemed by exercising the call option for early redemption.  Inspite of the above the complainant failed to submit the duly discharged bonds to R & T Agent.  Further the OP says that the contents of the complaint are false, frivolous, wrong and the complainant filed this complaint deliberately suppressing the facts of right of call option, and as per the terms and conditions of the bond, the bond holders are not eligible to receive any interest after the date of call option i.e., 31/03/2002.  Inspite of all these options as per the decision of the OP, keeping in view of the RBI directions the OP is ready and willing to pay the redemption amount to get her with interest at the rate of 3.5% p.a. compounded quarterly rest from 01/04/2002, on receipt of duly discharged bond, from the complainant. 

    

4. The complainant and the OP have filed their respective affidavits along with the documents.Heard the arguments of both the sides and now the points that arise for our consideration are as follows;

    

5. Whether there is deficiency of service on the part of the OP as alleged in the complaint?

    

6. Whether the complainant is entitled for the relief as sought for?

    

    

7. What order?

    

    

             The findings on the above points are as follows;

    

           Point No.1 :- Negative

           Point No.2 :- Negative

           Point No.3 :- As per the final order

    

   R E  A S O N S

    

8. Points No.01 & 02 :- It is the case of the complainant, that the father of the complainant had invested a sum of Rs.2,700/- in Deep Discount Bonds of IDBI Bank in the name of the complainant on 31/03/1992, who was minor at the time of investment and the name of his father H.R. Eshwarchandra is shown as U/G.  As per the terms and conditions mentioned in the bond the OP has not paid the maturity value, when asked by the complainant, through his letters dated 24/02/2014 and 02/04/2014. 

    

        Hence, alleging the deficiency of the service of the OP, the complainant has approached this Forum praying for the remedies sought in the complainant.

    

    

9. On verification of the complaint, coupled with the documents and the objections of the OP, it is evident that, the OP had released the Deep Discount Bond (series-1) dated 31/03/1992.The said bonds are issued in pursuance of sec 11(1)(a) of the “INDUSTRIAL DEVELOPMENT BANK OF INDIA ACT 1964”. Under some terms and conditions, mentioned on the face of the Bond itself.The first condition is that, “The Industrial Development Bank of India (IDBI) does here by promise to pay H.E. Darshan (minor) U/G H.R. Eshwarchandra or order on demand at the Head Office of IDBI @ Bombay on March 31^st 2017, the sum of Rs.1,00,000/- being the face value of the bond herein contained for value received”.The second condition is that “The holder(s) of this bond/IDBI shall have the option to encash/ redeem the bond only at the end of every five years from 31/03/1992, and for the deemed face value mentioned below.

    

     The Third condition is that on the holder(s) of this bond, receiving the amount as specified above on exercise of the option aforesaid, the liability of IDBI here under shall stand fully extinguished.

1. On going through the documents submitted by both the parties, it is very much clear that, as per the second condition mentioned in the bond i.e.,“THE HOLDER(S) OF THE BOND/IDBI SHALL HAVE THE OPTION TO ENCASH/REDEEM, THE BOND ONLY AT THE END OF EVERY FIVE YEARS FROM 31/03/1992 AND FOR THE DEEMED FACE VALUE MENTIONED BELOW.

    

     Accordingly IDBI has exercised its right of call option on 31/03/2002 for the deemed face value of Rs.12,000/- as on date, after complying all the legal formalities.

1. On perusal of the complaint averments and the objections of the OP and the documents filed by both the parties and their affidavits and submission of arguments of both sides, we are of the opinion that there is “NO DEFICIENCY OF SERVICE” from the OP.As per the terms of the bond the OP has exercised its right of call option on 30/03/2002.Accordingly as on date the deemed face value of the bond was of Rs.12,000/- (Rupees twelve thousand only) the complainant is entitle to receive the said amount only.The OP being the central Government

    

   undertaking is not liable to pay any amount beyond the call-option date.

    

2. As per the terms and conditions of the bonds, the holders are not eligible to receive any interest after the date of call option.However as per the directions of the RBI, the OP IDBI has taken the decision to pay the interest at the rate of 3.5% p.a. on quarterly compounded basis from the date of redemption on the redemption value of the unclaimed bonds.Hence, the complainant is entitled to receive the same only, after submitting the duly discharged bonds to R & T Agents.As there is no deficiency of service by the OP the complainant is not entitle for the compensation.Hence, we answer the issue No.1 and 2 in Negative.

    

3. In view of the above following;

    

   O R D E R

4. The complaint is allowed in part.

5. The complainant is entitled to receive the sum of Rs.12,000/- (Rupees twelvethousand only) with interest at the rate of 3.5% p.a. on quarterly compounded basis from 01/04/2002, after submitting the duly discharged bond to the R & T agents of the OP, within three months from the date of this order.

6. However both sides shall bear their own costs.

7. Issue certified copies of this order at free of cost to both the parties.

(Dictated to the Stenographer and got it transcribed and corrected and pronounced in the open Forum on this 17^th   day of December 2015)

      (LATHA.M.S.)            (V.A. PATIL)        (K.D. PARVATHY)       

         MEMBER               PRESIDENT               MEMBER

ANNEXURE

        Documents on behalf of complainant

        Documents on behalf of OP