NCDRC

NCDRC

RP/740/2020

IDBI BANK LIMITED - Complainant(s)

Versus

SADANANDA DAS - Opp.Party(s)

MR. RAJIVE R. RAJ

17 Aug 2023

ORDER

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
 
REVISION PETITION NO. 740 OF 2020
(Against the Order dated 14/02/2020 in Appeal No. 800/2018 of the State Commission West Bengal)
1. IDBI BANK LIMITED
THROUGH ITS AUTHORIZED OFFICER, MS. URVASHI VIKRAM SINGH DGM,SATPUAL MITTAL CENTRE, 1/6, SIRI FORT INSTITUTIONAL AREA, KHEL GAON MARG,
NEW DELHI-110049
...........Petitioner(s)
Versus 
1. SADANANDA DAS
S/O. SHRI GANGADHAR DAS, R/O. 6/1A, CREEK LANE, P.S. MUCHIPARA,
KOLKATA-700014
WEST BENGAL
...........Respondent(s)

BEFORE: 
 HON'BLE DR. INDER JIT SINGH,PRESIDING MEMBER

FOR THE PETITIONER :
MR. RAJIVE R. RAJ, ADVOCATE
FOR THE RESPONDENT :
MR. ANIRUDDHA BHATTACHARYA, ADVOCATE
MR. RAJ KUMAR MAURYA, ADVOCATE

Dated : 17 August 2023
ORDER

1.       The present Revision Petition (RP) has been filed by the Petitioner against Respondent as detailed above, under section 58 (1)  (b) of Consumer Protection Act 2019, against the order dated 14.02.2020 of the State Consumer Disputes Redressal Commission, West Bengal (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No. 800/2018 in which order dated 17.08.2018 of District Consumer Disputes Redressal Forum, Kolkata (hereinafter referred to as District Forum) in Consumer Complaint (CC) No. 426 of 2017 was challenged, inter alia praying for:-

 

(i)      setting aside/modifying/reversing the order dated 14.02.2020 passed by the State Commission;

 

(ii)     passing directions in favour of the Petitioner that the petitioner is not liable to pay any amount except the amount of Rs.19,214/- which has already been paid to the Respondent.

 

2.       While the Revision Petitioner (hereinafter also referred to as Bank) was Appellant and the Respondent (hereinafter also referred to as Complainant) was Respondent in the said FA No. 800/2018 before the State Commission the Revision Petitioner was OP and Respondent was Complainant before the District Forum in the CC No. 426/2017. Notice was issued to the Respondent on 01.11.2021.  Parties filed Written Arguments/Synopsis on 30.06.2022 and 10.06.2022 respectively.

 

3.       Brief facts of the case, as emerged from the RP, Order of the State Commission, Order of the District Commission and other case records are that:

 

(i)      the Petitioner is a company incorporated and registered under Companies Act, 1956 (1 of 1956) and a banking company within the meaning of Section 5 (c) of the Banking Regulation Act, 1949 (10 of 1949). In January 1992, the Petitioner had issued a Public Issue of IDBI Unsecured Bonds for a minimum aggregate amount of Rs. 300 Crores and invited general public for investment in the said scheme. In response to the same the Respondent had purchased one Deep Discount Bond Series-I bearing Certificate Nos. 01238840 Distinctive Nos. 001434671 to 001434671 for Issue Price @ Rs2,700/-.  As per the terms and conditions,  the Face Value of the aforesaid one Deep Discount Bond Series-I was Rs.1,00,000/- and for a tenure of 25 years upto 31.03.2017 and both the parties had the option to surrender/ redeem after every five years at the deemed face value as mentioned below:

 

          (i) At the end of 5 years i.e 31.03.1997       Rs. 5,700/-

(ii) At the end of 10 years i.e. 31.03.2002   Rs. 12,000/-

(iii) At the end of 15 years i.e. 31.03.2007  Rs.25,000/-

(iv) At the end of 20 years i.e. 31.03.20012          Rs.50,000/-

 

(ii)     The Respondent recorded their correspondence and permanent address as “6/1A Creek Lane, Kolkata, West Bengal -700 014”. Thereafter, the Respondent has neither made any correspondence till April 2017 i.e. at the time of redemption of the Bonds.

