SRI NAYANANANDA DASH,MEMBER:-
The case relates to non-payment of amount as promised for Rajalaxmi Plan-II floated by Unit Trust of India for the membership No.202970070000132 on maturity thus alleged deficiency in service by the UTI.
2. Brief facts of the case is that the complainant’s father purchased 250 units for the face value of Rs.10/- each totaling Rs.2500/- on dtd.06.07.1996 bearing No.202970070000132 in the name of the complainant which to be matured on dtd.06.07.2015. The OP had given assurance to pay 14 times in 20 years i.e. Rs.35,000/- on the date of maturity on dtd.06.07.2015. But the UTI has paid a meager amount of Rs.9125.86 which according to the complainant is arbitrary and amounts to deficiency in service in not paying the promised amount. Hence, this case is filed by the complainant to direct the OP to pay the rest amount of Rs.25,874.14 along with interest of 12 per cent per month from the date of maturity.
3. On being noticed, the OP has filed the written statement narrating the circumstances for which the scheme was terminated. UTI was a statutory corporation established under Section-3 of UTI Act,1963 with a view to encourage savings and investment and participation in the income, profits and gains occurring from acquisition, holding, management and disposal of securities. The business of UTI was inter-alia, seeking and purchasing units, investing in securities etc. as provided under Section-19 of the said Act. The general superitendence, direction and management of the affairs and business of the UTI were vested in the Board of Trustees constituted under Section-10 of the Act, UTI was required, in discharging its function under the Act, to act on business principles, regard being had to the interest of the unit holders. Section-21(1) provided for the Board to make from time to time, various schemes for issuing units and for investment by the public. Section-19(1)(8), provided for the Board to make plans in relation to the schemes. The said scheme was statutory in nature and the provisions of the said scheme was notified and published in the Gazette of India.
UTI continued as a healthy financial institution catering to the investment needs of general public up to the year 2000 subsequently the financial atmosphere of the country underwent a change with the gradual reduction of interest rates and also fluctuation of financial market condition. As a result of which the Govt. of India passed the UTI(Transfer of undertaking and Repeal) Act,2002, by which all business, assets, obligations, liabilities etc. of erstwhile UTI stood transferred and vested with either the administrators of the specified undertaking of Unit Trust of India(SUUTI) or with the specified company UTI Trustee Co.Pvt. Ltd.as per schedule 1 and II of Repeal Act. The said scheme i.e. RUP(II) formed part of Schedule-I of the Repeal Act, which stood transferred to and vested with SUUTI with effect from dtd. 01.02.2003.
The RUP(II) was terminated by SUUTI for the sole reason of arresting further erosion of capital invested in the scheme due to changed financial scenario. It is further asserted that continuation of the said scheme would have been detrimental to the interests of investors with the changed financial situation.
Further the OP states that the application cum brochure clearly states that the investment was subject to market risks. According to OP, the application brochure had 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 securities market. Past performance is not necessarily indicative of the future. There can be no assurance that objective of the plan will be achieved. RUP-II is only the name of the plan and does not in any manner indicate either the quality of the plan, its future prospects or returns. Please read scheme provisions before investing and retain this brouchure for future reference.”
Further the OP states that the application cum brochure contains the review clause which states that “ In case the yield is reviewed, investor will be given an option to withdraw at NAV based repurchase price and payment would be made to the father/mother/lawful guardian of the done child”. The membership advice No.202970070000132 also contains the above review clause on its backside. The OP also states regarding clause 13 of the said scheme which provides for termination of a scheme in the event of circumstances going against the interest of the members.
Taking into consideration the arguments, counter arguments by both the parties and basing upon different documentary and citations produced by both the parties, it is a admitted fact that the complainant had invested Rs.2500/- in a plan known as Rajlakshmi Unit Plan(ii) lauched by Unit Tust of India.
The RUP-II plan had made advertisement that the said plan would grow 14 times in 20 years. Thus, Rs.1500/- invested in the name of a female child up to and including the age of one year will become Rs.21,000/- after 20 years. Depending upon age of the child for whom the investment is made the maturity value will vary from a minimum of Rs.11000/- to Rs.21,000/-. The Complainant on dtd.06.07.96 invested for 250 units Rs.10/- per unit) with a total amount of Rs.2500/- vide Membership No.202970070000132 and on after dtd.06.07.2015, the amount received by the complainant was Rs.9125.86, as against Rs.35,000/- which was the 14 times of invested amount as per the scheme. One thing is clear that the RUP-II plan was not at all a scheme like a Bank Fixed deposit scheme where the bank undertakes to pay a specific amount on a specific date. This was a growth scheme taking into consideration the past result and depending upon various conditions.
Such schemes by Unit of Trust of India was always dependent on market conditions and always involved market risk. The application cum brouchure had contained the provision that all investments in the plan are subject to market risk and the NAV of the scheme may go up or down depending on the factors and forces affecting securities market. Further there is review clause in the application cum brochure which provides for premature termination under certain circumstance. Further, it can not be said that a Govt. of India financial institution engaged in the business of investment of public money through units in the securities market and otherwise will act against the interests of a investor. As described above, the sequence of events after the complainant had invested in the scheme, describes as to why the govt. had to pass an act in 2002 and also the decision to terminate the said scheme with the changed financial and economic scenario. A similar scheme called Rajlaxmi Unit scheme 1992 launched by UTI was discontinued for similar reasons. Many investors had filed cases against UTI in different High Courts and also Supreme Court of India regarding UTI’s power to discontinue schemes by advancing the date of termination. The Hon’ble High Courts of Bombay(Nagpur Bench) the Hon’ble Bombay High court, Hon’ble Patna High court, Hon’ble High Court of Kerala and Hon’ble High Court of Punjab & Haryana. All these Hon’ble High Courts have dealt this matter and have opined that provision of termination of schemes by UTI was provided in the scheme itself and was done taking into consideration the ultimate interest of the investors. Similarly the MRTP Commission had on a complaint filed before it by one of the Unit holders being No.9 of 2004 in a similar scheme, namely CGGF-86 scheme had found no irregularity by the UTI to terminate the above scheme and opined that was done to protect from capital erosion. The Hon’ble National Consumer Disputes Redressal Commission, New Delhi related to RUS.92 scheme vide its order dtd. 22nd Nov.2011 upheld the order of the State Commission Punjab in Toto and dismissed the revision petition of Shri Vijay Shakti and another R.P.No.3956/2011 filed by Nikita Sharma has also decided vide its order dtd. 03.04.2012, holding that it was the duty of the investor to approach the UTI for the redemption value and dismissed the petition with no order as to costs with a remark “Respondents can not be held responsible or guilty of deficiency of service when there was no illegality or infirmity on the part of UTI in respect of the termination of the Scheme”.
The decision to fore close the scheme i.e. RUP-II by reducing the period of the scheme, had been taken by the SUUTI in consultation with the board, which is the highest decision making body. Consciously taking into account the then prevailing volatile market conditions in equity and debt market and to safeguard the overall interests of the beneficiaries of the scheme. It was a bonafide decision. The foreclosure of the scheme was for ensuring the benefit of the beneficiaries of the scheme. The scheme had been foreclosed not to deny or avoid the future return to a minor child, but to ensure that there was no erosion of the capital of the scheme to the detriment of the minor child.
When there was foreclosure of the said scheme in 2004, besides press release in Times of India option forms had been sent to the Unit holder at her address. In the option forms, the investors of RUP-II were given option either to exit out of RUP-II scheme or to opt for 6.6 per cent ARS bonds. The last date was fixed for receipt of option on dtd.16,02,2004. Since, no option was received from the complainant, it was converted to ARS Bond and ultimately payment was made to the account of the complainant comprising of Rs.6800/- being the value of Bond and Rs.2325.86 being the interest through NEFT.
Taking into account all the facts as stated above, it can not be concluded that there was any arbitraniness on the part of UTI or any deficiency of service, Hence, the case is dismissed without any cost.
Pronounced in the open Court, this the 27th day of January,2016.
