State Consumer Disputes Redressal Commission
T.N. Sharma vs The Industrial Development Bank Of ... on 9 March, 2023
1st ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.305 of 2020
Date of institution : 08.12.2020
Reserved on : 24.02.2023
Date of decision : 09.03.2023
T.N. Sharma, aged about 68 years, son of Sh. R.R.Sharma, resident
of 1003, S.S.T. Nagar, Patiala.
.....Appellant/Complainant
Versus
1. The Industrial Development Bank of India, Head office IDBI
Tower, Cuffe Parade, Mumbai-400 005, through its M.D.
2. The Branch Manager, IDBI Bank, Chhoti Baradari, Patiala.
....Respondents/Opposite Parties
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 05.11.2020 of the District
Consumer Disputes Redressal Commission,
Patiala.
Quorum:-
Mr. H.P.S. Mahal, Presiding Judicial Member
Mrs. Kiran Sibal, Member Present:-
For the appellant : Sh. Manu Sachdeva, Advocate For respondents : Sh.T.K. Joshi, Advocate KIRAN SIBAL, MEMBER The instant appeal has been filed by the appellant/complainant against the order dated 05.11.2020 passed by District Consumer Disputes Redressal Commission, Patiala (in short, "the District Commission"), whereby the complaint filed by complainant against opposite parties (in short 'OPs'), under the Consumer Protection Act, was dismissed.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission. FA No.305 of 2020 2
3. Brief facts for the disposal of the appeal are that the complainant purchased 'IDBI Deep Discount Bond 1997 Flexi Bonds 2' folio No.FDD129650, vide distinctive No.0030180232-0030180232 for Rs.5500/- through IDBI Bank-OP No.2. The face value of the said bond to the tune of Rs.2,00,000/- was payable on 31.01.2022 and certificate No.1173850 dated 31.01.1997 was issued to the complainant. It was mentioned in the said certificate that the holder of the bond had option to redeem the bond on any of the dates mentioned in the bond. The complainant received a letter dated 02.12.2013, in response to the legal notice dated 30.11.2013, wherein the OPs intimated the complainant that the due date of redemption of the bond was 31.05.2017 for Rs.1,00,000/-. The complainant never opted for early redemption of the bonds, nor he ever received any notice from the OPs for redemption of the said bond. The complainant vide letter dated 07.06.2017 sent all the documents in original along with the original bond and details of the bank account for remitting the amount of Rs.1,00,000/- to the complainant. But the OPs had failed to remit the entire amount of Rs.1,00,000/- in favour of the complainant, which amounts to deficiency in service on their part. Accordingly, the complainant filed the consumer complaint before the District Commission and sought directions against the OPs to pay the entire amount of the bond amounting to Rs. 1,00,000/- along with interest @ 18% p.a. from the date of maturity of the bond, after adjusting/deducting the amount of Rs.16,901/-, which was already deposited in the account of the complainant and further to pay FA No.305 of 2020 3 Rs.1,00,000/- as damages for causing mental agony and harassment to the complainant.
4. The complaint was contested by the OPs by filing the written reply. In their written reply the OPs raised certain preliminary objections, inter alia, that the complaint was not maintainable against the OPs as the complainant is not a consumer of the OPs as defined under the Consumer Protection Act. The complainant had not come to the District Commission with clean hands and had concealed true and material facts of the case. On merits, the OPs stated that they had issued four types of Unsecured Bonds as IDBI Deep Discount Bonds 97 in January, 1997 under IDBI Flexibonds-2 series. In terms of offer document dated 06.12.1996, the OPs had decided to exercise their right (Call Option) to redeem the Deep Discount Bonds on 30.04.2001 after expiry of 4 years 3 months at deemed face value of Rs.10,000/- per bond, without calling for original bond certificate and no interest was payable after the said date. For the said purpose of the redemption payment, there would be back closure from 20th of February 2001 to 27th of February 2001. Accordingly, Call Option intimation dated 30.04.2001 was issued to all the registered bound holders informing them to submit the bonds by 16th April 2001, vide publication notices in various vernacular daily Newspapers like "The Tribune" in English dated 14.02.2001, "Dainik Tribune" in Hindi dated 14.01.2001, "The Assam Tribune" in English dated 13.02.2001 and "Daily Lokmat" in Hindi dated 13.02.2001. Accordingly, an amount of Rs.16,901/- was paid to the complainant, which was admitted by him in prayer clause of the complaint. The OPs further stated that the FA No.305 of 2020 4 complainant had never opted for early redemption, but the IDBI-OPs had exercised their right to redeem the bonds as per the terms and conditions of the bonds. As base date was 30.04.2001, the bonds were redeemed and payment was made to the bondholders through M/s Karvy Consultation Limited, Karvy House, 46, Avenue-4, Street-1, Banjara Hills, Hyderabad as per the public notices duly published in the newspapers. The OPs further stated that while replying to the legal notice, it had been mentioned that as per the bond the date of redemption was 31.05.2017 for Rs.1,00,000/-, however, the bonds of the complainant had already been redeemed and an amount of Rs.16,901/- had already been paid to the complainant, therefore he was not entitled for any payment. After denying the other averments made in the complaint, OPs prayed for dismissal of the complaint.
5. Parties led their evidence in support of their respective contentions before the District Commission and after hearing the learned counsel for the parties, the complaint was dismissed vide impugned order. Aggrieved by the said order, this appeal has been filed by the appellant/complainant for setting aside the same.
6. We have heard learned counsel for the parties and have also gone through written submission filed by parties as well as record of the case.
7. The learned counsel for the appellant has vehemently contended that the impugned order passed by the District Commission is arbitrary, illegal, against the facts on record and is not sustainable in the eyes of law. The District Commission has ignored the fact that the OPs miserably failed to prove on record by way of any cogent and FA No.305 of 2020 5 convincing evidence or acknowledge establishing delivery of the letter (Ex. OP-7) to the complainant. The appellant never opted for early redemption of the bonds, nor the he ever received any notice from the OPs for the redemption of the said bonds. Acknowledgment is must to prove delivery of any document. The learned counsel further contended that the District Commission, while passing the impugned order, has also ignored the fact that the bank cannot escape its liability by merely publishing something in a newspaper. Moreover, the alleged newspapers are of Haryana, Assam and other states and are not circulated in the Patiala, which are not binding on the complainant. In support of the said contention the appellant relied on judgment of Hon'ble National Commission passed in RP No.2975 of 2008 titled as "IDBI Bank Limited and Anr. Vs. T.K. Navaratnam", decided on 13.08.2008. The learned counsel further argued that in reply to the legal notice, the respondents/OPs stated that vide letter dated 28.02.2001, they had intimated the appellant/complainant regarding the option for 30.04.2001. But the said letter was never sent to the complainant, even the alleged intimation through UPC is invalid as it does not show whether the alleged letter was actually sent or not or who delivered the alleged letter. Alleging deficiency in service on the part of the OPs, the appellant prayed for acceptance of the appeal by setting aside the impugned order.
8. On the other hand, the learned counsel for the respondents/OPs contended that the District Commission has rightly dismissed the complaint filed before it in accordance with law. The learned counsel further contended that as per terms of the bond the FA No.305 of 2020 6 respondent/OPs had decided to use its right to 'Call Option' to redeem the bonds on 30.04.2001 after expiry of 4 years 3 months and at that time the amount payable was Rs.10,000/- per bond. The respondents/OPs accordingly sent intimation to all the bond holders through UPC/Post and the call option was also published in different newspapers having circulation in the area where the appellant/complainant was residing. Moreover, the notice for call option was duly sent to the appellant/complainant through registered post and even if it is presumed for the arguments sake that the notice was sent through UPC still the same is a valid mode of sending notice. Alleging no deficiency in service on the part the respondents/OPs, the learned counsel prayed for dismissal of the present appeal.
9. We have given thoughtful consideration to the contentions raised by the parties.
10. The admitted facts of the case are that the appellant/complainant purchased IDBI Deep Discount Bond 1997 Flexi Bonds 2, folio No.FDD129650, vide distinctive No.0030180232- 0030180232 for Rs.5500/- through IDBI Bank-OP No.2. It is also not in dispute that date of maturity of the said bond was 31.01.2022 and maturity value was Rs.2,00,000/-. The appellant/complainant alleged that OPs redeemed the said bond early and paid a sum of Rs.16901/- only, whereas he never opted for early redemption of the bonds, nor he ever received any notice from the OPs for redemption of the same. On the other hand, the OPs pleaded that as per terms and condition of the bonds they have the right (Call Option) to redeem the Deep Discount Bond before the maturity period on the dates mentioned in FA No.305 of 2020 7 the Key Terms of the IDBI Deep Discount Bond. Alleging deficiency in service, the appellant/complainant filed consumer complaint before the District Commission, which was dismissed vide impugned order. Aggrieved with the same, the appellant/complainant has filed the present appeal for setting aside the impugned order.
11. The foremost ground of appeal raised by the appellant/complainant is that the District Commission has ignored the fact that the OPs miserably failed to prove on record by way of any cogent and convincing evidence to establish delivery of the letter dated 21.05.2001(Ex. OP-7) for exercise of Call Option by IDBI, to the appellant/complainant and he never opted for early redemption of the bonds. On the other hand, the OPs contended that as per the terms of the bond, the respondents/OPs had decided to exercise its right to "Call Option" to redeem the bonds on 30.04.2001 and accordingly, they sent intimation to all the bond holders through UPC/Post and call option was also published in different newspapers.
