Karnataka

Kolar

CC/6/2017

Sri.N.Krishnappa - Complainant(s)

Versus

The Manager, CRM - Opp.Party(s)

Sri.Suman.K

08 Dec 2017

ORDER

Date of Filing: 17/01/2017

Date of Order: 08/12/2017

BEFORE THE KOLAR DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, D.C. OFFICE PREMISES, KOLAR.

 

Dated: 08^TH DAY OF DECEMBER 2017

PRESENT

SRI. K.N. LAKSHMINARAYANA, B.Sc., LLB., PRESIDENT

SMT. A.C. LALITHA, BAL, LLB.,  ……  LADY MEMBER

 

CONSUMER COMPLAINT NO.06 OF 2017

Sri. N. Krishnappa,

S/o. Narayanaswamy,

Aged About 40 Years,

Gokul College Road,

KHB Colony, Kolar.                                      ….  COMPLAINANT.

(Rep. by Sri. Suman.K & Somashekhar.R, Advocates)

 

- V/s -

1) The Manager (CRM)

Ujjivan Finance Services Pvt Ltd.,

431/1, 1^st Floor 2^nd Cross,

Jaibheem Nagar, Near Government 1^st

Grade College, M.G. Road Cross,

Chikkaballapur-562101.

(Rep. by Sri. G.R. Ramachandra Murthy, Advocate)

 

2) The Chief Administration Officer (HR),

Ujjivan Finance Services Limited,

Grape Garden, No.27, 3^rd A Cross,

18^th Main, 6^th Block, Koramangala,

Bangalore-560 095.                                       …. OPPOSITE PARTIES.

(Rep. by Sri. G.R. Ramachandra Murthy, Advocate)

                                                                      

 

-: ORDERS:-

BY SMT. A.C. LALITHA, LADY MEMBER

01.   The complainant having submitted this complaint on hand as envisaged Under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred in short as “the Act”) against the opposite parties claiming ESOP share amount of Rs.1,50,000/- and compensation of Rs.2,00,000/- and such other reliefs.

 

02.   The facts in brief:-

(a)    The complainant submitted that, he was an employee of OP No.1 and worked as Field Staff (CRS) for 07 years without any remarks.  The complainant requested OP No.1 for grant of leave for few days due to his ill-health problem i.e., piles disease, but the OP-1 without sanctioning the leave forcibly obtained resignation letter from the complainant on 23.10.2016.  The complainant has spent more than Rs.15,000/- towards his treatment and if he continuous in his job, he might have get the benefits under the Health Policy under the OP finance service limited.  OP No.2 is the higher authority of OP No.1.  And both are jointly and severally liable to pay the above said claims of the complainant.  The complainant has requested the OP for retention of the job, but OP imposed condition that, he should be demoted in his job.  The OP No.1 has agreed to pay other benefits of PF, TA, ESOP, Leaves, Grachuti funds except 450 share benefits in which each share carries Rs.350/- which are purchased under the Companies Scheme.  These shares are earned by the complainant on his own efforts while his working period and the OP No.1 refused to give the said share benefits, which amounts to deficiency of service.  So contending complainant prays for above set-out reliefs. 

(b)    Along with complaint the complainant has submitted below 07 documents:-

(i) The company Identity Card

(ii) Appreciation letter

(iii) Pay Slip May 2014

(iv) Notice Stock Option Grant Letter

(v) Compensation Break up letter

(vi) Office Copy of Legal Notice dated: 22.12.2016

(vii) Postal Acknowledgement two in Nos.

 

03.   In response to the notice the learned counsel for both Ops appeared and filed common objections by resisting the claim of the complainant in toto:-

(a)    The Ops have denied the entire averments of the complaint as false and put the complainant to strict proof to prove the same.  The Ops admitted that the complainant was an employee of OP No.1.  The further allegation of the complainant that, he is an sincere employee, due to his ill-health problem he requested OP No.1 to grant few days leave, but instead of sanctioning leave OP No.1 forced the complainant and obtained the resignation letter from him on 23.10.2006 are denied as false.  And so also denied that both are vicariously liable to return all benefits.  So also denied that the complainant is having parents, wife and children and he is the only earning member in the family.  And at this age there is no further companies offered him to any job.  The Ops submitted that, the complainant has voluntarily submitted his resignation on 21.10.2016.  And the same was accepted by the Ops company.  And there was no any force or threat from the Ops side.  The complainant does not fall under the definition of Section. 2(1)(d) of the C.P. Act.  The complainant joined the OP-company on 15.06.2009 and his employment was confirmed 23.03.2010 and he voluntarily submitted his resignation on 21.10.2016 and the same was accepted. 

 

(b)    The Ops further contended that, the company has started its business as Ujjivan Financial Services Private Limited in the year 2005 as Microfinance institution providing financial services to the economically active urban and semi-urban poor to build better lives.  The OP company became public limited company under the name Ujjivan Financial Services Limited in the year 2015 subsequently has become Ujjivana Small Finance Bank Limited in the year 2017.  And the Reserve Bank of India has issued license in favour of Ujjivan Small Finance Bank Limited.  The OP company has introduced Employee Stock Option Plan (ESOP) on 12.09.2012.  The company has allotted ESPO to its eligible employees on merit basis.  And the complainant was allotted 430 shares vide letter dated: 12.09.2012. The said ESOP scheme is governed by the securities and Exchange Board Of India (Employee Stock Option Scheme And Employee Stock Purchase Scheme) Guidelines, 1999 (“SEBI Guidelines”).  According to SEBI Guidelines, in the event of an employee resigning from the services of the company or his employment being terminated for any reasons, the employee should exercise the vested option within a period of time specified by the Company, after such resignation or termination.

 

(c)    As per Section 7(b) of ESOP policy if the employee resigns, they have to exercise the option within 5 days of resignation otherwise the options stand lapsed and they will not be able to exercise their options after the said period.  The complainant has availed a staff loan of Rs.50,000/- and there is an outstanding due of Rs.14,206/- as on the date of resignation of the complainant.  The complainant has not served the notice before one month prior to his resignation.  The complainant also not paid the mobile charge arrears and in all the complainant is liable to pay Rs.16,908/- to the company.  Court of Bangalore has the jurisdiction in respect of any and all matters, disputes or differences rising in relation to or of the ESOP-2010 as per Section 13.1 of company ESOP scheme document.  On 06.12.2017 the counsel for Ops has submitted memo with loan extract and other papers relating to loan of the complainant.  So contending, Ops have prayed for dismissal of the complaint with exemplary cost in the ends of justice.

 

04.   The complainant has filed his evidence by way of affidavit and produced list with following documents:-

(i) Copy of joining letter.

(ii) Copy of confirmation letter.

(iii) Copy of Resignation letter

(iv) Copy of Company License

(v) Copy of performance letter 6 in Nos.

(vi) Copy of ESOP grant paper

(vii) Copy of Hospital Medical record 6 in Nos.

(viii) Original Medical Bills 2 in Nos.

(ix) Original Reply notice with cover.

(x) Copy of Employee stock option scheme 2010 17 pages.

 

05.   The Assistant Manager of Ops has also filed evidence by way of affidavit and so also produced list with 09 documents:-

(i) Certificate of incorporation

(ii) License issued by RBI

(iii) Letter of confirmation of employment dated: 23.03.2010 issued to complainant.

(iv) Resignation letter 21.10.2016 issued by complainant.

(v) Letter dated: 12.09.2012

(vi) Copy of ESOP scheme 2010

(vii) Copy of SEBI guidelines

(viii) Legal notice dated: 22.12.2016

(ix) Reply notice dated: 11.01.2017.

 

06.   Counsel for complainant has also filed their written arguments with Memo along with citation.  The counsel for Ops also filed written arguments with citation.

 

07.   Heard arguments on both sides.

 

08.   Now the points that do arise for our consideration are:-

(1) Whether this Forum has jurisdiction to entertain this complaint and the complainant is a “Consumer” as per Section 2(1)(d) of the Consumer Protection Act, 1986?

 

(2)    If so, whether the Ops have rendered deficiency in service in repudiation of 430 shares of ESOP benefits of the complainant?

 

(3)    If so, to what relief the complainant is entitled for?

 

(4)    What order?

 

09.   Our findings on the above stated points are:-

POINT (1):       In the Affirmative

POINT (2):       In the Affirmative

POINT (3):       In the Affirmative

POINT (4):       As per the final order

                                        for the following:-

REASONS

POINT (1):-

10.   The Ops have contended that, this Forum lacks jurisdiction to entertain the complaint relied on Terms and Condition No.13.2 of Employee Stock Option Scheme – 2010 submitted by the Ops which reads as “the Courts of Bangalore, India shall have jurisdiction in respect of any and all matters, disputes or differences arising in relation to or out of this ESOP 2010.”  In support of this contention the counsel for Ops has relied on the citation of Supreme Court of India in Civil Appeal No.5476/2013 between Dr. Jagmittar Sain Bhagat V/s. Dir. Health Services, Haryana & Others.  The principle enunciated in this citation is “by no stretch of imagination a government servant can raise any dispute regarding his service conditions or for payment of gratuity or GPF or any of his retiral benefits before any of the Forum under the Act.  The government servant does not fall under the definition of a “Consumer” as defined Under Section 2(1)(d)(ii) of the Act.  Such government servant is entitled to claim his retiral benefits strictly in accordance with his service conditions and regulations or statutory rules framed for that purpose.  The appropriate forum for redressal of any of his grievance, may be the State Administrative Tribunal, if any, or Civil Court but certainly not a Forum under the Act.”

 

11.   Contrary to this the learned counsel appearing for the complainant has submitted the internet downloaded copy of The Economic Times subject to “Employees are Consumers, have right to benefits: Consumer Forum” wherein it referred the ruling reported in AIR 2008 SC 2957 Between The Regional Provident Fund Commissioner V/s. Bhavani, 2000 (1) SCC 98 between Regional Provident Fund Commissioner V/s. Shiv Kumar Joshi.  The principle enunciated in these two citations are an employee is a consumer Under Section 2(1)(d) of the Act and entitled to claim for his entire retirement benefits.

 

12.   The OP counsel brought to our notice the Terms and Condition No.13.2 of “Employee Stock Option Scheme- 2010” that, they have to approach Court of jurisdiction of Bangalore.  In our opinion, there is no specific place of Bangalore in which the party has to approach.  Simply quoting as Courts of jurisdiction of Bangalore how can a party to imagine where he had to approach would be the question?  And moreover Ops agreed to pay other retired benefits of complainant i.e., PF, TA, Leaves, Grachuti funds and only repudiated the claim of ESOP.  When the Ops have not raised question of jurisdiction while agreeing to pay the above all other benefits then what was the intention of the Ops while raising jurisdiction point only for claim of ESOP ?  The above citation does not applicable to the present case since there is no clarity in the terms and conditions of the ESOP Act, 2010.  Therefore, we have not considered the citation of Ops and we consider the citation submitted by the complainant. Therefore we are of the opinion that, the complainant is a “Consumer” Under Section 2(1)(d) of the Consumer Protection Act, 1986 and this Forum has got jurisdiction to entertain the complaint on hand.  Accordingly we answer this Point in the Affirmative.

 

POINT (2) AND (3):-

13.   To avoid repetition in reasonings and as these points do warrant common course of discussion, the same are taken up for consideration at a time. 

 

14.   The reason for repudiating the claim of complainant by Ops with regard to 430 shares of ESOP is the option for a convertible as equity shares of the company on the exercise date as per schedule at the agreed price.  According to SEBI guidelines in the event of an employee resigning from the services of the company or his employment being terminated for any reasons, the employee should exercise the vested option within a period of time specified by the Company, after such resignation or termination.  

