BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM<br /> VAZHUTHACAUD : THIRUVANANTHAPURAM<br /> <br /> PRESENT :<br /> <br /> SHRI. G. SIVAPRASAD : PRESIDENT<br /> SMT. BEENA KUMARI .A : MEMBER<br /> SMT. S.K. SREELA : MEMBER<br /> <br /> O.P.No. 185/2004 Filed on 03..05..2004 <br /> Dated: 30..06..2008<br /> <br /> Complainant:<br /> <br /> Jayaprakash T.N., Senior Chemist, Mining and Geology Department, Kesavadasapuram, Pattom – P.O., Thiruvananthapuram.<br /> <br /> (By Adv. Shri. M.S. Santhosh Kumar)<br /> <br /> Opposite parties:<br /> <br /> 1. The Zonal Manager, Rajelekshmi Unit Plan, Unit Trust of India, Cochin.<br /> <br /> 2. UTI, Investors Services Ltd., 45, Justice Basheer Ahmed Building, Second Line Beach, Chennai – 600 001.<br /> (By Adv. Shri. P. Dileep Khan) <br /> 3. M. Damodaran, Administrator Specified Undertaking of The Unit Trust of India, U.T.I Tower, General Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051. 4. The Branch Manager, Unit Trust of India, ISL, Swastik Centre, 3rd Floor, Thiruvananthapuram – 1. <br /> (By Adv. Shri. S. Reghu Kumar)<br /> <br /> This complaint is disposed of after the period so specified under the Consumer Protection Act, 1986. Though the case was taken up for orders by the predecessors of this Forum on 11..05..2006 the order was not prepared accordingly. This Forum assumed office on 08..02..2008 and re-heard the complaint. This O.P having been heard on 16..05..2008, the Forum on 30..06..2008 delivered the following:<br /> <br /> ORDER<br /> <br /> SHRI. G. SIVAPRASAD, PRESIDENT : <br /> <br /> The fact leading to the filing of the complaint is that complainant had purchased 1500 units having face value of Rs.10/- per unit in the name of his daughter Reshma. M.J (minor) on 18..04..1994 from the 1st opposite party. The said units were issued to the complainant under Rajalekshmi Unit Plan(II). The maturity was fixed as 18..04..2015. Complainant reinvested under Rajalekshmi Unit that the investment unit profit beyond the assured amount on maturity. Opposite parties unilaterally terminated the said scheme which amounts to deficiency in service. As a result the complainant was put to irreparable loss and damage apart from mental agony. Opposite party sent warrant for Rs.42,476.46 consequent on the unilateral termination of the above said scheme. The total return including interest would be Rs. 70510.92 as on the date of maturity. Had the said scheme continued the complainant would get Rs.1,80,000/-. In addition to this the complainant would get bonus @ Rs. 5,000/- per year from the date of purchase of the unit up to the date of maturity. The above said deficiency in service had caused a financial loss of Rs. 2,14,489.08/- and mental agony to the complainant. Hence this complaint claiming Rs. 2,14,489.08 from the opposite parties.<br /> <br /> 2. Opposite parties entered appearance and filed version contending that the complaint is not maintainable either in law or on facts. The complainant is not a consumer as defined under the Consumer Protection Act. The termination of the said scheme has ensured the benefit of the beneficiaries. UTI is a Statutory Corporation constituted under Section 3 of the UTI Act. It was established with a view to encourage savings and investment and participation in the income, profits and gains accruing from acquisition, holding, management and disposal of securities. The general superintendence, direction and management of the affairs and business of the UTI were vested in the Board of Trustees. Section 21(1) of the Act provided for the Board to make from time to time various schemes for issuing units and for investment by the public. The said scheme was statutory in nature and the provisions of the said scheme was notified and published in the Gazette of India. The said scheme has been terminated not with a view to derive any advantage to UTI but to ensure that there was no erosion of the capital invested in the said scheme to the detriment of the unit holders. The continuation of the said scheme on an ultimate analysis of the financial condition prevailing and likely to prevail would have proved gravely detrimental to the unit holders of the said scheme and therefore the said scheme was terminated. The application cum brochure contained the following clause: “All investments in the plan are subject to market risks and the NAV of the scheme may go up or down depending on the factors and forces affecting securities market. Past performance is not necessarily indicative of the future. There can be no assurance that objective of the scheme will be achieved. RUP – II is only the name of the scheme and does not in any manner