Chandigarh

StateCommission

FA/122/2010

Industrial Development Bank of India - Complainant(s)

Versus

Ms. Parveen Madan - Opp.Party(s)

Sh. Manish Jain & Sh. Arun Kumar

06 Oct 2010

ORDER


The State Consumer Disputes Redressal CommissionUnion Territory,Chandigarh ,Plot No 5-B, Sector No 19B,Madhya Marg, Chandigarh-160 019
FIRST APPEAL NO. 122 of 2010
1. Industrial Development Bank of India(Now known as : IDBI Bank Ltd.) IDBI Tower, WTC Complex Cuffe Parade, Mumbai 400005, Through its chief General Manager2. Industrial Development Bank of India Branch Office: SCO 54-55, Sector 8-C, Chandigarh through Mr. Kapil Vashisht, Assistant General Manager ...........Appellant(s)

Vs.
1. Ms. Parveen MadanW/o S.Tirlochan Singh Madan R/o # 1043, Sector 43-B, Chandigarh ...........Respondent(s)


For the Appellant :
For the Respondent :

Dated : 06 Oct 2010
ORDER

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            JUDGMENT
                                                             6.10.2010
 
Justice Pritam Pal, President
 
1.         The aforementioned two appeals arise out of one and the same order dated 16.2.2010   passed by the District Consumer Forum- I, U.T. Chandigarh    whereby complaints bearing   No.1363 of 2009 and 1364 of 2009 filed by Ms.Parveen Madan and Tirlochan Singh Madan respectively were allowed  with costs of Rs.2500/- each and  IDBI Bank  was  directed to pay to each complainant Rs.75000/- alongwith interest @ 8% p.a. since 2.12.2006 till its payment. The aforesaid amounts  were ordered to be paid within thirty days from the date of receipt of copy of the order, failing which OPs were made liable to pay penal interest @ 12% p.a. with effect from 29.9.2009, the date of filing the complaints till payment.    Since, in both these appeals common questions of law and facts are involved, so, we are deciding   these    appeals by this common judgment.
2.           The parties hereinafter shall be referred to as per their status before the District Consumer Forum.
3.               The facts as culled out from complaint No.1363 of 2009- Ms Parveen Madan Vs IDBI Bank & another are that the  complainant had  purchased three Deep Discount Bonds from OPs for Rs.5,300/- each (issue price) for which three certificates in the shape of IDBI Deep Discount Bond-1996 were issued. As per terms, the  maturity value of Rs.2,00,000/- per bond was payable  by the OPs on 18.3.2021 but the holder of Bond was having option to get  redeemed the same on 1.8.2000, 1.12.2006, 1.9.2011 and 1.6.2016 at the redemption amount of Rs.10,000/-, 25,000/-, 50,000/- and Rs.one lac respectively. The complainant  received two letters both dated 29.4.2009  from OP NO.1 wherein it was mentioned that they had exercised the call option on 1.8.2000 and also issued redemption notice dated 25.5.2000 individually to all the bondholders wherein the bondholders were advised to surrender the duly discharged bond certificates to their Registrar namely Investors Services of India Ltd. for release of redemption proceeds of Rs.10,000/- per bond. It was also mentioned  therein that no interest was payable after 1.8.2000. In response to the letter dated 29.4.2009,  complainant sent   legal notice dated 22.7.2009 stating therein that no communication was served upon her about exercising of  call option. In reply to the legal notice,  OPs informed the complainant vide letter dated 13.8.2009 that the call option was exercised on 1.8.2000 and call option notice alongwith redemption application was sent on 25.5.2000 to individual bondholders under certificate of posting requesting to surrender the duly discharged original Bonds. The notices were also  published in leading newspapers  after every six months thereafter and that the call option was binding on all the investors of IDBI Deep Discount Bonds 1996 and  they were offered to pay unclaimed amount alongwith   interest of 3.5% per annum. It was alleged that complainant never received any notice or letter about the call option.  Hence,  alleging  deficiency in service and unfair trade practice on the part of OPs, complainant filed complaint before the District Forum . On similar facts, Trilochan Singh Madan who is husband of Ms.Parveen Madan  filed complaint bearing NO.1364 of 2009.
4.             On the other hand,  OPs contested the complaint and filed reply before the District Forum inter-alia stating therein that the complainant was given the option to redeem the Bond on the dates mentioned in the Bond certificate  and similarly they  had the right of call option on the same dates and this  fact was clearly mentioned on the face of the Bond certificate. It was stated that  IDBI decided to exercise its right of call option on 25.5.2000 and advised all the bondholders by publishing the notices in leading newspapers in English and regional languages across India on 22.9.2000 and reminder notices were  also published in the leading newspapers in English and regional languages   at regular intervals of six months giving details of bonds redeemed by exercising the call option for early redemption but the complainant failed to submit the duly discharged bond certificates. OPs also sent individual notices to all the bonholders including the complainant vide letter dated 25.5.2000 under Certificate of Posting to surrender duly discharged bond certificates to get the redemption proceeds by 1.8.2000 but inspite of the aforementioned publication and  communication, complainant had not submitted the duly discharged bond certificate for redemption. It was pleaded that as per call option notice dated 25.5.2000 no interest was payable on the Bonds beyond 1.8.2000. In the second complaint bearing NO.1364 OPs filed similar reply by taking identical pleas.  
 5.       The District Consumer Forum after going through the evidence and hearing the counsel for parties allowed both the complaints vide common order dated 16.2.2010  as indicated in the opening part of this judgment. This is how feeling aggrieved against the said order , opposite parties have filed two separate appeals.  
 6.       We have heard learned counsel for the parties   and gone through the file carefully. The main point  of arguments raised on behalf of the appellants/OPs is that the publication in newspapers is a recognized mode of service even for purpose of law and OPs had got published in various newspapers about the call option notice  and also issued individual notice to the complainants at the given address under certificate of posting. It was submitted that two letters both dated 29.4.2009 were received by the complainants on the same address at which the earlier letter was sent. However the address on the UCP receipt was only indicative as it was not possible to have entire address thereon due to constraint of space but the folio number mentioned on the UCP receipt pertained to the complainants but they failed to exercise their option and now taking advantage of their own wrongs. The complaints were stated to be time barred as the call option was exercised by OPs in the year 2000 and the complaints before the District Forum were filed in 2009.   However, these points of arguments have been repelled by the  learned counsel for complainants.
7.    We have given our thoughtful consideration to the above submissions  put forth on behalf of the parties  and  find  no force in the contention of learned counsel for OPs  that the complaint was time barred as the same was filed after nine years, inasmuch as the Deep Discount Bonds held by the complainants were redeemable upto 1.6.2016 and  there is no dispute about the right of OPs to exercise call option to redeem the bonds on the dates mentioned on the Bond Certificate for which individual notice was required to be served upon the Bond holder. As analyzed by the District Forum, no notice as required under the bonds was sent to the complainants. Annexure A-III containing a copy of the UPC was produced by OPs . The name of the complainants appeared at Sr.No.241230 and 241231. The address at which the UPC was sent is mentioned to be “House Number 1043”. No Sector number has been mentioned in this address.    House Number 1043 is available in almost all the Sectors of Chandigarh and as such by simply mentioning house number sans Sector the envelope could not reach the addressee. Further, no evidence has been produced on behalf of OPs that the complainants were served with individual notice . On receiving letters dated 29.4.2009, complainants came to know about the call option exercised by OPs and they made correspondence and ultimately filed complains before the District Forum which were well within limitation of two years as envisaged under the Consumer Protection Act, 1986 .  
8.         In such a  similar situation, the Hon’ble National Commission in IDBI Bank Limited & Anr Vs T.K.Nagarthna 2009(1)CLT 108 held that the bank cannot escape its liability by merely publishing something in a newspaper. The contention of IDBI bank that  the call option was communicated through UPC was rejected in the absence of any acknowledgement. The observations of the Hon’ble National Commission in that regard are reproduced as under ;
“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 evolution. 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 all newspapers to locate such advertisement. Hence the bank cannot escape its liability by merely publishing something in a newspaper. It is not the case of the petitioner Bank that it had paid the amount alongwith interest accrued to the complainant on 31.3.2002. The money had remained with the Bank which has an opportunity cost. Further though the amount involved in this case is very small the mighty Bank has chosen to litigate up to the level of the National Commission retaining the amount with it of a small investor.”  
9.      As the OPs could not prove the service of individual notice upon complainants about their exercising of right of call option on 1.8.2000, so they were rightly held liable to pay the redemption value which was due on 1.12.2006 which was Rs.25,000/- as per Bond certificate. The amount remained with OPs and they made use of the same whereas complainants remained bereft of the use of their money, so they were  rightly awarded interest @ 8% p.a. since 2.12.2006 till its payment.
10.       In the result, both appeals fail and  are hereby dismissed leaving the parties to bear their own costs. 
            Certified Copies of this order be sent to the parties, free of charge. The file be consigned to record room.         

                                               


HON'BLE MRS. NEENA SANDHU, MEMBERHON'BLE MR. JUSTICE PRITAM PAL, PRESIDENT ,