Smt. Syeda Shahnur Ali, Member (L)

This is a complaint made by Sri Gourhari Manna against the Branch Manager and Managing Director of GREENAGE FOOD PRODUCTS LTD., praying for a direction upon the OPs to return the redemption value of Debentures of Rs.20050/- along with interest @ 10% from 17.04.2016 till realization, and compensation of Rs.68000/- with litigation cost of Rs.10000/-.

In short, case of the Complainant, is that, he invested a sum of Rs.10000/-, as Debentures on 18.01.2012 with the OP No. 2 through OP No. 1 for being Certificate No. B/20509/1665/117260. The date of redemption of the above Debentures was 17.04.2016. On maturity, Complainant demanded the Debenture values from the OP and submitted all relevant documents to facilitate this. However, OPs have not settled his claim hence, this case.

None of the OPs appeared to contest the case in spite of receiving summons so the case is heard ex-parte against OPs.

Point to be considered in this case is whether or not the Complainant is entitled to the relief(s) sought for by him.

Decision with reasons

We have carefully perused the affidavit of the complainant and all the documents filed by the complainant.

Moreover, Debentures are of various kinds, namely Convertible, Nonconvertible, Secured, Unsecured and Redeemable, Unredeemable. Nonconvertible Debentures are unsecured Bonds that cannot be converted to company equity or stock. Nonconvertible Debentures usually have higher rate of interest than Convertible Debentures. While secured NCD are loans taken by the companies which are backed up by some assets which can be liquefied for paying off Debenture holder in case the company issuing the same is not able to redeem them. As such, the returns are secured. The Secured Debentures are fully secured against the assets of the company. Section 71 Chapter IV of The Companies Act 2013 deals with the provisions relating to the issuance of Debentures along with the penalties for the noncompliance of the same.

Therefore, when the Debentures is secured by the charge on some asset or set of assets which is known as secured or mortgage Debenture, we hold that the act of the issuing company as that of hiring of service and there is a deficiency in service on their part. In this case, as such, the reference filed up by the OP is not applicable herein and we are of the considered view that nonpayment of Secured Nonconvertible Redeemable Debentures tantamount to deficiency in service.

We, therefore, hold the OPs are liable to refund the entire deposited money, i.e., Rs. 20050/- together with compensation and litigation cost.

After consulting the uncontroverted documents of the complainant we have no hesitation to hold that the complainant is entitled get relief, as prayed for.

This complaint case, thus, succeeds.

Hence,

O R D E R E D

That CC/121/2016 be and the same is allowed exparte against the OPs. OPs are directed to pay, redemption value of Rs.20050/- to the complainant within four months from the date of this order for ends of justice, in default, OPs will have to pay interest at the rate of 10% p.a. till final payment. OPs are further directed to pay compensation of Rs.3000/- and Rs.1000/- as litigation cost to the complainant within four months from the date of this order, failing which OPs will be liable to pay Rs.100/- daily as punitive charges which will be payable to the Consumer Welfare Fund.

Let the copies of the judgement be supplied to all the parties free of cost.