9911796707
TMI Blog2001 (4) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of women. The scheme itself is proclaimed to be a tribute by the UTI to women. The Scheme is meant for all those who care for her future, when she would enter the most critical phase of her life, around the age of 21 and encounters challenges of marriage, entry and adjustment in a new household, motherhood and economic independence. This Scheme is intended to meet the critical financial needs of the women during the critical phase of her life. Indeed, a very laudable object. 3. The Scheme provides for an investment that will grow 21 times in 20 years. An investment of Rs. 1,000 invested in the name of a female child up to and including the age of one year will become Rs. 21,000 after 20 years and Rs. 5,000 will become over one lakh. 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 (in years) Minimum Amount Lock in Period (in years) Maturity amount payable after completion of lock in period Upto& Including 1 Rs. 1,000 20 Rs. 21,000 Above 1 to 2 Rs. 1,000 19 Rs. 18,000 Above 2 to 3 Rs. 1,000 18 Rs. 15,000 Above 3 to 4 Rs. 1,000 17 Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erminated not to deny or avoid the future return to a minor child, but to ensure that there is not erosion of the capital of the Scheme to the detriment of the minor child. It is explained that any further continuation of the Scheme might, in the ultimate analysis, have resulted in grave consequences detrimental to the holders of the units. 10. It is the case of the UTI that it is a pragmatic decision taken in the best interest of the unit holders. The Scheme was launched with the objective to invest in debt and equity when the return on debt investment was anticipated at 18 per cent to 20 per cent per annum and return on equity was expected at 15 per cent to 20 per cent per annum. In the said prevailing scenario, at the relevant time when the Scheme was launched, the UTI thought that a return of 16.16 per cent to 16.75 per cent on this Scheme would be a feasible return and was a foreseeable possibility. It is brought to the notice of the Court that on account of steps taken towards the globalization of the economy and in particular in the direction of opening up the economic and financial sectors led to a sharp decline in domestic interest rates. As a result of such transitory ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act defines 'unit'. 'Unit' means a unit issued under a unit scheme. Section 2(r) defines 'unit scheme'. 'Unit Scheme' means a scheme made under section 21. The general superintendence, direction and management of the affairs and business of the Trust shall vest in a Board of trustees. The Board in discharge of its functions under the Act is mandated to act on business principles regard being had to the interest of the unitholders. The Board of trustees consists of experts in their respective fields and drawn from premier financial institutions. The Chairman is appointed by the Central Government in consultation with the Development Bank (Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964). The following is the composition of the Board of trustees : "10. The Board of trustees shall consist of the following, namely :-- (a )the Chairman to be appointed by the Central Government in consultation with the Development Bank, (aa)one trustee to be nominated by the Reserve Bank; (b)four trustees to be nominated by the Development Bank of whom not less than three shall be persons having special knowledge of, or experience in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this regard is traceable to sub-section (3) of section 21. The action therefore, cannot be held to be without jurisdiction. 17. The period of the scheme was between 16 to 20 years. By the impugned action what has been done by the Board is to reduce the period of scheme and close the scheme on 30-9-2000. There is no dispute whatsoever that the beneficiaries are offered amount due to them on the basis of the same return of about 16.16 per cent to 16.75 per cent per annum as provided for in the scheme itself while paying the redemption proceeds. By the impugned decision, the period has been no doubt drastically curtailed to about 8 to 9 years. In my considered opinion, the impugned action on the part of the first respondent is nothing but amending the Scheme by reducing the period. 18. Perhaps having realised the difficulty, the petitioners filed an application to amend the prayer in the writ petition seeking declaration to strike down the clause (xxvii) of the Scheme and section 21 of the Act. It is contended that clause (xxvii) of the Scheme enables premature termination of the Scheme on the ground as "not being in the interest of the unit holders" and also on the ground "not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions to any Scheme. The legislative policy, as to how the Board is required to exercise and discharge its functions, is clearly laid down and delineated in section 9 itself. In the circumstances, it cannot be said that sub-section (3) of section 21 confers any uncontrolled discretion-ary power upon the Board to add or amend, from time to time, to the scheme already made under section 21. The very scheme itself is framed for the purpose of providing facilities for participation in the income, profits and gains, arising out of the acquisition, holding, management or disposal of securities by the trust. The legislative policy for making the schemes and additions or amendments to the schemes is clearly evident from the provisions of the Act itself. 