BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION :HYDERABAD

F.A.No.1796/2007  against C.D.No.637/2004,   Dist. Forum-III,Hyderabad.

Between:

1.The Manager, UTI Investor Services Limited,

    Central Processing Center, Plot No.3,

    Sector-11, Belapur, Navi Mumbai-400 614.

2. Branch Manager, Unit Trust of India,

    Surabhi Arcade, 1^st Floor, 5-1-664, 665 & 669,

    Bank Street, Hyderabad.                                  …Appellants/

                                                                          Opp.parties

               And

1.M.S.Vijaya Prasad, S/o.Late M.B.G.Shastri,

   Aged 53 years, Occ:Chartered Engineer,

   R/o.Meher Mansion, 83, Shantinagar,

    Hyerabad-28.

2. Smt.N.Vijaya Sree, S/o.Sri N.Anil Kumar,

    Aged 40 years, Occ:Housewife,

    R/o.USA, Rep. by her G.P.A. Res. No.1

3. Meher Prakash, S/o.Late M.B.G.Shastri,

    Aged 37 years, Occ:Software Engineer,

    R/o.Newsland, rep. by his G.P.A.

    Respondent No.1.                                          …Respondents/

                                                                        Complainants

Counsel for the Appellants      :   Mr.K.Manmadha Rao

Counsel for the Respondents   :   Mr.A.Ravi

CORAM:HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT,

AND

SMT. M.SHREESHA, HON’BLE MEMBER

              TUESDAY, THE TWENTY SECOND DAY OF  JUNE,

TWO THOUSAND TEN.

Oral Order :(Per  Smt. M.Shreesha, Hon’ble Member)

                                                ****

            Aggrieved by  the order in C.D.No.637/2004 on the file of District Forum-III, Hyderabad , the opposite parties preferred this appeal 

        The brief facts as set out in the complaint  are that the complainant’s father had made several investments with UTI  in US 64  scheme to benefit his children.   He made different investments jointly   in anyone or survivor mode  with himself as first person  and different individuals as second persons and he also made different investments with joint holdings, single holdings with nominations   and single holdings  without nominations. U.S.64 scheme did not take off  and the  principal amount invested in the scheme suffered heavy losses. The complainant’s father died on 1.11.2001 and the Government came forward with special packages   to investors  with the aim to reduce the burden    of losses  they incurred after trusting the U.T.I.    The family members traced out some US 64  Unit Certificates and found  the same with the name of J.V.Subba Lakshmi  as nominee and the family members of late M.B.G.Shastri suspect that  the lady J.V.Subbalakshmi  might have taken away some of the important property documents.  The complainant submit that the UTI officials are  using this lack of complete detail to their advantage.   The certificates which were found  in the house were distributed among the legal heirs as part of family settlement. In that settlement the complainants got the following Investor IDs  with the following US.64 Unit Holders:

        The complainant surrendered all these certificates to UTI and the UTI  registered 1^st complainant as POA (Power of Attorney)   and  gave POA ID No.177813010 to represent second complainant  and POA ID No.177812951 to represent the third complainant.  In the third week  of March 2003 the  first complainant  received the  option letter in  regard to the  different investments  under US. 64  scheme  and in the said option letters, the UTI   asked the respective unit holders to give                                                                                                                                  their options  either for repurchase of units or for conversion into new scheme (6.75% tax free bonds called US 64 bonds).    The first complainant opted for repurchase and submitted  three option forms on 27^th March 2003   and took acknowledgements. 

         On 11^th June ,2003  the first complainant  received 3 cheques  sent by UTI , the details of which are as follows :

The complainant observed  that the UTI had wrongly computed the repurchase values with respect to the holdings held by all the three complainants.  The first complainant says that  in accordance with the scheme, all the  three complainants have not utilized the special package benefit  which is applicable  only  to first 5000 units,  all the ‘A’ category units with respect to each investment of the complainants should be repurchased @ Rs.12/-  per unit.  Hence according to the first complainant the expected repurchase payments mentioned in the option letters of UTI are as follows:

Since the cheques were sent with wrong denominations they are returned to second opposite party on 12^th June, 2003  and requested for proper payments in accordance with the scheme. Since there was no response even after a month  the 1^st complainant approached the 2^nd opposite party  and the second opposite party only informed that the matter was being forwarded to the Head Office.  The  Complainant received a letter dt.14^th July 2003   from the first opposite party  with the same three cheques returned by the first complainant   unaltered  and also the  date of expiry of said cheques was 30^th July,2003 . In the said letter dt.14^th July 2003   the opposite party contended that  they sent the payment for the difference in the amount, but the first complainant did not receive the said difference   in the amounts and he had presented  these cheques without prejudice just before the expiry  date of three cheques.  He also got issued legal notice dt.25^th July 2003  to the first opposite party  who replied  that three cheques for Rs.10,000/- each in favour of  three complainants were dispatched on 1.7.2003 to the address of the  1^st complainant .   In August,2003   the complainant received three similar statements from first opposite party enclosing the proforma of application for issue of duplicate cheque and dispatch statement  details of purported cheques. The complainant  observed that the  enclosed  dispatch  payment details  were similar to  the one  the 1^st opposite party had given to the complainant’s  brother  earlier in October 2002. The complainant also submits that the proforma of application form for issue of duplicate  cheques is  only intended for those persons who  lost the original cheque.  If the purported cheques are truly dispatched,  the complainant cannot be held responsible for any loss of the same. Also if the first opposite party is sure about the  purported dispatch of cheques by ordinary post   the complainant questions the necessity to send the proforma form 3.16  along with proforma form 3.15. The first opposite party must be well aware that these purported cheques  were expired  by 29.8.2003.  The complainant further submits that the  first opposite party had intentionally  withheld the payment of Rs.10,000/- to each of the complainants.  Vexed with their attitude the complainant approached the District Forum seeking direction to the opposite party  award    interest on Rs.3,16,300.37 ps.  @ 16% p.a. from 1^st June,2003  to 30^th July,2003, to pay Rs.10,000/-   which is difference in amount together with interest on difference amount of Rs.10,000/- @ 16% p.a.  from 31.5.2003 till the date of payment together with other costs and  reliefs to the  1^st complainant .  The reliefs of the second and third complainants prayed for are also on the similar lines  based on the amounts to be paid to them.

         The opposite party filed counter stating that under Section 21  of UTI Act,1963  the Board of Trustees is empowered to formulate plans and issue units to the Public Unit Scheme -1964   referred  to as US-64    is one such a scheme launched by the  Trust and this Trust appointed second opposite party as Registrar  and Transfer Agent for the  said scheme.  It is submitted that the said Act  got repealed by an Act of Parliament  more particularly by Unit Trust of India Act-2002.  UTI has been bi-furcated into two entities   firstly  Administrator  of the specified undertaking of Unit Trust of India and  secondly  the UTI Trustee Company  Pvt. Ltd.   The management of the said schemes  which includes the subject scheme  vests with the administrator of the specified undertaking of Unit Trust of India.  On 15.7.2001   the Trust announced  the Special Package Repurchase facility for small investors under US-64 approved by the UTI Board.   The Trust announced to provide repurchase facility upto 3000 units  which were purchased by the investor and allotted by  Trust on 30.6.2001.   As per the special package rate the investor may apply for repurchase  any time between August, 2001 and May 2003 , the details of which are  as follows:

        The above eligibility  was raised to 5000 units w.e.f. 1^st January ,2002 whereby the units allotted by the Trust as on 30^th June 2001  can be repurchased by  Investor  in time between January,2002  and May 2003. It is further submitted that the units purchased by the investor and allotted by the Trust as on 30.6.2001   upto 5000 units  were repurchased at special package rate  and units above 5000 were  repurchased as per Net Asset Value  prevailing  on the date of such  request,  provided , if  an investor applies in the month of May’2003   upto 31^st May 2003.  If so ,  for repurchase of his units  he would be  entitled to receive Rs.12/- per unit upto unit holding of  5000  units and remaining units at Rs.10/- per unit which has been  purchased   by the Investor as on  30.6.2001. The complainant has already availed 5000 units  at the special package rate in respect of his investments made prior to 30.6.2001 and hence sum of Rs.3,66,300.37, 3,66,300.37 & Rs.1,46,520.15  respectively @ Rs.10/-  per unit were paid . The complainants have already availed repurchase under Special Package rate   for 5000  units and  is not entitled  for the balance units under special package rate, hence they cannot claim Rs.10,000/-  each.  Hence there is no deficiency in service on their behalf. 

        The District Forum based on the evidence adduced i.e. Exs.A1 to A23  allowed the complaint directing the opp.parties to pay the following amounts:

Complainant no.1:

(i)Interest loss for delay in settlement of ‘A’ category units

 Rs.60,000/- from 2^nd May,2003 to 30^th July,2003 for 90

days @ 16% p.a. (60,000 x 90/365x16/100)            =Rs.2367.12 ps.

