State Consumer Disputes Redressal Commission
Industrial Development Bank Of India ... vs Bhupinder Kaur And Others on 25 April, 2023
1st ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.1 of 2021
Date of institution : 01.01.2021
Reserved on : 13.04.2023
Date of decision : 25.04.2023
1. Industrial Bank of India through its Chairman, IDBI Tower, WTC
Complex, Cuffe Parade, Colaba, Mumabi-400005.
2. IDBI Bank through Branch Manager, Feroze Gandhi Market
Branch, Ludhiana, Punjab
.....Appellants/Opposite party No.1 & 2
Versus
1. Bhupinder Kaur Grewal, 153, Model Town, Ludhiana, Punjab.
Respondent No.1/Complainant
2. Karvy Group through its Chairman & Managing Director, Karvy
House No.46, 8-2-609/K, Avenue 4, Street No.1, Banjara Hills
Hyderabad-500034, Telagana, India.
3. Karvy Group through its Branch Manager, Feroze Gandhi Market
Branch, Ludhiana, Punjab.
....Respondents No.2 & 3/Opposite parties No.3 &4
First Appeal under Section 15 of the
Consumer Protection Act, 1986 now as
amended vide Section 41 of the Consumer
Protection Act, 2019 against the order
dated 30.10.2020 passed by the District
Consumer Disputes Redressal Commission,
Ludhiana.
Quorum:-
Mr. H.P.S. Mahal, Presiding Judicial Member
Mrs. Kiran Sibal, Member Present:-
For the appellant : Sh. T.K. Joshi, Advocate
For respondent No. 1 : Sh. P.S.Dhindsa, Advocate
For respondents No.2 & 3 : Ex-parte
FA No. 1 of 2021 2
KIRAN SIBAL, MEMBER
M.A. No.4 of 2021( Additional Evidence)
This application has been filed by the applicants/appellants along with present appeal for placing on record publication dated 04.06.2010 and 30.09.2011 in additional evidence. The learned counsel for the applicants pleaded that the appellants had exercised the recall option for redemption of bonds and had informed the respondent/complainant by way of publication of notice on 04.06.2010 and 30.09.2011 in "The Tribune Chandigarh" and "Dainik Bhaskar"
respectively, but inadvertently the same could not be tendered in evidence before the District Commission.
2. On the other hand, the respondent/complainant contended that the application for placing on record the publication by way of additional evidence at this belated stage and after a long time gap, is liable to be rejected. In support of his contention, the learned counsel has relied upon the judgment of the Hon'ble Supreme Court in the matter of "Union of India V. Ibrahim Uddin", (2012) 8 SCC 148.
3. We have heard the contentions of the parties and have carefully gone through the application, replies and documents available on record.
4. It is clearly envisaged under order XLI Rule 27 of CPC that the party shall not be entitled to adduce the additional evidence at the appellate stage because they have to show the due diligence that they were not in possession of the documents at the trial stage. However, as per Rule 27(2), it also says that wherever additional evidence is FA No. 1 of 2021 3 allowed to be produced by an Appellate Court, the Court shall record the reason for its admission.
5. Since the said documents were in the possession of the applicants/appellants, however, inadvertently, the other Newspapers, which were not circulated in the area where respondent/complainant is residing, were placed in evidence before the District Commission instead of the Newspapers circulated in the area where he resides. It is not disputed that the documents, which the applicants are producing at the appellate stage are not genuine and are not related to the present case. As per the submissions in the application, the applicants want to place on record the publications, to prove that the respondent/complainant was duly informed about the recall option exercised by the applicants.
