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

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Complt. Case No :1417 of 2009

Date of Institution:   29.10.2009

Date of Decision  :   24.05.2010

Gurkirat Singh (minor) through his father/natural guardian Jaswinder Singh S/o Capt. Sarwan Singh, resident of House No.3283/2, Sector 44-D, Chandigarh.

 ……Complainant

V E R S U S

1]          Industrial Development Bank of India Limited, Regd. Office: IDBI Tower, WTC Complex, Curfee Parade, Mumbai 400 005 through its Chairman & Managing  Director.

2]       IDBI Bank Ltd. bank Square, Sector 17, Chandigarh through its Branch Manager.  

.…..Opposite Parties

CORAM:          SH.LAKSHMAN SHARMA                           PRESIDENT

                    MRS.MADHU MUTNEJA                          MEMBER

PRESENT:      Sh.Sawarn Singh, Auth. Agent of the complainant.

Sh.Amit Sharma, Adv. for OPs

PER MADHU MUTNEJA, MEMBER

                    This complaint has been filed under Section 12 of the Consumer Protection Act.  The complainant, who is minor has represented through his father that the OPs be directed to redeem the IDBI Deep Discount Bond at the requisite issue price as well as pay interest and compensation for delayed payment thereon.

1]                 Taking a look at the facts of the case, the complainant, who is a minor, under the guardianship of his father, purchased IDBI Deep Discount Bond at the issue price of Rs.5500/-.  A copy of the IDBI Deep Discount Bond has been placed on record as Ann.C-1.  As mentioned in the certificate, the bond holder could get these bonds redeemed at any of the four dates mentioned therein.  The details mentioned in the bond certificate are as under:-

                    After issuance of Bond Certificate, the complainant did not receive any letter about the exercising of option from the OPs.  He only received a letter on 4.5.2009, which has been placed at Ann.C-2 wherein he was informed that IDBI had exercised a call option on 30.4.2001and issued redemption notice individually to all bondholders and directed them to surrender the duly discharge bond certificates to Karvy Computershare Pvt. Ltd. (KCPL), who were the Registrars to release of the redemption proceeds of Rs.10,000/- per bond, and no interest would be payable on the bonds after 30.4.2001.  The complainant has not received any such earlier communication and neither had he come across any printed notice about the exercise of this option by OPs.   He requested the OPs vide letter dated 6.7.2009 to redeem the bond as per terms of the original contract without causing any loss to the bondholder and accordingly pay redemption proceeds with interest upto date.  A copy of the letter sent to the OPs is at Ann.C-4.

                    Thereafter the OPs vide their letter dated 29.7.2009 made an offer to the complainant to pay interest at the rate of 3.5% p.a. on quarterly compounding basis on the redemption amount from the initial date of exercising the call option i.e. 30.4.2001 till date.  The OPs directed the complainant to surrender the bond certificate duly discharged at any branch of IDBI Bank by 31.8.2009.  A copy of this letter is at Ann.C-5. 

                    The complainant informed the OPs that since he had never received any notice for surrendering of bond prior to 4.5.2009.  He could not be bound by the letter at Ann.C-5.  He also offered the OPs to redeem the bonds considering the second option date, which was 30.9.2007 as per table above and requested the Ops to pay the redemption amount of rs.25,000/- along with interest as agreed @3.5% p.a. quarterly compounding basis w.e.f. from 30.9.2007 till date.  However, no response was received from the OPs.

                    The complainant has, therefore, respectfully prayed that OPs be directed to redeem the bond certificate considering the second option dated i.e. 30.9.2007 with face value of Rs.25,000/- along with interest @3.5% p.a. quarterly compounding basis as agreed by OPs with effect from 30.9.2007 till payment is made along with compensation.

2]                 The OPs in their reply after taking preliminary objections as to the maintainability of the claim have submitted that the IDBI had made a public issue of Deep Discount Bonds at the price value of Rs.5500/- and the investors of these bonds had the option to withdraw the bonds on the dates mentioned therein. (The table has already been shown above).  The OP decided to exercise the right of call option on April 30, 2001 and advised all the bondholders by publishing the notices in major leading newspapers in English and regional languages across India on 14.2.2001.  Thereafter, the OPs also sent individual notices to all bond holders including the complainant vide their letter dated 28.2.2001 through U.P.C. to surrender the duly discharge bonds by 16.4.2001 to enable the bondholders to receive the redemption proceeds by April 30, 2001.  The call option notice was dispatched to the complainant at his registered address by UPC.  They have also clearly mentioned in that notice that no interest would be payable beyond the period of April 30, 2001.  Since, the complainant did not comply with any term and condition of the offer document and did not submit the duly discharge bonds to KCPL, he could not get back his money. 

                    The OPs have submitted that as per the R.B.I. guidelines on unclaimed deposits, the complainant can 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 till the date of payment.  Hence, they have prayed that the complainant be directed to surrender the duly discharged original bond at the earliest to get the maturity amount.  They have further submitted that when a reminder was sent to the complainant on May 4, 2009 requesting him to receive the redemption amount of Rs.10,000/- by submitting the bond certificate duly discharge, he, instead of surrendering the bond certificates, filed the present complaint.  They have, therefore, prayed that they are willing to pay back the amount as per the initial date of redemption and interest thereon as per R.B.I. guidelines, mentioned above.

3]                 We have heard the learned counsels for both the parties and perused the evidence led by both parties in support of their contentions.

4]                 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, they 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 there is no proof about the delivery of the letter to the recipient.  The OPs have not been able to prove whether the letter dated 28.2.2001 was actually delivered to the complainant.  Hence, they cannot say that the complainant was aware of the redemption.

5]                 At the same time, the demand of the complainant cannot be met since IDBI cannot go beyond the required norms and pay “him 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 first option only dated 30.4.2001 and pay interest @3.5% on quarterly compounding basis on the redemption amount of Rs.10,000/- w.e.f. 30.4.2001 till the date of payment.  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. 30.4.2001 with face value of Rs.10,000/- along with interest @3.5% p.a. quarterly compounding basis w.e.f. 30.4.2001 till the date of payment.

ii)            To pay the complainant a sum Rs.5000/- as cost of litigation.

          This order be complied with within 45 days from the date of receipt of its certified copy, failing which the OPs shall jointly and severally pay the aforesaid decreed amount of bonds along with interest @12% per annum from the date of order till the date of realization besides the cost of litigation.

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

Announced

24.05.2010                                                                      Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

                                                                                  Sd/-

(MADHU MUTNEJA)

MEMBER