 

(iii)    On 31.03.2002 the Petitioner exercised call option of the aforesaid Bonds as per terms and conditions mentioned in the Offer Document. As per Offer Document, the Bank announced its intention to exercise Call Option in one English & one Hindi daily newspaper without any commitment of location/ regional language, of the said publication. Accordingly, the call option notices were published in all leading National Daily Newspapers including, Anand Bazar Patrika, Times of India, Prabhat Khabar, Financial Express, Indian Express, Jansatta, Hindustan Times, Deccan Herald, Hindu, to name a few, dated 19.08.2001 wherein the subscribers were called to redeem the said Bonds. It was mentioned in the call option notice (sent to individual bondholder & also published in newspapers) that in order to claim redemption amount, bondholders have to surrender original bond certificate and interest will be paid on maturity/ redemption amount at the savings Bank rate after 31.03.2002 i.e. call option date. The Petitioner also issued individual letters to all the subscribers in September 2001 i.e. six months prior to call option date, intimating Bank's intention to exercise call option in the aforesaid scheme and accordingly a Call Letter dated 30.09.2001 was also issued to the Respondent, sent under post/UPC dated 30.9.2001 at her recorded address i.e. 6/1A, Creek Lane, Kolkatta, West Bengal-700 014. The Petitioner also obtained a letter dated 26.11.2009 issued by the Indian Express confirming publication of the Call option notice published in their Newspaper on 19.08.2001. However despite receipt of the aforesaid letter dated 30.09.2001 the respondent never approached the petitioner for redemption of the said Bond. The Petitioner had been regularly publishing Reminder Notices in the National Daily Newspapers vide Notices dated 03.10.2002, 19.08.2001, 21.06.2006,  25.01.2007 and 19.02.2008. However, despite the knowledge of the aforesaid notices, the Respondent did not approach the Petitioner for redemption of the said Bonds. Thereafter the Petitioner again published Reminder Notices in the National Daily Newspapers i.e. Notice dated 04.06.2010 and Notice dated 30.09.2011. However, the Respondents again did not approach the Petitioner for redemption of the said Bonds. The Petitioner has incurred huge expenses towards the publishing of the said advertisements which is apparent from the Invoices placed on record.  

 

(iv)    The Respondent had not approached the Petitioner for the redemption of the said Bonds. Hence, the Petitioner, besides a reminder in May 2009, once again sent Call Notice vide Regd. AD Post dated 22.08.2013 to the Respondent at her recorded address, but the Respondent never approached the Petitioner for redemption of the said bonds.

 

(v)     That on 21.04.2017, the Respondent applied/claimed redemption of the Bonds. On receipt of the said request and original Bond Certificates and other documents, the Petitioner processed the redemption and accordingly an amount of Rs.19,214/- has been credited to the State Bank of India Account of the Respondent on 14.07.2017 through NEFT, in favour of the Respondent towards the full and final payment of the said Bonds.  The Petitioner has calculated the said amount as Redemption Value of Rs.12,000/- of Bond as on 31.03.2002 plus simple interest @3.5% p.a. w.e.f. 01.04.2002 till 18.04.2017. 

 

(vi)    After receipt of the said cheque, the Respondent issued Letter dated 28.07.2017 to the Petitioner for the first time alleging grievances about the said Redemption and remittance of less amount and the Petitioner informed the Respondent vide Reply dated 05.08.2017 that it had exercised call option on 31.03.2002 and the redemption amount is Rs.12,000/- plus interest at savings Bank rate from the date of call option till realization as the said scheme was redeemed vide call notice dated August 2001.

 

(vii)   Being not satisfied with the response of the Petitioner, the Respondent issued legal notice dated 25.08.2017 and subsequently filed complaint before the District Forum against the Petitioner.  

 

 

 

4.       Vide Order dated 17.08.2017 in the CC No. 426/2017, the District Forum allowed the complaint against the OP with litigation cost of Rs.10,000/- and directed the OP/Petitioner herein to pay Rs. 80,786/- as balance amount of Deep Discount Bond (Series-I) with interest @5% p.a. to the complainant within 30 days from the date of this order along with litigation cost. The OP was also directed to pay Rs.50,000/- to the complainant as compensation for harassment and mental agony of the complainant within 30 days from the date of passing the order.  The District Forum also directed the OP to deposit Rs.25,000/- with the District Forum as punitive damages for practicing unfair trade.

 

5.       Aggrieved by the said Order dated 17.08.2018 of District Forum, Petitioner appealed in State Commission and the State Commission vide order dated 14.02.2020 in FA No. 800/2018 passed the following order:-

 

“that the Appeal be and same is allowed on contest in part. The Appellant/OP is directed to pay Rs. 80,786/-, being the balance amount of the Deep Discount Bond Series-I within 45 days from the date of the instant order. The Appellant/OP is further directed to pay a cost of Rs. 5,000/- and compensation of Rs. 30,000/- to the Respondent/Complainant within the same deadline, failing which, simple interest @ 9% p.a. shall accrue to Rs.1,10,786/-, being the total of the refund amount and compensation, from the date of default till the entire amount is fully realized. The impugned judgment and order stands modified accordingly.” 

 

6.       Petitioner has challenged the said Order dated 14.02.2020 of the State Commission mainly on following grounds:

 

 

(i)      the impugned order dated 14.02.2020  passed by the State Commission is bad in law, biased and is against the principles of natural justice as such is a non-speaking order and is liable to be quashed/set aside.  The impugned judgment is against the facts of the case and principles of natural justice and is based on surmises and conjectures without considering the documentary proofs on record and thus has resulted in grave miscarriage of justice hence liable to be set aside. The State Commission committed material irregularity and passed the impugned order without observing the merits of the Appeal and the facts of the matter that the Petitioner since the year 2002 has been consistently publishing the Call Notice/Reminder Notices in leading/daily National Newspapers alongwith West Bengal Editions and the said Newspapers are having vast readership in the vicinity where the Respondent has been residing. The State Commission committed material irregularity and has passed the impugned order arbitrarily without considering the basic facts and admissions of service of call notice through publication.  The State Commission never considered the principles laid down by this Commission in the matters RP 3930 of 2013 titled as Chatur Bihari Sharma Vs. IDBI Bank Ltd. & Anr. vide judgment dated 25.11.2013 and RP No. 3107 of 2012 titled as Mahendrapal Kashiram Sharma Vs. IDBI Bank Ltd. & Anr. vide judgment dated 28.11.2016.  Both the above judgments have been passed by this Commission on similar facts and circumstances on non-redemption of the same Bonds in the year 2002 by the other subscribers. 

 

(ii)     Because the State Commission grossly erred and did not consider the facts that the Call Notice has been duly sent vide UPC Post on the recorded address of the Respondent. The State Commission grossly erred and has not considered the material facts that the Respondent till April 2017 has never communicated with the Petitioner.  The State Commission failed to consider the facts that a Call Notice sent to the respondent vide Regd. AD Post dated 12.05.2009 and 22.08.2013 at the respondent’s address which has been in the records of the Petitioner.

 

(iii)    The State Commission has grossly erred and has not considered the material facts that the Respondent has approached the Petitioner after 16 years from the date when the Call Notice has been published/ issued in the year 2001. The State Commission has committed material irregularity and has not considered the material facts that the Petitioner has complied all the terms and conditions of the said Bond Series especially Redemption/Withdrawal Clause of Bond Offer Document. The State Commission has grossly erred and has passed the impugned order despite not observing any infirmity in the compliances made by the Petitioner. The State Commission committed gross irregularity in not interpreting all the documents correctly which have been placed on record. The impugned order is against the settled principles of law and the guidelines framed by the Reserve Bank of India and even otherwise the Ld. Commission below is not empowered to grant such reliefs. The State Commission miserably erred in not considering that there was no deficiency of services on the part of the Petitioner and the impugned order will send wrong signals to the public at large as also to the other subscribers of the said Bond Series who till date have not redeemed the same and would promote frivolous litigation hence the impugned order is against the principles of law as the defaulter has been awarded. 
The State Commission despite defaults by the Respondent failed to grant any relief to the Petitioner and dismissed the appeal and directly granted concessions to which the Respondent was not entitled. The State Commission has grossly erred and has held the Petitioner liable for the lapses and defaults which is in contrary to the facts and records placed before the Fora below and  miserably failed to appreciate the material facts that the Petitioner is the custodian of the public money and by granting such reliefs the interest of the public at large is affected.  No explanation or weightage has been adduced to the documents filed by the Petitioner. The State Commission failed to consider that the Respondent out of their own freewill and choice had subscribed to the said Bonds and admittedly have never raised any complaints hence once the Agreement has been duly executed the parties have to abide by the terms and conditions as stipulated therein. The Petitioner has neither violated any law of the land nor the terms and conditions of the said Bond Series. The State Commission failed to consider that the Respondent is not covered under the Consumer Protection Act. The State Commission has committed material irregularity and has not decided the complaint on merits and without any corroboratory evidence came to the conclusion that the Petitioner has committed deficiency in services and unfair trade practices.

 

7.       Heard counsels of both sides.  Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

 

7.1.    During the arguments, the Petitioner in addition to repeating what has been stated under the grounds, under para (6) above, contended that it is surprising to note the Respondent/complainant admitted receipt of notice, which was sent through UPC on 22.08.2013 but conveniently denied the receipt of notice sent on 30.09.2001. Both the Notices were sent through UPC at the same address i.e. Sadanand Das, 6/1A, Creek Lane, Calcutta-700014. That none of notices sent to Respondent/Complainant were received back as unserved.

 

 

7.2     The deemed face value of the Bond at the end of 10 year period i.e. on 31.03.2002 was Rs.12,000/- (comprising of the Issue Price of Rs. 2700/- + Discount/Interest of Rs.9300/-). In terms of offer documents, Bond Holder had to surrender the original bond and then money was to be credited in their account. Admittedly, the Respondent/Complainant never approached the Bank to surrender the bond but approached only in 2017, claiming the full maturity. The Bank consequently informing the decision to exercise call option during the year 2002 credited Rs.19,214/- in SBI account of bond-holder through NEFT in terms of the RBI Circular which provided for payment of interest on unclaimed deposit, extended the benefit of interest at the rate of Saving Bank Account on the deemed face value payable as on date of call option.  From bare perusal of the aforesaid publications would reveal that no District/Taluka/Talukas was left out, and the newspaper publication collectively covered all the Districts/Talukas/Taluks, pan India. Furthermore, although not required under and in terms of the Offer Document, the Bank in the general interest of the bondholders issued publication in "vernacular" also. Thus, the public notices were issued in leading daily newspapers having wide circulation in the vicinity and neighborhood where the bondholders reside. The Petitioner also issued reminder newspaper publications periodically and the Respondent was negligent by not redeeming bond when call option notice for redemption was issued and periodic newspaper publications were made. The aforesaid actions, apart from repeated newspaper publications, has resulted in immense financial burden on the Petitioner Bank, over and beyond the action contemplated in the bond document, however the Petitioner Bank remained committed to expend additional resources if needed in the efforts to reach the remaining  bond-holders. The said facts clearly reveal that the Petitioner Bank did not commit any deficiency in service, as it acted well beyond the actions mandated in the Bond document to ensure that the redemption amount is paid to all Bond-holders. The Offer Document is silent on the mode of dispatch of personal notices however with abundant precaution, Petitioner sent all Notices through UCP, which was the only mode of Registered post and prevalent in those days and the same is an acceptable, valid and permissible mode of dispatch of personal notice. In addition to the above modes of service, the Petitioner Bank had taken an endeavor to pay to all unclaimed / unpaid bond holders their amounts due, Bank is regularly and continuously updating its website with all details of unclaimed bonds in different series and their status as well as FAQs which addresses most of the common queries of the Bondholders. The information is prominently displayed on the main page of the website where bondholders can check their investment details along with contact details Registrar and Transfer Agent (RTA) as well as process of claiming the redemption amount. Besides, with a view to ensure quick resolution queries, the details of the Bank appointed RTA are mentioned on the bond certificate. The Bondholder also has access to all the Branches of Petitioner Bank and can approach the nearest Branch, pan India resolution of their queries or for claiming redemption amount.

 

7.3.    The  State Commission failed to consider the principles laid down by this  Commission in the identical Bond related matters i.e. Revision Petition No. 3930 of 2013 titled as Chatur Bihari Sharma vs. IDBI Bank & Anr. vide judgment dated 25.11.2013 has already upheld the Bank's decision to exercise the call option in terms of the bond document as legal, as also the mandatory condition of surrendering of the bond to claim the redemption amount. This Commission further directed the Bank to pay interest @ 3.5% p.a. on quarterly compounding basis w.e.f. 31.03.2002 on the redemption value of the unclaimed bond. At the risk of repetition, it is submitted that the Bank has been offering / paying the same to all the bondholders and Revision Petition No.3107 of 2012 titled as Mahenderpal Kashiram Sharma vs. IDBI Ltd. & Anr. vide judgment dated 28.11.2016. In view of the above, it is prayed that the orders of the Fora below be set aside in view of the facts and circumstances mentioned above.

 

7.4     On the other hand respondent contended that on 27.02.1992, on the basis of the representations made by the authorized agents of the Petitioner, invested in a Deep Discount Bond Series-I issued by the Petitioner for an issue price of Rs.2700/-.  The Face value of the said Bond was Rs.1,00,000/- .  It was clearly stated that on 31.03.2017 the sum of Rs.1,00,000/- would be payable to the Respondent in the capacity of being the holder upon redemption of the same from OP.  The said Deep Discount Bond also recorded the address of the Respondent being “6/1A Creek Lane, Kolkata -700 014”.  In pursuance of the terms and conditions, the Respondent deposited the Deep Discount Bond with the Petitioner. A verification of his specimen signature, Form No. 15 (G), a cancelled cheque of his bank account in State Bank of India, Entally Branch (Bank Account) into which the sums payable on redemption of the Deep Discount Bond were to be deposited by the Petitioner/OP along with a copy of his PAN Card, Aadhar Card and his Voter ID Card. On 14.07.2017, the Respondent found that an amount of only Rs.19,214/- had been credited into his Bank Account against the redemption of the Bond which was in clear contravention to the terms expressly mentioned in the Deep Discount Bond.  On 28.07.2017, the Respondent requested the OP to inform why a lesser amount than that promised under the said Bond had been remitted into Respondent’s account and further requested to remit the remaining amount of Rs.80,786/- into the Respondent’s account.  On 05.08.2017, the OP replied to the same stating that upon the redemption of the Respondent the amount due to him including interest would be around Rs.18,000/- as the OP had exercised a call option upon the Deep Discount Bonds of all investors who had invested in such Deep Discount Bond.  Such unilateral exercise of a call-option by the OP was and is in complete contravention to the laws of India and the specific norms of the Reserve Bank of India.  It is contended that the Respondent that they never received the letter from the Petitioner on account of wrong address. In this regard, they drew the attention of the Bench to the Order of the State Commission regarding wrongly printed address and obvious mis-delivery of the letter. The Petitioner on the other hand contended that the only mistake in the address was that “Green Lane” was mentioned instead of “Creek Lane” and letters have been sent by UPC, which, according to the Petitioner, is a registered post. 

8.       We have carefully gone through the orders of State Commission, District Forum, the terms & conditions of bond issue and other relevant case records, and observe as follows:-

 

8.1     It is the case of Petitioner that  as per terms and conditions the Face Value of the One Deep Discount Bonds Series-I were Rs.1,00,000/- and the tenure of 25 years upto 31.03.2017 and both the parties had the option to surrender/redeem after every five years at the deemed face value. The Petitioner exercised this option at the end of 10 years i.e. on 31.03.2002, when the deemed face value of bond was Rs.12,000/-.  The District Forum in its order dated 17.08.2018 observed:-

 

 

“The Ld. Advocate for the OP further contended that notices dated 03-10-2002 and 04-06-2010 were duly published in the newspaper calling upon the bond holders to return the discharge original bonds to the OP for redemption. He further contended that the complainant did not return the original bond in terms of notice dated 03-10-2002 and 04-06-2010. Ultimately in the month of April 2017, complainant approached the OP/Bank for redemption of the said Deep Discount Bond (Series -1) and the OP/Bank duly credited the amount of Rs.19,241/- through NEFT together with interest to the bank account of the complainant. According to her, the complainant was fully aware of the fact that the bond could be redeemed by the OP after completion of any five years term. The redemption of bond by the OP in no manner can be termed as deficiency in service. She furnished photocopy of a judgment of the Hon'ble National Consumer Disputes Redressal Commission, Bench - 4 where the District Forum dismissed the complaint, appeal-was also dismissed by the State Commission and the Hon'ble National Commission on the submission of the Ld. Counsel of the IDBI disposed the Revisional Application. We have gone through the photocopy of the cited judgment. The facts of the cited judgment is different from the facts of the present case. As such, the cited judgment is not applicable in the instant case.

 

During argument Ld. Advocate for the complainant submitted that paper publication cannot be taken into account as being good service of notice of the exercise of the call option as has been clearly held in the numerous judgments in a case such as this where the OP has failed to provide personal notice to the complainant. As such, the OP cannot escape their ability.

 

Ruling reported in IV(2015)CPJ 144 (N.C) cited by the complainant shows that National Commission has been pleased to set aside the judgment of the State Commission and also to modify the order of the Forum and direct the OP/IDBI to pay to the complainant Rs.25,000/- with Savings Bank Interest rate from 01-12-2006 till the date of realization, together with costs of Rs.5,000/-.

 

He further cited a decision reported in 2008 (3) C.P.C628, IV (2008) C.P.J.136 (N.C.) of the National Commission. We have gone through the said cited decision. In the said cited decision the National Commission does not carry weight the publication of an advertisement in the newspaper about its intention to exercise the call back option. In the present day very few people have time to read all pages of all newspapers to locate such advertisements, Therefore, the OP/Bank cannot escape its liability by merely publishing something in a newspaper.  The above cited decision fully corroborated the case of the complainant. Ruling reported in l(2011) CPJ 168 (UT Chd.), furnished by the complainant shows that individual notice has not been served on the complainant, OP cannot be said to have exercised the call option in respect of the complainant with effect from 2001. The above cited decisions supported the case of the complainant.

