Forum asks IDBI Bank to pay Rs 8.50 lakh to 66-yr-old woman

Ishrat S Banwait

Tribune News Service

Chandigarh, April 19

Providing relief to a 66-year-old woman, who waited for 25 years for a policy in her son’s name to mature, the district consumer forum has penalised a bank for refusing to pay the complete maturity amount. On a complaint of Pritpal Kaur and her son Sukhjit Singh, residents of Mohali, IDBI Bank Limited, Chandigarh and Mumbai, has been asked to cough up Rs 8.50 lakh.

According to the complaint, Pritpal Kaur purchased four “Deep Discount” bonds in the name of her minor son, Sukhjit, and four in her name in 1992 at Rs 2,700 each. The bank had promised to pay Rs 1 lakh for each bond at the end of 25 years i.e. March 31, 2017, as printed on the bond certificate.

However, upon maturity after 25 years, when the bonds were submitted to the bank for encashment, an email was received on April 20, 2017, informing that IDBI had offered a call option to all investors to redeem the bonds. It was also communicated through a letter and the print media in 2002.

At the time of the call option, the redemption amount was Rs 12,000 for each bond. Now, the present value, including interest, will be around Rs 19,000 for each bond. Pritpal had replied that no such notice was received. The matter was referred to the Reserve Bank of India and it was then forwarded to the banking ombudsman. The ombudsman made a report qua the call option and the claim of the complainant was not acceded to.  The bank in its reply said it was informed that they shall have the option to encash/redeem the bond at the end of every five years from March 31, 1992. In this case, the bank exercised the option of redemption of bonds after 10 years i.e. on March 31, 2002, when the deemed face value of the bond was Rs 12,000.

Keeping in view the financial viabilities, the bank was not able to continue with the scheme due to which the bonds were redeemed at an early date. All investors were informed accordingly through publication in the leading newspapers and a notice was also sent through the UPC on the given address.

In its order, the forum observed that the option to redeem the bond “could not have been exercised one-sided as the holder of the bond was entitled to know the result of the said option”. It added that no such material had been placed on record to prove that the notice was published in a daily newspaper circulated in the vicinity of the complainant.

 It also pointed out that the communication was sent in the form of a UPC and not a registered post. The forum thus ordered that IDBI Bank immediately pay the maturity value of the eight bonds i.e. Rs 8 lakh in the form of promissory notes along with Rs 40,000 as compensation for deficiency in service and mental agony and harassment caused to the complainants. Additionally, the bank was told to pay Rs 10,000 as the cost of litigation.