6. From the perusal of the application and after hearing the contentions of the parties, it can be said that it was their bonafide mistake and not intentional and the reasoning as detailed in the application is cogent and convincing. Moreover, the respondents have not raised any objection with regard to the authenticity of said publication, so question of its tampering or procuring does not arise at all at this stage as the same is very much admissible in the evidence for just and proper adjudication of the case. Accordingly, we allow the present application for additional evidence and the documents i.e Publication in newspapers, annexure A-4, are taken on record. FA No. 1 of 2021 4 Main Case
7. The instant appeal has been filed by the appellants/opposite party No.1 & 2 against the order dated 30.10.2020 passed by District Consumer Disputes Redressal Commission, Ludhiana (in short, the "District Commission"), whereby the complaint filed by complainant against opposite parties No.1 & 2 (in short 'OPs'), under the Consumer Protection Act, was allowed as under:-
"13. As a result of above discussion, the complaint is allowed in terms that OP1 and OP2 shall pay Rs.1,00,000/- each against two Deep Discount Bonds to the complainant along with interest @7% per annum from 31.03.2017 till the date of actual payment. OP1 & OP2 shall further pay Rs.5,000/- (Rupees Five Thousand only) to complainant compositely assessed as compensation and litigation expenses. "
8. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
9. Brief facts for the disposal of the appeal are that the complainant purchased two 'IDBI (Deep Discount) Bonds Series-1", i.e. one bond along with her minor son Gagandeep Singh, bearing certificate No.01275756, Folio No.0001053459 and another along with her minor daughter Gurnimrat Kaur, bearing certificate No.01275757, Folio No.0001053460 at the issue price of Rs.2700/- each with face value of Rs.1,00,000/- each on 31.03.2017. As per terms and conditions of the said bonds, the complainant had an option to redeem the bond at the end of every 5 years as per the mentioned schedule. FA No. 1 of 2021 5 But the complainant never opted for early redemption and waited to redeem the bonds at the maturity date i.e. 31.03.2017. After the date of maturity, the complainant applied for redemption of the bonds through OPs No.3 & 4. However, the OP No.3 vide email dated 06.03.2018 informed the complainant that the bond had already been redeemed in the year 2002 with face value of Rs.12,000/- and the complainant was asked to submit the required documents for redemption of the bonds. OP No.3 further forwarded the advertisement, which was published in "The Hindu" newspaper Thiruvananthapuram on 04.06.2010. The complainant never received any such intimation from the OPs about redemption of bonds in question. Moreover, the said newspaper was not circulated in the local area, where the complainant resides. As per the provision made in the Call Option Clause, the bonds would be fully discharged only on receiving the amount by the bond holder. No payment has been received by the complainant, therefore the bonds cannot be said to be fully discharged. Alleging deficiency in service on the part of the OPs, the complainant filed the consumer complaint before the District Commission and sought directions against the OPs to pay Rs.2,39,000/- along with interest @ 18% p.a. from 01.05.2018 till realization on account of deficiency in service and further to pay Rs.50,000/- as compensation for causing mental agony and harassment to the complainant.
10. The complaint was contested by OPs No.1 and 2 only, whereas, OP No.3 and 4 were proceeded against exparte due to non appearance.
FA No. 1 of 2021 6
11. In their joint reply, OPs No.1 and 2 stated that the complainant purchased the bonds in question from them and as per the terms and conditions of the bonds, the investor had the option to redeem/withdraw the bonds, as well as the IDBI had call option to redeem the bonds at the end of every 5 years from the date of allotment. In that event, the deemed face value would be Rs.5,700/- at the end of 5 years, Rs.12,000/- at the end of 10 years, Rs.25,000/- at the end of 15 years, Rs.50,000/- at the end of 20 years and Rs.1,00,000/- at the end of 25 years. The deep discounted price of the bonds at Rs.2700/- each would stand enhanced to a value of Rs.1,00,000/- at the end of 25 years only if the Investor/IDBI does not exercise their option to withdraw/redeem the bonds. OPs No. 1 & 2 further stated that on 30.09.2001, the Chief General Manager of the bank had call off three types of bonds including Deep Discount Bonds and before the said call off option, the OPs had sent the letters for call off to all the bonds holders including complaiannt and also the publication to this effect was published in the leading newspapers on 19 August 2001. The reminders of the said call off option was also published in the leading newspapers i.e. Indian Express on 03.10.2002, Dainik Bhaskar on 19.08.2003, Indian Express on 15.07.2009, Times of India on 19.02.2008 and the Hindu on 04.06.2010. The complainant was duly informed regarding call option exercised by the OPs, hence, there was no deficiency in service on the part of OP No.1 & 2. After denying the other averments made in the Complaint, OP No.1 & 2 prayed for dismissal of the complaint. FA No. 1 of 2021 7
12. The parties led their evidence in support of their respective contentions and the District Commission after going through the record and hearing learned counsel for the parties, accepted the complaint of the complainant against OP No.1 & 2, vide impugned order as above. Aggrieved with the same this appeal has been filed by the appellants/OP No.1 & 2.
