Unit Trust of India vs HITENDRA KUMAR SINGH WADHWA

AGGRIEVED by the order of the State Consumer Disputes Redressal Commission, Union Territory of Chandigarh in Appeal Case No. 17 of 2005, the Unit Trust of India has filed this revision petition before us. Case of the complainant:

THE complainant applied to the Unit Trust of India and was allotted 2,46,300 units for Rs. 24,63,000 and 2,32,000 units for Rs. 23,26,000. THE complainant had exercised option C i.e., Cumulative option. It is stated that the scheme assured to the complainant income @ 11.30% per annum. But for the period from 1.6.1999 to 30.7.2000 the UTI paid income @ 11.19% per annum only as per the statement of accounts. In this manner the complainant was paid Rs. 4,390 less than what was due to him for the said period on the amount of Rs. 4,78,000 which he had invested with the O.Ps. @ 11.30% per annum. It is also stated that further income on Rs. 4,390 was also due to the complainant at the compounded rate of interest at 11.30% per annum for the period from 1.4.2000 to 31.3.2004. Thus, the total amount payable to the complainant as on 31.3.2004 came to Rs. 6,732 which has not been paid by them despite service of legal notice. THE UTI contended that depending upon the date of receipt of applications, the investor will be compensated @ 10.75% per annum upto 31st May, 1999 by a cheque which will be sent along with the Membership Advice/Unit Certificate, as desired by the investor. Hence, the dispute revolves around the interest to be paid for the period from 1.6.1999 to 31.3.2000. THE UTI contended that the income at 11.19% was paid on the units for the period from 1.6.1999 to 31.3.2000 on pro-rata basis against the annualized yield of 11.30% because it was a period of only ten months and so the income had to be paid to the complainant proportionately. UTI further contended that if the annual income be 11.30% per annum on units, then the pro-rata income for ten months would come to 9.417% for the proportionate period of ten months in a year. However, in their bounty the O.Ps. have paid dividend @ 11.19% for a slab of ten months (from 1.6.1999 to 31.3.2000). The District Forum upheld the contention of the UTI and dismissed the complaint. Dissatisfied by the District Forum''s order complainant/respondent filed appeal before the Consumer Disputes Redressal Commission, U.T., Chandigarh. The State Commission after hearing the parties held that the amount is to be cumulated @ 11.30% per annum after adjusting the amount already paid @ 11.19% per annum in the shape of units. The complainant is entitled to get the litigation costs, which was quantified at Rs. 3,000.

The learned Counsel for the petitioner/O.P. submitted that though the complainant was entitled @ 10% the interest would come to 9.417%. The UTI paid dividend @ 11.19% for a slab of 10 months. He submitted that UTI has already paid on pro-rata basis taking into consideration the annualized yield of unit, hence, the District Forum''s order may be upheld by allowing the Revision Petition.

ON the contrary, learned representative of respondent submitted that UTI scheme was opened on 1.6.1999 and prior to that they had agreed to pay interest @ 10.75% to those who had invested their funds earlier to the opening of the scheme and it is not in dispute that this amount had been received by them. The issue is of payment of interest from 1.6.1999 onwards and he contended that they had invested for the full period of five years. He produced the original copy of the monthly income plan of the UTI which was opened for sale from 5.4.1999 to 19.5.1999. He read out certain important clauses of this plan. He submitted that nowhere in this form there is a mention that pro-rata income and annualized yield which have been extrapolated by the learned Counsel for the UTI. Therefore, he submitted that the State Commission has rightly came to the conclusion and upheld his contentions. Findings:

LET us go through some of the important features of UTI Monthly Income Plan, 1999 (Plan Open for Sale from 5th April, 1999 to 19th May, 1999) * A five years close ended income Plan which offers three options (i) Monthly Income Option, (ii) Annual Income Option and (iii) Cumulative Option. * Assured income @ 10.75% per annum payable monthly under Monthly Income Option and @ 11.30% per annum payable annually under Annual Income and Cumulative Option throughout the Plan period. * Option ''C'' Cumulative Option-There will be no payout of income under this option. The income will be cumulated @ 11.30% per annum. Choice of option to be indicated at the time of joining and is final once exercised. In case no option is exercised for investment of Rs. 10,000 and more, it will be deemed to be under Monthly Income Option and processed accordingly. * Cumulative Option-Under this option there will be no payout of income. The income will be cumulated @ 11.30 per annum. Depending upon the date of receipt of application, the investor will be compensated @ 10.75% per annum upto 31st May, 1999 by a cheque which will be sent along with the Membership Advice/Unit Certificate as desired by the investor. * Date of Acceptance -Date of acceptance will be Ist June, 1999.

As the complainant had invested prior to the first day of acceptance he was compensated @ 10.75% under Cumulative Option till 31.5.1999. Nowhere in the scheme there is a mention of pro-rata interest income payment of annualized yield payment for a broken period for investment for ten months. As the scheme itself was open from 1st June, it covers only ten months during the first financial year before the financial year ends but the investor''s money is blocked for five years. The State Commission has correctly analysed the case in the following words: The terms and conditions regarding the ''Features of the Plan'' are binding on both the parties i.e., the complainant as well as the O.Ps. A bare reading of Option ''C'' - Cumulative Option shows that the respondents assured to the investor i.e., the complainant that the income will be cumulated @ 11.30% per annum. There is no stipulation under Optiom ''C'' that if the income is to be cumulated for a period of less than a year i.e., for ten months in the instant case, the rate will be calculated on pro-rata basis. In the absence of any such stipulation and in view of the specific assurance contained under Option ''C'' of Cumulative income @ 11.30% per annum, the respondents UTI could not deviate from the terms and conditions contained in M.I.P. 1999.

WE entirely agree with the analysis and conclusions of the State Commission. Accordingly, we dismiss the revision petition. The petitioner is directed to pay Rs. 10,000 as costs to the respondent. Revision Petition dismissed.