CANBANK Mutual Fund vs Savita Dahiya

AGGRIEVED by the order of the State Consumer Disputes Redressal Commission, Union Territory, Chandigarh, in Appeal Case No. 1363 of 2000/ RBT No. 75 of 2006, the Trustees (Canbank Mutual Fund) - Petitioner in this case have filed this revision petition.

BRIEFLY, the facts of the case according to the Respondent in this case Savita Dahiya and Anr., who was the original complainant before the District Forum, is that, in 1990 she had purchased 2000 units at Rs. 10 each amounting to Rs. 20,000 in a Capital Growth Scheme launched by the Petitioner called Candouble. As per the offer and schedule of this scheme it was stated that at the end of the 5th year from the date of allotment, a Candouble unit holder shall get back atleast twice the amount of the face value of each Candouble unit held and at the end of the 10th year from the date of allotment, the Candouble unit holder shall get atleast four times the amount of the face value of the Candouble unit held. In 1997, i.e., after 7 years when the Respondent surrendered the units for re-purchase she was astonished to note that instead of Rs. 53,000 the Petitioner paid the Respondent an amount of Rs. 35,540 which was even less than what had been assured by the Petitioner under the Candouble Scheme, after a period of five years. Treating this as deficiency in service, the Respondent filed a complaint against the Petitioner in the District Forum and sought the following reliefs: Payment of deficient amount of Rs. 17,460 at the rate of 18% per annum till the payment of the said amount along with compensation of Rs. 10,000 due to mental and physical harassment.

THE Petitioner in its version has confirmed that, it is a fact that it had launched a Capital Growth Scheme called Candouble in 1990 for a period of five years and that the object of the Candouble fund was to cumulate the capital fund in such a manner that at the end of the 5th year when the fund is terminated Candouble unit holders would get back at least twice the amount. The Petitioner has however, denied the Respondent''s contention that the scheme had also provided for giving back alteast four times of the face value at the end of the 10th year to its unit holders. Also it is a fact that the Respondent subscribed and was allotted 2000 units @ Rs. 10 per unit for a total consideration of Rs. 20,000. As redemption of the scheme was due on 15.2.1995, i.e., at the end of the 5th year, Petitioner offered the following four options to its Candouble unit holders: 1. Redemption (paid @ Rs. 2,156 per unit); 2. Roll over, i.e., continuation in the scheme; 3. Switch over to open ended scheme; 4. Partial redemption/ partial roll over/ partial switch over. It was highlighted in the option letter of the roll over scheme that its features were now revised and repurchase of the units would be at the prevalent NAV to be declared weekly and there was no assured return in the roll over scheme. The scheme was also re-named as ''Canganga''.

IN response to the Petitioner''s above offer of options, over 19,000 unit holders, out of a total of about 96,500, opted for the roll over scheme while 61,520 unit holders opted for redemption. The latter were paid Rs. 21,560 per unit as assured to them, under the Candouble scheme of 1990. The Respondent voluntarily chose the roll over option and signed a letter dated 7.1.1995, certifying therein that she had read and understood the contents of the revised scheme. When on 16.9.1997 the Respondent sent the units for repurchase, they were repurchased at the applicable NAV of Rs. 17.77 per unit and the proceeds of 2000 units amounting to Rs. 35,340 were duly despatched to the Respondent who encashed it. After encashment, the Respondent filed a complaint before the District Forum, claiming an additional amount of Rs. 17,460 along with interest @ 18% per annum and Rs. 10,000 as compensation. The Petitioner reiterated that there was no deficiency in service on its part and it had acted fully in accordance with the Scheme(s) offered it by.

THE District Forum after considering the evidence before it dismissed the complaint on the grounds that the complainant/ Respondent had preferred to continue in the scheme after voluntarily signing the option letter dated 7.1.1995 and was, therefore, bound by its provisions/ terms and conditions which clearly stated that there was no assured return. Thus, there was no deficiency in service on the part of the Petitioner.

