Indfund Management Ltd vs K Chaturvedi

THIS revision is directed against the order dated 21.2.2005 of State Commission, Delhi dismissing appeal against the order dated 13.9.2001 of a District Forum whereby petitioner/opposite party No. 1 was ordered to pay to respondent/ complainant amount of Rs. 15,746/ - with interest @ 9% p.a. w.e.f. 30.11.1999 as also cost.

RESPONDENT purchased 14,000 units in Ind Prakash Scheme floated by the petitioner, in his name and also that of his wife and mother on 30.11.1990. Date of maturity of units was 30.11.1999. Respondent alleged that under the scheme, the petitioner is liable to refund amount of Rs. 42,500/ - but only an amount of Rs. 26,754/ - was refunded and that too on 20.12.1999. Petitioner pleaded that only the net realised value was to be distributed to the unit holders and calculating the net realized value @ 19.11 per unit, said amount of Rs. 26,754/ - was refunded. Copy of Offer Document (scheme) is placed at pp. 12 -21. Admittedly, issue price was Rs. 100/ - per unit in cash at par. Latter part of para No. 3 of this document under the head ''The Scheme and its Objects'' which is material, is reproduced below: ''The objective of the scheme is to generate and distribute a reasonable annual return to the investors and also to attempt generation of capital appreciation by investing in Non -convertible/ Convertible debentures, equities, other equity related investments and money market instruments. Keeping in view the nature of the underlying investments, investment in Ind Prakash is subject to market risks. While past performance is not necessarily indicative of future results, owing to the diversification of investments across industries and instruments, it has been possible to minimize such risks and generate reasonable income and capital, appreciation.

Para 7 of said document under the heading Return of Investment which is material, reads thus: ''Plan A Indicative return at the following rates is payable annually to the investors. However, the first payment shall be for the period from 1.6.1992 (i.e. date of allotment) to 31.3.1993. 1st Ten months 1.6.192 to 31.3.1993 15.00% 2nd year 1.4.1993 to 31.3.1994 15.25% 3rd year 1.4.1994 to 31.3.1995 15.50/0 4th year 1.4.1995 to 31.3.1996 15.75% 5th year 1.4.1996 to 31.3.1997 16.00% 6th year 1.4.1997 to 31.3.1998 16.25% 7th year 1.4.1998 to 31.3.1999 16.50% Last eight months 1.4.1999 to 31.11.1999 17.00% Plan B

Investors can also opt for cumulative returns, wherein the value of units will appreciate in tune with the minimum returns indicated under Plan A or at higher returns that may be declared. Income will not be distributed till redemption. However, certificates indicating the income accrued every year will be issued on request.

Indicative value of Rs. 1,000/ - invested at the above returns is given below: End of 10th month i.e. as on 31.3.1993 -Rs. 1,125/ - 22nd month i.e. as on 31.3.1994 -Rs. 1,297/ - 34th month i.e. as on 31.3.1995 -Rs. 1,498/ - 46th month i.e. as on 31.3.1996 -Rs. 1,734/ - 58th month i.e. as on 31.3.1997 -Rs. 2,011/ - 70th month i.e. as on 31.3.1998 -Rs. 2,338/ - 82nd month i.e. as on 31.3.1999 -Rs. 2,724/ - End of the Scheme i.e. as on 31.11.1999 -Rs. 3,032/ -''

Sub -para (b) of para 15 under the heading Distribution on Termination of the Scheme provides:

''The Trustees shall distribute to unit holders, in proportion to their respective interest in the trust property under the scheme all net cash proceeds derived from the realisation of the Trust property and available for the purpose of such distribution after making all provisions and meeting all liabilities. Every such distribution shall be made only against production of the certificate(s) relating to units in respect of which, the same is made and upon deliver to the Trustees of such form of request for payment, as the Trustees shall, in their absolute discretion require.''

RELYING on above sub -para (b) of para 15 of Offer Document, the contention advanced by Mr. Himanshu Munshi for petitioner was that the respondent is entitled only to the net realised value of Rs. 19.11 per unit and payment of Rs. 26,754/ - made to respondent was based on that value. According to him, District Forum fell in error in ordering further payment of Rs. 15,746/ - with interest and State Commission acted erroneously in affirming the order of District Forum. Submission is, however, without any merit.

PARA 15(b) has not to be read in isolation but in conjunction with other paras of the scheme and in particular the latter part of para 3 and para 7 extracted above. In our view, under the garb of said para 15(b, the respondent who had opted for Plan B, cannot be denied payment of assured indicative return as stipulated in said para 7. There is no illegality or jurisdictional error in the orders passed by Fora below warranting interference in revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986. Revision petition is, therefore, dismissed. Revision Petition dismissed.