UNIT TRUST OF INDIA vs KUMARI GOUTHAMI

JUDGMENT :- This is a Revision Petition against the Order dated 8th June, 1994 of the State Commission, Andhra Pradesh by which it dismissed the Appeal No. 742/93 on its file, filed by the present Petitioner � Unit Trust of India (for short UTI) who was opposite party in the original complaint filed before the District Forum and in which the present respondents were arrayed as complainants. The District Forum had allowed the complaint.

THE facts as gathered from the record are that the UTI had launched a scheme known as "Rajlakshmi" under Section 21 of the Unit Trust of India Act, 1963 (for short the Act). The complaint was filed on behalf of Kumari Gouthami and Kumari Greeshma (Minors) by their Grand Father. The case of the complainants was that the opposite party introduced the above scheme and issued a brochure in October, 1992 wherein the scheme was set out as follows: "1. The Scheme: The scheme provides for an investment that will grow 21 times in 29 years. Thus Rs. 1,000/- invested in the name of a female child below the age of one year will become Rs. 21,000/- after 20 years and Rs. 10,000/- will become Rs. 2.1 lakhs. Depending upon the age of the child for whom the investment is made, the maturity value will vary from a minimum of Rs. 11,000/ - to Rs. 21,000/- as shown below: Entry Age Minimum Maturity on Amount Completion of 20 years age Upto and Rs. 1,000/- Rs. 21,000/- including 1 Above 1 to 2 Rs. 1,000/- Rs. 18,000/- Above 2 to 3 Rs. 1,000/- Rs. 15,000/- Above 3 to 4 Rs. 1,000/- Rs. 13,000/- Above 4 to 5 Rs. 1,000/- Rs. 11,000/- The maturity value will be given only to the beneficiary. Till then no body can touch it. It is thus an irrevocable gift."

Acting on the said brochure the guardian of the complainants purchased the following units for them. (i) complainant No.1 (a) Name : Gouthami (b) Date of birth : 16.11.88 (c) Date of purchase: 16.10.92 No. :of Units purchased: 1200 Certificate No.R 933047000732 (ii) Complainant No. 2 (a) Name : Greeshma (b) Date of birth : 8.4.88 © Date of purchase: 23.10.92 No. of Units purchased :1000 Certificate No. R. 933047004780

The units of complainant No. 1 were purchased when she was above 3 years but below 4 years and as per the brochure she should be entitled to on completion of the age of 20 years on 16th November, 2008 the maturity value of Rs. 1,56,000/- under Unit Certificate No. R. 933047000732 and of Rs. 1,30,000/- under Certificate No. R. 933047004806. The units of complainant No. 2 were purchased when she was above 4 years but below 5 years and as per the brochure she should be entitled toon completion of the age of 20 years on 8th April, 2008 the maturity value of Rs. 1,10,000/- under Certificate No. 933047004780. Based on the investments, certificates were issued showing the respective maturity value in all the three cases but in the case of one Certificate namely Certificate belonging to Gouthami bearing No. 933047000732 the date of maturity was shown as 16th November, 2008. The UTI recalled that Certificate and corrected the date of maturity as 16th October, 2009 based on the period of 17years as calculated from the date of investment. According to UTI there was no mistake in the other two certificates as the date of maturity was calculated on the basis of number of years namely 17and 16years from the date of entry since the age of the complainants (grand-daughters) was 4 and 4 to 5 years at the time of entry. The grand-father of the complainants filed a complaint before the District Forum challenging the date of maturity given in the certificates. According to him the date of maturity should be the date of which the complainants would complete 20 years of their age but in the certificates dates are shown long after the said dates which is in contravention of the said brochure and thus constitute deficiency in service.

IT may be mentioned here that UTI with-drew the earlier brochure and issued a revised one in which the term lock in period'' was inserted. Clause VII of the scheme which shows how it works, reads as follows: "VII How the Scheme Works: The scheme envisages a minimum investment of Rs. 1000/- which can be invested by any adult or person as mentioned herein before in favour of the girl child who is not exceeding 5 years of age. Depending upon the age of the child while entering the scheme, the lock in period will be for a minimum 16yearsand the maturity amount will vary from Rs. 11000/- to Rs. 21,000/-as per the chart given below: Entry Minimum Lock in Maturity amount payable after Age amount period completion of lock in period. Upto and Including 1 Rs.1000/- 20 Rs.21,000/- Above 1to 2 Rs.1000/- 19 Rs 18,000/- Above 2to 3 Rs. 1000/- 18 Rs.15,000/- Above 3to 4 Rs. 1000/- 17 Rs. 13,000/- Above 4to 5 Rs.1000/- 16 11,000/- Thus according to the revised brochure the relevant period is therefore, not the age of the unit holder but the lock in period.

IN the memorandum of appeal the respondent (i.e. complainants) have pleaded that the U.T.I, is free to revise the brochure but it is however, reasonable to the investor to assume that the contents of the revised brochure will apply prospectively and not retrospectively. Thus the introduction of the new term ''lock in period'' completely alters the scope of the scheme which stated in the earlier brochure issued in October, 1992 "when she would enter the most critical phase of her life age of 21". Thus the maturity dates shown in the certificates completely negates the promise made under para 1 of the printed brochure issued in October, 1992. The provisions of the scheme as per the printed brochure issued in October, 1992 do not envisage "lock in period". The said printed brochure did not indicate anywhere that an investor was required to refer to the Gazette of India if necessary wherein full further details of the scheme had beer elaborated. Further the scheme was published in the Gazette of India dated 17th April, 1993 and hence it was not available for reference even if one desired when investment was made way back in October, 1992. At that time the only document available was the printed brochure which was issued in October, 1992 which was part of the application form. The opposite party i.e. U.T.I admitted that addition of the word "age" in the brochure issued in October, 1992 was erroneously added by the printer and it might have caused some ambiguity. The UTI had, therefore, withdrawn the existing printed form and had issued fresh form which dearly indicated that the period is "lock in period" which varies maximum of 20 years to minimum of 16 years and not the age of the unit holder. This error in print cannot overrule the provisions of the scheme duly approved by the Board and the brochure is not a complete offer document and has necessarily to be read with the provisions of the said scheme. In Unit Certificate No. R 933047004806 the date of maturity was correctly shown as 23rd October, 2009. In Certificate No. R 933047004780 also the date of maturity was correctly shown as 23rd October, 2008. However, in Certificate No. R 933047000732 the date of maturity was wrongly shown as 15th November, 2008 and it was corrected to 16th October, 2009. Thus the date of maturity as given in the certificates do not call for any further rectification.

THE District Forum, Hyderabad before whom the complaint was filed held that the doctrine of promissory estoppel was applicable in the present case as on the basis of the representation made by the UTI in the brochure and form issued in October, 1992 the grand father of the minors, acting upon that representation invested huge sum of Rs. 32,000/- and purchased the above said units in the name of the minor-complainants in the hope and belief that on completion of the age of 20 years they would receive the maturity amount shown in the said brochure applicable to the age at the time of investment. It may be mentioned here that the District Forum had further remarked that there are, however, exceptions to the doctrine of promissory estoppel as it cannot apply against the Legislature in the exercise of its legislative function nor can the Government or public authority be debarred by promissory estoppel from enforcing a statutory provision nor can the principles of promissory estoppel be used to compel the Government of public authority to carry out a promise or representation which is contrary to law or which is outside their authority or power. The District Forum went on to state that the above exceptions do not apply to the present case because compelling the opposite party to make good its promise does not entail debarring the Trust from enforcing a statutory provision or requiring it to carry out a promise which is contrary to law. This is only a scheme formulated by the UTI and as can be seen from Clause XXXII of the Scheme the Chairman or in his absence the Executive Trustee of the Trust may in order to mitigate hardship or smooth and easy operation of the Scheme, relax, vary or modify any of the provisions of the Scheme in case of any unit holder or class of unit holders upon such terms as may be deemed expedient and this is precisely the situation in the present case where hardship is likely to result if the Trust does not make good the promise or representation made by it in the earlier brochure. The District Forum, therefore, directed that the Unit Certificates issued to the complainants be rectified so as to make the maturity amounts shown therein payable on the dates when the complainants would complete 20 years of age.

FEELING aggrieved against that order UTI filed appeal before the State Commission. It was submitted before the State Commission that the scheme as approved by the Board was published in the Gazette and the date of maturity depends on the "lock in period" whether it is 16 years or 20 years depending upon the age of the minor at the time of purchase of units and not on attaining the age of 20 years. However, the State Commission brushed aside that argument on the ground that for the first time the said Scheme was published in the Gazette on 17th April, 1992 and by that time the grand-father of the minor Complainants had purchased units only on the information available to him and its benefits as mentioned in the brochure and pamphlet which clearly showed that the date of maturity and payment was the completion of attaining the age of 20 years and, therefore, he invested under the Scheme as he would get money after completion of 20 years'' age of the complainants to enable him to perform their marriages etc. It was further remarked that if UTI wants to alter the date of maturity it would amount to deficiency of service on their part. If the complainants'' grand father had known that the maturity would be after "lock in period" and then only the amount would be paid, probably he would have invested the money in some other scheme or with some other third parties where he would be sure of receiving the matured amount on completion of the age of 20 years of the minor complainants. It also referred to Clause XXXII of the scheme and remarked that it is of the view that it is open to the Chairman to exercise the power under that clause in favour of the complainants. Accordingly the order of the District Forum was upheld and the appeal of UTI was dismissed. Feeling aggrieved the UTI has come before this Commission by way of this Revision Petition. We have heard the parties and gone through the record. It was urged on behalf of the petitioner that it is not logical to capitalise on a small error which occurred in the printing of the pamphlet by the addition of the word ''age'' and the Commission should have concluded that money can grow only from the date of investment and not prior to the date of investment. On behalf of the complainant-respondent it was urged tha t there was no printing error and in fact Circular dated lst October, 1992 inter alia states: "This is an open ended scheme under which an irrevocable gift of a minimum of Rs. 1,000/- can be made to a girl child not exceeding 5 years of age. There is no limit on maximum investment. An investment of Rs. 1000/- in the name of the girl child at birth will fetch Rs. 21,000/- on completion of 20 years of age. It means money multi-plies 21 times in 20 years. However, depending upon the age of entry money will grow between Rs. 11,000/- to Rs. 21,000/-when the girl child completes 20 years of age as mentioned in the Annexure. In addition the Trust will declare bonus from time to time which would be paid on maturity".

Annexure is also attached to that circular giving the salient features of Rajlakshmi Scheme.

THE relevant issue of the Gazette has been produced on the file and it says that the provisions of the Rajlakshmi Scheme, 1992 formulated under Section 21 of the Unit Trust of India Act, 1963 were approved by the Executive Committee in the meeting held on 9th September, 1992 and amended in the Executive Committee meeting held on 7th October, 1992. It appears that before the Scheme was finally approved and published, UTI issued the pamphlets in October, 1992 as well as circular letter of October. However, we are of the opinion that in the present case the principles of doctrine of promissory estoppel would not apply because the Scheme has been framed under the Act and it was duly published in the Gazette though at a later date. A Scheme framed under that section has to be notified as provided by Sub-section (4). Thus the Scheme as published is the authentic document and it overrides the terms of the proposed scheme as published in the brochure issued in October, 1992 prior to its final approval. It is not the case of the complainants that :he action of UTI is not in accordance with the Scheme as published. The earlier brochure was not in accordance with the Scheme and, therefore, it was withdrawn and fresh brochures were issued. The UTI was carrying its statutory functions.

