Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No. 181/26.07.2017
Suraj Prakash son of Late Nain Singh,
R/o H.No. 62, Lambi Gali,Mangu Mohaila,
Ghitorni New Delhi-110030. ...Complainant
Versus
SIDBI, Ground Floor, VideoCon Tower,
B- 1, Rani Jhansi Raod, Jhandewalan Extension,
New Delhi- 110005.
Also At:- MSME Development Centre,
C-11, G-Block, Bandra Kurla Complex,
Bandra (E), Mumbai 400051. ...Opposite Party
Order Reserved on: 11.01.2023
Date of Order: 02.03.2023
Coram: Shri Inder Jeet Singh, President
Shri Vyas Muni Rai, Member
Ms. Shahina, Member -Female
Inder Jeet Singh
ORDER
1.1. (Introduction to case of parties) : The consumer dispute involved is that the complainant took deep discount Bond for a period of 25 years, however, when the period of 23 years and 6 months was passed vis-à-vis maturity period of one and a half year was left, then in the month of October 2016, complainant received a letter dated 30.09.2016 from the OP that the said bond was redeemed by it long back on 01.02.2002. The amount of Rs. 2,500/- was deposited on 01.02.1993 and maturity date was of 01.02.2018 and amount payable on maturity was Rs. 1,00,000/-. There is deficiency of services on the part of OP.
1.2: Whereas, the OP has reservations there is no deficiency of any services, there was specific letter of offer and deep discount Bond were issued under terms of contract, specifying that bond can be withdrawn by the complainant or it can be redeemed on specified period of 5 years, 9 years, 12 years, 15 years, 20 years and 25 years. The OP exercised that option of redeem on the eve of 9 years by giving advance notice as well as publication of information in the newspapers. The complaint is liable to be dismissed.
2.1 (Case of complainant ) : That the complainant is a Government employee.
He had purchased a Deep Discount Bond-(Series- 1) from OP for an amount of Rs.2,500/- on 01.02.1993 with a maturity period of 25 years, which is of 01.02.2018 [copy of Bond is Annexure-A to the complaint]. All of sudden in October 2016, the complainant receives a letter dated 30.09.2016 of OP (Annexure-B) stating call option available to opposite party was exercised by the OP on 01.02.2002 at the end of 9 years and by publishing it in leading newspapers of 01.07.2001. OP in letter dated 30.09.2016 claims that it had sent reminders on 01.07.2001, 09.05.2005, 03.07.2006 and 05.05.2009 to all the registered bond holders at their registered addresses but complainant never received any such notice or reminder, despite complainant has been residing at the same address for the past 24 years. The OP by said letter is seeking redemption of said bond with interest payable upto 01.02.2002 only for the period of 9 years from the date of Bond. The first intimation received by complainant was in October 2016 only by letter dated 30.09.2016, thus the complainant immediately sent his reply to the opposite party via speed post and courier [copy of reply along with receipts and report are Annexure-C (colly.)]. The complainant received OP's reply dated 11.01.2017 [Annexure-D], proposing non-acceptable nominal interest and asked the complainant to accept that break-up amount, after the aforementioned redemption that too after 23 years and 6 months of bond period had passed and when only one and half year was left maturity period of the deep discount Bond. to attain maturity.
There is deficiency of service by opposite party for not providing legal valid amount to the complainant but cheated the complainant not only monetarily but also by playing with complainant's trust as a customer, who had invested money for long back 23 years ago and was in good assurance that he will get return for his long waiting of 25 years. The complainant deserves complete maturity amount of Bond of Rs. 1,00,000/- from OP. The OP is also liable to pay a sum of Rs.50,000/- towards mental pain and agony and further to pay a sum of Rs. 2,00,000/ - as compensation.
3. (Case of OP): The OP opposed the complainant vehemently The complaint is unfounded, misconceived, vexatious, therefore, it untenable under law. All the contentions and averments therein, except those which are matter of records, are out-rightly denied, as they are nothing but a bundle of lies, which were concocted and distorted version of the true facts and have been mischievously stated to suit the whims and fancies of the complainant.
In fact, the actual case is, that the OP/SIDBI had allotted deep discount Bond on 01/02/1993 bearing Folio No. SI 03102868-0 (Certificate No. 00210589, Annexure-P/1 page 8 to the reply) to the complainant at a issue price of Rs.2500/- as per offer document. The deep discounted price of the bond at Rs.