(ii).The interest loss for delay in part settlement of

‘B’ category units on Rs.3,06,300.37 ps. From 1^st June,

2003 to 30^th July,2003 for 60 days  @ 16%  p.a.

(306300.37 x60/365 x 16/100) .                            =8056.12 ps

(iii) The difference in repurchase amount with

respect to ‘B’ category units                                  =10000.00 ps.

                                                                      ______________

                                                                     Rs.20,423.24 ps.

                                                                      _______________

Complainant No.2:

(i)Interest loss for delay in settlement of ‘A’ category units

 On Rs.60,000/- from 2^nd May,2003 to 30^th July,2003 for 90

days @ 16% p.a. (60,000 x 90/365x16/100)            = Rs.2367.12 ps

 (ii).The interest loss for delay in part settlement of

‘B’ category units on Rs.86,520.15 ps. from 1^st June,

2003 to 30^th July,2003 for 60 days  @ 16%  p.a.

(86520.15 x60/365 x 16/100) .                        =Rs.2275.60 ps.

(iii) The difference in repurchase amount with

Respect to ‘B’ category units                         =Rs.10000.00ps.

                                                                   _____________

                                                                   14,642.72 ps.

                                                                   _____________

Complainant no.3

(i)Interest loss for delay in settlement of ‘A’ category units

 on Rs.60,000/- from 2^nd May,2003 to 30^th July,2003 for 90

days @ 16% p.a. (60,000 x 90/365x16/100)      = Rs.2367.12 ps.

(ii)The interest loss for delay in part settlement of

‘B’ category units on Rs.3,06,300.37 ps. from 1^st June,

2003 to 30^th July,2003 for 60 days  @ 16%  p.a.

(306300.37 x60/365 x 16/100)                        =Rs.8056,12 ps

(iii) The difference in repurchase amount with

respect to ‘B’ category units                            =Rs.10000.ps                                                                             ____________

                                                                  Rs. 20,423.24 ps.

                                                                   _____________

In addition to the above said amounts the opposite parties are directed to pay interest on  difference amounts @ 16%  p.a.  from 1^st June 2003 till the date of payment  to the complainants 1 to 3.

It is an admitted fact that  the complainants are holding the following units in the following names :

It is also  not in dispute that in the  third week of March 2003 the first complainant  received option letters with regard to the different investments with UTI under US.64 Scheme from the Administrator  of specified undertaking  of UTI, Mumbai. This is  evidenced under Ex.A7 dt.11.3.2003 addressed to M.S.Viaya Prasad and Exs.A8 and A9 addressed  to the other complainants stating that  UTI is giving  option for repurchase of units or for conversion into new scheme i.e. 6.75% tax free US 64  bonds.  It is also an admitted  fact that the first complainant opted for repurchase and submitted 3 numbers of option forms on 27.3.2003.  The complainant no.1  received 3 cheques  the details of which are as follows:

It is the case of the complainant  that UTI  had wrongly computed the repurchase  values with respect to  the holdings held by three complainants.  Since all the three complainants have utilized  Special Package benefit which is applicable only to the first 5000 units, all the ‘A’ category  units with respect to the each investment of the complainant should be repurchased at Rs.12/- per unit.  Therefore it is the case of the complainants   that they  expect repurchase payments mentioned in the option letters  of UTI  which are as follows:

It is the further case of the complainants that the aforementioned cheques are to be sent by UTI   in the  1^ST week of May, 2003  but they sent only 3 cheques  for Rs.3,66,300.37, Rs.3,66,300.37 & Rs.1,46,520.15  respectively and did not respond to several communications   made by the complainants for the balance amount i.e. Rs.10,000/- to be  paid to each of the complainant.  The complainant vide Ex.A13 dt.11.6.2003 addressed a letter to the opposite party stating that he  is returning the afore mentioned three cheques for the aforementioned  amounts and to settle the claim  with correct amounts.  Ex.A14 is  the  reminder cum legal notice  dt.1.7.2003  got issued by the first complainant to the opposite party stating that for the following amounts  due amounts were not paid:

        Ex.A15 is the reply given dt.14.7.2003  which reads as follows:

        “Please refer your letter  regarding short receipt of repurchase proceeds. We advise having sent  the difference amount of Rs.2/-  to you. We hope by now you must have received the  same. Meanwhile, we are  returning your  repurchases cheque sent by you for correction.   We regret the inconvenience caused to you”. 

