Per Shri S.R. Khanzode, Hon’ble Presiding Judicial Member:
This matter is taken on today’s Board with the consent of both the parties. Appellant moved an application to take the matter on today’s Board to which respondent had no objection. Ld. Counsel for Respondent files Vakalatnama, taken on record.
With the consent of both the parties, matter is heard finally. It is the case of respondents/original complainants that deep discount bonds floated by the Appellant – Industrial Development Bank of India (IDBI Bank in short). The bonds from series I were purchased in the name of respondent NO.1 Rohan when he was a minor. He became major on 31.5.2005. In the year 2009, appellant issued letter dated 29.4.2009 to the respondent ( which was received by them on 20.5.2009) and intimated them that those discount bonds (Series I) Scheme was closed by the Bank on 31.3.2002. In fact, what is communicated to the respondent by the IDBI Bank is their rquest to the bond-holder to exercise their exit option ( or put option). In the year 2001, after completion of 10 years of the bonds, the Bank exercised option available to it i.e. call option and intimated the bond-holders through the public notice in newspapers as well as by individual notice sent under postal certificate. However, the respondent failed to act accordingly and surrender the bonds and to collect the amount. Under the circumstances, IDBI Bank submitted that `12,000/- were payable at the end of 10 years i.e. 31.3.2002 as deemed face value/maturity value of those bonds. Since the respondent did not collect the same, it is willing to pay the same alongwith interest (applicable to saving bank A/C ) @ 3.5% P.A. However, the respondent claimed the amount of `25,000/- which is payable at the end of 15 years and since the bank was not willing to honour the said request, consumer complaint was filed. Forum allowed the complaint and directed appellant bank to pay ` 25,000/- alongwith interest @ 6% p.a. w.e.f. 1.4.2006, in addition `1000/- were awarded as compensation for mental torture. Feeling aggrieved thereby, this appeal is prepared by the original opponent-Bank.
Heard both sides. Referring to the terms of these bonds i.e. Series I, it could be seen that the investor had option to exist exercising ‘put option’ and IDBI Bank also had call option to be exercised at the end of every 5 years from the date of allotment and in that event, the deemed face value or maturity value of the bonds would be i) at the end of 5 years , ` 5,700/- ii) at the end of 10 years, `12,000/- iii) at the end of 15 years, `15,000/- and iv) at the end of 20 years, `50,000/-. Original discounted price of the bond was ` 2,700/- which was expected to enhance in value gradually to `1,00,000/- in the course of time.
In the instant case, exercising its call option at the end of 10 years, IDBI had intimated the investors including the original complaint by sending individual notice under postal certificate on 25.9.2001 and also published a public notice in the Indian Express and Live India Newspapers. This notice was also published at the subsequent years also. Copies of these notices are on record. In view of such exercising its option by IDBI Bank, it submitted that they are willing to pay `12,000/- i.e. deemed face value/or maturity value at the end of 10 years. Though according to the Bank they are not entitled to pay any interest after exercising option, they are still willing to pay it at the rate of 3.5% p.a. This could be reflected from the letter of IDBI Bank issued in favour of the investors bond-holder dated 20.9.2001 as well as from the written version of the Bank. Under the circumstances since appellant- IDBI Bank was acting within terms and conditions of the bond, no deficiency in service on their part could be alleged. The observations of the Forum that notice issued to their Registrar of the particular bond cannot be held as notice issued by the IDBI Bank are erroneous and will not stand in the eyes of the law.
The complaint, since the complainant failed to substantiate his case for the deficiency in service, ought to have been dismissed . Since the concession is given by the Appellant-IDBI Bank to pay the amount of `12,000/- with interest 3.5% p.a. from the date of redemption i.e. 31.3.2002 till its payment, we find it proper and just to modify the impugned order accordingly. Hence, the order :
O R D E R
Appeal is allowed.
The impugned order is modified and substituted with the following :
Appellant i.e. the original opponent-IDBI Bank had to pay `12,000/- towards Series I of the bond held by the original complainant alongwith interest @3.5% p.a. w.e.f. 1.4.2002 till its payment. Rest of the reliefs claimed by the respond stands rejected.
In the given circumstances, both the parties to bear their own costs. Accordingly, appeal stands disposed of.
Pronounced 28th June 2011.