2500/- shall stand enhanced to Rs. 1,00,000- at the end of 25 years only if the Investor/complainant or SIDBI/OP does not exercise the option to withdraw or redeem the Bond, as to exercise this option was available to either of the parties in the offer document at the end of 5th or 9th or 12th or 15th or 20th year from the date of allotment. Moreover, in case of exercise of withdrawal or redemption, then deemed face value of the Bond would be as Rs.5,300/-, Rs.9,600 / - Rs. 15,600/-, Rs.25,000/- and Rs.50,000/- respectively. Therefore, in terms of the provisions of the said offer document, the OP decided to compulsorily redeem the Bonds after 9 years by exercising the 'Call Option' and accordingly the Bond allotted to the complainant was redeemed on 01/02/2002 at the deemed Face Value of Rs. 9600/- (subject to deduction of TDS at then applicable rates). Moreover, prior to exercise the call option, OP had followed the due process as outlined in the offer
documents. OP had issued notice dated. 01.07.2001 and 02.07.2021 respectively in one leading English and Hindi newspapers in order to announce its intention to do so. Further, advance communication letter Under Certificate of Posting [UPC] were sent on 24/07/2001 along-with Form 15H/15AA to all the Registered Bondholders including the Complainant thereby requesting them as per terms of the Offer documents to surrender their Bond Certificates for redemption of Bond(s). (copy of letter dated 24/07/2001 along-with bulk dispatch receipt dated 31/07/2001 is Annexure-P/4 colly./page 19- 20]. Most of the bond holders, barring the complainant on receipt of above communications, surrendered their Bonds as required and redemption proceeds were remitted to them. In addition to above communications, with a view to reach out all such bond holders alike complainant, who were yet to surrender their bond certificate(s), they were issued reminders
of 09.05.2015, 03.07.2006 and 05.03.2009 (its copies are Annexure-P/5 pages 21-23). There were publications in newspaper of 21/12/2005, 24/12/2005 and 04/01/2016 (Annexure-P/6, pages 24-29) for informing such bondholders. Since the OP had first exercised the right of Call Option, thus the transaction stood matured, concluded and closed on 01/02/2002. Consequently, OP was under no obligation to pay any interest or penalty or compensation for the delay and lapses on the part of complainant in surrendering the duly discharged Bond Certificate. The present complaint is severely barred by limitation. The limitation shall be seen from 01.02.2002, when the Call Option was exercised by the O.P.
The complaint is abuse of the process of law since, it is the complainant, who did not take timely action to redeem his Bond despite being duly informed by
OP and he was sleeping over his rights; but he filed the complaint has mischievously that too after exceptional delay. .
4. (Replication of complainant) That complainant denies vehemently the allegations of OP and its reply. He also denied that complaint is barred by limitation and complainant is still a consumer of the OP and till date the
bond is pending with the opposite party and lastest recent communication is of letter bearing date 30.09.2016 & its reply between the parties.
5.1 (Evidence) : Complainant Shri Suraj Prakash, son of Late Sh. Nain Singh, R/o H. No. 62, Lambi Gali, Mangu Mohalla, Ghitorni, New Delhi- 110030, led his exclusive evidence on the basis of complaint with documents filed.
5.2.: Whereas on the other side, OP's Parvinder Thukral, son of Late Sh. M.L Thukral, Assistant General Manager, having office at SIDBI, Branch office at Ground Floor, Videocon Tower, E-1, Rani Jhansi Road, Jhandewalan Extension, New Delhi-110055 led evidence, while relying upon the same documents filed in support of reply. The documents of the parities have already been referred with their respective case.
6.1 (Submission of Parties) : The complainant filed written arguments by giving the dates and circumstances in chronological way to highlight his case that on plain reading of evidence coupled with documentary record, it clearly establishes that the complainant was never served with any notice, which was mandatory requirement of offered document, being relied upon by the OP, it was also emphasized during the oral submissions (especially Annexure P2/ page no. 14 under the heading deep discount Bond, which reads as ‘in the event of SIDBI deciding to compulsorily redeem the Deep Discount Bonds at the end of the 5th or 9th or 12th or 15th or 20th year from the date of allotment, 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, at least 6 months prior to the date of redemption.’ The OP had not communicated to the complainant nor it is proved so. Since there is clear cut violation on the part of OP, consequently there is deficiency in service by the OP and complainant proved his case against the OP.
The complainant also submits that in a similar situated another case against OP, the Hon'ble National Consumer Dispute Redressal Forum in "Small Industrial Dispute Redressal Vs Dr Saraswati Gupta R.P.No.982/2010 clearly held that due to want proof of service of any intimations to bond-holders by the Revisionist in the said matter, the deficiency of service was on the their part and it was held liable to pay the bond amount to the complainant with interest.
6.2: Whereas, OP opposes the case and contentions rendered on behalf of complainant, on the same set of documents filed in support of pleadings. First of all, there was public notice of exercise of redemption option, it was also sent by post to the complainant and other bond holders in bulk quantity, all these correspondence are matter of record. There is also reminders to the bond holders inclusive of the complainant, however, it was complainant who remained silent to furnish discharge voucher for redeem of the bond. The bondholders were also made clear in the public notices as well as in other correspondence and reminder that bondholders will not be entitled for interest after 01.02.2018.
When the matter was pending, the OP's then Shri Mukesh Kumar, S/o Sh. J. Sah, Assistant General Manager, Small Industries Development Bank of India, having office at 1st Floor, SIDBI, 1, Atma Ram House, New Delhi-110001 filed his sworn affidavit about status of document of service proof by stating that the entire list of 21,618 deep discount bondholders containing the names, inclusive of complainant as well all other bond holders, who were intimated through aforesaid letter dt. 24/07/2001 under dispatch of UPC is not traceable in the record presently maintained with O.P for the reason, that due to disastrous floods and deluge during July 2005 in Mumbai, the documents which were kept in the basement of the office building of OP in Mumbai were destroyed and hence O.P is not in a position to submit the aforesaid list or documents. He further submitted that, record pertaining to letter dated 09/05/2005 (of Annexed Annexure-P/5) sent by O.P to Complainant and other similar bond holders and their related dispatch receipt & proof of delivery are not found in OP's record for the same forgoing reasons. He further explained that letters dated 03.07.2006 and 05.03.2009 were both bona-fide sent to complainant and similar bond holders via ordinary post, and therefore OP is not in a position to place on record the delivery status/proof of these letters to bond holders. Under these circumstances, the complainant cannot blame OP for want of exercise his own timely action to receive redeemed amount. Since there is no deficiency of services, the complaint deserves dismissal.
7.1 (Findings) : The contentions of both the sides are considered, keeping in view the oral submission as well as documentary record besides the case law presented. The case involves some legal issue and others are on merits, both will be discussed point-wise in brief.
7.2: Complainant had filed the complaint on 26.07.2017, however, accordingly to OP the redemption date was of 01.02.2002 after 09 years of issuance of bonds, consequently the complaint is time barred. Whereas, according to complainant, he had received letter dated 30.09.2016 and after receipt of that letter, there was correspondence inter-se the parties, thence he filed the case, it is within limitation period.
7.2A: The OP has not referred its letter dated 30.09.2016 nor filed it in support of the reply. The complaint specifically referred this letter in paragraph 4 of the complaint, then in reply to paragraph no. 4 of the complaint, OP simply said that it is matter of record. By taking gist of the reply and evidence, this letter dated 30.09.2016 (Annexure-B) is not specifically denied and from the date of that letter the complaint dated 26.07.2017 is within time. The contention of OP stands disposed off.
7.3: After analyzing the documentary record and explanation tendered in evidence or subsequently on behalf of OP also, the following conclusions are drawn:-
(i). There is no dispute about obtaining of deep discount Bond- (Series I) vide application no E5313825 by the complainant from the OP, apart from date of issue and its maturity of 25 years, the amount of deposit was of Rs. 2,500/- and its maturity deemed face value was Rs. 1,00,000/-, there are also record of offer letter, which prescribes covenants inclusive of withdrawal and redemption clause at different intervals with corresponding deemed face value.
(ii). The OP’s case is that the complainant had not exercised option of withdrawal but OP had exercised the redemption of bond in terms of offered documents. The document (Annexure-P/2) at it page no. 14 bears the procedure that when redemption option is to be exercised by the OP, it is required to announce its intention in one English and one Hindi daily newspaper and also communicate to all the registered holders of such bonds, at least six months prior to the date of redemption. This requirement is mandatory and it is not just a formality, since after receipt of information/communication, then only bond-holders can act upon for next course of action.
In support thereof OP had filed photocopy of 'call option notice' in newspaper [Annexure-P3, page no. 17 -18] and letter dated 24.07.2001 (Annexure- P4, page no. 19 is without copy attached to that letter) followed by other reminders. On plain reading of Annexure-P4 and just a cursory look, the letter was not addressed to complainant and it also does not bear any office letter reference number vis-à-vis it was also case of OP that letter were sent in bulk, meaning thereby there is no specific record maintained and proved by the OP about communicating its intention of redemption to the complainant by said letter, which was one of the essential and mandatory requirement of redemption. The OP has also filed reminders dated 09.05.2005 and 03.07.2006, again these reminders are without any office reference number, the reference number space has been left blank and there is no record of proof of mode of dispatch or service. Another reminder dated 05.03.2009 bears the reference number 6197 but mode of dispatch and service is not proved. The complainant has proved letter dated 30.09.2016 (page 7 of complaint), which bears reference no. 4752 which was received by the complainant by post and thence reply was given by him (page 9), and there was proposal dated 11.01.2007 by the OP vide letter reference no. LOO116656/SIDBI (page 11), followed by filing of the complaint.
The OP’s Shri Mukesh Kumar, S/o Sh. J. Sah, Assistant General Manager, Small Industries Development Bank of India had filed detailed affidavit, which is self-speaking that no record was available with them to show proof of dispatch and service of the letters/reminders. Moreover, the OP is taking contradictory stand in the reply to complaint regarding dispatch and service of reminder by UPC, while comparing it with the affidavit of Shri Mukesh Kumar that it was by ordinary post. It is also raising a question that photocopies of letter dated 24.07.2001 with signature of its author, apart from other letters, is available with the OP but record of dispatch and service are not available? Consequently, the OP could not establish that it had complied the mandatory condition of redemption by advance information by way of written communication to the complainant. The OP is also taking contradictory plea that barring complainant, other bondholders got redeemed the bond and simultaneously, it states that other bond holders were sent reminders. Thus, the ratio of decision in Small Industrial Dispute Redressal Vs Dr Saraswati Gupta R.P.No.982/2010 (supra) with regard to want of proof of service applies with the present case.
(iii). Since redemption of the complainant's bond was not as per terms and conditions of offer letter, the period specified were of different interval 5 years, 9 years, 12 years, 15 years, 20 years and 25 years but the complainant got information first time by way of letter dated 30.09.2016 which was received by him in October, 2016 and till then period of 23 years and 6 months was passed. Although, the OP with-held that letter from record and OP also kept silent in its reply about this letter also. As appearing, near about the maturity period the complainant received information that bond was redeemed on 01.02.2002, OP could not establish of complying the requirements of redemption of bond of complainant as on 1.2.2002.
(iv). The discussion as well as conclusion drawn in paragraph (i) to (iii) above establish the case of complainant as well as all preponderance of probabilities are leaning towards the complainant, the ratio of Small Industrial Dispute Redressal Vs Dr Saraswati Gupta R.P.No.982/2010 (supra) applies to the situation in hand, that there is deficiency on the part of OP.
8.1 Accordingly, the complainant is held entitled for return of his maturity amount of Rs.1.00,000/-, which was payable on 1.2.2018. Since, the amount was pertaining to deposits, he would have earned simple interest during the subsequent period, thus simple interest @ 4pa from date of complaint till realization of amount is determined in favour of complainant and against OP .
8.2: The complainant seeks damages of Rs.50,000/- for sufferings, inconvenience & harassment. The initial amount was deposited for long period, under contract, having trust in the institution as well to have better returns, however, the trust of complainant was shattered under the circumstances, he suffered inconvenience, harassment. mental agony, to secure his amount, thus considering these circumstances and in order to meet both ends of just, the damages are quantified as Rs. 10,000/- in his favour and against the OP.
8.3: Accordingly, the complaint is allowed in favour of complainant and against the OP to pay maturity amount of Rs.1,00,000/- along-with simple interest of 4% p.a. from date of filing of complaint till realisation of amount, apart from damages of Rs.10,000/- & costs of Rs.5000/-, payable by OP within 30 days from the date of receipt of this order.
9. Copy of this Order be sent/provided forthwith to the parties free of cost as per Regulations.
10: Announced on this 2nd day of March, 2023 [फागुन 11, साका 1944].
[Vyas Muni Rai] [ Shahina] [Inder Jeet Singh]
Member Member (Female) President
