Chandigarh

DF-II

CC/471/2018

Surjit Kaur - Complainant(s)

Versus

M/s IDBI Bank Ltd. - Opp.Party(s)

Adv. Sandeep Kumar & Kashmir Singh

28 May 2019

ORDER

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

 

Consumer Complaint  No	:	471 of 2018
Date  of  Institution	:	23.08.2018
Date   of   Decision	:	28.05.2019

 

 

 

 

 

Surjit Kaur wife of Avtar Singh, resident of House No.2140/A, Sector 42-C, Chandigarh.          HaryaHarHar      

             …………….Complainant

 

Versus

 

1]  M/s IDBI Bank Ltd., SCO No.54-55, Sector 8-C, Madhya Marg, Chandigarh through its Manager.

 

2]  IDBI Bank Ltd., Tower WTC Complex, Cuff Parade Mumbai 400005 through its Manager.  

  

………. Opposite Parties

 

BEFORE:  MR.RAJAN DEWAN        PRESIDENT

MRS.PRITI MALHOTRA    MEMBER

         MR.RAVINDER SINGH     MEMBER

           

Argued by :- Sh.Sandeep Kumar, Adv. for complainant.

             Sh.Sahil Singla, Adv. for OPs

 

RAVINDER SINGH, MEMBER

 

                    The complainant purchased Deep Discount Bond worth Rs.2700/- dated 31.3.1992 from OP Bank (An.C-1 & C-2).  It is averred that as per terms & conditions of the said bond, as on 31.3.2017, a sum of Rs.1,00,000/- would be the face value of said Bond.  However, the OPs issued public notice on dated 4.6.2010 in “The Hindu” (Ann.C-3) for redemption of bond scheme by exercise of call option prior to normal maturity dates, which was not in the knowledge of the complainant.  As such, after the period of maturity i.e. 31.3.2017, when the complainant enquired about the value she would receive against the said Bond, she was informed that the bank has already invited a call option to all investors to redeem the bonds.  It is stated that at the time of call option, the redemption amount was Rs.12000/- against the investment of Rs.2700/- for each bond.  Now the present value including interest will be around Rs.17,000/- for each bond.  It is stated that complainant has not received any communication or notice from the OPs with regard to their Call Option to all the investors to redeem bonds in the year 2002.  Therefore, alleging the said act of OPs as deficiency in service, hence this complaint has been filed.

 

2]       The  OPs have filed joint reply and while admitting the factual matrix about the sale of bond in question, stated that they have the option to encash/redeem the bond at the end of every five years from 31.3.1992.  It is stated that the OPs exercised the option of redemption of bonds after 10 years i.e. on 31.3.2002 when the deemed face value of the bond was Rs.12,000/-.  It is also stated that keeping in view the financial viabilities, the OPs were not able to continue with the scheme due to which the bonds were redeemed at an early date and all the investors were informed accordingly through publication in the leading newspapers and notices were also sent through UPC on the given address. Denying all other allegations and pleading no deficiency in service, the Opposite Parties have prayed for dismissal of the complaint.

 

3]      Replication has been filed by the complainant thereby reiterating the assertions as made in the complaint.

 

4]       Parties led evidence in support of their contentions.

 

5]       We have heard the learned Counsel for the parties and also carefully examined the entire evidence on record.

 

6]       The complainant invested Rs.2700/- in Deep Discount Bond (Series-I) and was issued one Bond Regd. Folio No.DD00680985, Certificate No.00817825 on 31.3.1992 by Industrial Development Bank of India (IDBI) (Ann.C-1).  The Bond in the form of Promissory Note, after maturity on 31.3.2017, was holding its face value of Rs.1,00,000/- payable to the holder of Bond.

 

7]       The contentions raised by the OPs that while exercising their powers as per terms & conditions laid down in the said Promissory Note dated 31.3.1992, they have opted to redeem the bond in the year 2002 and as such liable to pay only redemption amount of Rs.12,000/- with interest thereon of Rs.5000/- against the said bond to the complainant, is totally untenable and not permissible under law of equity and fair play.  The investment in Bonds culminate into a contract between the investor and the company.  Any Company, party to the contract, cannot unilaterally do any action to nullify the beneficial effect of the contract, accruing to the investor.  The OPs herein cannot whimsically backtrack from its commitment and an make the promissory note as redundant prejudicial to the interest of investor.   

 

8]       The Opposite Parties could not compel any holder of bond to redeem or surrender the bond against his will before the maturity date as laid down in the Promissory Note itself.  It is the discretion of the bond holder to prematurely redeem the bonds or to wait for its maturity.  The OPs/IDBI cannot thrust upon its indiscriminate decision to redeem the bond upon the bondholder.

 

9]       The contentious issues involved in this complaint, has already been considered by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petiton No.2975 of 2008 – IDBI Bank Limited and Anr. Vs. T.K.Nagarathna, decided on 13.8.2008 and held that:-

“6. The contention of the petitioner's Counsel that Bank has published an advertisement in the newspaper about its intention to exercise the call back option does not carry weight in the days of electronic revolution. In today's world television is found in almost every urban house. Complainant is a resident of Chitradurga a District Headquarters and very few people have time to read all pages of the newspapers to locate such advertisements. Hence the Bank cannot escape its liability by merely publishing something in a newspaper.”

 

10]              The Hon’ble State Consumer Disputes Redressal Commission, UT, Chandigarh in Appeal No.130 of 2018 – M/s IDBI Bank Ltd. & Anr. Vs. Prit Pal Kaur & Anr., decided on 17.12.2018, while dismissing the appeal preferred by IDBI Bank, upheld the order of District Forum regarding liability of IDBI to pay the maturity amount of the bond on its due date of maturity. 

 

11       The Opposite Parties has failed to produce on record any document or evidence to substantiate the fact of delivery of any letter to the complainant in the year 2002 or thereafter regarding their decision for redemption of bond prematurely.  The amount of bond, as stated to be payable by the Opposite Parties, was never tendered or transferred to the account of the complainant/bond holder.  The amount remained with IDBI since the date of promissory note i.e. 31.3.1992 till date and as such any decision or option adopted by the OPs at their own regarding early redemption of the bond in question, carries no legal value.

 

12]      Keeping into consideration the facts & circumstances of the case, as discussed in the preceding paragraphs, we are of the opinion that the complainant is fully entitled for maturity value/amount of the bond, which is Rs.One Lakh, as becomes due on the date of maturity as on 31.3.2017.  The withholding of maturity amount of the bond by the Opposite Parties despite its maturity on 31.3.2017 amounts to unfair trade practice.  The complaint as such is allowed with directions to the Opposite Parties to pay Rs.One Lakh to the complainant, being maturity value of the bond in question, along with interest @9% p.a. from 31.3.2017 till payment, along with litigation cost of Rs.10,000/-, within a period of 30 days from the date of receipt of copy of this order.  The complainant shall return the Bond Certificate and sign/execute the requisite documents in favour of IDBI/OPs, as per their requirement.

 

         The copy of this order be forwarded to the parties free of cost as per rules.

Announced

28^TH May, 2019             

                                                Sd/-

(RAJAN DEWAN)

PRESIDENT

 

Sd/-

                                                           (PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER