V.K.AGARWALLA vs Unit Trust of India

THE complainant/petitioner had been holding 16,300 Master shares purchased from the Stock Market. In October, 1993, the Opposite Party No. 1 declared that Master-share holders would be eligible for redemption of the shares at the rate of Rs. 49.70 per share and for that purpose shares along with filled up redemption forms should be lodged with any branch of U.T.I, or M/s. M.N. Dastur and Company, Registrars during the period from 1st November to 30th November, 1993.

THAT the Opposite Party No. 1 also notified that investors acquiring Master-shares from the market and intending redemption should lodge the certificates together with duly executed transfer deeds and redemption form on or before 25.10.1993. It was further notified that those investors who acquired master-shares after 25.10.1993 shall not be eligible for redemption.

The opposite party No. 1 further declared that those who would not opt. for redemption would be eligible for dividend at the rate of 18%, bonus in the ratio of 1:3 and Rights on the increased holding after bonus issue would be in the ratio 1:1 at a premium of Rs. 5/-.

THE complainant/petitioner opted for redemption of 16,300 shares (Master-shares) and lodged the same with duly filled in redemption form together with duly executed transfer deeds, where it was necessary, with opposite party No. 3 The said option was availed of by the complainant/petitioner in view of the statement of the opposite parties in the letter of redemption that payment would be made within 30 days from the date of receipt of the application.

THE complainant/petitioner expected to receive the redemption value of the shares by 15.12.1993 amounting to about Rs. 8.10 lakhs calculated at the rate of Rs. 49.70 per share on 16,300 Master shares. THE complainant/pettioner intended to invest the said proceeds in the public issue of shares of State Bank of India which was opened from 15.12.1993 to 24.12.1993. THE shares of SBI were issued at Rs. 100/- each where as selling price of the shares in the market was Rs. 210/- each thus premium of Rs. 110/- per share would have been availed of by the complainant/petitioner and the said premium further went up to Rs. 200/- per share. As the complainant/petitioner did not receive the redemption value of 16,300 Master shares amounting to Rs. 8.10 lakhs from the Opposite Parties within the stipulated period, he could not apply for 8,100 shares of S.B.I, investing the said redemption amount and as the complainant/petitioner would have been allotted 2,700 shares or more which had it been sold at a premium of Rs. 110/-each it would fetch an earning of about Rs. 2.97 lakhs to the complainant/petitioner. This has been established by the complainant/petitioner in detailed calculation in Annexure "A" to petition. Had the complainant/ petitioner opted for the alternative course of the U.T.I, to continue with the scheme he could have availed of dividend, bonus and Rights on account of 16,300 Master shares held by the complainant/ petitioner and in that case, the complainant/ petitioner would have fetched an earning of Rs. 1,75,482/-. Trusting the U.T.I, and calculating the benefit on redemption to be much larger than that on continuing with the scheme, the complainant/petitioner opted for redemption. The complainant/petitioner had not until the due date namely 10.12.1993 received the redemption value of 16,300 Master shares and kept on anxiously waiting since after 10.12.1993 and more so after 15.12.1993 for getting the redemption value but in vain. Anxiety for everyday means more mental torture, specially because the other alternative of continuing with the scheme was no more available to the complainant/petitioner. The complainant/petitioner has also pleaded that the conduct of the opposite parties was not reasonable and that out-of-turn payments of redemption amount were made to other ''favoured'' persons.

IN the circumstances, the complainant/ petitioner prayed for direction upon the Opposite Parties to pay the redemption sum of Rs. 8,10,110/- for 16,300 Master-share at the rate of Rs. 49.70 per share and also to pay compensation amounting to Rs. 2,97,000/- to the complainant/petitioner as per Annexure "A" to the petition and also to pay interest at the rate of 24% on compensation and redemption amount from 10.12.1993 until date of payment and for compensation of Rs. 50,000/- for mental torture/anxiety suffered by the complainant/petitioner and cost of this proceedings etc.

THE Opposite Parties firstly did not appear before this Commission to contest the matter but kept on only asking for time on 20.5.1994 an Advocate on behalf of the Opposite Party No. 3 appeared before this Commission and submitted that the complainant/petitioner be advised to contact the Opposite Party No. 3 at its local office at 56, Chowringhee Road, Calcutta for settlement of the dispute amicably by mutual discussion. None of the contentions of the complainant/petitioner were challenged by the Opposite Parties. THE complainant/petitioner contended that any suggestion for settlement at this late stage was clearly a ploy to delay matters. It is pertinent to note that 20.5.1994 was fixed for final arguments and orders. The complainant/petitioner submitted that the Opposite Party No. 1 has already admitted their fault for its inability to pay the redemption value for 16,300 Master shares in time as per their promise as the Opposite Party No. 1 has paid compensation on that account and the complainant/petitioner accepted the said amount under protest, the same being much below his expectation and nowhere near what would meet the ends of justice.

In view of the above position we award directing the Opposite Party No. 1 to pay the redemption value of Rs. 8,10,110/- as reduced by the sum already paid to the complainant/petitioner within ten days from the date of this order. We further direct the Opposite Party No. 1 to pay a sum of Rs. 2,97,000/- as reduced by the compensation already paid to the complainant/petitioner as compensation within ten days from the date of this order.

WE are not inclined to award interest to the complainant/petitioner for the past period. The Opposite Party No. 1 to pay cost assessed at Rs. 1,000/- to the complainant/ petitioner. The complaint petition is thus disposed of. Complaint allowed.