1.      This revision petition has been filed by the petitioner, SunjoyPodaar, against the order dated 29-04-2011of the State Consumer Disputes Redressal Commission, West Bengal(in short ‘the State Commission’).

2.      The case of the complainant is that the Unit Trust of India, opposite party No.1 introduced a medical plan titled Senior Citizens’ Unit Plan (SCUP) in collaboration with the opposite party No.2 for public subscription in mid-1993.  The complainant invested Rs.3,900/- when he was 29 years old.  Under the plan, the investor was entitled to medical coverage of Rs.2.5 lakh after attaining the age of 58 years and further to Rs.5 lakh coverage after the age of 61 years.  There was a tripartite agreement of the UTI with the opposite party No.2 and the hospitals to enable the members of SCUP to get medical treatment without payment on production of identity card.  Unit Trust of India Act, 1963 was repealed on 2002 and the SCUP vested w.e.f. 01-02-2003 in UTI Mutual Fund (UTIMF), set up as a trust.  UTIMF, by a circular dated 08-01-2008, intimated the complainant that it decided to terminate the scheme and plan SCUP from the close of its business on 18-02-2008.  The complainant alleged that the features of the said circular of UTIMF were not there in SCUP and the complainant never agreed to bind himself to any amendment whatsoever.  Nor was he even asked for such consent.  The complainant challenged the unilateral termination of SCUP as illegal and unfair. The complainant, by e-mail dated 21-03-2008 followed by letter dated 24-04-2008 to the opposite party No.1, protested the salient features of the circular and asked for the withdrawal of the circular.

3.      The complainant then filed consumer complaint case No.CDF/Unit-II/CC No.1021/2009 before the District Consumer Disputes Redressal Forum, Kolkata, Unit-II, (in short ‘the District Forum’), which was dismissed vide order dated 05.08.2010.

4.      Aggrieved with the order of the District Forum, complainant preferred appeal No.FA/561/2010 before the State Commission, which was also dismissed vide its order dated 29.04.2011.

5.      Hence the revision petition.

6.      Heard the Authorised Representative (AR) Mr. Vishwanath Poddar, on behalf of the petitioner and the learned counsel for the respondent Nos.1 and 2.

7.      The AR of the petitioner stated that the scheme namely, ‘Senior Citizens Unit Plan-1993’ was floated by the Unit Trust of India in the year 1993 and was open for subscription from 6.5.1993 to 25.6.1993.  It was a onetime payment scheme and members and their spouses were covered under the scheme.  The scheme was to provide medical treatment in specified hospitals beyond the age of 58 years till life time upto Rs.2.5 lakhs and upto Rs.5 lacks after age of 61 years.  The petitioner also joined the scheme by paying Rs.3,900/-.  The scheme was taken over by the UTIMF from the UTI.  The UTIMF by notice dated 08.01.2008 proposed to foreclose the scheme with effect from 18.02.2008 and the scheme was closed with effect from that date.  AR argued that it was a clear breach of contract, entered between a member of the SCUP scheme and the UTI and its successor UTIMF. No such enabling clause existed in the original scheme as would be clear from the brochure of the scheme.  Provision regarding foreclosure of the scheme was subsequently added in the scheme and it was published in the official Gazette dated 28.8.1993 wherein notification dated 18.8.1993 was published about the scheme SCUP.  AR of the petitioner asserted that the original scheme was not published in the official Gazette and it was only the amended scheme with the foreclosure Clause that was published in the Gazette dated 28.8.1993.

8.      AR of the petitioner also pointed out that SEBI has not given clear permission for the foreclosure of the scheme though it is being alleged by the opposite parties that SEBI has cleared foreclosure.  First of all, the provisions of SEBI will not apply to the scheme because SEBI was not in existence when the scheme was floated.  Moreover, the letter issued by SEBI does not clearly give permission for such foreclosure.  The permission was ought to have been obtained from IRDA because this was clearly an insurance product, but the same has not been obtained.  The opposite parties have produced a letter of Ministry of Finance, Government of India purporting it to be a permission of Government of India. But in the scheme of things, the Government of India has no role to play  as no government money was involved in the scheme and it was clearly a scheme designed and implemented by UTI/UTIMF and the New India Assurance Company.  Therefore, the permission of Ministry of Finance, Government of India has no meaning in this regard.  AR of the petitioner referred to the following judgments:-

i.          “Modern Insulators Ltd. Vs. the Oriental Insurance. Co. Ltd., (2002) 2 SCC 734.It has been held:

“6.       The National Commission asked the parties to file…....... ………So the other terms and conditions containing the above exclusion clause were not communicated.  In the reply affidavit filed by the respondent it was not specifically mentioned that the exclusion clause was also communicated to the appellant.

  7.      The National Commission was of the view that “it is equally responsibility of the respondent to call for these terms and conditions even if they were not sent by the appellant as alleged, to understand the extent of risks covered under the policy and the associated aspects.

 8.       It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties known.  The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since the obligation of good faith applies to both equally.

