State Consumer Disputes Redressal Commission
Paramjit Sahni vs Canara Bank on 29 May, 2006
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b)of the Consumer Protection Act, 1986 ) Date of Decision: 29-05-2006 Complaint Case No. C-215/97 Mrs. Paramjit Sahni Complainant A-4, Nizamuddin West, Through New Delhi. Mr.T.S. Sawhney, Attorney. Versus (1) Canara Bank Opposite Party No.1. Jeevan Bharti Building, Through Parliament Street, New Delhi. Mr. Amit Sethi, Advocate. (2) Canbank Mutual Fund, through Opposite Party No.2. Canbank Financial Services Ltd, Through 11, Legal Building, Mr. Jaya Savla with Sansad Marg, New Delhi.l Ms. Meenakshi Ogra Advocates. CORAM : Justice J.D. Kapoor- President Ms. Rumnita Mittal - Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
JUSTICE J.D. KAPOOR, PRESIDENT (ORAL) This complaint pertains to the non-payment of share certificates under the Scheme known as Can Double and Canstar by Can Bank Mutual Fund. In terms of the Scheme, the share certificates can be encashed after three years. Said certificates were matured on 16-02-1995 and 17-9-95. The total investment of Rs. 4.00 lakhs had become double to the value of investment after five years. Market value at the time of maturity was approximately Rs. 24/- per share under Growth Scheme.
2. Case of the complainant, in brief, is that the staff of the Canbank approached the complainant on 27-01-1995 in her office and informed that the income under growth scheme did not reach upto the mark because of slackness in the market though growth was expected at Rs. 20/- per share. He suggested that if the money is rolled over then the investor can get better return. He also assured that the money can be withdrawn after one year from the date of roll over and by that time the market will definitely improve.
3. That under the advice of Canbank officials, forms for roll over were completed and delivered to Canbank officials in their office under hir signatures on 27-01-1995. (P/copy of certificate issued by Canbank, New Delhi are Annexure C colly). Complainant made a request to the Canbank Financial Services Ltd. for redemption of said certificates vide letter dated 20-05-1997. The claim of redemption of shares was rejected by the OP on the ground that the Can Double 95 has been rolled over vide their letter dated 6-6-97 and repurchase facility were suspended by the Board of Trustee vide letter dated 9-5-97. The complainant wrote a letter dated 29-6-97 that she never gave consent for roll over for further period of 5 years. Shares were permitted to roll over for a period of one year which can be withdrawn after one year as was suggested by the officials of the OP.
4. Thus the amount due to complainant as claimed by her is as under:-
40000 shares value @ Rs. 24/- per share Rs. 9,60,000.00 Share money remained with OP from 1.3.95 to 1.9.97 i.e. 2 years, 50% of the rolled over amount. Rs.
4,80,000.00 Total Rs. 14,40,000.00
5. As against this the version of the OP is that the Can Double scheme was floated in the year 1990. Originally the scheme was for 5 years. When the redemption was due on 1st March, 1995 the investors of Can Bank Scheme was given the following four options vide letter dated 5th December 1994:-
(i) to redeem the investment and accept the amount.
(ii) To continue in the scheme and there was no assured return under continuance of the scheme.
(iii) Switch over to Open Ended scheme.
(iv) Partial redemption, partial roll over and partial switch over.
6. That the complainant thereafter signed and agreed for continuation in the scheme and stickers were given to the complainant. Complainant affixed stickers on the reverse of the certificate and acknowledged her continuation in the scheme. In 1997 dividend was declared which was also accepted by the complainant. Other benefit was tax benefit because she was continuing in the scheme. Rs. 42,500/- was the dividend paid during 1996-1997. Thereafter on 05-10-1997 further dividend @ 20% was declared and cheque for a sum of Rs. 80,000/- was sent to the complainant but she did not encash it. In may 2006 a further dividend of Rs. 1,99,876/- was declared and despatched. However, 1 : 1 bonus was declared on the original holding of the complainant as a result the NAV per unit as on 26-05-2006 was 16.71 per unit and according to OPs calculation the total amount by investment was Rs. 16,58,347/- and there was assured return as the schemes were linked with performance of the market.
7. We have heard counsel for both the parties at length and accorded careful consideration to the material on the record. As is apparent from the conspectus of facts the complainant agreed for continuation for the scheme for one year. Had it not been so she would not have accepted the dividend of Rs. 42,500/-. However, encashment of the dividend under protest shows that she had only agreed for extension of one year in the scheme and not for continuation of the scheme for five years and at the relevant time the value of the share was Rs. 24/- per unit.
8. In the given facts and circumstances of the case and the terms on which the dividends have been paid which was refused by the complainant show that she had never agreed for more than one year continuation and is entitled for Rs. 24/- per unit. Accordingly the dividend arising at the aforesaid rate be refunded by OP No.2 & 3 to the complainant with compensation of Rs. 25,000/- including the cost of litigation.
9. Complaint is disposed of in aforesaid terms.
10. A copy of this order as per the statutory requirements, be forwarded to the parties free of charge and thereafter the file be consigned to Record Room.
11. Announced on the 29th day of May, 2006.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj