State Consumer Disputes Redressal Commission
Industrial Development Bank Of India, vs Donthi Reddy Madhava Reddy on 30 September, 2022
Before the State Consumer Disputes Redressal Commission
(constituted under the Consumer Protection Act, 2019
of Telangana, Eruvaka Building, Khairathabad at Hyderabad
FA NO.744 OF 2020 AGAINST CC NO.157 OF 2017
ON THE FILE OF DISTRICT cOMMISSION, RANGA REDDY
Between:
Industrial Development Bank of India,
Represented by its Managing Director,
IDBI Towers, Cuffe Parade, Bombay,
Maharashtra - 400 005.
Appellant/Opposite party
And
Donthi Reddy Madhava Reddy
S/o D.Gopi Reddy, aged about 56 years,
Occ: Ex-Serviceman, R/o Flat No.7,
APIIC Colony, Opp: Radhika Cinema,
ECIL Post, Ranga Reddy district 500 062.
..Respondent/Complainant
Counsel for the Appellant Sri B.Harinath Rao
Counsel for the Respondent Sri R.Limbadri
CORAM:
*****
Hon'ble Sri Justice MSK Jaiswal President
Smt Meena Resmanathan Member
and Sri K.Ranga Rao Member Friday, the Thirtieth day of September Two Thousand Twenty Two *** This is an appeal preferred by the Opposite party aggrieved by the orders dated 16.10.2019 passed by the District Consumer Forum, Ranga Reddy in cc No.157/2017 in allowing the complaint and directing the Opposite party to pay Rs.1,00,000,/- to the Complainant, together with interest@ 6% per annum from 31.03.2017 till realisation and also to pay costs of Rs.5,000/-, granting time of (30) days for compliance and on failure, to pay Rs. 10,000/- as punitive damages.
2) For the sake of convenience, the parties are referred to as arrayed in the complaint.
Ex-serviceman and he
that he is
It is the case of Complainant
3) 27.02. 1992 by
Discount Bond (Series-1) on
purchased the IDBI Decp to be
the face value
of Rs. 1,00,000/,
paying Rs.2,700/- on assuring
at
he was working
redeemed on 31.03.2017. By the time of purchase, transferred to 12 thereafter was Air Force Academy at Dundigal, and Certificate bearing he received the Wing Air Force, Chandigarh where For No.A-7669065 on 30.06.1992 by registered post bearing No.427547.
communication from IDBI regarding 25 years long, he never received any either on his native updates and change in the policies and programmes address or the present address.
After the maturity period of 25 years i.e., on 04.04.2017, he made
4) a request to the Opposite party to permit him to redeem the assured amount of Rs.1,00,000/-, to which, a third party by name karvy Consultant responded through mail informing that Complainant would be redeeming just Rs.16,000/- only against the said Certificate and asked him to surrender the original bond and other documents like PAN card, form-15G, bank details with address proof, bank attestation and signature verification in their office at Gachibowli, Hyderabad. As he is no way concerned with Karvy Consultants, he addressed a letter on 07.04.2017 to the Opposite party, to which, he received a letter on 11.04.2017 that he would be receiving only Rs.19,000/- on surrendering the original certificate. On 14.04.2017, Complainant wrote another letter to close the account with assured amount of Rs.1,00,000/- but the Opposite party failed to respond. Hence, filed the present complaint with a prayer to direct the Opposite party to award compensation of Rs.1,00,000/- towards the original maturity amount plus interest and costs of the proceeding.
5) Opposite party filed its written version admitting to have issued the bond in question. However, in terms of the offer document, it reserved the right (call option) to redeem the bond on 31.03.2002. It decided to exercise the call option falling due on 31.03.2002. It gave paper publications from time to time and sent letter dated 25.09.2001 under Certificate of Posting to the bond holders regarding early redemption including the Complainant, but there was no response from him. Hence, there is no deficiency of service on their part and accordingly prayed to dismiss the complaint with costs.
3in order to
6) During the course of enquiry before the District Forum, as PWI and prove his case, the Complainant filed his affidavit evidence got marked the documents Ex.Al to A7. On behalf of Opposite party, One K.Srinivas, its Assistant General Manager filed his affidavit evidence as Rwl and got marked the documents Ex.B1 to B8. Vide orders dated 29.09.2022 in FAIA No.166/2021, the petition mentioned documents Therein are ordered to be received in evidence and marked as Exs.B9 to Ex.B12 material available on
7) The District Forum after considering the orders record, allowed the bearing CC No.157 of 2017, by complaint dated 16.10.2019, as stated, at paragraph No.1, supra.
Aggrieved by the said orders, the Appellant preferred the present
8) evidence below failed to consider appeal contending that the forum and erred in allowing the brought on record in proper perspective the communication of complaint. It failed to understand the fact that exercising the call option to redeem the bond by the Appellant is Certificate of completed when it sent the calloption notice through besides giving wide publicity posting on 25.09.2001 to the given address to in various newspapers. It misconstrued the territorial jurisdiction decide the complaint in dispute. Hence, prayed to allow the appeal by setting aside the orders impugned The point that arises for consideration is whether the impugned
9) by the District Commission suffers from any error or order as passed modified or interfered irregularity or whether it is liable to be set aside, with, in any manner? To what relief?
The admitted fact is that the IDBI, the Opposite party has floated a
10) scheme known as Deep Discount Bond, Series-1' in March-1992. As per and after the said scheme, an investor had to invest a sum of Rs.2,700/- 25 years i.e., by the end of March 2017, the investor will be paid Rs.1,00,000/-. Before the period of maturity i.e., 25 years, both the investor as well as the IDBI had the option to encash/redeem the bond only at the end of five years from 31.03.1992. As per the said scheme, once the amount is invested in March-1992, after 5 years, either the investor or the IDBI had the right to redeem or encash the investment and in that event, the sum that is payable also been mentioned in the bond which in the instant case is marked as Ex.A2. For example, either the investor or the bank wanted to redeem/encash the bonds after 5 years, the amount that is payable is Rs.5,700/-; and after 10 years, it is Rs.12,000/-; and after 15 years, it is Rs.20,000/-; and after 20 years, it 1S Rs.50,000/-; after 25 years, the amount will be Rs.
1,00,000 Therefore, what is manifest from Ex.A2 is that both the investor as well as the bank has the right either to encash or redeem the bond pre mature as has been stated supra and is entitled to the amount that has been promised in the bond.
11) In the instant case, according to the Appellant, lakhs and lakhs of people have invested in the said scheme but in 2001, i.e., after 10 years, it was found that the said scheme was not viable and therefore, the IDBI invoking the right conferred on it, have decided to redeem the said bonds and has accordingly informed the investors through broad well as publication as personally that they are not continuing with the said scheme and that the investors are required to send their bonds and get the money as has been assured in the bond.
In other words, when the right was invoked in 2001, i.e., after 10 years after the issuance of the bond, the IDBI has offered Rs.12,000/- for each of the investor who has invested Rs.2,700/.
12) The contention of the Respondent/Complainant is that the IDBI has not communicated that it is exercising the option of encashing/ redeeming the investment premature and therefore, he had no knowledge and hence the IDBI is liable to pay the amount of Rs.1,00,000/- as has been promised after 25 years of the investment.
13) The learned counsel appearing for the Appellant/Opposite party submits that the option exercised by the IDBI was widely publicised and individual notices were als0 sent to the investors and as a matter of fact, even in the Upper House of the Parliament viz., Rajya Sabha a speech was made by the then Union Finance Minister about this scheme being withdrawn. Therefore, according to the learned counsel appearing for the IDBI, the Respondent/Complainant cannot be heard saying that he has no notice about the exercise of the option by the IDBI to redeem/ fore-close the said scheme.
18 as 10
14) of the above, the point that needs to be adjudicated view its option Whether the Appellant/ Opposite party had properly cxerciscd cannot be called O1 redeeming/ fore-closing the scheme and therefore they of 25 years.
upon to pay a sum of Rs.1,00,000/- after the expiry a copy ol b A s already stated, as per the terms of the offer document, the it is evident that in which is marked as Ex.B9 dated 21.09.1992, Discount Bonds at the end of event of IDBI deciding to redeem the Deep communicate its intention to do so in any of the five years period, it will to all and also communicate English and one Hindi daily newspaper one to the date bonds at least six months prior the registered holders of such of redemption.
the Appellant/Opposite
party
In the instant case, as per Ex.B9,
16) 30.09.2001 under
Ex.B3
of redemption on
has expressed its intention bond
to surrender their respective
bond holders
requesting all the to
so as to enable them
certificates with the Registrar by 31.12.2001
31.03.2002,
amount of Rs.12,000/- by
make payment of redemption
condition of
Appellant/Opposite party has followed the therebythe date of intention of redemption six months prior to the expressing its the communicated to intention was also redemption. The said in vide Ex.B3 and was also published widely Respondent/ Complainant of which have been marked. Ex.B4, B5, several newspapers, the copies the said are the various newspapers wherein B7, B7, B8, B10 and B11 The newspapers are Deccan Herald, Bangalore notice was published.
Financial Express; The Hindu and Eenadu telugu edition; Times of India;
the newspapers during the period local daily. They were all published in 2010.
from August 2001 to June
the Respondent/Complainant is
notice to
17) Insofar as personal
of the notice addressed to the Respondent/ concerned, Ex.B3 is the copy to the notice dated 30.09.2001 was sent Complainant. The said Certificate of Posting as is evident from Respondent/Complainant under from Ex.B2 that under Certificate of Posting Ex.B2. It is noticed sent to the Respondent/ Complainant No.844058, the said notice was post: Telaprolu, Taluq:
"Donthireddy Madhava Reddy C/o D.Gopi Reddy, 521109. It is the same address of the Gannavaram, Krishna district he has furnished in Ex.A3 and Respondent/Complainant which 6 therefore, the notice Ex.B3 was sent to the same address as is evident irom Bx.B2 which is a Certificate of Posting. The contention ol the learned counsel appearing for the Appellant/Opposite party that sending of such a notice was under Certificate of Posting is valid, compliance of the condition in the offer document and in support thereof, reliance 1s placed on certain authorities, a reference to which shall be made hereinafter.
18) Even though both the Appellant/Opposite party and the Respondent/Complainant has relied upon various authorities rendered by different State Commissions across the country, suffice it to refer to the decisions of the NCDRC on this subject which have binding effect.
a) In the matter of Mahendrapal Kashiram Sharma versus Manager, IDBI Bank and two others, in RP No.3107/2012, decided on 28.11.2016, the National Consumer Disputes Redressal Commission, New Delhi observed in paragraph-5 as under:
"As clearly stated in the letter dated 25.05.2000, whereby call option was exercised by IDBI, the bond could be redeemed either by the investor or by IDBI at specified intervals. One of the said intervals was 01.08.2000 and on that date, of a sum Rs.10,000/- was payable having face vahue of Rs.2,00,000/- and issue price of Rs.5,300/ The Petitioner/ Complainant having applied for the bond on the aforesaid terms and conditions, he is bound by that and consequently, cannot have a valid grievance on account of IDBI having exercised the option for redemption with effect from 01.08.2000."
b) In the matter of Chatur Behari Sharma versus IDBI Bank Limited and another, in RP No.3930/2013, decided on 25.11.2013, the National Consumer Disputes Redressal Commission, New Delhi, in paragraph-4 held as under
"Perusal of record reveals that OP exercised option for redemption of bon d and intimation was given to the Complainant under Certificate of Posting and redemption notice was also published in various newspapers. Leamed District Forum while dismissing complairnt observed as under: In the 1 Cannot circumstances, the Complainant bODe mentioned and other Succeed to get redemption amount of Rs.25,000/-
The redemption option of Crarges as prayed in the complaint.
the bank took
the bond as exercised by the IDBI w a s legal and
by
holders issuing Public
enough measures toinform the bond
the
regarding the redemption of
Notice in leading neuwspapers, The bond holders including bond ofthe value a s on 31.03.2002.
individually also by sending the Complainant were informed notice under UPC"
No.2195/2011, of G.D. Grover versus IDBI, in RP
c) In the matter Redressal National Consumer Disputes decided on 06.03.2013, the observed a s under Commission, New Delhi, in paragraph-8 the respondent/IDBI that "It is argued on behalf of the intimation of recall no individual Complainant cannot claim that under notice was sent to him the bonds was given to him. The of had paid the value of Certificate of Posting. Yet the Respondent the bonds as of 2007."
the terms and
19) The above authorities coupled with a perusal of
Ex.B2 and
conditions of the bond and the personal notice sent vide
Respondent/Complainant in
Ex.B3 to the address as furnished by the Ex.A3 coupled with wide publicity in the newspapers referred to supra, has discharged clearly demonstrates that the Appellant/Opposite party its obligation of expressing its intention to redeem the bonds with proper communication to all the bond holders including the Respondent/ Complainant. In spite of personal notice to the last known address of the Respondent/Complainant and wide publicity in newspapers and reminders, the Respondent/Complainant has failed to surrender the bond as per the call options made by the Appellant/Opposite party. Therefore, the Appellant/Opposite party cannot be said to be guilty of any act of deficiency. The Appellant had strictly adhered to all the terms and conditions of the bond and has properly exercised its right of redemption.
20) In view of the above, the Respondent/ Complainant cannot be heard saying that the Appellant/Opposite party is liable to pay a sum of Rs.1,00,000/- at the end of 25 years viz., 31.03.2017 as mentioned in the bond. As per the conditions stipulated in the bond, at the end ol i years i.e., on 31.03.2002, the bonds were redeemed and the amount that is payable to the Respondent/Complainant ill be Rs.12,000/- together with interest thereon@ 3.5% per annum from 01.04.2002 till the payment is made. The Respondent/Complainant cannot be granted the relief of award of Rs.1,00,000/- as claimed by him.
21) The District Forum has not properly appreciated these aspects in proper perspective and has erroneously directed the Appellant/ Opposite party to pay a of Rs.1,00,000/- to the sum Respondent/Complainant.
The said findings cannot be sustained and the same are liable to be set aside. Instead, the Appellant/Opposite party can be directed to pay a sum of Rs.12,000/- together with interest @ 3.5 %per annum irom 01.04.2002 till the payment is made subject to condition that the Respondent/Complainant should surrender the bonds to the Appellant/ Opposite party. The point is accordingly answered.
22) In the result, the appeal is allowed and the impugned order is set aside by modifying the said order directing the Appellant/Opposite party as under.
The Appellant/Opposite party is directed to pay a sum of Rs.12,000/- to the Respondent/Complainant together with interest thereon @ 3.5% per annum from 01.04.2002 till the payment is made subject to condition that the Respondent/Complainant should surrender the bonds to the Appellant/Opposite party.