AI Structured Summary
Not yet generated for this judgment
Judgment
V.K.Jain, J.
A company namely M/s Pal Puegeot Ltd. offered, to the public, Secured Redeemable Partly Convertible Debentures and Secured Redeemable Non-Redeemable Debentures, carrying interest @ 15% per annum. Vide Trust Deed dated 21.02.1997, ICICI Ltd. was appointed as the Debenture Trustee in respect of the aforesaid debentures. Each complainant/respondent was allotted secured redeemable non-convertible debentures to the extent of Rs.4,000/- having maturity value of Rs.17,090/- each. The debentures were to mature on 31.03.2008. The issuing company having defaulted in payment of interest after June 1997 and also in payment of redemption amount, the complainants approached the concerned District Forum by way of a consumer complaint, impleading the officials of the petitioner ICICI Bank Ltd. as the OP.
The petitioner filed its written version taking several preliminary objections including that the complainants were not its consumers. On merits, it was alleged that the petitioners were only trustees and not guarantors in respect of the debentures and therefore, were not liable to pay the amount claimed by the complainants. It was also alleged that the petitioner had filed a Civil Suit and taken several other steps in order to fulfill its obligations under the Debenture Trust Deed and therefore, there was no deficiency or default on its part.
The District Forum, vide order dated 24.10.2009, directed the petitioner to pay the debenture amount alongwith interest @ 15% per annum w.e.f. 01.07.1997 and the cost of litigation quantified at Rs.5,000/-.
Being aggrieved from the order passed by the District Forum, the petitioner approached the concerned State Commission by way of an appeal. The said appeal having been dismissed, the petitioner is before this Commission by way of this revision petition.
Initially, the appeal filed by the petitioner against the order of the District Forum was dismissed by the State Commission as barred by limitation. The said order however, was set aside by this Commission vide its order dated 04.02.2011 passed in RP/2579/2010. Thereafter, the appeal filed by the petitioner was dismissed on merits vide order of the State Commission dated 09.08.2012.
On a perusal of the Debenture Certificate filed by the complainants themselves, it is evident that it was company M/s Pal Puegeot Ltd. which was under an obligation to redeem the debentures. These debentures did not oblige the trustee namely ICICI Ltd. to pay to the debenture holders in the event of default by the company nor did ICICI Ltd. guarantee the payment of the debenture amount or interest payable on the debentures. The Debenture Certificate shows that the trustee namely ICICI Ltd. was required to act in accordance with the provisions of the Debenture Trust Deed dated 21.02.1997 and that all rights and remedies of the debenture holders against the company in respect of, arising out of or incidental to the debenture holders could be exercised only through the trustees. There is no evidence of the trustees being under an obligation to pay the redemption amount of the debentures or the interest payable on them, in the event of default by the issuing company. Therefore, the complainants have no legal or contractual right to recover the redemption amount and/or interest on debentures from the petitioner.
The next question which arises for consideration is as to whether there was any default on the part of the petitioner in rendering services as the trustees acting under the Debenture Trust Deed dated 21.02.1997. It is true that the debenture holders could avail their rights and remedies in respect of the debentures only through the trustees. However, there is no evidence of the petitioner having not taken adequate steps to enforce the rights and remedies available to the debenture holders against the issuing company M/s Pal Puegeot Ltd. As stated in the reply filed by the petitioner, the Trust Deed clearly stipulated that the trustee shall not be responsible for the money paid by the applicants for the debentures and shall not be liable for anything whatsoever except the breach of trust and knowingly committed. It is thus evident that the petitioner is not liable to pay to the debenture holders in the event of default on the part of the issuing company. There is no evidence of the petitioner having committed any breach of trust knowingly and intentionally. In the absence of such a breach of trust on its part, the petitioner cannot be said to be deficient in rendering service to the debenture holders.
As stated in the written version filed by the petitioner before the District Forum, on coming to know of the default on the part of the issuing company, it had filed a Suit being Suit No.3636/1999 before the Hon'ble Bombay High Court against the debenture issuing company, for redemption of debentures and payment of the interest owned to the debenture holders. There is no evidence of the petitioner having not taken steps, which it could reasonably be expected to take to recover the redemption amount and interest payable to the debenture holders. As stated in the written version filed by the petitioner before the District Forum, Bombay High Court appointed a receiver on 30.06.1999 in respect of all the moveable and immoveable properties of M/s Pal Puegeot Ltd. and the said Court Receiver took physical possession of the said property on 21.02.2002, by virtue of the order of the High Court dated 08.02.2002. Thereafter, vide its order dated 26.09.2006, Bombay High Court directed winding up of the company M/s Pal Puegeot Ltd. and appointed an official liquidator to manage its affairs. Vide order dated 04.03.2008, the Court Receiver was directed to sell moveable and immoveable properties of the company to the extent of area 541.436 sq. mtrs. However, the sale of the aforesaid property could not be confirmed since the highest bid was below the reserved price. In fact, the petitioner has not even received its payment due as trusteeship fee and the expenses incurred by it in safeguarding the interests of the debenture holders.
A perusal of the impugned order would show that the petitioner filed documents relating to liquidation proceedings including the orders passed by Bombay High Court on 30.06.1999, 20.12.2001, 08.02.2002, 16.04.2003, 04.03.2008 and 24.06.2009. However, even if the aforesaid orders are not taken into consideration on the ground that they were not filed before the District Forum, the information disclosed in the written version filed by the petitioner company is sufficient to show that there was no deficiency on its part, in rendering services, as the trustee acting under the Trust Deed. More importantly, the onus was upon the complainants to prove some defect or deficiency in the services rendered by the petitioner. No evidence of any defect or deficiency on the part of the petitioner company in rendering services as a trustee having been produced, the complainants squarely failed to discharge the onus placed on them.
For the reasons stated hereinabove, the impugned order cannot be sustained and the same is accordingly set aside, with no order as to costs. The revision petition stands disposed of.