Haryana

Yamunanagar

CC/279/2011

Gulab Singh S/o Jhari Ram - Complainant(s)

Versus

Managing Director,IDBI Tower - Opp.Party(s)

Kulwant Singh

18 Jan 2017

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, YAMUNA NAGAR

 

                                                                                          Complaint No. 279 of 2011.

                                                                                          Date of institution: 31.03.2011 

                                                                                          Date of decision: 18.01.2017

 

Gulab Singh son of Shri Jhari Ram, aged about 42 years, resident of village Uncha Chandana (near Indira Colony), Tehsil Jagadhri, District Yamuna Nagar.                                                                                                                                                                              

…Complainant.

                                    Versus

 

1. Managing Director, IDBI Tower, Cuffe Parade, Mumbai.
2. Chairman, IDBI Tower, Cuffe Parade, Mumbai.
3. Secretary Finance, Govt. of India, New Delhi.

                                                                                                        …Respondents.

 

 

BEFORE:         SH. ASHOK KUMAR GARG…………….. PRESIDENT.

                         SH. S.C.SHARMA………………………….MEMBER.

 

Present:           Complainant in person.

            Shri PK Kashyap, Advocate for OP No.1 and 2.

                         OP No.3 already given up vide order dated 04.07.2013.

ORDER

 

1                      The present complaint has been filed under section 12 of the Consumer Protection Act. 1986.

2.                     Brief facts of the present complaint, as alleged by the complainant, are that respondents No.1 & 2  (hereinafter respondents will be referred as OPs) had given an advertisement regarding the issuance of Bond, the date of which was i.e. Issue Open on 23.01.1992 and issue close on 27.02.1992. As per advertisement, given by respondents No.1 and 2 (hereinafter respondents No.1 & 2 will be referred as OPs No.1 & 2 Bank) the complainant purchased the bond and deposited Rs.2700/- with the OPs No.1 & 2. Accordingly the OPs No.1 & 2 Bank allotted bond No.000871973 bearing certificate No.00871673 on dated 15.06.1992 against the application bearing No. 2506059, folio No.DD00725373. According, to the terms and conditions of the bond the OPs Bank shall have the option to encash /redeem the bond at the end of every five (5) years from March, 31, 1992 with the Deem face value as mentioned below:

 

(a)        At the end of 5 year, Rs. 5700/-

(b)        At the end of 10 years, Rs. 12,000/-

(c)        At the end of 15 years, Rs.25,000/-

(d)        At the end of 20 years, Rs.50,000/-.

                        It has been further mentioned by the complainant that the OPs No.1 & 2 Bank issued draft for Rs.16,343/- bearing No.DD00725973  dated 03.01.2011 only without any reasonable cause whereas, as per terms and condition of the bond the complainant was entitled to get Rs.50,000/- after the lapse of the period of 20 years. The complainant made request so many times but the OPs did not pay any heed and lastly prayed for directing the OPs No.1 & 2 Bank to make balance amount of Rs.33,657/-  (Rs.50000-Rs.16343 already paid) and also to pay compensation as well as litigation expenses.

3.                     Upon notice, OPs appeared and filed its written statement jointly by taking some preliminary objections such as complaint is not maintainable; complainant has no locus standi to file the present complaint; no cause of action; complainant is estopped from filing the present complaint by his own act and conduct; complainant does not fall under the definition of consumer; the IDBI Bank Limited was initially established as a statutory corporation by the name, Industrial Development Bank of India under the Industrial Development Bank of India Act, 1964; the OP Bank had made the public issue of the IDBI Bank bond series -1(1992)  under which the Deep Discount Bonds were offered for subscription by the Public during January, 23, 1992 to February, 27, 1992. These bonds were allotted on March 31, 1992 (Annexure 1). Since these bonds were for a very long period (25 years) significant rise or fall in the lending/deposit  rates due to changes in market conditions and government policies during this period were inevitable. With a view to safeguarding the interest of the Issuer as well as Holders of these bonds the provision of early redemption by way of call and put option was stipulated in the above mentioned Offer Document. It was mandatory for the issuer to redeem the bond (s) on the specified date if the put option was exercised by any of the bond holder(s) and upon receipt of the duly discharged bond certificate(s), pay to bond holder(s) applicable redemption money for the specified date. Likewise, it was also mandatory for bond holder(s) to surrender the duly discharged bond certificate and get redemption money applicable for that specified date, if the call option was exercised by the issuer. With a view to effecting early closure of the captioned high cost bonds erstwhile IDBI Bank decided to withdraw and redmeed these bonds on March, 31,2002 (i.e. Call option date) by exercising the call option at the deemed face value of Rs.12000/-  per bond. Accordingly, erstwhile IDBI Bank published the Call Option Notice (CON) dated August, 10, 2001 in all the leading news papers of India through Ad factors Advertising (Annexure 2). Few illustrative copies of the advertisement are furnished in (Annexure -3). The erstwhile IDBI also intimated vide common CON dated September 30, 2001 (Annexure -4) sent by posting individually to all the bond holders under certificate of posting and requested them to surrender, sufficiently in advance (preferably by December, 31, 2001) the duly discharged bond certificate (s)  to IDBI/investor services of India Limited (ISIL), the registrar and transfer agent to the issue, so that the redemption proceeds could be sent to the rightful holder of the bond (s), in time, after processing the redemption request. Thereafter, periodically on various dates public notices were published in newspapers to reach out to the investors (registered and/or unregistered) whose residential address might have got changed and who had not surrendered the bonds. The bond is redeemable only on surrender of the duly discharged bond certificate by the registered bond holder(s). Therefore, the payment could  not be effected in respect of those registered investors/bondholders who did not respond to the call option notice issued by  IDBI and did not surrender the duly discharged bond certificate for obtaining the early redemption money (Rs.12,000/- ) payable as on the date of Call Option i.e. March, 31, 2002. The OP No.1 and 2 have once again sent reminder notices dated April, 29, 2009 and September 30,2010 by registered post to all those registered bond holders who had failed to respond to earlier notices which were sent individually to all registered bond holders by post under certificate  of posting. The decision was also made known to all registered and/or unregistered bondholders through public notifications published in leading news paper. These steps were taken totally in conformity with the terms and conditions of the captioned bond issue as stipulated in the Offer Document dated January, 15, 1992. Further, in the light of the fact that the notice regarding call option was also published in the newspaper having wide circulation throughout India, the Hon’ble State Commission has also observed/ opined that sufficient notice to the complainant (s)  was given by the appellants (i.e. the Bank)  before exercising the Call Option and hence the Bank has not committed any deficiency in service. It was only on surrendering of the duly discharged bond certificate, which was received by ISIL on December, 14, 2010 that the payment could be made vide warrant dated January, 3, 2011 for Rs.16,343/- the said redemption warrant has been encashed by the complainant. In this context, it may please be noted that the said payment of Rs.16,343/- was inclusive of the deemed face value of Rs.12,000/- plus Rs.4343/- by way of additional interest from the date of the call option to the date of payment. It may also please be noted that the bank’s decision to pay additional interest as mentioned herein above has been upheld  by the Hon’ble Justice Shri D.A. Mehta of Gujarat High Court, Ahmedabad vide his oral order dated November 04, 2009 (Annexure 9) in case titled “Smt. Vinaben Balakrishna Trivedi & Others Vs. IDBI (Special Civil Application No.4908/2009) and lastly prayed for dismissal of the complaint.

4.                     To prove the case, counsel for complainant tendered into evidence short affidavit of the complainant as Annexure CX and CY, photocopy of bond in the Form of Promissory note as Annexure-C1, photocopy of allotment of Deep Discount Bond(s)  (Series-1) as Annexure C-2, photocopy of advertisement as Annexure C-3, photocopy of Form receipt as Annexure C-4, photocopy of bank receipt as Annexure C-5, photocopy of bank receipt as Annexure C-6, photocopy of exercise of call option-IDBI Deep Discount Bonds Series-1 (1992) as Annexure C-7 and closed the evidence on behalf of complainant.

5.                     On the other hand, learned counsel for the OP Bank tendered into evidence affidavit of Prashant Anand, Branch Head, IDBI Bank Ltd. as Annexure RX and affidavit of Brajesh Singh, Branch Head, IDBI Bank Ltd. Branch, Yamuna Nagar as Annexure RY, photocopy of offer document as Annexure R-1, photocopy of account payee cheque as Annexure R-2, photocopy of newspaper cutting as Annexure R-3, photocopy of exercise of Call Option as Annexure R-4, photocopy of list with Serial No., name and addresses as Annexure R-5, photocopy of newspaper cutting as Annexure R-6, photocopy of Order passed by Hon’ble Chhattisgarh, SCDRC, Pandari, Raipur as Annexure R-7, photocopy QUOTE of NCDRC, New Delhi as Annexure R-8, photocopy of oral order of Hon’ble Mr. Justice D.A. Mehta, order dated 04.11.2009 and closed the evidence on behalf of OP Bank.

6.                     We have heard the counsels of both the parties and have gone through the pleadings as well as documents placed on the file very carefully and minutely. The counsel for the complainant reiterated the averments mentioned in the complaint and prayed for its acceptance whereas the counsel for OP reiterated the averments made in the reply and prayed for dismissal of complaint.

7.                     It is not disputes that complainant purchased bond No. 00871637 and had deposited Rs. 2700/- on 15.06.1992 with the OP Bank. It is also not disputed that as per terms and conditions of the bond certificate, the IDBI Bank decided to withdraw and redeemed these bonds on March, 31,2002 ( i.e. Call Option Date) by exercising the call option at the redeemed base value of Rs. 12000/- per bond. It is also not disputed that accordingly the OP Bank published the call option notice dated 10.08.2001 in leading newspaper of India through Ad factor advertising Annexure R-2 and R-3 and also intimated vide CON dated 30.09.2001 (Annexure R-4) by posting individually to all the bond holders under certificate of posting and requested them to surrender, sufficiently in advance ( preferably by December, 31, 2001) the duly discharged bond certificates to the IDBI/Investor Service of India Limited ( ISIC), the Registrar and Transfer Agent to the issue, so that the redemption proceeds could be sent to the rightful holder of the bonds, in time, after processing the redemption request. Thereafter, the periodically on various dates public notices were published in the newspaper to reach out to the investor (registered and/or unregistered), whose residential address might have got changed and who had not surrendered the bonds. the bond was redeemable only on surrender of duly discharged bond certificate by the registered bond holders. Therefore, the payment could not be effected in respect of those registered investor bond holders who did not respond to the call option notice issued by the IDBI and did not surrender the duly discharged bond certificate for obtaining the early redemption money (Rs. 12,000/- payable as on date of the call option i.e. March, 31, 2002, which is duly evident from the photo copies of documents placed on file by the OPs Bank as Annexure R-1 to R-6.

8.                     The only grievances of the complainant is that he was entitled to get full amount of Rs. 50,000/- from the OPs No.1 & 2 Bank whereas the Ops No.1 & 2  Bank had refunded the amount of Rs. 16343/- vide DD No. 00725973 dated 03.01.2011 drawn on State Bank of Patiala which constitute the deficiency in service and unfair trade practice on the part of OPs No.1 & 2 Bank.