indicate either the quality of the scheme, its future prospects or returns. Please read provisions of the scheme before investing and retain this brochure for future reference”. Complainant has mislead this Hon'ble Forum by not disclosing the clause provided in the application brochure of the said scheme. Hence on this ground alone, the complaint deserves to be dismissed in limine itself. Clause 13 of the said scheme authorises and empowers the UTI to terminate the scheme. Hence decision of termination to the said scheme was made bonafide and consciously by taking into account the present volatile market conditions in equity and declining trend in debt market and to safeguard overall interest of the beneficiaries of the said scheme. The complainant was aware that the said scheme is terminable and with the knowledge of the termination clause and review clause, the complainant has invested in the said scheme. Hence opposite parties have never committed any deficiency in service or unfair trade practice as alleged in the complaint. Hence opposite parties prayed for dismissal of the complaint.<br /> <br /> 3.The points that would arise for consideration are:<br /> <br /> (i) Whether there has been deficiency in service on the part of opposite parties?<br /> (ii) Reliefs and costs?<br /> <br /> 4. To support the contention in the complaint, the complainant has filed an affidavit of himself as PW1 and Exts. P1 to P4 were marked. On behalf of opposite parties, A. Sree Kumar, Chief Manager, UTI, Asset Management Company Ltd. has filed an affidavit and Exts. D1 to D4 were marked.<br /> <br /> 5. Points (i) & (ii) : First point requiring consideration is whether there has been deficiency in service on the part of opposite parties. The grievance of the complainant is that the complainant had purchased 1500 units having face value of Rs. 10/- per unit in the name of his daughter Reshma. M.J (minor) on 18..4..2004 from the 1st opposite party. The said units were issued to the complainant under Rajalekshmi Unit Plan (II). The maturity was fixed as 18..04..2015. The assured maturity value was Rs. 1,80,000/- with bonus of Rs.5,000/- per year from the date of purchase of the units upto the date of maturity. On 18..03..2004 complainant received a communication stating that the UTI had unilaterally redeemed the units with effect from 01..04..2004. Option for reinvestment was also provided. But the scheme offered for reinvestment was having only lesser benefits than the under Rajalekshmi Unit Plan (II). The 3rd opposite party had abruptly served a warrant dated 01..04..2004 for Rs. 42,476.46 with the intimation of termination of the scheme to the complainant. The action of the 1st opposite party caused huge financial loss and mental agony to the complainant. Ext.P1 is the copy of the brochure circulated by the UTI. Ext.P2 is the copy of the membership advice No. 305960070002035 issued by UTI. As per Ext. P2, No. of units: 1500, date of maturity: 18..04..2015. Ext.P3 is the copy of printed letter dated 15..12..2003 showing termination of the said scheme, issued by the Administrator of the specified undertaking of the UTI. Ext. P4 is the copy of warrant for Rs. 42,476.46. Main thrust of argument advanced by the counsel appearing for the opposite parties was to the effect that opposite parties discontinued the said scheme invoking the powers conferred under various clauses of the scheme. Further the said scheme was terminated by opposite parties as it was not viable. It has been contended by the opposite parties that the Rajalekshmi Unit Plan (II) authorised the UTI to terminate the scheme by giving a notice of 3 months to the members of the scheme. Ext. D3 is the copy of the Gazette of India, August 27, 1994 wherein the scheme details of Rajalekshmi Unit Plan (II) was notified. The clause XIII of the said scheme deals with termination of the scheme and the plan made thereunder. The clause XIII reads and provides as under: <br /> “The scheme and the plan made thereunder may if circumstances so prevail not being in the interest of the numbers or the Trust be terminated by giving a notice of three months to the members. In the event of termination of the plan no new entrants shall be allowed to join the plan after the specified date of termination. The outstanding units of the members whose names are entered in the Register on the date to be specified shall be repurchased at such a rate and such manners as may be decided by the Trust. Besides receiving the final repurchase price so determined no further benefit for any subsequent period shall accrue. The members shall be paid the amount due as early as possible after the membership advice with the form of repurchase duly completed has been received by it. The membership advice and other documents received for repurchase shall be retained by the Trust for cancellation. When the Trust decides to terminate the scheme and plan made thereunder, it will be binding on the members and they shall have no right to persuade the Trust to continue the scheme and plan made there under”.<br /> <br /> 6. Submission by opposite parties was that clause 13 of the said scheme empowered the opposite parties to terminate the scheme. The scheme specifically provided for premature of scheme. On termination of the scheme, the complainant was informed about the termination and hence the exercise of right under Rajalekshmi Unit Scheme does constitute deficiency in service. The learned counsel appearing for the opposite parties made reliance on the the decision reported in 2005 CTJ 1179 (CP) SDRC, Kerala. The said decision deals with the same question wherein the said scheme was prematurely terminated and the contention of the complainant was that it constituted deficiency in service, which was rejected. The Rajalekshmi Unit Scheme 1992 contained a clause that authorised the Trust to terminate the scheme and it is in exercise of the said provision that the scheme was terminated. The State Commission held that as the decision to terminate the scheme was in compliance of the scheme and the invocation of the said right by UTI did not constitute deficiency in service. The State Commission relied on the decision of the Hon'ble High Court of Kerala. The legal position laid by the Hon'ble High Court of Kerala is that it cannot be contended that the Board of Directors has no statutory authority to reduce the period of scheme. As per provisions contained in Sub Section 3 of Section 21 of the UTI Act 1963, statutory authority competent to reduce the period is the Board of Directors. As the period was reduced exercising statutory powers conferred under Sub Section(3) of Section 21 of the Act it cannot be argued for a moment that either financial loss or mental agony was suffered by the complainant. Opposite parties also made reliance on the decision of the National Commission reported in 1(1996) CPJ (NC). The said decision also deals with a similar question wherein the said scheme was prematurely terminated and the contention of the said complainant was to the effect that it constitutes deficiency in service, but the same was rejected. There, Rajalekshmi Scheme 1992 contained a clause that the Trust can relax, vary or modify that the scheme was altered. The National Commission held that as the decision was in compliance, the scheme did not constitute deficiency in service. Opposite parties also made reliance on decision of the Hon'ble State Commission, Kerala reported in 1 (2001) CPJ 131, wherein the question dealt with was suspension of a scheme. The State Commission held that the said suspension was consistent with the provision in the scheme and the exercise of the said right by UTI did not constitute deficiency in service. Ext. D1 is the certified copy of the extracts of the meeting of Board of Advisors of specified undertaking. Ext. D2 is the certified copy of the extracts of the Minutes of the meeting of the Board Directors of UTI Asset Management Company Ltd held on 20th May 2003. In the light of the above discussion we are of the opinion that the termination of the scheme was, as per the provisions of the scheme and it does not constitute deficiency in service. Deficiency in service not proved. Hence the complaint is liable to be dismissed.<br /> <br /> In the result, complaint is dismissed. There will be no order as to costs. <br /> <br /> A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.<br /> Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum, this the 30th day of June, 2008.<br /> <br /> <br /> G. SIVAPRASAD,<br /> PRESIDENT.<br /> <br /> <br /> BEENA KUMARI. A : MEMBER<br /> <br /> <br /> S.K. SREELA : MEMBER<br /> <br /> <br /> <br /> ad.<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> OP.No.185/2004<br /> APPENDIX<br /> I. Complainant's witness: NIL<br /> II.Complainant's documents:<br /> P1 : Original acknowledgment – RUP (II) of Rajalekshmi Unit Plan with Sr.No.95 dated 18..04..1996.<br /> P2 : Original Membership advice No.30596 007 0002035 dated 18..04..1996<br /> P3 : Original printed letter dated 15..02..2003 sent to the complainant<br /> P4 : Original warrant No.85317946 dated 01..04..2004 for Rs. 42476.46.<br /> <br /> III.Opposite parties witness: NIL<br /> IV.Opposite parties documents: NIL<br /> <br /> <br /> <br /> <br /> PRESIDENT<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />