Unit Trust of India vs K. NALINI KURUP

ALLOWING the complaint filed by the complainant/respondent herein the Forum below (Consumer Disputes Redressal Forum, Pathanamthitta in O.P. No. 16/2001) passed the impugned order. The operative portion of the order reads thus: "The opposite parties are directed to pay a sum of Rs. 16,839/- (Rupees sixteen thousand eight hundred and thirty-nine only) with 12% interest per annum from date of termination till date of payment to the petitioner within one month from the date of receipt of this order. The opposite parties are also directed to pay a sum of Rs. 10,000/- (Rupees ten thousand only) as compensation for mental agony and to pay a sum of Rs. 1,000/- (Rupees one thousand only) as cost of proceedings to the petitioner."

THE facts undisputed are that the respondent purchased 500 units worth Rs. 5,000/- from Rajalekshmy Unit Scheme of Unit Trust of India Office at Pathanamthitta in the name of her grand daughter Sneha. That scheme provided for an investment that will cover 21 times in 20 years and the complainant was given a cash receipt for Rs. 90,000/- with bonus and special incentive. Letter dated 20.8.2000 was sent by the 3rd opposite party to the complainant informing that Rajalekshmy Unit Scheme (RUS-92) was terminated with effect from 1.10.2000 and on termination the complainant''s grand daughter would be getting only a sum of Rs. 16,680/-. Asserting that the complainant is entitled to get Rs. 35,625/- from the opposite parties the complaint has been filed before the Forum below. The sustainability of the order passed by the Forum below is challenged by preferring this appeal by the opposite parties 1 to 3 and the contention urged by the learned Counsel for the appellants before us is that the Forum below was not justified in passing the impugned order directing the opposite parties to pay a sum of Rs. 16,839/- with 12% interest per annum from the date of termination and also awarding to complainant compensation on the ground that Rajalekshmi Unit Scheme, 1992 was terminated under the provisions of Unit Trust of India Act, 1963 and the provision of the scheme also carried the authority to terminate the scheme. It is also contended that termination was in the interest of unit holder. According to appellants the scheme indicated only an implicit return varying between 16.16% and 16.75% on an annualised basis and Clause XXVII of the scheme authorised the Unit Trust of India to terminate the scheme. The amount of Rs. 16,680/- which accrued benefits is the amount actually due to the complainant. Appellants also contended that there is no deficiency of service on the part appellants.

In support of his contention the learned Counsel for the appellants has drawn to our attention to the provisions of the scheme confering authority to terminate the scheme and the legal position laid down by the Division Bench of the Hon''ble High Court of Kerala in O.P. Nos. 27838, 27397, 34357, 27799, 28058, 28105 and 27292 of 2000.

WE find considerable force in the submission made on behalf of the learned Counsel appearing for the appellants. The Division Bench of the Hon''ble High Court of Kerala in O.P. No 27838 of 2000-L and other O.Ps. made the following observation: Para 13 : "WE will first consider the question whether there is statutory power for the 3rd respondent to take a decision to terminate the Rajalekshmi Units Scheme, 1992 before the completion of the originally intended period. According to the petitioners, the power given under Clause 27 in the scheme is not supported by a statutory provision. The scheme is promulgated by the Board of Trustees in exercise of its power under Sub-section (1) of Section 21. The period of the scheme was between 18 to 20 years. By the impugned decision what has been done by the Board of the 3rd respondent is to reduce the above period and close the scheme on 30.9.2000. The investors are offered amount due to them on the basis of the same return of about 16.6% to 16.75% per annum as in the scheme itself while paying the redumption proceeds. The period has been curtailed to about 7 to 8 years. The above would show that what had been done by the Board of the 3rd respondent is to amend the scheme by reducing its period. Therefore, according to us, the action is supported by statutory authority as per the provisions contained in Sub-section (3) of Section 21 of the Act." In view of the legal position laid down by the Division Bench it cannot be contended that the Board of Directors has no statutory authority to reduce the period of scheme. As per the provisions contained in Sub-section (3) of Section 21 of the Unit Trust of India Act, 1963 (for short Act) statutory authority competent to reduce the period is the Board of Directors. It is not in dispute that after reducing the period of the scheme the amount entitled to the respondent''s grand daughter on the expiry of the reduced period is only 16,839/-. As the period was reduced exercising statutory powers conferred under Sub-section (3) of Section 21 of the Act it cannot be argued for a moment that either financial loss or mental agony was suffered by the complainant and, therefore, we can hold without any compunction that awarding of compensation for mental agony is not at all justified.

AS rightly pointed out by the Counsel for the appellant compensation can be awarded only on recording a finding by the Forum below that there was deficiency in service on the part of the appellants and on account of deficiency in service loss or injury was suffered by the complainant. Counsel argued vehemently that as no finding has been recorded by the Forum below that there was any deficiency in service on the part of the appellants the awarding of compensation is no at all justified. No material is available on record to come to a finding that there was deficiency in service and, therefore, it cannot be said that any loss or injury was suffered by the respondent on account of deficiency in service. The further conclusion to be drawn is also that awarding of interest on the amount entitled to the complainant (Rs. 16,839/-) till payment at 12% per annum from the date of termination within one month from the date of receipt of the order cannot also be sustained. We are unable to sustain the order passed by the Forum below and the course open to us is to dismiss the complaint filed by the respondent. In the result, the appeal is allowed and the complaint is dismissed. There will be no order as to costs. Appeal allowed.