 

15.   According to Ops as per ESOP policy Section 7(b) if an employee resigns, he has to exercise the option within a period of 5 days of resignation otherwise the options stand lapsed and they will not be able to exercise their options after the said period.  And also submitted that, the complainant is still due of Rs.16,908/- of various arrears to the company.  Contrary to this the counsel for complainant has brought to our notice on the next column of the same scheme which reads thus:-

		Prior to Listing	Post Listing
Vested Options
1	Resignation/Termination (other than due to misconduct or breach of the company policies/terms of employment)#	Employees: All the vested options to be exercised within 5 days of resignation/ termination Ex-Employees: All the vested options to be exercised within 40 days from the date of communication from the Company or such other period as may be decided by the Board.	Employees: All the vested options to be exercised within 5 days of resignation/ termination Ex-Employees: All the vested options to be exercised within 30 days from the date of communication from the company or such other period as may be decided by the Board.
2	Death#	All the vested options to be exercised within 40 days from the date of communication from the Company or such other period as may be decided by the Board	All the vested options to be exercised within 30 days from the date of communication from the Company or such other period as may be decided by the Board.
3	Retirement/early retirement approved by the Company	All the vested options to be exercised within 5 days of retirement/early retirement	All the vested options to be exercised within 30 days from the date of retirement or such other period as may be decided by the Board.

 

 

According to the above options after 40 days after retirement or termination there is no meaning now to take a condition that within 5 days it has to be informed or it has to exercised. 

 

16    On perusal of the documents and pleadings of both parties it is clear that, there is no dispute with regard to the purchase of said ESOP stock options by the complainant and according to the Annexure – 7, 8 and 11 the appreciation of Ops given to the complainant with regarding to this stock options is good and moreover the complainant has submitted the medical records with regard to his health condition.  The health condition is an behind anyone hand and which is excusable on the principle of natural justice.  The date of resignation of the complainant is 21.10.2006 according to Annexure-C.3 and he issued legal notice through his counsel on 22.12.2016.  In between this as submitted by the complainant he approached Ops and requested orally for his claim.  Therefore we believe the version of the complainant and we are of the definite opinion that, the complainant is entitled for the said 430 shares of ESOP along with other retired benefits too. 

 

17.   And with regard to the arrears of the complainant to OP No.1 company as contended by the OP No.1 the counsel for OP No.1 has submitted loan extract and other papers relating to loan of complainant which discloses that, this complainant had availed staff loan from OP No.1 on 07.04.2015 of Rs.50,000/-  On perusal of the said account statement after deduction of amount towards loans every month from the payment of this complainant still balance loan is of Rs.14,206/- up to 23.12.2016.  Therefore this complainant is liable to pay balance loan amount of Rs.14,206/-.  In the version OP No.1 prayed for mobile charges arrears from complainant.  But without being any evidence towards balance of mobile arrears oral pleadings cannot be consider.  Therefore OP No.1 is held entitled to deduct the loan arrears of Rs.14,206/- from the amount of ESOP shares of complainant. 

 

18.   We reject the prayer of the complainant as to issue directions to the Ops to retain his earlier service since we lack jurisdiction for it.  Therefore we consider that Ops have rendered deficient in service in repudiating ESOP shares of the complainant and we answer these points accordingly in the affirmative.

 

POINT (4):-

19.   In view of the above discussions on Point (1) to (3) we proceed to pass the following:-

ORDER

01.   For foregoing reasons the complaint is allowed with respect to amount of share of ESOP scheme with costs of Rs.1,000/- against the Ops.

02.   The Ops are hereby directed to deduct a sum of Rs.14,206/- towards loan arrears of complainant from 430 shares of ESOP benefits and pay balance amount to the complainant along with other benefits of the complainant with compensation of Rs.3,000/-. 

03.   The Ops are directed to comply the above said order within 30 days from the date of communication of this order, failing which, the same shall carry interest at the rate of 9% from the date of filing of this complaint till realization.

04.   Send a copy of this order to both parties free of cost.

 

(Dictated to the Stenographer, transcribed by him, corrected and then pronounced by us on this 08^th DAY OF DECEMBER 2017)

 

 

LADY MEMBER                                PRESIDENT