1.       The present Revision Petition (RP) has been filed by the Petitioner against Respondent as detailed above, under section 21(b) of Consumer Protection Act, 1986  against the order dated 01.11.2019 of the State Consumer Disputes Redressal Commission, Chandigarh (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No.144 of 2019  in which order dated 28.05.2019 of District Consumer Disputes Redressal Forum, U.T. Chandigarh (hereinafter referred to as District Forum) in Consumer Complaint (CC) No. 471 of 2018 was challenged, inter alia praying for:-

(i)      setting aside/modifying/reversing the order dated 01.11.2019 passed by the State Commission;

(ii)     passing directions in favour of the Petitioner to pay an amount of Rs.17,000/- along with bank interest only for the Bond in question 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. 144 of 2019 before the State Commission the Revision Petitioner was OP and Respondent was Complainant before the District Forum in the CC No. 471 of 2018. Notice was issued to the Respondent on 12.02.2020.  Parties filed Written Arguments/Synopsis on 02.01.2023 and 19.01.2023 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 No. 00817825 of Issue Price @ Rs.2,700/-.  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 “House No. 554-2, Sector-41, Chandigarh". Thereafter, the Respondent has neither made any correspondence nor any request for the change of recorded address to the Petitioner.

(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, Financial Express, Indian Express Chandigarh, Jansatta Chandigarh, Hindustan Times, to name a few, dated 10.08.2001 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 UPC dated 30.9.2001 at her recorded address i.e. House No. 554-2, Sector-41, Chandigarh. 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 also obtained a letter dated 26.11.2009 issued by The Indian Express confirming publication of the Call option notice published in their News Paper on 19.8.2001. As several subscribers including the Respondent of the aforesaid Bonds had not approached the Petitioner for the redemption, the Petitioner had been regularly publishing Reminder Notices in the National Daily Newspapers vide Notices dated 03.10.2002, 19.08.2003, 21.06.2006 and 25.01.2007. However, despite the knowledge of the aforesaid notices, the Respondent did not approach the Petitioner for redemption of the said Bond. 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  20.08.2013  to the Respondent at her recorded address i.e. House No. 554-2, Sector-41, Chandigarh, but the Respondent never approached the Petitioner for redemption of the said bonds.

(v) After as lapse of more than 16 years from the issuance of Call Notice for Redemption, the Respondent approached the Petitioner vide undated Letter/email for the redemption of the aforesaid Bond. The Petitioner scrutinized its records and vide email dated 11.5.2018 & 14.5.2018 informed the Respondents that the redemption value of her bond is Rs.17,000/- alongwith interest as the said scheme was redeemed vide Call Notice dated August 2001 and further requested the Respondent to submit all the documents to its agents namely Karvy Computer Shares Private Limited for encashment. The Respondent was not satisfied with the response of the Petitioner thus filed complaint against the Petitioner bearing CC No. 471 of 2018 before the Ld. DCDRF-II, Chandigarh.

4.       Vide Order dated 28.05.2019 in the CC No. 471 of 2018, the District Forum allowed the complaint and directed the OP/Petitioner herein to pay       Rs. One Lakh to the complainant being maturity value of the bond in question,

along with interest @ 9% p.a. from 31.03.2017 till payment, along with litigation cost of Rs.10,000/-, within a period of 30 days from the date of receipt of copy of this order. The District Forum directed the complainant to return the Bond Certificate and sign/execute the requisite documents in favour of IDBI/OPs, as per their requirement. Aggrieved by the said Order dated 28.05.2019 of District Forum, Petitioner appealed in State Commission and the State Commission vide order dated 01.11.2019 in FA No144/2019 dismissed the appeal.

