State Consumer Disputes Redressal Commission
Idbi Bank Limited vs S.D. Jindal on 30 July, 2013
2nd Addl. Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 725 of 2010
Date of institution: 3.5.2010
Date of decision : 30.7.2013
IDBI Bank Limited through its Manager, IDBI Tower, W.T.C. Complex,
Cuffe Parade, Mumbai-400005
.....Appellant
Versus
S.D. Jindal S/o Sh. Ram Dass Jindal, R/o H. No. 5/108, Arya Block, Dhuri,
Tehsil Dhuri, District Sangrur.
.....Respondent
2nd Appeal
First Appeal No. 726 of 2010
Date of institution: 3.5.2010
IDBI Bank Limited through its Manager, IDBI Tower, W.T.C. Complex,
Cuffe Parade, Mumbai-400005
.....Appellant
Versus
Seema Jindal D/o Sh. S.D. Jindal, R/o H. No. 5/108, Arya Block, Dhuri,
Tehsil Dhuri, District Sangrur.
.....Respondent
First Appeal against the order dated 4.2.2010
passed by the District Consumer Disputes
Redressal Forum, Sangrur.
Before:-
Shri Piare Lal Garg, Presiding Member
Shri Jasbir Singh Gill, Member Argued By in F.A. No. 725 of 2010:-
For the appellant : Sh. Jatin Kumar, Advocate
For the respondent : Ex.-parte.
First Appeal No. 725 of 2010 2
PIARE LAL GARG, PRESIDING MEMBER
This order will dispose of two appeals i.e. First Appeal No. 725 of 2010(IDBI Bank Ltd. versus S.D. Jindal) and First Appeal No. 726 of 2010(IDBI Bank Ltd. versus Seema Jindal). Both the appeals are against the impugned orders dated 4.2.2010 passed by the District Consumer Disputes Redressal Forum, Sangrur(in short the "District Forum") and are disposed off in a single order as the facts and dispute involved in both the cases is similar. The status of the parties taken from 'First Appeal No. 725 of 2010' and the parties would be referred by their status in this appeal.
2. Brief facts of the case are that the respondent (complainant) purchased one IDBI Deep Discount Bond Series-I vide application No. 05578123 registered Folio No. DD00727191 Envelope No. 00727191 on 15.6.1992 for an amount of Rs. 2700/- with his father Sh. Ram Dass Jindal, who had since died on 24.7.2003 and also purchased one another IDBI Deep Discount Bond Series-I vide application No. 02927707 registered Folio No. DD00727192 Envelope No. 00727192 on 15.6.1992 for an amount of Rs. 2700/- in the name of Seema Jindal (minor). The respondent had right to encash the same on the end of every five years from the date of its issuance against the face value mentioned on the bond. The respondent applied for the encashment of the bond after 15 years of its issuance and on 31.3.2007 the face value of the same was Rs. 25,000/-. But the appellant issued warrant Nos. 24194 and 24220 dated 25.8.2009 for an amount of Rs. 15,531/- each, which were received by the respondent at Dhuri. When the face value of the First Appeal No. 725 of 2010 3 same was Rs. 25,000/- each as on 31.3.2007. The respondent accepted the warrant as part payment under protest and requested the appellant to pay the remaining amount with interest. Legal notice was also served upon the appellant for payment of the remaining amount but the same was not paid, which was deficiency in service as well as unfair trade practice on the part of the appellant. The complaint was filed with the prayer that the appellant may be directed to pay Rs. 9469/- i.e. Rs. 25,000/- (-) Rs. 15531/- = Rs. 9469/- with interest @ 12% p.a. from 25.8.2009 till its payment and also pay interest of Rs. 7250/- calculated on Rs. 25,000/- @ 12% per annum from 31.3.2007 to 25.8.2009 for 29 months in each case. It was also prayed that the appellant may be directed to pay Rs. 20,000/- as compensation for mental harassment, agony alongwith Rs. 7700/- as litigation expenses in each case.
3. Upon notice, the appellant filed reply by way of affidavit of Sh. Rajiv Arora s/o Sh. P.L. Arora, Branch Head, IDBI Bank, Tripuri, Patiala stating that he was competent and authorised to depose the present affidavit on behalf of the appellant by taking preliminary objections that the respondent had not complied with the terms and conditions of the documents and also not followed any of the advise of Investor Services India Ltd. for redemption of the bond. The discharged bond was not submitted to Registrar of Transfer Agent (hereinafter 'R.T. Agent'), no cause of action arose in favour of the respondent to file the present complaint, the bond was issued by the appellant under the offer document, which does not fall within the definition of goods or services, the complaint was not maintainable in First Appeal No. 725 of 2010 4 the District Forum as the respondent does not fall under the definition of 'consumer', the respondent had neither bought any goods for consideration nor hired any services of the appellant for consideration. The District Forum had no territorial jurisdiction to try and decide the complaint as the registered office of the appellant was located at Mumbai and the bond was also issued from Mumbai as well as maturity value was also paid from Mumbai, as such, the complaint was liable to be dismissed. It was admitted that three types of IDBI unsecured redeemable bond series-I viz. Deep Discount Bonds - Series-I, Double Option Bonds series-I and Regular Return Bond - series-I were offered in January, 1992 by way of public issue. The face value of the Deep Discount Bonds - Series-I was Rs. 2700/- and the investor had the option to withdraw and the appellant had the option to redeem the bond on any of the dates mentioned below. In the event, the deemed face value of the bond was as under:-
In case of withdraw/redemption Deemed face value March 31, 1997 Rs. 5,700/-
March 31, 2002 Rs. 12,000/-
March 31, 2007 Rs. 25,000/-
March 31, 2012 Rs. 50,000/-
March 31, 2017 Rs. 1,00,000/-
4. It was also admitted that one Deep Discount Bond under Folio No. DD0727191 as per the terms and conditions of the offer document was purchased by the respondent. The appellant decided to exercise its right of call option on March 31, 2002 and advised all the bond holders by publishing the notices in the leading newspapers in English and Regional Languages across India on 19.8.2001 as well First Appeal No. 725 of 2010 5 as public notices were also issued to inform the bond holders that since the appellant was redeeming the bonds, any change in address etc. be communicated to R.T. Agents immediately. Individual notices were also sent to all the bond holders including the respondent vide UPC letter dated 30.9.2001 to surrender duly discharged bond certificate to R.T. Agents by 31.12.2001 to enable the bond holders to receive redemption receipts by 31.5.2002. It was clearly mentioned in the notice dated 30.9.2001 that the respondent will not be liable to pay any interest on the bonds beyond 31.3.2002. Reminders were also published in leading newspapers in English and Regional Language across India at regular intervals of six months giving details of bonds redeemed by exercising the call opinion for early redemption. The respondent had deliberately had suppressed the facts of right of call opinion available to the appellant on the dates mentioned in the face value of the bond. The face value was payable only after surrender of the original bond certificate, duly discharged by the bond holder(s) in terms of the offer documents, the appellant exercised its right of call option on 31.3.2002 and all the investors including the respondent vide letter dated 30.9.2001 were advised to surrender duly discharged bond certificate to R.T. Agents till 31.12.2001. The appellant exercised its right of call option on 31.3.2002 and redeemed the Deep Discount Bond Series-I 1992 on 31.3.2002, as such, the appellant was not liable to pay any amount beyond the call option date. The appellant paid additional interest @ 3.5% per annum on quarterly compounding basis on the maturity value of Rs. 12,000/- from the date of redemption till date of payment First Appeal No. 725 of 2010 6 on surrender of duly discharge original bond certificate, as such, the respondent was not entitled for any relief as claimed in the complaint.
5. On merits, the same stand was reiterated by the appellant and dismissal of the complaint was prayed.
6. After hearing the learned counsel for the parties and going through the record, the District Forum accepted the complaint and directed the appellant to pay Rs. 9469/- (25000 - 15531) alongwith interest @ 9% per annum from 25.8.2009 till realization and also pay Rs. 5,000/- as litigation expenses within 60 days from the receipt of the copy of the order.
7. Aggrieved from the order of the District Forum, the present appeal is filed by the appellant on the grounds that the order of the District Forum is totally derogation of the rights of the appellant, who has legal right of redemption as per the terms and conditions of the bond, the appellant exercised the right of call option on 31.3.2002 much before the respondent exercised his right of "put option" on 31.3.2007, hence, the right of the put option is infructuous. The respondent neither has a locus-standi nor the privity of contract with the appellant, the order of the District Forum is against the law, as such, the order of the District Forum is liable to be set-aside.
8. We have gone through the pleadings of the parties, grounds of appeal, perused the record of the learned District Forum and heard the arguments of the counsel for the appellant.
9. There is no dispute between the parties that the respondent purchased Deep Discount Bond for an amount of Rs.
2700/- from the appellant and has the right to exercise an option to First Appeal No. 725 of 2010 7 encash/redeem the bond at the end of every five years from the date of issue against the value as shown on the face of bond in dispute.
10. The version of the appellant that it had already used his call option on 31.3.2002 advising all the bond holders by publishing the notices in the leading newspapers in English and Regional Languages vide which the Investors were advised to surrender duly discharged bond certificates to R.T. Agents by 31.12.2001 to enable the bond holders to receive redemption receipts till 31.3.2002. The bond holders including the respondent vide letters under Certificate of posting were also intimated/advised to surrender duly discharged bonds certificates till 31.12.2001 to R.T. Agents. But the respondent had not sent duly discharged certificate till 31.12.2001 to R.T. Agent. On 31.3.2002, the face value of the bond was Rs. 12,000/- and warrant No. 24194 dated 25.8.2009 for an amount of Rs. 15,531/- was sent to the respondent at Dhuri after calculating the interest @ 3.5% per annum from 1.4.2002 till the issuance of warrant dated 25.8.2009, which was received by the respondent.
11. The appellant has not produced an iota of evidence to prove its version that letter under Postal Certificate (UPC) was sent to the respondent, vide which he was advised to surrender the discharged bond till 31.12.2001. No postal receipt is produced by the appellant regarding sending of the letter under UPC to the respondent. Even the appellant has not produced its despatch register to prove its version regarding the despatch of letter dated 30.9.2001 under UPC to the respondent as alleged. First Appeal No. 725 of 2010 8
12. It is also admitted version of the appellant that refund amount of Rs. 15,531/- was paid by the appellant to the respondent vide warrant No. 24194 on 25.8.2009. If, the appellant has exercised its right of call option on 31.3.2002 then why the payment of the bond was not paid to the respondent by the appellant within a reasonable time and the payment was made after 7½ years i.e. when the respondent exercised his right of "put option" on 31.3.2007 when the face value of the bond was Rs. 25,000/-. The appellant has neither mentioned any date in the reply nor produced any evidence when the discharged Bond certificate was surrendered by the respondent to the R.T. Agent. Even it is admitted version of the appellant in para No. 7 of the grounds of appeal that the respondent exercised his "right of put option" on 31.3.2007.
13. In view of the above discussion, we are of the view that version of the appellant that the respondent was advised/intimated to send discharge voucher as the appellant had decided to exercise its right of call option on 31.3.2002 vide letter dated 31.9.2001 under UPC is not correct. It is held by the Hon'ble National Commission in case "IDBI Bank Limited & Anr. Versus T.K. Nagarathna", 20- 09(1) CLT 108 in para No.6 as follows:-
"6. The contention of the petitioner's Counsel that Bank has published an advertisement in the newspaper about its intention to exercise the call back option does not carry weight in the days of electronic revolution. In today's world television is found in almost every urban house. Complainant is a resident of Chitradurga a District Headquarters and very few people have time to read all pages of the newspapers to locate such advertisements. Hence the Bank cannot escape its liability by merely publishing something in a newspaper. It is not the case of the petitioner Bank that it had paid the amount along with the interest accrued to the First Appeal No. 725 of 2010 9 complainant on 31.3.2002. The money had remained with the Bank which has an opportunity cost. Further though the amount involved in this case is very small the mighty Bank has chosen to litigate up to the level of the National Commission retaining the amount with it of a small investor."
14. The bond was purchased by the respondent at Dhuri, the bond was also received at Dhuri, the refund amount was also received by the respondent at Dhuri, as such, the part of cause of action accrued to the respondent at Dhuri, which falls under the jurisdiction of District Forum, Sangrur, as such, the District Forum has the jurisdiction to try and decide the complaint as held by our own Commission in case "Sucheta versus Unit Trust of India and another", 1998(1) CLT 655 in para No. 4(relevant part) as follows:-
".....The complainant having purchased the shares 1500 in number has become owner of such shares and transfer of such shares is part of the service which is to be rendered by the Company. After effecting such transfer, the shares are to be sent to the owners at their addresses. The fact cannot be lost sight of that the Company is situated at one place and the share holders are spread over the country. If there is deficiency in rendering such service, share holders are not to rush to the head office to get the relief. Such relies is to be granted to them where they were expected to receive the transferred shares..........."
15. As per above law, the District Forum has the jurisdiction to decide the complaint.
16. The appeal is filed by Sh. Kapil Vashisht, Branch Manager, IDBI Bank, Sector 17, Chandigarh on behalf of the appellant but no general power of attorney or authorisation letter is annexed by the appellant with the appeal vide which he was authorised by the appellant to file the appeal on behalf of the appellant, as such, the appeal is not maintainable and the same is also liable to be dismissed on this score only.
First Appeal No. 725 of 2010 10
17. In view of the above discussion, it is clear that the orders passed by the learned District Forum are legal and valid and there is no ground to interfere with the same. Both First Appeals No. 725 of 2010 and 726 of 2010 without any merit are dismissed with costs of Rs. 5,000/- in each appeal. The impugned orders of the District Forum are affirmed and upheld. Rs. 5,000/- awarded in each appeal, be paid by the appellant to the respondent of each appeal within one month from the receipt of copy of the order.
18. The arguments in these appeals were heard on 26.7.2013 and the orders were reserved. Now the orders be communicated to the parties.
19. The appellant in both the appeals i.e. F.A. No. 725 of 2010 and F.A. No. 726 of 2010 had deposited an amount of Rs. 7,518/- in each appeal with this Commission at the time of filing the appeal. This amount of Rs.7,518/- with interest accrued thereon, if any, be remitted by the registry to the respondent by way of a crossed cheque/demand draft after the expiry of 45 days. Remaining amount shall be paid by the appellant to the respondent of both the appeals within 30 days from the receipt of the copy of the order.
20. The appeals could not be decided within the statutory period due to heavy pendency of Court cases.
21. Copy of this order be placed on First Appeal No. 726 of 2010(IDBI Bank Ltd. versus Seema Jindal).
(Piare Lal Garg)
Presiding Member
July 30, 2013. (Jasbir Singh Gill)
as Member
First Appeal No. 725 of 2010 11