DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA

C.C. No. 441 of 21-07-2014

Decided on 14-08-2015

Ashwani Jindal R/o 3071 Street No. 5, Power House Road, Bathinda.

…...Complainant

Versus

Sardar Sarover Narmada Nigam Limited, Block No. 12, New Sachivalaya Complex, Gandhi Nagar 382 010 (Gujarat)

Managing Director, Sardar Sarover Narmada Nigam Limited, Block No. 12, New Sachivalaya Complex, Gandhi Nagar 382 010 (Gujarat)

.......Opposite parties

Complaint under Section 12 of the Consumer Protection Act, 1986.

Quorum :

Sh. M.P.Singh. Pahwa, President

Smt. Sukhwinder Kaur, Member

Sh. Jarnail Singh, Member

Present :

For the Complainant : Sh. Hitesh Goyal, counsel for complainant.

For the opposite parties : Sh. Chander Mohan, counsel for OPs

O R D E R

M. P. Singh Pahwa, President

This complaint has been filed by Ashwani Jindal complainant under Section 12 of the consumer Protection Act, 1986 (here-in-after referred to as 'Act') against Sardar Sarover Narmada Nigam Limited and another (here-in-after referred as “opposite parties').

Briefly stated, the case of the complainant is that opposite party No. 1 is public limited company incorporated under Companies Act, 1956 and is wholly owned company by Gurjarat Govt. Opposite party No. 2 is Managing Director of the company and responsible for conducting day to day business of the company.

It is pleaded that in the year 1995, the opposite parties floated secured redeemable Deep Discount Bonds with a face value of Rs. 1,11,000/- and a issue price of Rs. 3600/-. The complainant applied for issue of one number of bond for issue price of Rs. 3600/- and redemption value on maturity Rs. 1,11,000/-. The same was allotted to the complainant by company vide letter dated 29-6-95 alongwith hard copy of Bond, issued on 7th January, 1995, with following particulars : -

a) Registered Folio No. 240041

b) Certificate No. 186844

c) Distinctive No. 186844-186844

d) Issue Price Rs. 3600/-

e) One Number Bond

f) Face Value Rs. 1,11,000/-.

As per complainant, the said bond with face value Rs. 1,11,000/- and issue price of Rs. 3600/- were redeemable after the expiry of twenty years i.e on 11-01-2014 as mentioned in clause No. 3 of the financial conditions on the back side of the bond certificate itself. Consequent upon the maturity of the bond i.e. 11-1-2014, the complainant sent a request letter registered dated 1-4-2014 at the registered office of the company for payment of Rs. 1,11,000/- as the redemption value after the statutory period of twenty years. The bond has already been matured in January, 2014 and seven months have passed, but neither any payment was made nor any reply to request letter of the complainant was sent. It is alleged that failure on the part of the company to pay the redemption value of Rs. 1,11,000/- on due date has caused great harassment and financial loss to the complainant. There is deficiency service and unfair trade practice on the part of the opposite parties.

On this backdrop of facts, the complainant claimed directions to the opposite parties to refund the maturity value of bond i.e. Rs. 1,11,000/- alongwith interest @ 18% p.a. till realization and pay Rs. 10,000/- as compensation for harassment and Rs. 10,000/- as litigation expenses.

Upon notice, opposite parties appeared through their counsel and contested the complaint by filing written version. In written version, the opposite parties have pleaded that they deny all the averments, allegations and contentions raised by the complainant except those which have been specifically admitted in further part of reply. It is also pleaded that Sardar Sarovar is an Inter-State, multi-purpose joint venture of four States viz Gujarat, Madhya Pradesh, Maharasthra and Rajasthan to build a terminal dam on the river Narmada alongwith water distribution and hydro-electric facilities. This public interest project is meant to provide irrigation to farmers of Gujarat, Mahrashtra and Rajasthan, drinking water in scarcity prone areas of Gujarat and power to Madhya Pradesh, Maharashtra and Gujarat. With a view to implement the said public interest project speedily, the opposite party No. 1 was incorporated as a company registered under the Companies Act, 1956, as a wholly owned company of the Government of Gujarat. With a view to, inter alia, part finance the Sardar Sarovar Project, the opposite party No. 1 had, inter alia, come out with a public issue of Secured Redeemable Non Tax Exempt Deep Discount Bonds (here-in-after referred to as 'Bonds') of the face value of Rs. 1,11,000/- each to be issued at a discounted price of Rs. 3600/- per Bond with a maturity period of 20 years from the date of allotment. The opposite party No. 1 issued prospectus dated 29-09-1993 and pursuant to this, issued bond certificates to the Bond Holders. It is further pleaded that Sardar Sarovar Project is still not fully completed. The rate of interest under the Bonds which was in excess of 18% was out of alignment with the prevailing market conditions. Such high rate of interest is unsustainable for any project, much less a mega social infrastructure project being undertaken by opposite party No.1. Such high rate of interest entails substantial liability and outflow of funds, which could be otherwise utilized by opposite party No. 1 in relation to the Sardar Sarovar Project. In view of these, it was felt necessary, in the larger public interest to redeem the bonds before the maturity date and thereby save additional interest burden for the period 2009 to 2014. The Government of Gujarat in public interest, passed the Sardar Sarovar Narmada Nigam Limited (conferment of power to Redeem Bonds) Act, 2008 (here-in-after referred to as 'said Act') which was published on March 29, 2008 in the Gujarat Government Gazette. The said Act amends the financial covenants and conditions for Bonds by providing an option to opposite party No. 1 to redeem the Bonds earlier on such date and with such deemed face value as the opposite party No. 1 may determine by payment of the amount so determined as stipulated in the said Act.

It is further pleaded that Board of Directors of opposite party No. 1 at their meeting held on November 3,2008, in terms of the said Act, had decided to redeem the Bonds earlier and determined the date for such redemption as January 10,2009 with deemed face value of Rs. 50,000/- per Bond. The opposite party No. 1 through its Registrar and Transfer Agent, MCS Limited, had sent individual notices to all the Bond Holders, inter-alia, explaining the procedure for claiming the redemption amount as on January 10,2009. In addition to the aforesaid, the opposite party No. 2 had published the contents of notice, inter-alia, in Times of India, all India Editions, on November 5, 2008. This public notice and notice to the individual Bond Holders are also put on the website of opposite party No. 1 being www.sardarsarovardam.org. Such notice was sent to the complainant at her registered address, available with the opposite party No. 1 being H. No. 3071, Street No. 5, Power House Road, Bathinda, Punjab, under postal certificate. Clause 8 of the said notice provides that no interest on the redemption amount will accrue after 10th January, 2009. The complainant was holding one bond bearing folio No. 240041 and certificate No. 186844. Despite this notice, complainant did not approach either MCS Limited or the opposite party No. 1 for long time for redemption of his bond. It is further pleaded that on this background, the complaint is clearly not maintainable and is required to be dismissed.

The opposite parties have also raised further legal objections that complaint is misconceived, misconstrued, false, frivolous and not maintainable. That the complaint is not maintainable in law as the redemption of the Bond was carried out pursuant to the enactment of the said Act and the same is binding to the complainant. That the complaint is vague and without particulars;That this Forum has no territorial jurisdiction to entertain and try the complaint and it is liable to be dismissed. That no cause of action for filing the present complaint has arisen within the territorial jurisdiction of this Forum due to following facts :-

(a) Decision for early redemption of Bonds was taken by the Board of Directors of the opposite party No. 1 at Gandhingar.

(b) The register of Bonds is kept with MCS Limited, the Registrar and Transfer Agent of the opposite party No. 1 at Ahmedabad.

(c) Notice for early redemption was issued by opposite party No. 1 to the complainant from Gandhinagar.

(d) Bond certificates were to be surrendered with MCS Limited at Ahmedabad.

(e) As per the terms and conditions of Bond Certificate, redemption amount was to be paid by opposite party No. 1 at its registered office at Gandhinagar.

It is also pleaded that moreover, the registered office of opposite party No. 1 is located at Gandhinagar and office of MCS Limited is located at Ahmedabad. Thus, the complaint deserves dismissal and the complaint is time barred. It is also pleaded that there is no deficiency in service or unfair trade practice on the part of opposite parties.

In reply to para-wise contents also, the opposite parties have denied all the averments and have reiterated the stand as taken in the preliminary objections and detailed above.

Both the parties were afforded opportunity to produce evidence. In support of his claim, complainant has tendered into evidence his affidavits dated 21-7-14 and 16-12-14 (Ex. C-1 & Ex. 7), photocopies of letter and postal receipt (Ex. C-2 & Ex. C-3), photocopy of letter (Ex. C-4), photocopy of bond certificate (Ex. C-5) and photocopy of driving licence (Ex. C-6).

In order to rebut this evidence, opposite parties have tendered into evidence affidavit of Harish Kantilal Patel dated 5-11-14 (Ex. OP-1/1), photocopy of prospectus (Ex. OP-1/2), photocopy of Gazettle (Ex. OP-1/3), photocopy of minutes of meeting (Ex. OP-1/4), photocopies of notice (Ex. OP-1/5 & Ex. OP-1/6), photocopy of UPC list (Ex. OP-1/7) and photocopy of cutting of news papers (Ex. OP-1/8).Both the parties have also submitted written submissions.

We have heard learned counsel for the parties and gone through the record and written submissions of the parties.

Learned counsel for complainant has reiterated his averments as set up in the complaint and as detailed above. It is submitted by learned counsel for the complainant that opposite parties have raised main objection regarding jurisdiction of this Forum to entertain and try the complaint, but the offer was made to the general public including of Bathinda. The prospectus was issued through authorised website including bank at Bathinda. Form was received at Bathinda through authorized bank i.e. Bank of India, Bank Bazar Branch, Bathinda. Offer was accepted by the complainant at Bathinda by depositing payment of Rs. 3600/- with the authorized bank and the complainant also issued letter dated 11-4-2014 to the opposite parties from Bathinda. The letter dated 29-6-1995 was received by complainant at Bathinda vide which the bond was issued and the original bond was also received at Bathinda. Therefore major part of the act was performed at Bathinda. As such, complainant has cause of action at Bathinda and this Forum has got territorial jurisdiction to entertain and decide the complaint.

It is further submitted by learned counsel for the complainant that it is not disputed that the face value of the bond issued by the opposite parties is Rs. 1,11,000/-. The opposite parties cannot change terms and conditions of the bond unilaterly. Moreover, the opposite parties have not made the payment on due date i.e. in the year 2009. Now the complainant is entitled to full face value of the bond i.e. 1,11,000/- alongwith compensation to the tune of Rs. 50,000/- and litigation expenses.

On the other hand, learned counsel for the opposite parties has submitted that no cause of action accrued to the complainant at Bathinda. Therefore, this Forum has got no territorial jurisdiction to entertain and decide the matter. The opposite party No. 1 is registered Company. Its registered office is located at Gandhinagar. The complainant has claimed jurisdiction of this Forum mainly for the reason that Form was received through authorized bank at Bathinda and the payment was made through bank from Bathinda. The bank has acted only as collecting agent of the opposite parties. Bonds were issued from registered office of the Company. Bonds were to be redeemed from the registered office of the company which is at Gandhinagar (Ahmedabad).

It is further submitted by the learned counsel for the opposite parties that although this Forum has got no territorial jurisdiction, still on merits also, complainant is not entitled to any relief. The bonds were issued as per prospectus Ex. OP-1/2 but the opposite parties decided to redeem the bonds earlier and determined the date for such redemption as 10th January, 2009. Copy of resolution Ex. OP-1/4 proves this fact. In pursuant to this resolution, notices were issued to all the bond holders including the complainant but the complainant did not turn up. Notice was also published in the news papers for general public. Therefore the publication of notice in news papers is deemed to be notice to the complainant also. The complainant has not submitted the bond so far. As such, there is no deficiency in service on the part of the opposite parties.

To support his submissions, learned counsel for the opposite parties has cited case law which are summarized as under :-

(i) Revision Petition No. 147 of 2000 decided on 26-08-2003 in the case titled Puran Chand Wadhwa Vs. Hamil Era Textiles Ltd., wherein it was observed by Hon'ble National Commission that the effort by the petitioner to bring in Punjab and Sind Bank as an Agent of the respondent with a view to fall within Section 11(2)(c), is too naïve to be accepted and dealt in by us. Bank is only a facilitator to accept the money at the time of floating of debentures and encash cheques issued by the respondents. This is limited service being rendered by them for all aspiring investors. By no stretch of imagination can they be called the agents of the respondent.

It was also observed that there is an increasing tendency on the part of litigants to indulge in speculative and vexatious litigation and adventurism which the Fora seem reality to oblige. We think such a tendency should be curbed.

(ii) 2007(II) Supreme Court Cases 335 case titled Alchemist Ltd., and another Vs. State Bank of Sikkim and other., wherein it was observed that 'The expression 'cause of action' has neither been defined in the Constitution nor in CPC. It may, however, be described as a bundle of essential facts necessary for the plaintiff to prove before he can succeed. Failure to prove such facts would give the defendant a right to judgement in his favour. Cause of action thus gives occasion for and forms the foundation of the suit. If there is no cause of action, the plaint or petition has to be dismissed.

The learned counsel for the opposite parties also cited 2015 (II) CPJ 36 (NC) case titled Delhi Development Authority Vs. Parveen Kumar & Ors., and 1995(I) CPJ 235 (NC) case titled Haryana Development Authority Vs. Vipan Kumar Kohli : to support his submissions.

We have carefully gone through the record and have considered the rival contentions.

The complainant is resident of Bathinda. The opposite parties are having its office at Gandhinagar (Gujarat). The opposite parties have firstly raised objection regarding territorial jurisdiction of this Forum to entertain and decide the matter.

Now, it is well settled law that a defect of jurisdiction, whether it is pecuniary or territorial, strikes at the very authority of the Forum to pass any order and such an order is a nullity and its invalidity could be set up whenever or wherever it is sought to be enforced.

Therefore keeping in view the facts of the case, firstly it is to be seen as to whether this Forum has territorial jurisdiction to decide this complaint. Before proceeding into the matter/merits of case, the observations of the Hon'ble Apex court in some judgements are relevant to be mentioned. The Hon'ble Apex Court in the case Alchemist Ltd., and another Vs. State Bank of Sikkim (supra) has also observed that :-

“For the purpose of deciding whether facts averred by the appellant-petitioner would or would not constitute a part of cause of action, one has to consider whether such facts constitute a material, essential or integral part of the cause of action. If it is, it forms a part of cause of action. If it is not, it does not form a part of cause of action. In determining the said question, the substance of the matter and not the form thereof has to be considered. Even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless it must be 'part of cause of action' nothing less than that.”

In the case of Delhi Development Authority Vs. Parveen Kumar & Ors., (supra), it was reiterated by the Hon'ble National Commission, New Delhi, that each and every fact pleaded by the respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court's territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned.”

On the basis of these observations, it was concluded that filling up of the application forms at Mansa will not constitute even a part of the cause of action since filling up of the form has no relevance to the issue involved in the complaint.

It is relevant to mention that in the above cited case, applicant Parveen Kumar applied to Delhi Development Authority under its Housing Scheme, 2010 for allotment of a residential flat.

In the case in hand also, bonds were issued from the office of the opposite parties situated at Gandhi Nagar. The bonds were to be redeemed from Gandhi Nagar. Of course, the complainant submitted application through authorised bank situated at Bathinda, but this act will not constitute part of cause of action to confer jurisdiction to this Forum.

Therefore in view of the facts of this case, the conclusion is that no cause of action accrued to the complainant within territorial jurisdiction of this Forum, as such, this Forum cannot decide the matter.

Since this Forum cannot try and adjudicate this complaint in view of the discussion made above, merits of the case are not being touched. Resultantly, this complaint is dismissed for want of territorial jurisdiction.

Before parting with this order, it is made clear that complainant is at liberty to approach the competent Forum/Court for getting his grievances redressed, if so advised and permitted by law.

The complaint could not be decided within the statutory period due to heavy pendency of cases.

Copy of order be sent to the parties concerned free of cost and file be consigned to the record.

Announced :

14-08-2015

(M.P.Singh Pahwa )

President

(Sukhwinder Kaur)

Member

(Jarnail Singh )

Member