12. To determine this controversy, we have perused the evidence on record as well as pleadings of the parties. A perusal of Ex. OP-2, shows that under the heading 'Key Terms', there is an 'Early Redemption Option' under which the investors have the option to redeem the Deep Discount Bond before the Maturity period on the dates mentioned in it, which is reproduced as under:-
'Early Redemption Option': Investors also have the option to redeem the Deep Discount Bond before the maturity period on the following dates and get the amount indicated there against (which is the Deemed Face Value of the Bond at the time of redemption):-FA No.305 of 2020 8
Early Period from Amount
Redemption date of payable to
Option Date allotment Investor
(Deemed Face
Value)
April 30, 2001 4 years and 3 Rs.10,000
months
Sept. 30,2007 10 years and 8 Rs.25,000
months
July 31, 2012 15 years and 6 Rs.50,000
months
May 31, 2017 20 years and 4 Rs.1,00,00
months
Further under the same Key Term Call Option, the OPs also reserved the right (Call Option) to redeem the said bonds before the maturity date and the relevant portion is as under:-
"Call Option, IDBI also reserves the right (Call Option) to redeem the Deep Discount Bond on the dates mentioned above. In that event, the Deemed Face Value of the Bond as per the table given above will be paid to Bondholders. The full maturity value of Rs.2,00,000/- shall be payable only if the Bondholder does not exercise the Early Redemption Option and IDBI does not exercise the Call Option to redeem the Bond. On the Bondholder receiving the amount as specified above on exercise of the Early Redemption Option/Call Option at any time, the Bond shall stand fully discharged."
Accordingly, as per the above said Key Terms of the bond, the OPs had the right (Call Option) to redeem the Deep Discount Bond on the dates mentioned in the terms and conditions. Further, in the letter dated 21.05.2001, regarding Exercise of Call Option by IDBI, Ex.OP-7, it has been mentioned that the IDBI had exercised its Call Option in terms of relevant offer document to redeem 'IDBI Deep Discount Bonds' Issue of 1997 on the call option date April 30, 2001. It has also been mentioned in the said letter that "As the bonds would cease to carry interest after April 30, 2001, we once again request you to surrender the bonds immediately". Notice to this effect was published in the newspapers on February 13, 2001 and notice was FA No.305 of 2020 9 also sent to each individual investor by post. The plea of the respondents/OPs is that the bank issued the registered notice regarding 'Call Option' on the last given address of the complainant. To support this plea they relied upon Ex. OP-9 and Ex. OP-11. A perusal of Ex. OP-9 shows that at Sr. No.19023, the name of the appellant/complainant is mentioned as "T.N.Sharma" and the address is mentioned as "Near Polytechnic College, Patiala". The list of Registered Covers sent to bond holders, Ex.OP-11, also shows that at Sr. No.4604 the same name and address are mentioned. Therefore, it is proved on record that the respondents/OPs duly intimated the complainant regarding exercising "Call Option" to redeem the bonds on 30.04.2001, by sending letter at his registered/last recorded address. The plea of the appellant/complainant that acknowledgement is must to prove delivery of any documents is proved by these documents i.e. Ex. OP-9 and OP-11. Therefore, we find that the stand of the appellant/complainant for denying the receipt of the aforesaid letters sent through valid mode of service is falsified.
13. Another contention raised by the appellant/complainant is that the bank cannot escape from its liability by merely publishing something in a newspaper. But the said contention does not hold any ground as it is a matter of common knowledge that nowadays newspapers are the most reliable and established mode of communication to inform the general public. The District Commission has rightly observed in the impugned order dated 05.11.2020 as under:-
"12. ............................. This call option was exercised and notice was given in The Tribune dated FA No.305 of 2020 10
14.2.2001,Ex.OP3, according to which IDBI Deep Discount Bond 1997 Flexi Bonds-2 will be redeemed by 30.4.2001 with the face value of Rs.10,000/- and no interest will be payable after 30.4.2001. This call option was also exercised in Dainik Tribue, copy of which is Ex.OP4, in The Assam Tribune, copy of which is Ex.OP5 and in the Lokmat ,copy of which is Ex.OP6. Ex.OP7 is a copy of letter written by the IDBI to the bond holders regarding Call Option with the request to surrender the bonds. Address was also given where the bonds were to be sent and instructions are Ex.OP8. Vide Ex.OP8 a notice was also sent to T.N.Sharma, complainant.
13. So it is clear that as per public notice issued vide Ex.OP1, a Call Option was exercised by the OPs and the notice was given in the daily news papers, copies of which are on the file and it is clearly mentioned in the newspapers and the letter, Ex.OP7 sent to the bondholders that IDBI has exercised Call Option on IDBI Deep Discount Bond on 30.4.2001 with the face value of Rs.10,000/- and no interest shall be payable after this date.
Similarly the Hon'ble National Commission Delhi in the judgment Mahendrapal Kashiram Sharma Vs. Manager IDBI Bank and others, (supra) has held that Right to Call Option is correct and the revision petition was dismissed.
So due to our above discussion the amount of Rs.16901/- was paid by the OPs to the complainant when the Call Option was exercised by them and the complainant is not entitled to any other amount. The complaint is dismissed accordingly."
14. In view of our above discussion, we find that the District Commission has rightly decided the case and there is no material infirmity and irregularity in the order of the District Commission. Finding no merit in this appeal filed by the appellant/complainant, the same is hereby dismissed & the order of the District Commission is upheld.
15. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases and non-sitting of this Commission due to pandemic of Covid-19.
(H.P.S. MAHAL) PRESIDING JUDICIAL MEMBER (KIRAN SIBAL) MEMBER March 9th, 2023.
DV