Smt. Syeda Shahnur Ali, Member

This is a complaint made by one Sri Asit Bera against the Branch Manager and Managing Director  of LRN Finance Ltd., praying for a direction upon the OPs to return Rs. 1,30,000/- along with interest @ 10%, compensation for a sum of Rs. 50,000/- and litigation cost of Rs. 10,000/-.

In short, case of the Complainant, is that, he invested a sum of Rs. 1,30,000/- with the OP No. 2 through OP No. 1 on 31-08-2013 for two years as debenture being Certificate No. 00240047.  On maturity, Complainant demanded the maturity amount from the OP and submitted all relevant documents to facilitate this.  However, OPs have not settled his claim.  Hence, this case.

OP No. 2 contested the case by filing WV, whereby it denied all the material allegations of the complaint.  It is further stated that the Complainant claimed the maturity proceeds through his Ld. Advocate without furnishing relevant documents for this purpose.  So, this OP asked the Complainant over phone to submit requisite documents, but the Complainant is yet to furnish the same.  Thus, this OP prayed for dismissal of the case.

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

Complainant has furnished photocopy of the purported Policy Certificate No. 00240047, wherefrom it transpires that he deposited a sum of Rs. 1,30,000/- with the OP No. 2 company.  It is stated that the same was invested in the OP No. 2 company through its branch office, i.e., OP No. 1.  The OP No. 2 expressed its inability to settle Complainant’s claim over non-receipt of original policy certificate.  In this regard, it is asserted from the side of the Complainant that he submitted all the relevant documents to the office of the OP No. 1. Insofar as the factum of submission of relevant documents remains uncontroverted from the side of the OP No. 1, and above all, keeping in mind the fact that the Complainant has got nothing to gain withholding relevant documents with him, we see no reason whatsoever to disbelieve the version of Complainant stated under affidavit. 

On the other hand, although it is claimed by the OP No. 2 that it asked the Complainant over phone to furnish original documents, no tangible proof is advanced from its side to establish that.  Moreover, one wonders, what prevented it from dropping a few lines in response to the alleged legal notice served by the Ld. Advocate of the Complainant.   That apart, there is no clarity as to how the OP No. 2 got hold of the telephone no. of the Complainant when supposedly the Complainant did not approach the OP No. 2 directly.  It is quite unusual for Ld. Advocates to mention the contact no. of their clients in their legal notices. Overall, we see no reason whatsoever to accept the contention of the OP No. 2 that non-receipt of relevant documents in original tied its hands.

Even for the sake of argument if it is assumed that OP No. 2 has not received the original policy certificate and other relevant documents from its branch office, i.e., OP No. 1, those the Complainant submitted to redeem the policy certificate, to our mind, it is purely an internal administrative affair of the OPs.  In case the OP No. 1 indeed faltered in forwarding the original policy certificate and other documents submitted by the Complainant to the OP no. 2, such alleged laxity on the part of its branch office, as long as the authenticity of the policy certificate is not in dispute, is no ground at all to sit tight over the claim of the Complainant. More so, the W/V filed by the OP is not signed, neither the statements made are on oath, i.e. without any affidavit. As such, we do not hold such statements made by the OP to be true at all.

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. 1,30,000/- together with compensation and litigation cost.

This complaint case, thus, succeeds.

Hence,

O R D E R E D

that CC/94/2016 be and the same is allowed on contest against the OP No. 2 and ex parte against the OP No. 1.  OPs are directed to pay, within 40 days hence, a sum of Rs. 1,30,000/- to the Complainant along with compensation in the form of interest @ 10% p.a. from the date of redemption, i.e., on 30-08-2015 and litigation cost of Rs. 5,000/-.  Noncompliance of this order within the aforesaid stipulated time frame would entail a fine @ Rs. 100/- per diem from this date till full and final payment is made which will be deposited to Consumer Welfare Fund.