  9.      In view of the above settled position of law we are of the opinion that the view expressed by the National Commission is not correct.  As the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant, respondent cannot claim the benefit of the said exclusion clause.  Therefore, the finding of the National Commission is untenable in law.”

ii.  M/s. MotilalPadampat Sugar Mills Co. (P) Ltd. Vs. State ofUttar Pradesh &Ors., 1979 AIR 621. It has been held:

  “5……….where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations oraffect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is infact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it,………..

  11.    ………..It is elementary that in a Republic governed by the rule of law, no one, a however high or low is above the law.  Every one is subject to the law as fully and completely as any other and the Government is no exception.  It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned; the former is equally bound as the latter.  On no principle can a Government committed to the rule of law, claim immunity from the doctrine of promissory estoppel.  The Government cannot be heard to say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of ‘honesty and good faith’.  In fact the Government should be held to a high “standard of rectangular rectitude while dealing with its citizens……….

12.   ………. Therefore, it is not open to Government to claim immunity from the applicability of the rule of promissory estoppel and thereby repudiate a promise made by it on the ground that such promise may fetter its future executive action.  If the Government wants to preserve its freedom of executive action from being hampered or restricted, the Government should not make a promise knowing or intending that it would be acted on by the promisee and promisee would alter his position relying upon it.  But, if the Government makes such a promise and the promisee acts in reliance upon it and alters his position the Government would be compelled to make goods such promise like any other private individual.”

9.      The main contention of the AR is that a contract entered between the parties cannot be altered without consent of both the parties and in this case no consent has been given by the petitioner member of the scheme. Similarly his thrust is that the provision enabling the foreclosure of the scheme was not made known at the time of purchase of the scheme.

10.    Learned counsel for the respondents stated that there was only one Gazette notification for the scheme dated 18.8.1993, which was published in the Gazette of 28.8.1993.  There was only one Gazette notification relating to the scheme, which had all the features and provisions relating to the scheme of SCUP.  Therefore, it is wrong to say that the original scheme was not notified in the Gazette and only the amended scheme having clause relating to foreclosure was notified.  The circumstances in which the scheme was to be closed were mentioned in the notice dated 08.01.2008.  An option was asked from all the members of the scheme in the following terms mentioned in the notice:

  “Exercising your option

As the Scheme is going to be terminated you have an option to either:

(a) Opt for the alternate product of the NIAC and exit the Scheme by repurchasing the remaining units.The premia payable to NIAC will be deducted from the repurchase proceeds calculated based on the NAV ofthe Scheme prevalent as on 18^th February 2008 and the balance, if any, will be paid to the investors.

(b)  Do not wish to opt for the alternate product of NIAC and prefer to repurchase the outstanding units.In this case, the outstanding Units will be repurchased at the prevailing NAV as on 18^th February 2008.

In case you wish to opt for the alternate product offered by NIAC, the Policy form (enclosed herewith) issued by NIAC may also be filled in and sent to us.

To exercise your choice kindly complete the enclosed Option Form in all respects and send it to us along with the original Membership Advice and the original Log book, if already issued to you under the UTI SCUP processing at our end.

Since the Scheme will be terminated at the close of business on 18^th February 2008, no interest, costs or any compensation of any kind thereafter will be payable by us, if there is any delay in receiving the option form from you or if UTIAMC is unable to process your case due to incomplete application form or non receipt of original documents.

The last date for receiving the option form along with any other documents, as applicable, is 4^th February 2008.”

11.    The learned counsel argued that no prejudice was caused to the members as they could either take the current value of the units or opt for another scheme of New India Assurance Co. Ltd. on medical treatment. The learned counsel drew my attention towards  Clause XXX of the Gazette notification that deals with the termination clause. The learned counsel argued that this Clause was notified in the year 1993 and it would be deemed to have been known to everybody, particularly the members of the scheme.  Therefore, it is wrong to say that there was no termination Clause in the scheme.  Moreover, one year time from the period of offer of purchase was provided for exiting from the scheme, if the member was not satisfied with the provisions of the scheme.  Learned counsel also opined that all mutual funds including UTIMF are governed by its regulator SEBI under the provisions of the SEBI Act.  Proposal for closing SCUP scheme was approved by the SEBI vide their letter dated 26.12.2007.  It is wrong to say that SEBI has not given permission for closure of the scheme as alleged by the petitioner.  The letter dated 26.12.2007 of SEBI reads as follows:-

“Please refer to your letter dated November 1, 2007 on the captioned subject.

The proposal has been considered by us.  In view of the facts and circumstances mentioned in your aforesaid letter, the procedure adopted while terminating the Rajlakshmi Unit Scheme , 1992 may be followed.”

12.    From the above reply of SEBI, it is amply clear that the closure of SCUP scheme had the permission of SEBI.  Additionally, the Government of India, Ministry of Finance had also approved closure of the SCUP scheme vide their letter No.5/15/2004 UTI & JPC dated 23.07.2007.