BOTH the District Forum and the State Commission have placed reliance upon Clause XXXII � of the Scheme which reads as well as : "XXXII Relaxation/Variation/Modification of provisions: The Chairman or in his absence the Executive Trustee of the Trust may in order to mitigate hardship or for smooth and easy operation of the scheme, relax, vary or modify any of the provisions of the scheme in case of any unit holder or class of unit holders upon such terms as may be deemed expedient."

According to the District Forum and the State Commission the present case is one in which the Chairman or the Executive Trustee of the Trust should exercise its discretionary power under the above clause to mitigate hardship which might be caused to the complainants. We are unable to appreciate this reasoning of the District Forum and the State Commission. No Court or Authority can force the Chairman or the Executive Trustee of the Trust to exercise its discretionary power in any particular way. It is for the Chairman or the Executive Trustee to exercise that power vested in them under that clause. It is for them to see if there is any particular case which needs the exercise of discretionary power for mitigation of any hardship.

Both the District Forum and the State Commission have also relied upon the principle of promissory estoppel. As already indicated we are of the opinion that in the present case the said principle is not applicable. Rajlakshmi Unit Scheme, 1992 was framed by the UTI in exercise of the powers conferred upon it by Section 21 of the Act, 1963. The said Scheme was published in the Gazette of India dated April 17,1993. Thus this scheme was framed by the UTI under the powers given under a Statute. It is settled principle that the principle of promissory estoppel is not applicable against a statute. If there is any agreement or contract between the parties which is against the statutory provisions that agreement is not enforceable. Here we may refer to the order of the Supreme Court in SLP (C) No. 38/ 95 titled Post Master, Dargamitta H.P.O. Nellore v. Ms. Raja Prameelamtna. In that case the complainant had purchased six National Saving Certificates (VI Series) for Rs. 10,000/- each on April 28, 1987 from Post Office. The rate of interest payable w.e.f. April 1, 1987 was 11%. This was notified by the Government of India. However, due to inadvertence on the part of the Clerical Staff old rate of interest and the maturity value which was printed on the Certificates was not corrected. In that case the District Forum as well as the State Commission came to the conclusion that the Government of India and the Post Office were bound to pay uncorrected maturity value of the certificates indicated on each of the printed certificates. That case came up in Revision Petition before us. The majority view was that there was no jurisdictional error or irregularity in the order passed by the State Commission and the Revision Petition was dismissed. One learned Member of this Commission dissented from the majority view and his reasoning was : "It is evident from the definition of the term "deficiency" that it must be a fault, imperfection, short coming or inadequacy in the quality, nature and manner of performance which is required to be maintained under a law or has been undertaken to be performed in pursuance of a contract. In fact of the notification issued by the Ministry of Finance, Government of India, on 1.4.87 i.e. prior to the date of issue of the certificates, the erroneous indication of a higher rate of interest and a higher maturity value cannot be deemed to be a deficiency in service with reference to the law governing the sale of National Savings Certificates. As regards the contract, no doubt the sale of National Savings Certificates with the terms and conditions embodied thereon constitutes a contract between the Government of India as seller and the holders of the National Savings Certificates. But as this contract was contrary to the terms notified by the Government of India and this was due to inadvertence of the staff In my opinion it does not become a contract binding the Government of India being unlawful and void. As such this is not a case of deficiency in service either in terms of the law or in terms of the contract as defined in Section 2(1 )(g) of the Consumer Protection Act."

The Supreme Court agreed with the aforesaid reasoning and the conclusion reached by the learned Member and accordingly the appeal of the appellant was allowed and the order passed by this Commission as well as by the District Forum and the State Commission were set aside and the complaint was dismissed. The observations of the Supreme Court are clearly applicable to the present case.

IN the light of the above discussion we are of the opinion that the State Commission has exercised its jurisdiction with material irregularity while rejecting the appeal of the Unit Trust of India and confirming the order of the District Forum. Accordingly we accept the present Revision Petition and set aside the orders of the District Forum and the State Commission and dismiss the complaint. We make no order as to costs.