 

Having regard to the facts of the case coupled with evidence as well as documents on record we find that conduct of the OP/Bank is not proper and there was deficiency of service on the part of the OP Bank. Accordingly, complainant is entitled to get relief as prayed for. Thus, both the points under determination are decided in favour of the complainant and against the OP/Bank.”

 

The District Forum ordered as follows:

 

“That the Complaint Case being No.426 of 2017 be and the same is allowed on contests against the OP With litigation cost of Rs.10,000/- (Rupees Ten thousand only) in terms of Section show 13(2)(b)(1) of the C.P. Act, 1986.

 

That the OP is directed to pay Rs.80,786/- (Rupees Eighty thousand seven hundred and eighty six only as balance amount of Deep Discount Bond (Series-1) with interest @5% p.a. to the complainant within 30 days from the date of this order along with litigation cost.

 

That the OP is also directed to pay Rs.50,000/- (Rupees Fifty thousand only) to the complainant as compensation for harassment and mental agony of the complainant within 30 days from the date of this order.

 

That the OP is also directed to deposit an amount of Rs.25,000/- (Rupees Twenty Five thousand only) with this Forum as punitive damage for practicing unfair trade.

 

Failure to comply with the order will entitle the complainant to put the order into execution according to law.”

 

 

 

8.2     While dismissing the appeal vide order dated 14.02.2020, the State Commission observed that:-

 

“As contended, the Appellant/OP should not have just washed off their hands by publicizing the Call Option Notice. What would have been a better option for them was to send notice to every individual consumer which they claimed to have sent but, the Respondent/Complainant did not receive it. It appeared on perusal of record at running pages 32 and 78, being the Respondent/Complainant’s recorded address of residence in the bond and the same in the record maintained with the Appellant/OP Bank respectively, the Ld. Advocate submitted that the notice was sent to ‘Green lane’ without the PIN Code being recorded therein instead of ‘Creek lane’ of PIN—700014. The wrongly printed address on the body of the envelope containing the notice, as submitted, led to obvious mis-delivery of the same.

 

The Ld. Advocate cited a catena of decisions of which the order of the Hon’ble National Commission in Revision petition No.4081 of 2014 [Balwan Singh—Vs—Chairman and Managing Director, IDBI and Ors.] reported in Manu/CF/0353/2015 and the decision of the Hon’ble National Commission in [IDBI Bank Limited and Anr.—Vs—TK Nagarathna] reported in Manu/CF/0231/2008 appeared to be of relevance. In the former, in a case of similar nature, the Hon’ble National Commission at para 18 modified the orders of the Ld. District Forum and State Commission setting aside the wrongly concluded observation that the notices were sent at the same address.

          In the said case the Hon’ble Commission at para 13 observed in the lines,“The aforementioned provison stipulates that individual notices are also to be sent to registered bondholders. The learned Counsel for the Respondent submitted that the notices dated 25.05.2000 and 22.09.2009 were sent to the same address and hence the Revision Petitioner cannot state that he received the notice dated 29.04.2009 but did not receive the one dated 25.05.2000. A brief perusal of the record shows that the UPC list pertaining to the year 2000, which shows an incomplete address, only was filed. There is no documentary evidence on record to establish that both the notices were sent to the same address. In fact the Revision Petitioner/Complainant himself filed the notice dated 29.04.2009 which has his complete address as under:

 

“Balwan Singh

VPO Pauli

Dist.Jind
Haryana”


Whereas the earlier notice dated 25.05.2000 had only

Balwan Singh

VPO Pauli”

 

In the latter the Hon’ble National Commission, while dismissing the Revision petition, observed at para 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 all newspapers to locate such advertisements. Hence the Bank cannot escape its liability by merely publishing something in a newspaper.”

x x x x

 

It was also a fact that a Call Option Notice was issued by the Appellant/OP Bank and the same notice was publicized by newspaper advertisements throughout the country. We did not agree with the Respondent/Complainant’s contention that there was no newspaper advertisement of the aforesaid notice in any newspaper of Kolkata Publication. The advertisements of running pages 139, 140 and 141 were seen to have been published from Kolkata.

We were convinced that chances were there that any such publication might skip the notice of individual for whom the said notice was meant for. So, it would have always been a better option for issuing individual notices to all the bond holders to their recorded address maintained with the bond issuing authority. Here too, the individual notices were allegedly issued but as it revealed from the record that such notice in respect of the Respondent/Complainant was sent to a wrong address for misquoting of the same on the body of the envelope due to mis-maintenance of record at the end of the Appellant/OP.

 

Since the above mistake on the part of the Appellant/OP led to the mis-delivery of the notice, it was the Appellant/OP organization itself and none else should be blamed for the issue to be developed to a state of present complicacy.

 

In the facts and circumstances narrated above, we were of the considered view that the Ld. District Forum had made no mistake in fixing up responsibility for imposing penalty upon the Appellant/OP Organization.  We, however were not in Agreement with the punitive damage imposed upon the Appellant/OP and intended to waive the same.  We were also of the view that there should be no payment of interest on the amount of refund as there was order for payment of compensation.  We were of further view that the cost and compensation were assessed by the Ld. District Forum at a higher side and those amounts should be reasonable reduced.”

 

The State Commission passed the following order:-

 

“…..the Appeal be and same is allowed on contest in part. The Appellant/OP is directed to pay Rs80,786/-, being the balance amount of the Deep Discount Bond Series I within 45 days from the date of the instant order. The Appellant/OP is further directed to pay a cost of Rs.5,000/- and compensation of Rs.30,000/- to the Respondent/ Complainant within the same deadline, failing which, simple interest @ 9% p.a. shall accrue to Rs.1,10,786/-, being the total of the refund amount and compensation, from the date of default till the entire amount is fully realized. The impugned judgment and order stands modified accordingly.”

 

8.3     A perusal of  “Offer Document” of the said Deep Discount Bond (Series-I) issued by Petitioner IDBI 1992 shows that the investor has the option to withdraw and IDBI has the option to redeem the bond only at the end of every 5 years from the date of allotment.  The Relevant portion is reproduced below:-

 

“TERMS OF THE BONDS UNDER SEPARATE SCHEMES

 

A) Deep Discount Bond (Series I)

 

The Deep Discount Bond having a face value of Rs.1,00,000/- will be issued at a deep discounted price of Rs.2,700/-, with a maturity period of 25 years from the date of allotment (i.e. March 31, 1992). The investor has the option to withdraw, and IDBI has the option to redeem the Bond only at the end of every 5 years from the date of allotment. In that event, the deemed face value of the Bond would be as under:

 

In case of Withdrawal/Redemption        Deemed Face Value

At the end of 5 years                                                 Rs. 5,700/-

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

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

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

 

The deep discounted price of the Bond at Rs.2,700/- will stand enhanced to a value of Rs.1,00,000/- at the end of 25 years in the manner aforesaid only if the Investor/IDBI does not exercise the option to withdraw/redeem the Bond. On the investor receiving the amount as specified above in respect of a Bond on exercise of the option at any one time, the liability of IDBI under such Bond will stand extinguished fully.

 

           x x x x

 

REDEMPTION/WITHDRAWAL

 

Deep Discount Bond

In the event of IDBI deciding to redeem the Deep Discount Bonds at the end of any of the five year periods; it will announce its intention to do so in one English and one Hindi daily newspaper and also communicate to all the Registered holders of such Bonds, atleast 6 months prior to the date of redemption,

 

In the event of the Investor deciding to exercise his/her option to withdraw the Bond at the end of any of the five year periods, the Investor shall intimate in writing, alongwith the Bond Certificate(s), his/her option to IDBI between 6 months and 3 months prior to the date of withdrawal. The Investor will be entitled to receive the applicable deemed face value only if he/she gives such intimation in the time period specified above.

 

In the event of investor deciding to withdraw the Bond or IDBI deciding to redeem the Bond at the end of any of the five year periods, the investor shall first get it registered in his/her name. The Bonds will be redeemed or withdrawn only on the surrender of the Bond Certificates by the registered Bondholder(s).”

 

The Deep Discount Bond (Series-I) Certificate issued by Petitioner/IDBI to the Respondent also contain similar provisions, as contained in the Offer Document (cited above). It states that:

 

 

    “The holder(s) of this Bond/IDBI shall have the option to encash/redeem the Bond only at the end of every five years from March 31, 1992 and for the deemed face value mentioned below:

 

    x x x x

 

    On the holder(s) of this Bond receiving the amount as specified above on exercise of the option aforesaid, the liability of IDBI hereunder shall stand fully extinguished.”

 

9.       From the above it is clear that both the parties i.e. Petitioner/IDBI as well as the Respondent/Allottee had the right to exercise option to redeem this bond before the completion of its full period of 25 years as cited above.

 

 

10.     We note that the said Offer Document envisage that refund in case of rejection of Applications or non-allotment of the bonds will be made by cheques/pay orders which will be despatched by Registered Post to the applicant’s address.  Similarly, the bond certificate will be despatched to the allottees by Registered Post.  The said document under the Redemptions/withdrawal instructions state that “In the event of IDBI deciding to redeem the Deep Discount Bonds at the end of any of the five years period, it will announced its intention to do so in one English and one Hindi daily newspaper and also communicate to all the registered holders of such bonds, at least 6 months prior to the date of redemption”.  These instructions do not state the mode of communication to be adopted by IDBI in such situation.  However, considering that for the other two situations viz  return of cheque in case of non-allotment and despatch of bond in case of allotment, the instructions clearly envisage Registered Post as the mode of communication.  Hence, in the absence of any specific mention about mode of communication in case of redemption before maturity, there is no reason for IDBI not to resort to the same mode of communication i.e. registered post, for communication to the allottees, its decision to exercise the redeem option at the end of 10 years.  In the instant case, the IDBI did not communicate to the allottees such decision, which is mandatory in addition to newspaper publication, by registered post. Rather it choose to send such communication through UPC (Under Postal Certificate).  Petitioner itself has admitted that despite repeated publications in newspapers over the years, starting with 2001, including the publication during 2002, 2003, 2006, 2007, 2008, 2010, 2011, incurring huge expenses on such publications, still large number of subscribers have not come forward to get their bond redeemed.  This goes to show that newspaper publications alone, howsoever widely and repeatedly done, as claimed by the Petitioner, have not been effective and sure means of communication to the bondholders.  Ideally, ‘Petitioner’ at the first instance in 2001 itself, when it decided to exercise its option to redeem the Bond, should have sent notices to bond holders by registered posts rather than UPC.  The extra expenses on such registered posts could have actually helped them in spending less on newspaper publications in future.  Petitioner admits that ultimately they sent a registered post notice to the Respondent in this case on 12.05.2009 & 22.08.2013, but that is after 8/12 years since the redeem option was exercised by it in 2001 that too on the wrong address.  In the instant case, both the Fora have given concurrent finding on non-delivery of notice of redemption to the Respondent.  The contention of Petitioner/IDBI that UPC is also a registered post is not a valid one. UPC and Registered Posts are two distinct modes of posts, the later one entailing a higher cost than the former, and envisaging delivery to the person named therein under receipt.  In the case of UPC, the post office merely delivers a certificate of posting, and gives no proof/certificate of delivery/return etc., but in case of registered post, it gives some sort of confirmation about the delivery/return/refusal etc. (these days such status can be checked by the sender of registered post online also with the registered post number).  UPC has since been discontinued by the postal department. Hence in the instant case, in the absence of any proof of service of UPC/Regd. post to the Respondent herein on the correct address of Respondent, and in a situation of Respondent denying any such communication, we are of the view that there was no valid communication to the Respondent herein about Petitioner exercising its redemption option after 10 years, which was mandatory, in addition to the newspaper publication. In terms of the Offer Document Newspaper publication alone was not ‘sufficient communication’.  In this case, the notice itself was sent on the wrong address. Hence, we hold that in the instant case, there was no valid communication to the allottee about IDBI exercising the redeem option after 10 years.  Hence, Petitioner cannot force the Respondent to accept the face value of Bond after 10 years along with interest.  In this case, the Respondent wrote to Petitioner to pay/redeem the full face value of bond i.e. Rs.1.00 Lakh on completion of 25 years.  Hence, they are entitled to get the full face value of the bond i.e. Rs.1,00,000/- on completion of 25 years i.e. as on 31.03.2017, along with interest w.e.f. 01.04.2017 till the actual payment.

 

11.     Hence, on account of reasons of lack of valid individual/personal communications to the Respondent/allottees, which was mandatory, in addition to the newspaper publication, the Respondent/allottee in the instant case is entitled to claim the full face value of Rs.1.00 lakh of the bond after the 25 years i.e. 31.03.2007 along with interest w.e.f. 01.04.2007 till the actual date of payment. 

 

 

12.     For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, we find no material irregularity/illegality or jurisdictional error in the orders of the State Commission and the same is upheld, but with slight modifications.  Accordingly the RP is dismissed with following modifications to the order of State Commission.

 

(i) The OP IDBI Bank (Petitioner herein) shall pay the balance amount of Rs.80,786/- under the said bond along with interest @9% p.a. w.e.f. 01.04.2017 till the date of actual payment alongwith litigation cost of Rs.50,000/-.

 

(ii)     All payments under this order be paid within two months from the date of this order. 

 

 

13.     The pending IAs in the case, if any, also stand disposed off.

 

 
................................................
DR. INDER JIT SINGH
PRESIDING MEMBER

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