 Ex.A17 is the  notice with respect to the short payment of investor I.D.Nos.71614115, 71614085  and 71614077  with respect to the three complainants for the  differential amounts of Rs.10,000/- each.  Ex.A19 is the dispatch payment  details given by the opposite party to the first complainant  stating that  they have sent cheques by ordinary post the dispatch  date being 1.7.2003   and given the instrument details as follows:

“Dispatch Details :

Dispatch Mode   Dispatch Date        Dispatch Address    RUD Status

Ordinary post     01.Jul.2003   Meher Mansion  10-2-289/83

                                           Avatar Meher Baba Marg,

  Shaktinagar, Hyderabad-500 028.

Doc. Type           Doc. Ref. No.       No. of Docs.   

Cheque                54059639               1

Inst.type   Instr.No. Instr.Date  Vldty End dt.   Instr Amt   Bank details

Cheque  54059639  30.Jun,2003 29-Aug-2003 10,000-00  State Bank

of Hyd,10-2-289 

Acct No.     Status and dt  “

10925               unpaid

Exs.A20 and  A21 also evidence the same

The appellants filed written arguments  stating that they have announced the Special Package Repurchase Facility  for  small investors under US.64 approved by UTI Board  on 15.7.2001   and as per the Board’s decision, the Trust announced to provide repurchase facility upto 3000  units which were purchased by the Investor and allotted by Trust as on 30.6.2001 per investor as per  under noted  Special Package Rate, which investor may apply for repurchase any time  between August,2001 and May, 2003.  The appellants submitted that  the above eligibility was raised to 5000 units w.e.f. 1.1.2002, whereby the  units allotted by the Trust as on 30.6.2001  can be repurchased by an investor as per the noted rates in the table mentioned  hereunder any time between January,2002 and May ,2003.  The Units purchased by the investor and allotted by the Trust as on 30.6.2001  upto 5000 units were repurchased at the Special Package  Rate and the units above 5000 units were repurchased as per Net Asset Value prevailing on the date of such  request provided that if an investor applies in the month of May,2003 and only upto 31.5.2003 for repurchase of his units, he would be entitled to receive Rs.12/-  per  unit upto the unit holding of 5000 units  and remaining units @ Rs.10/- per  unit which has been purchased by the investor as on 30.6.2001  and allotted by Trust as on 30.6.2001.  The said position was also widely published in all the National dailies including the UTI bulletin in the month of August,2001 and January,2002.    

It is further submitted by the appellants/opp.parties that the complainants have already availed 5000 units at the Special Package Rate in respect  of their investments made prior to 30.6.2001  since the units were consolidated under ID No.71614069  and since the  respondents have already availed repurchase under Special Package Rate  for 5000 units, they are not e ntitled to get the balance units under Special Package Rate.

        The contention of the appellants/opposite parties that the respondents/complainants  have already availed repurchase under Special Package Rates for 5000 units  hence they are not entitled  for the balance units  is unsustainable  in the light of Ex.A15  in which  the opposite party had  clearly stated that they have sent  different amounts  of Rs.2/- per unit to them and  once again evidenced  under Exs.A19, A20 and A21 together with the dispatch details.   It is clear that these subject cheques were sent by ordinary post   i.e. Exs.A19 to A21.  Exs.A1 to A4 evidence the number of units in the complainants’ names  and  reply of the opposite party with respect to the number of units allotted as on 8.11.2001-8.11.2002.  Exs.A10, A11 and A12 evidences  that the amounts receivable have not been computed  in accordance with the scheme and notified  rates since they have not been categorized  as ‘A’ and ‘B’  units and the entire   units are converted @ Rs.10/- .  It is pertinent to note that Ex.A15 clearly states that the  difference amount of Rs.2/- for the first 5000 units are of ‘A’ category  and Ex.A19, A20 and A21 are the Dispatch Payment Details  wherein  it shows that Rs.10,000/- being the difference in the amount payable  was dispatched to the complainant by ordinary  post which the complainant  never received.   Hence the complainant cannot  be made to suffer  for any negligence of the opposite party.  Further we observe from the record that the District Forum has awarded interest at 16% p.a.  which we reduce to 9%  p.a. while we  confirm the rest of the order of the District Forum. 

        In the result this appeal is allowed  in part modifying the order  of the District Forum  reducing the interest rate from 16% p.a. to 9% p.a.  i.e. interest amounts are to be calculated @ 9% instead of 16% p.a. while we confirm the rest of the order of the District Forum. Time for compliance four weeks . No costs.

                                                        PRESIDENT

MEMBER

Dt.22.6.2010

Pm*