5.       Petitioner has challenged the said Order dated 01.11.2019 of the State

Commission mainly on following grounds:-

(i) the impugned order dated 01.11.2019 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 arbitrarily without considering the basic facts and admissions of the defaults on the part of the Respondents. The State Commission committed material irregularity and has passed the impugned order without observing the merits of the Appeal and the facts that the Petitioner since the year 2002 has been consistently publishing the Call Notice/Reminder Notices in leading/daily National Newspapers alongwith Chandigarh Editions and the said Newspapers are having vast readership in the vicinity where the Respondent had been residing. The State Commission passed the impugned order arbitrarily without considering the basic facts and admissions of service of call notice through publication dated 04.06.2010 as admitted in para 6 of the complaint. The State Commission misinterpreted the judgment passed by this Commission in T. K. Nagaratha and wrongly applied the principles laid down in the said judgment in the present case and failed to consider the judgement of this Commission passed in DDA Vs Sunil Bharti.

(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  have shifted from their recorded address and have never approached the Petitioner for recording their fresh addresses. The State Commission grossly erred and did not consider the facts that a Call Notice sent to the respondent vide letter dated 30.09.2001 vide UPC Post was delivered to the respondent. The State Commission has committed irregularity and failed to consider the material fact that the Petitioner taking abundant precaution has also sent the Call Notice vide Regd. AD Post dated 20.08.2013 to the Respondent at the 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 committed material irregularity and never passed any order for compliance of the Section 13(2) of The Consumer Protection Regulations 2005 and did not give any opportunity to the Petitioner for filing of the written arguments. 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.

6.       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.

6.1.    During the arguments, the Petitioner in addition to repeating what has been stated under the grounds, under para (5) above, contended that it is surprising to note the Respondent/complainant conveniently denied the receipt of notice sent on 30.09.2001 (through UCP) and 20.08.2013 (through Regd. Post). Both the Notices were sent through UCP and Regd. Post at the same address i.e. House No.554-2, Sector-41, Chandigarh. That none of notices sent to Respondent/Complainant were received back as unserved.

6.2.  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. 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 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. 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 Bondholders. The Offer Document is silent on the mode of dispatch of personal notices however with abundant precaution,  Petitioner sent all Notices through UPC, 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.

6.3.    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.

6.4.    On the other hand, respondent contended that as per terms and conditions of the Bank, the sum of Rs.1,00,000/- will be the face value of the Bond on 31.03.2017. The respondent got influenced by the attractive marketing campaign by the petitioner and purchased the Deep Discount Bond worth Rs.2700/- dated 31.03.1992 from the Petitioner. The petitioner confirmed the said  purchase vide letter dated 15.05.1992. On 04.06.2010, a  public notice was published by the petitioner in the ‘ Hindu’ newspaper for redemption of some of the bond schemes by exercise of call option prior to normal maturity dates. After the period of maturity, the respondent sent an e-mail to the petitioner requesting to inform about the amount received by the respondent at the time of maturity. The petitioner replied to the e-mail on 11.05.2018, informing that it has already invited call option for all the investors by exercising its option to redeem the bonds. The petitioner sent another mail on 14.05.2018 stating that the petitioner call to all investors by exercising its option to redeem the bonds which was also communicated through print media in 2002. At the time of call option the redemption amount was Rs.12000/- against the investment of Rs.2700/- for each bond and now present redemption value including interest will be around Rs.17000/- plus per each bond.

6.5     It is contended by the Respondent that action of the Petitioner calling for redemption of the bond schemes prior to maturity dates was not in the knowledge of the Respondent and the Petitioner did not send any communication/information letter to  the Respondent regarding the same.  There is no record or evidences or documents filed by Petitioner regarding delivery of any letter to the Respondent in the year 2002 or thereafter.  The Petitioner has also not transferred the amount of the Bond to the account of the respondent and the same remained with the Petitioner since the date of promissory note i.e. 31.03.1992.  Relying on the judgment of this Commission in IDBI Bank Ltd. & Anr. Vs. T.K. Nagarathna in RP/2925/2008 decided on 13.08.2008, which has been relied upon by the State Commission in the impugned order, the Respondent argued that Petitioner cannot escape its liability by merely publishing something in the newspaper.  Further, the Respondent concluded that in Fakir Mohd. (Dead) by LRs Vs. Sita Ram 2002 (1) Apex Court Judgments 325 (S.C.), the Hon’ble Supreme Court laid down the law that when notice is sent under certificate of posting, it is obligatory on the part of the sender to prove the service of notice in view of the statement on oath given by addressee denying receipt of any such notice.