13. The learned counsel drew my attention to the prayer in the complaint, which reads as follows:-

“a. UTI MF Circular letter dt. 8.1.2008 (Anexure-1) be declared ultravires, treated as withdrawn and not binding upon complainant,

b. O.P. No.2 be bound to honour the tripartite agreement and abide by it in respect of SCUP plan,

c.  Decree be passed that Complainant continues to be member of SCUP on original terms of Plan,

d. O.P. be ordered to pay cost and compensation for harassment amounting to Rs.25,000/-, and

e. such further order or orders be passed as the District Forum deems fit and proper.”

14.    It was argued by the learned counsel that the prayer does not imply any deficiency on the part of the respondent.  In fact,power to declare any order as ultravires does not rest with the consumer fora and only the High Courts and Hon’ble Supreme Court have such jurisdiction.  Therefore, the complaint itself is not maintainable in the consumer fora.

15.    I have carefully considered the arguments advanced by both the parties and have perused the records.  From the Gazette dated 28.8.1993 wherein the notification dated 18.8.1993 relating to SCUP has been published, it is clear that the scheme has been published in its entirety, which contains the provisions relating to termination of the scheme also.  This is only notification that has been published for the scheme ‘SCUP’.   The clause XXX relates to termination of the scheme which reads as follows:-

  “XXX Termination of the Scheme

            The Scheme shall stand finally terminated at the discretion of the Trust. In the event of termination of the scheme no new entrants shall be allowed to join the scheme after the specified date of termination.  The outstanding units of the member whose names entered in the Register on the date to be specified shall be repurchased at such a rate as may be decided by the Trust.  The members shall be paid the amount due as early as possible, after the membership certificate/s with the form on the reverse thereof duly completed has been received by it.  The Membership Certificate received for repurchase shall be retained by the trust for cancellation.  When the Trust decides to terminate the Scheme it will be binding on the members and they shall have no right to persuade the Trust to continue the Scheme.”

16.    The promoters of the scheme have acted according to the above clause.  The circular dated 08.01.2008 is in accordance with this clause.  It is not the case of the petitioner that he has not received the circular.  As per the provisions mentioned in the notification dated 18.08.1993 published in the Gazette dated 28.08.1993, the option was given to all the members of the scheme to get the payment of accrued units as per current value or switch to another medical treatment scheme floated by the New India Assurance Company Limited.  The complainant did not give any option and contested the circular. As all the provisions relating to the scheme were published in the Gazette initially, it cannot be said that the provision relating to termination was added subsequently. The judgements referred to by the petitioner are not applicable in the present case as the facts of the present case are different and Gazette notification implies publication for everybody’s knowledge.

17.    It seems from the record that SEBI vide its letter dated 26.12.2007 has agreed to the proposal sent by UTIMF for closing the scheme.  It is difficult to agree with the argument of the petitioner that the letter of SEBI does not clearly give permission for the foreclosure and that SEBI was not authorised even to give this letter as SEBI was not in existence when the SCUP scheme was floated.  As the scheme was transferred from UTI to UTIMF, it came under the purview of SEBI and letter dated 26.12.2007 of SEBI clearly indicates that SEBI had no objection to the closer of this scheme.  Similarly, Ministry of Finance, Government of India vide their letter dated 23.07.2007 have also given ‘go ahead’ to the closure of this scheme.  Neither the SEBI, nor the Ministry of Finance, Government of India have asked UTIMF to obtain any permission from IRDA.  Therefore, I do not find force in the argument of the petitioner that permission of IRDA has not been obtained and therefore, closure of the scheme was not authorized.  If permission was required from IRDA and a decision was taken without that permission, the regulator IRDA would have definitely taken up the matter with UTIMF.  However this was for the regulator to consider.  

18.    From the above examination, it is clear that there was a provision in the original scheme for closure of the scheme SCUP and the scheme had been closed based on that provision.  Members were given option as per the provision of the scheme.  It was also clearly stated that no interest will be given after 18.2.2008 on the value of the units. The permission of Regulator SEBI and Ministry of Finance, Government of India was also obtained for closure of the scheme.   Thus, the scheme SCUP has been closed under the provisions given in the original notification dated 18.08.1993 published in Gazette dated 28.8.1993 and the relevant approvals were also obtained.  Accordingly, no illegality or irregularity is evident in the issuance of the circular dated 08-01-2008 of the UTIMF.

19.  So far as the prayer of the petitioner for declaring the circular dated 8.1.2008 as ultrawires is concerned, I agree with the assertion made by the learned counsel for the respondents that this power does not rest with this Commission and the same can only be exercised by the High Courts and the Hon’ble Supreme Court. Hence this Commission cannot grant this relief.

20.    Based on the above discussion, I find that there is no illegality, material irregularity or jurisdictional error in the order dated 29.04.2011 of the State Commission, which calls for any interference by this Commission.  Accordingly, the revision petition stands dismissed.  No order as to costs.