BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

O.P. No. 333/2005 Filed on 05.10.2005

Dated : 15.02.2010

Complainants:

1. R. Srimathi, W/o T.V. Lekshmikanthan, residing at T.C 42/1440(15), Ganesh Nivas, Sreevaraha Nagar, Valllakkadavu P.O, Thiruvananthapuram.

    

2. T.V. Lekshmikanthan, S/o Venkitaraman, residing at T.C 42/1440(15), Ganesh Nivas, Sreevaraha Nagar, Valllakkadavu P.O, Thiruvananthapuram.

(By adv. M. Nizamudeen)

Opposite parties:

1. M/s DCM Ltd., 6^th Floor, Vikram Towers, 4 Rajendra Palace, New Delhi-110 008 represented by its Chairman & Managing Director.

    

2. Chairman & Managing Director, M/s DCM Ltd., 6^th Floor, Vikram Towers, 4 Rajendra Palace, New Delhi-110 003.

    

3. M/s Bajaj Capital Ltd., Wellington Plaza, No. 32, 1^st Floor, 90, Annasalai, Chennai – 600 002 represented by its Chairman/ Managing Director.

    

4. The Branch manager, M/s Bajaj Capital Ltd., Attukal Shopping Complex, East Fort, Thiruvananthapuram.

(By adv. R.S. Mohanan Nair)

This O.P having been heard on 30.12.2009, the Forum on 15.02.2010 delivered the following:

ORDER

SRI. G. SIVAPRASAD: PRESIDENT

The facts leading to the filing of the complaint are that complainants invested Rs. 12,000/- on 20.02.1997 against 12 Non-Convertible Debentures (NCD) bearing Nos. 82906 to 82917 issued by opposite parties, that the said debentures carried interest at the rate of 19.5% per annum payable compounded half yearly, that the 1^st opposite party agreed to redeem the said debentures at the end of 17 months and 25 days from the date of allotment, that even after the date of half yearly interest 1^st opposite party has not paid the agreed rate of interest to the complainants, that even after repeated requests 1^st opposite party vide letter dated 04.02.2004 assured and agreed to repay 50% of the principal amount on 02.01.2005 and the next 50% on 02.01.2006 and 100% interest on 02.01.2007, that opposite party did not pay accordingly. The act of non-payment of amount by opposite parties is unfair, irresponsible and deficiency in service. Hence this complaint to direct opposite parties to pay Rs. 30,941/- to the complainants along with Rs. 50,000/- as compensation and Rs. 5,000/- as costs.

1^st and 2^nd opposite parties submitted preliminary objection by post stating that in case of any dispute relating to non-convertible debentures, Delhi courts alone has the jurisdiction, that the opposite party company filed a comprehensive scheme of restructuring and arrangement to restructure its business and reschedule its debt in December 1999, that the said scheme was sanctioned by Hon'ble Delhi High Court vide its order dated 29.10.2003, and a copy of the scheme was filed with Registrar of Companies for registration, that once the scheme has been sanctioned under provisions of Sec. 391/394 of the Companies Act, it is binding on all the shareholders, creditors as well as all the subordinate courts, forums or tribunals. It is further averred in the objection that in terms of the sanctioned scheme, the payment would be made to NCD holders as per the schedule that upto Rs. 12,000/-, 50% of the principal amount in the first year, next 50% in the second year and 100% interest in the third year. In accordance with the schedule company has paid 50% of the principal amount vide D.D No. 517437 dated 10.11.2005 for Rs. 6,000/-. As per the scheme the interest is required to be paid at the date of maturity at the contracted rate from 15.08.1998 to 31.12.1998 at 14%. There is no provision for interest beyond 31.12.1998.

Opposite parties 3 & 4 filed version contending that the complaint is hopelessly barred by the law of limitation, that complaint is bad for misjoinder of the parties, that there is no allegation of any kind whatsoever regarding deficiency in service on the part of Bajaj Capital Ltd., that there is no contract or privity of contract between complainants and Bajaj Capital guaranteeing the repayment of the NCDs. Opposite parties 3 & 4 acted as a broker only to transmit the application of the complainants to other respondents, who accepted the said deposit and issued non-convertible debentures to the complainants. The cheque of the complainants towards the NCDs along with application was duly transmitted by the 3^rd opposite party to other respondents. If at all any refund against the above said NCDs is to be made, that is to be made by other respondents and not by opposite parties 3 & 4. There is no deficiency in service on the part of opposite parties 3 & 4. Hence opposite parties 3 & 4 prayed for dismissal of the complaint.

The points that arise for consideration are:-

1. Whether the complainant is entitled to get Rs. 30,941/- from the opposite parties?

2. Whether the complainant is entitled to get interest at the rate of 19.5% for the said amount?

3. Whether there is deficiency in service on the part of opposite parties?

4. Whether the complainant is entitled to get compensation, if so, at what amount?

5. Whether the complainant is entitled to get cost? If so, at what amount?

In support of the complaint, 2^nd complainant has filed an affidavit of himself as PW1 and Exts. P1 to P8 were marked. Opposite parties did not file affidavit.

Points (i) to (v) :- It has been the case of the complainants that complainants invested Rs. 12,000/- on 20.02.1997 against 12 Non-convertible debenture (NCD) bearing Nos. 82906 to 82917 issued by opposite parties 1 and 2, that the said debentures carried interest at the rate of 19.5% per annum payable compounded half yearly and that the 1^st opposite party agreed to redeem the said debentures at the end of 17 months and 25 days from the date of allotment, viz, 20.02.1997. It has also been the case of the complainants that even after the date of half yearly interest 1^st opposite party has not paid the agreed rate of interest to complainants, that even after repeated requests 1^st opposite party vide letter dated 04.02.2004 assured and agreed to repay 50% of the principal amount on 02.01.2005, and the next 50% on 02.01.2006 and 100% interest on 02.01.2007, that opposite parties did not act accordingly and that at last after filing this complaint, 1^st opposite party sent Rs. 6,000/- as half of the principal amount. Ext. P1 is the copy of the Debenture Certificate dated 02.02.1998 issued by opposite parties 1 & 2. As per Ext. P1 complainants held 12 Non-convertible debentures of Rs. 1,000/- each bearing Nos. 82906 to 82917. On a perusal of Ext. P1 it is seen that interest at the rate of 19.5% per annum will be due half yearly on 20^th August and 20^th February every year on the amount outstanding, that the last such payment of interest would be on the date of redemption, that the company shall redeem those debentures at its face value of Rs. 1,000/- per NCD under series 'A' held by such holders who have not exercised their right of 'put option' for early redemption at the end of 17 months and 25 days from the date of allotment viz, 20.02.1997. It is argued by the complainant that the said investment against NCD was done through opposite parties 3 & 4. Ext. P2 is the letter dated 15.07.1998 issued by opposite parties 3 & 4 wherein it is stated that opposite parties 3 and 4 are acting as brokers only. Ext. P3 is the letter dated 18.04.1998 issued by opposite parties 3 & 4 to complainants. Ext. P4 is the letter dated 15.08.1998 issued by opposite parties 1 & 2. Ext. P5 is the letter dated 04.02.2004 addressed to complainant by opposite parties 1 & 2 informing them about the payment plan of their NCDS. Ext. P6 is the letter dated 22.02.2005 addressed to 1^st opposite party by the complainants stating that the aforesaid amounts not yet received by them. It is averred in their version by opposite parties 1 & 2 that the respondent company filed comprehensive scheme of restructuring and arrangement to restructure its business and reschedule its debt in December 1999, that the said scheme was approved by an overwhelming majority of the shareholders/creditors in the court convened meetings held in May 2000, that the Regional Director, Kanpur and official liquidator also filed their no objection certificate to the scheme and that finally the scheme was sanctioned by the Hon'ble High Court vide order dated 29.10.2003, that in terms of the said scheme the payment would be made to NCD holders in such a manner that 50% of the principal amount in the first year, the next 50% of the principal amount in the 2^nd year and 100% interest in the third year, that company had paid Rs. 6,000/- (50% of the principal on 10.11.2005 and the balance payment would be made on the due date as per provisions under the scheme. It is argued by the complainant that opposite party has not paid the balance amount as assured. Opposite parties 3 and 4 filed their version contending that they have acted as a broker only having no liability of any kind whatsoever regarding the repayment of the NCDS and that they never acted as the agent of opposite parties 1 & 2 and that the complaint against opposite parties 3 & 4 is beyond the scope of the Consumer Protection Act as such complaint is not maintainable against opposite parties 3 & 4. In view of the foregoing discussions it is pertinent to point out that opposite parties 1 & 2 had not acted as per the condition of NCDs and as per the re-structured scheme. Thus the action of opposite parties 1 & 2 would definitely amount to deficiency in service. In view of the matter we are of the considered opinion that complainants are entitled to get Rs. 6,000/- as 50% of the principal amount of Rs. 12,000/- with contracted interest at the rate of 19.5% for Rs. 12,000/- from 20.02.1997 to 14.08.1998 and 14% interest from 15.08.1998 to 31.12.1998.

In the result, complaint is allowed. Opposite parties 1 & 2 shall pay the complainant a sum of Rs. 6,000/- as 50% of the principal amount of Rs. 12,000/- along with contracted interest at the rate of 19.5% for Rs. 12,000/- from 20.02.1997 to 14.08.1998 and at 14% from 15.08.1998 to 31.12.1998. Opposite parties shall also pay the complainants a sum of Rs. 5,000/- towards compensation and Rs. 1,000/- towards cost.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 15^th day of February 2010.

G. SIVAPRASAD,

President.

BEENAKUMARI. A : MEMBER

S.K. SREELA : MEMBER

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O.P. No. 333/2005

APPENDIX

I COMPLAINANT'S WITNESS :

PW1 - Lekshmikanth

II COMPLAINANT'S DOCUMENTS :

P1 - Photocopy of Debenture Certificate dated 02.02.1998

P2 - Photocopy of payment receipt dated 15.07.1998

P3 - Photocopy of letter dated 18.04.1998

P4 - Photocopy of registered letter

P5 - Photocopy of letter dated 04.02.2004 addressed to

complainant by opposite party.

P6 - Photocopy of registered letter dated 22.02.2005

P7 - Photocopy of postal receipt dated 22.02.2005

P8 - Photocopy of acknowledgement card

III OPPOSITE PARTY'S WITNESS :

NIL

IV OPPOSITE PARTY'S DOCUMENTS :

NIL

PRESIDENT