6.6     Respondent, relying on the impugned judgment of State Commission, argued that the Petitioner cannot compel any holder of Bond to redeem or surrender the Bond against his will before the maturity date as laid down in the promissory note itself.  It is the discretion of the bond holder to prematurity redeem the bonds or to wait for its maturity.  The Petitioner cannot thrust upon its indiscriminate decision to redeem the bond upon the bondholder. 

7.       The questions that fall before us for consideration are:

(a)      Do the terms and conditions of Bond issue permit the Petitioner to unilaterally redeem the bond before maturity, without the consent of the Respondent?   If the answer to this is in the affirmative, should the Petitioner on exercise of the call/redeem option after 10 years i.e. 31.03.2002, ought to have transferred the due amount to the account of the Respondent or paid him through cheque/bank draft, without waiting for any consent/confirmation from the Respondent. 

(b)     Can “Under Postal Certificate” (UPC) mode of postal delivery, in the absence of proof of service, be accepted as valid service on the Respondent?  Is UPC a registered made of postal delivery? Whether in the absence of a valid proof of service of individual communication to the Respondent, publication in newspapers could be treated as deemed service on the Respondent?

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 both the Petitioner and Respondent had the option to encash/redeem the bond at the end of every 5 years from 31.03.1992, and 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/-.  District Forum in its order 28.05.2019 has observed:

“The contentions raised by the OPs that while exercising their powers as per terms & conditions laid down in the said Promissory Note dated 31.3.1992, they have opted to redeem the bond in the year 2002 and as such liable to pay only redemption amount of Rs.12,000/- with interest thereon of Rs.5000/- against the said bond to the complainant, is totally untenable and not permissible under law of equity and fair play. The investment in Bonds culminate into a contract between the investor and the company. Any Company, party to the contract, cannot unilaterally do any action to nullify the beneficial effect of the contract, accruing to the investor. The OPs herein cannot whimsically backtrack from its commitment and can make the promissory note as redundant prejudicial to the interest of investor.

    The Opposite Parties could not compel any holder of bond to redeem or surrender the bond against his will before the maturity date as laid down in the Promissory Note itself. It is the discretion of the bond holder to prematurely redeem the bonds or to wait for its maturity. The OPs/IDBI cannot thrust upon its indiscriminate decision to redeem the bond upon the bondholder.”

The District Forum relied upon the judgment of this Commission in T.K. Nagarathna (supra), in which this Commission observed as follows:-

"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 the newspapers to locate such advertisements. Hence the Bank cannot escape its liability by merely publishing something in a newspaper."

          The District Forum observed:-

    “The Opposite Parties has failed to produce on record any document or evidence to substantiate the fact of delivery of any letter to the complainant in the year 2002 or thereafter regarding their decision for redemption of bond prematurely.  The amount of bond, as stated to be payable by the Opposite Parties, was never tendered or transferred to the account of the complainant/bond holder. The amount remained with IDBI since the date of promissory note i.e. 31.3.1992 till date and as such any decision or option adopted by the OPs at their own regarding early redemption of the bond in question, carries no legal value.”

8.2     While dismissing the appeal vide its order dated 01.11.2019, the State Commission has observed that:

“11.  The core question that falls for consideration before us is as to whether the Forum has rightly passed the impugned order. The answer, to this, question is in the affirmative. Annexure C-1 is a copy of Deep Discount Bond - (Series I) issued by Industrial Development Bank of India bearing Regd. Folio No.DD00680985 on 31.03.1992.  It is also clear from the said bond in the form of Promissory Note that after maturity on 31.03.2017, its face value is shown as Rs.1,00,000/-.  The plea of the appellants that as per terms and conditions of Deep Discount Bond (Series I), they decided to exercise the call option to redeem the said bond after 10 years i.e. on 31.02.2002 at deemed face value of Rs.12,000/- per bond, for which, they also got published to exercise call option in regional & national newspapers, also informed the respondent/complainant about call option through UPC and also notice displayed in Bank. The said plea of the appellants has no value at all because the law on the subject is very clear. Acknowledgement is a must to prove delivery of any document through UPC. Even the complainant specifically denied regarding receipt of aforesaid letter sent through UPC. On the other hand, the appellants/Opposite Parties miserably failed to prove on record by way of any cogent and convincing evidence or acknowledge establishing delivery of the aforesaid letter to the respondent/complainant.

So far as the contention qua publishing of information in the newspaper is concerned, it may be stated that whether it was circulated in the locality where the complainant used to reside at the relevant point of time. In this regard, the Forum has rightly cited the judgment passed by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petiton No.2975 of 2008 - IDBI Bank Limited and Anr. Vs. T.K.Nagarathna, decided on 13.8.2008 and held that:-

x  x  x x  x

Further in   case of  Fakir Mohd. (Dead) by L.R.s Vs. Sita Ram, 2002 (1) APEX COURT JUDGMENTS 325 (S.C.), the Hon'ble Supreme Court of India laid down the law that when notice is sent under certificate of posting, it is obligatory on the part of the sender to prove the service of notice in view of the statement on oath given by the addressee denying receipt of any such notice. As discussed above, in the instant case, the appellants/Opposite Parties have failed to prove the contention of successful delivery of alleged letter sent through UPC to the respondent/complainant.  Ratio of judgment in the case is fully applicable to the facts of the case in hand.

12.    Not only this, the Forum has rightly stated in para No.8 of its impugned order that " the Opposite Parties could not compel any holder of bond to redeem or surrender the bond against his will before the maturity date as laid down in the Promissory Note itself.  It is the discretion of the bond holder to prematurely redeem the bonds or to wait for its maturity.  The OPs/IDBI cannot thrust upon its indiscriminate decision to redeem the bond upon the bondholder."

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, 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 20.08.2013, but that is after 12 years since the redeem option was exercised by it in 2001.  The contention of Petitioner that Respondent approached the Petitioner after 16 years from the date when the call notice has been issued in 2001 is not valid as Respondent approached them in 2017 means he approached the Petitioner when the 25 year bond issued in 1992 became due for redemption in 2017.  Hence, this cannot be called as delay on the part of Respondent in approaching the Petitioner in claiming the face value of the bond in question.  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 to the Respondent herein, 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’.  Keeping in view the observations of Hon’ble Supreme Court in Fakir Mohd. (Supra) in which Hon’ble Supreme Court held/observed that “where a notice is sent under certificate of posting, it is obligatory on the part of sender to prove the service of notice in view of other side denying the receipt on oath, 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, although we are not in agreement with the observations/findings of State Commission and District Forum that IDBI did not have the right to redeem the bond before maturity and only allottee has such right, and that IDBI/Petitioner cannot compel the Respondent/Alottee of any  bond to redeem or surrender the bond against his will before the maturity date and it is the discretion of the bond holder to prematurely redeem the bond or to wait for its maturity, 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, the RP is dismissed/disposed off with the following directions/reliefs/modifications to the orders of the State Commission: -

1. The Petitioner herein (OP before District Forum) shall pay the full value of the said bond as on 31.03.2007 i.e. Rs.1.00 Lakh, along with interest @9% p.a. w.e.f. 01.04.2007 till the actual date of payment.  The payment as per this order shall be made within three months from the date of this order, failing which, it shall carry interest @ 12% p.a.

2. The Petitioner shall also pay Rs.25,000/- as litigation costs (include the litigation cost of Rs.10,000/- awarded by the District Forum).

3. The Respondent herein shall return/hand over the original bond certificate duly signing it, and complete various formalities, as required, within 45 days of this order. 

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