9.                     On the other hand, learned counsel for the OPs No.1 & 2 argued at length that the OPs No.1 & 2 Bank has refunded the amount of Rs. 16343/- as per terms and conditions of the bond certificate and draw our attentions towards the call option letter/notice dated 30.09.2001 (Annexure R-4) and news published in various News Papers Annexure R-6 and argued that as per procedure, the Ops No.1 & 2 Bank has refunded the amount to the complainant. Learned counsel for the OPs No.1 & 2 further argued that as the amount of the complainant was lying with the OPs No.1 & 2 Bank after due date of call option i.e. 31.03.2002 (call option date). Hence, the Ops No.1 & 2 Bank has also granted additional interest at the rate of 3.5% per annum as applicable on saving banks account till the date of payment to the complainant i.e. Rs. 12,000/- the face value of the bond certificate and Rs. 4343/- as interest has been given to the complainant. Hence, there is no deficiency in service or unfair trade practice on the part of OPs No.1 & 2 Bank. Lastly, requested for dismissal of the complaint.

10.                   After hearing both the parties, we are of the considered view that there is deficiency in service and unfair trade practice on the part of OPs No.1 & 2 Bank as OPs No.1& 2 Bank has itself admitted that after the call option date i.e. 31.03.2002 the amount of the complainant was lying with OPs No.1 & 2 Bank till the date of refund i.e. 03.01.2011 on which an amount of Rs.16343/- has been refunded by the Ops No.1 &2 Bank to the complainant. Learned counsel for the OPs No.1 & 2 Bank has totally failed to convince this forum that on what date the OPs No.1 & 2 Bank issued individually notice to the complainant as no postal receipt or any other mode vide which any notice regarding call option was sent to the complainant has been placed on file. Although the OPs No.1 & 2 Bank has placed on file a general notice dated 30.09.2001 (Annexure R-4) but no postal receipts or any acknowledgement has been placed on file to prove that in fact the call option letter was sent to the complainant. On the other hand also when the OPs No.1 & 2 Bank issued call option then why the huge amount of the complainant was withheld by the OPs No.1 & 2 Bank till 03.01.2011 i.e. for a period of near about 9 years i.e. from the date of call option i.e. 31.03.2002 to 03.01.2011, more particularly when the Ops No.1 & 2 Bank was having correct address of the complainant with him. It is not the case of the Ops No.1 & 2 Bank that the OPs No.1 & 2 Bank issued the call option individually to the complainant and further refund the amount of bond certificate as per call option but the same was received back due to incorrect postal address or other reason. Meaning thereby that OPs No.1 & 2 Bank never informed to the complainant individually in time due to which the complainant could not surrender/submit his bond certificate to the OPs No.1 & 2 Bank and huge amount was remained lying with the OPs No.1 &2 Bank. Overall although the OPs No.1 & 2 Bank has compensated the complainant with interest at the rate of 3.5% per annum, however, we are of the view that the OPs No.1 & 2 Bank has not granted the proper rate of interest to compensate the complainant, as such, we award the interest at the rate of 9% per annum to avoid further litigation.

11.                   Resultantly, in the circumstances note above and taking into consideration all the facts of the case, we partly allow the complaint of complainant and direct the OPs No.1 & 2 Bank to pay interest at the rate of 9% per annum from the date of call option i.e. 31.03.2002 to 03.01.2011 instead of 3.5% per annum on the amount of Rs. 12,000/- of the face value of the bond certificate. The OPs No.1 & 2 Bank is also directed to pay Rs. 3,000/- as compensation for mental agony, harassment as well as litigation expenses. Order be complied within a period of 30 days after preparation of copy of this order failing which complainant shall be entitled to invoke the jurisdiction of this Forum as per law. Copies of this order be sent to the parties concerned free of costs as per rules. File be consigned to the record room after due compliance.

Announced in open court. 18.01.2017.

 

                                                                                          (ASHOK KUMAR GARG)

                                                                                           PRESIDENT

                                                                                          DCDRF Yamuna Nagar

 

 

                                          (S.C.SHARMA)

                                           MEMBER