13. Notice of the appeal has been issued to the respondents, but respondents No. 2 & 3 failed to appear to contest this appeal despite service. Hence, they were proceeded against exparte, vide order dated 26.02.2021.
14. We have heard learned the counsel for the appellants and respondent No.1 and have also gone through the record of the case.
15. The learned counsel for the appellant vehemently contended that the impugned order passed by the District Commission is wrong, illegal, against the settled principles of law and based on surmises and conjectures. The District Commission did not appreciate the terms and conditions of the bonds, wherein it was specifically mentioned that the holder or the bank had the option to encash or redeem the bonds before the date of maturity, after the end of every 5 years. Further there is no requirement or getting consent of either party. The learned counsel further contended that the District Commission has lost sight of the fact that there was proper publication of the call option notices in various newspapers besides individual notices were sent through post. The publications were made in all the leading newspapers of India and for the State of Punjab, the FA No. 1 of 2021 8 publications were made on 04.06.2010 and 30.09.2011 in "The Tribune Chandigarh and Dainik Bhaskar respectively, which are annexed with the present appeal as Annexure A-4(Colly) as Additional Evidence. The purpose of giving advertisements in the newspaper is that the bondholders could approach the bank and the maturity amount was deposited with the bondholders after taking bonds. Alleging no deficiency in service on the part of appellants/OP No.1 & 2, the learned counsel prayed for dismissal of the present appeal by setting aside the impugned order.
16. Per Contra, the learned counsel for the respondent/complainant argued that the District Commission after going through the evidence on record and law laid down by Hon'ble National Commission in the case of "IDBI Bank Ltd. & Anr. Vs. T.K. Nagarathna, reported in 2009(1)CLT 108, wherein it has been held that merely publishing an advertisement in the newspaper about its intention to exercise his option is not sufficient to escape its liability. The learned counsel further argued that the complainant never received the letter alleged to have been sent by the appellants through registered post. The learned counsel further argued on the similar lines as stated in the complaint and prayed for dismissal of the present appeal.
17. We have given thoughtful consideration to the contentions raised by the appellants and respondent No.1.
18. The admitted facts of the case are that the complainant purchased two 'IDBI (Deep Discount) Bonds Series-1", i.e. one bond FA No. 1 of 2021 9 along with her minor son Gagandeep Singh, bearing certificate No.01275756, Folio No.0001053459, Ex.C-1, and another along with her minor daughter Gurnimrat Kaur, bearing certificate No.01275757, Folio No.0001053460, Ex.C-2 at the issue price of Rs.2700/- each with face value of Rs.1,00,000/- each on 31.03.2017. The respondent/complainant alleged that the OPs redeemed the said bonds early without giving any intimation to her. On the other hand, the appellants/OPs No.1 & 2 pleaded that as per terms and condition of the bonds they have the right (Call Option) to redeem the bonds in question before the maturity period and they duly informed the respondent/complainant about the same. Alleging deficiency in service, the respondent/complainant filed consumer complaint before the District Commission, which was allowed vide impugned order as above. Aggrieved with the same, the appellants/OPs No.1 & 2 has filed the present appeal for setting aside the impugned order.