AGGRIEVED by the order of the District Forum, the Respondent filed an appeal before the State Commission. The State Commission allowed the appeal on the following grounds: "According to Candouble offer, which was contained in the printed form, after five years on 15.2.1995, the appellant was entitled to Rs. 40,000. Even otherwise, price of 2000 units @ 23.56 p. comes to Rs. 47,120, i.e., more than double. It is further stated in the Candouble offer under the heading "Declaration and reinvestment of income distribution" that the scheme provides for declaration of income distribution and the annual income distribution shall not be less than 12.5% in any year. Therefore, respondent No. 1 had assured that a Candouble holder shall be entitled to interest @ 12.5% per annum and after a period of five years, he/she will be entitled to double of the amount for which shares are held and after 10 years, he/she shall be entitled to get at least 4 times the amount of face value of each Candouble held. There is no evidence on file that on 7.1.1995, the appellant had switched over to new scheme known as "Canganga" scheme and bound herself with the provisions of said scheme. On the other hand, on 16.9.1997, she had applied to respondent No. 1 for purchase of units and surrendered the original units. Respondent No. 1 did not state that she had switched over to Canganga scheme and bound herself, but allowed the appellant to sell the units as Candouble units. In such circumstances, respondent No. 1 was not competent to pay Rs. 35,540, but on the other hand, it should have paid Rs. 52,917 including interest @ 12.5% for 31 months on the amount of Rs. 40,000 which became due on 15.2.1995. However, it paid only Rs. 35,540. Thus, there is deficiency of service on the part of Respondent No. 1 in making the payment."

THE State Commission directed that, the Petitioner may refund the Respondent Rs. 17,377 along with interest @ 12.5% per annum from the date of 20.9.1997 till payment along with Rs. 2,000 as cost.

AGGRIEVED by the order of the State Commission the Petitioner has filed this present revision petition.

WE have heard learned Counsel for the Petitioner. None appeared on behalf of the Respondent. Learned Counsel for the Petitioner has stated that, the State Commission has erred in its order by not taking into account and appreciating fully the evidence on record. For example, it is nowhere stated in the Candouble Scheme or in the subsequent Canganga Scheme that unit holders would be entitled to at least four times the face value of each Candouble unit after ten years. On the other hand, it is clearly stated in the revised Canganga scheme, which was a roll over of the earlier Candouble scheme, that unit holders under this roll over scheme will no longer be given any assured return on their investment. The State Commission has also wrongly recorded a finding that there is no evidence that the Respondent had switched over to the new Canganga scheme. All these facts were produced in evidence before the District Forum who had correctly appreciated the evidence and, therefore, ruled in favour of the Petitioner, by concluding that there was no deficiency of service on its part.

WE have carefully considered the evidence on record including the submissions made by the learned Counsel for the Petitioner. After going through the terms and conditions of the Candouble scheme, we fully agree with the Petitioner that the Scheme only assured that at the end of the 5th year, its unit holders will get at least twice the amount of the face value of each Candouble unit held. There is no mention in the scheme (as wrongly contended by the Respondent as well as the State Commission) that after ten years a unit holder will be entitled to get at least four times the amount of the face value of each Condouble unit held. It is also a fact that the Petitioner has fully honoured the assurance given by it, in respect of the Candouble scheme to all its unit holders who had opted for redemption on termination of the scheme and who were, therefore, paid Rs. 2,156 per unit. Further, the letter dated 7.1.1995 sent by the Petitioner to those unit holders who had opted for the roll over scheme makes it very clear that under this revised scheme there will be no assured benefit. It is also in evidence that the Respondent after reading the terms and conditions indicated in the letter, had in writing accepted the roll over scheme and had thus bound herself voluntarily to its provisions. Under the circumstances, we are rather surprised to note that the State Commission has overlooked the above evidence and erroneously concluded that there was deficiency in service on the part of the Petitioner.

TO sum up, we allow the revision petition and set aside the order of the State Commission. Order of the District Forum is restored in toto. Ordered accordingly. Revision Petition allowed.