19. The foremost ground of appeal raised by the appellants is that the District Commission has wrongly arrived at the conclusion that the complainant was not informed about the early redemption of bonds by it and accordingly had held the appellants deficient in service. To determine the said issue, we have perused the evidence on record as well as pleadings of the parties. A perusal of Deep Discount Bonds (Series-I), Ex. C-1 and C-2, show that the said bonds were issued at price of 2700/- each with a face value of Rs.1,00,000/- on 31.03.2017, however, the bond holder and the bank both had option to get encash or redeem the bonds before the date of maturity, after the end of every FA No. 1 of 2021 10 5 years. The relevant portion mentioned in the bonds, Ex. C-1 & C-2, is reproduced as under:-
"The holder(s) of this bond/ IDBI shall have the option to encash/redeem the bond only at the end of every five years from March 31, 1992 for the deemed face value mentioned below:-
a) At the end of 5 years for Rs.5,700/-
b) At the end of 10 years for Rs.12,000/-
c) At the end of 15 years for Rs.25,000/-
d) At the end of 20 years for Rs.50,000/-"
Accordingly, as per the above said term, the appellants/OP No.1 & 2 exercised the Call Option for early redemption of the Bonds and redeemed the Bonds in question on March 31, 2002 at the deemed face value of Rs.12,000/- per bond. The fact that the OPs have right to exercise the Call Option for early redemption of the bonds before the date of maturity, is not disputed by the respondent/complainant. The respondent/complainant alleged that he has not received any intimation regarding early redemption of bonds by the OPs and the said fact came to the knowledge of the complainant only when she applied for redemption of the bonds after the date of maturity i.e. March 31, 2017. To counter the said allegation, the appellants/OP No.1 & 2 placed on record duly sworn affidavit of Sh. Kamlesh Sharma, Deputy General Manager, IDBI Bank Ltd., Ex. R-A, wherein he categorically stated that on 30.09.2001, the Chief General Manager of the bank had exercised Call Off option of three types of bonds including the bonds in question. He further stated that before exercising the Call Option for redemption of bonds, the appellants had sent the letters for call off the bonds to all the bonds holders on 10.08.2001 and also the publication to this effect was published in the FA No. 1 of 2021 11 leading newspaper on 10.08.2001 as well as the reminders of the same were duly published in leading newspapers at periodic intervals. A perusal of Ex. R-4 & R-5, show that the appellants/OPs published the Call Option Notice on 10.08.2001 in various leading newspapers. Further, a perusal of Bulk Register, Ex. R-6, shows that notice to the complainant was issued regarding call off the bonds on 30.09.2001 and entry to this effect was duly shown vide No.28182 and 28183 and further vide UCP No.31039 and 31040. Moreover, from the perusal of Ex. R-7 i.e. detail of registered letter issued to the bond holders, it is evident that intimation was duly given by OPs No. 3 & 4 to the bond holders i.e. Gagandeep Inder Singh and Gurnimrat Kaur through registered letters No.RN321132725IN and RN321132739IN. The said documents were not considered by the District Commission on the ground that no official of OPs No.3 & 4 has been examined as witness, who could state on oath that detail mentioned in Ex. R-6 and R-7 was in fact sent to the bond holders including the complainant. But the complainant himself placed on record email dated 06.03.2018 sent by the OP No.3 to the complainant, Ex.C-3, which has been overlooked by the District Commission, wherein it has been specifically stated by OP No.3 that IDBI invited a call option to all investors by exercising its option to redeem the bonds and further it is also communicated through letters and print media also in the year 2002. The relevant portion of the said email dated 06.03.2018, Ex. C-3, is reproduced as under:-
"As per your concern mail, would like to bring to your notice that the below said bond certificate was purchased by you in the year 1992. In this Connection, IDBI invited a call FA No. 1 of 2021 12 option to all investors by exercising its option to redeem the bonds & further it is also communicated through letters and print media also in the year 2002. At the time of call option the redemption amount was Rs.12,000/- against the investment of Rs.2700/- for each bond. Now, present redemption value including interest (i.e. saving bank interest only) will be around Rs.18,000/- plus per each bond."
The appellants/OPs further contended that intimation regarding redemption of bonds was also given to the bond holders at periodic intervals through publications in newspapers (in various languages). In support this contention, the appellants placed reliance on their document i.e. "Exercise of Call Option by the Bank" attached with Ex. C-3, wherein the said fact is duly mentioned by the appellants at para No.5, which is reproduced as under:-
"5. IDBI had published the Call Option Notice (CON) on August 10, 2001 in the news papers in various languages across the states of India. CON was also issued to individual bond holders by post (Under Certificate of Posting) with a request to surrender the duly discharges bond certificate(s) for redemption. Thereafter, at periodic intervals advertisements, in this regard, were released in newspapers (in various languages) across all the states of India. Notices were again issued to individual bond holders reminding them about the call option exercised by IDBI."
Further, in order to prove their bonafide, the appellants/OPs placed on record Annexure A-4 in Additional evidence before this Commission, which shows that appellants had also informed the respondent/complainant by publishing the notice in leading newspapers of India including "The Tribune Chandigarh" and "Dainik Bhaskar" published in regional languages, which were widely circulated in the State where complainant resides. Once, it is established that notices were duly served to the complainant through registered post and also by publication in the daily newspapers having circulation in the locality of the complainant, the effect of 'substituted FA No. 1 of 2021 13 service' is complete under order 5, Rule 20 of the Code of Civil Procedure. Accordingly, we are of the opinion that the appellants took enough measures to inform the bond holders/complainant by issuing public notice in the leading newspapers as well as through UPC/registered post, regarding the redemption of the bond of the value as on 31.03.2002. Hence, there is no deficiency in service on the part of the appellants/OP No.1 & 2. The District Commission has wrongly held the appellants deficient for not informing the bond holders/complainant regarding early redemption of the bonds.
20. The appellants in their document i.e. "Exercise of Call Option by the Bank" attached with email dated 06.03.2018, Ex. C-3, have specifically stated at Para No.6 that "The Offer Document further stipulated that IDBI shall not be bound to pay any additional interest or damages or compensation on the bonds redeemed by exercising the call option. However, in accordance with the extant guidelines issued by the Reserve Bank of India, in respect to unclaimed deposits, as also keeping in view the interest of esteemed bondholders, the bank decided to pay additional interest at saving bank rate (quarterly compounding basis) from the date of the Call Option (i.e. March 31, 2002) to the date of payment on the deemed face value of the bond (i.e. Rs.12,000/- per bond). (Saving Bank rate up to May 02, 2011 @ 3.5% p.a. and from May 03, 2011 @ 4.00% p.a.)." As the respondent/complainant has not received any amount with regard to redemption of the bonds in question, she is entitled for deemed face value of bond (i.e. Rs.12,000/- per bond as on 31.03.2002) as per FA No. 1 of 2021 14 above terms mentioned at para No.6 of "Exercise of Call Option by the Bank".
21. Sequel to our above discussion, we partly allow the appeal and modify the impugned order dated 30.10.2020 passed by the District Commission, Ludhiana to the extent that the appellants/OP No.1 & 2 are directed to pay only Rs.24,000/- i.e. Rs.12,000/- per bond, along with interest at saving bank rate (quarterly compounding basis) from the date of the Call Option (i.e. March 31, 2002) till realization (Saving Bank rate shall be calculated from March 31, 2002 up to May 02, 2011 @ 3.5% p.a. and from May 03, 2011 @ 4 % p.a.)."
22. The appellants had deposited an amount of Rs.25,000/- at the time of filing the appeal with this Commission and further deposited an amount of Rs.2,33,660/- in compliance of order dated 15.01.2021. These amounts alongwith interest, which accrued thereon, if any, be remitted by the Registry to the District Commission forthwith. Parties may approach the District Commission for the release of the above amount and the District Commission may pass the appropriate order in this regard after the expiry of limitation period in accordance with law.
23. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases.
(H.P.S. MAHAL) PRESIDING JUDICIAL MEMBER (KIRAN SIBAL) MEMBER April 25th, 2023.
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