22. It is well-settled that the discretionary power is not necessarily a discriminatory power and abuse of power is not to be easily assumed particularly where the discretion is confided not to a petty official but to an expert body--Jyoti Sarup v. Board of Revenue [1962] 44 ITR 489 (SC). 23. It is true, total absence of guidelines cannot be defended on the ground that the discretion is vested in high authorities. The prophetic words of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in no manner defeat the purpose of the Scheme or the Act as contended. 24. In my considered opinion, neither the clause (xxvii) of the Scheme, which enables the Board to terminate the Scheme prematurely, nor the section 21(3) suffer from any constitutional vice. The contention is accordingly rejected. 25. The next question required to be considered is whether the impugned decision suffers from any legal infirmity. Whether it is a bona fide one? Whether the relevant factors have been taken into consideration by the Board before taking the impugned decision? 26. We have already in ex tenso referred to the reasons and the rele- vant factors that were taken into consideration by the first respondent to reduce the period of Scheme. It is the case of the UTI that the decision to terminate the scheme was taken consciously keeping in mind the best interest of the investors, viz., minor female children. It was considered advisable, prudent and in the interest of unit holders to discontinue this Scheme before any irreversible erosion in the capital of the Scheme took place. The Board in its wisdom thought that the influx of foreign direct investment directly into infrastructure projects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill depend upon an over all assessment and if a policy decision is taken on a reasonable basis, it is not for the Courts to interfere with the policy itself. It is a different thing altogether that the Courts may in appropriate cases interfere if the policy decision is patently arbitrary, discriminatory or mala fide. "The Courts do not possess the expertise and are consequently incompetent to pass judgment on the appropriateness or the adequacy of a particular policy". 29. Having regard to the magnitude, complexity and technical nature of the enquiry involved in the matter and keeping in view the far reaching implications of continuing the Scheme, as was originally conceived for which the petitioners have prayed, I must confess that the judicial review proceeding of the nature initiated is not an appropriate one for determination of such matters, hi what manner, the Scheme should be formulated and implemented, bearing in mind the fundamental object of the statute, viz., encouraging savings and investment and participation in the income, profits and gains and the best interest of the unitholders, is a matter for decision exclusively within the province of the Board. Such Complex fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision making process itself. It is thus different from an appeal. Since the power of judicial review is not an appeal from the decision, the Court cannot substitute its own decision. Apart from the fact that the Court is hardly equipped to do so, it would not be desirable either. It is not the function of a judge to act as a super board, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator." [Emphasis supplied] However, a reference is made by the learned senior counsel Sri S. Ramachandra Rao to a decision of the Supreme Court in LIC of India v. Consumer Education & Research Centre [1995] 5 SCC 482 in support of his submission that the respondent corporation being an instrumentality of the State is required to act in a fair, just and equitable manner. Any decision of the Corporation which is not fair, just and equitable is susceptible to be judicially reviewed by this Court, is the submission made by the learned senior counsel. There is absolutely no dispute whatsoever about the proposition urged by the learned senior counsel. Shri Harish Salve, the learned Solicitor General did not raise any objection as to the maintainability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... robable objections the petitioners could have raised had a notice been issued to them. No material, which ought to have been taken into consideration by the respondent Corporation if any available with the petitioners, is placed before the Court. In the circumstances, I find it difficult to accede to the submissions made by the learned senior counsel appearing on behalf of the petitioners. 37. It is contended that the Scheme containing a clause enabling the premature termination was published on 17-4-1993 after the petitioners made their investment and they are not bound by the said clause. The plea put forth by the petitioners in this regard is self-destructive. Admittedly, the investments are made by the petitioners after the scheme is framed by the respondent-corporation. In the application form itself, it is stated that the units will be issued subject to the provisions of the Raj Lakshmi Unit Scheme. In the counter affidavit filed by the respondents, it is explained that it was the standard practice followed by the Corporation during 1992- 93 that the detailed provisions of the Scheme were available at respon- dent No. l's office to all concerned. The application form only h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons on the advent of globalization process in the last 7 or 8 years. The investors were duly put on notice that all securities and investments carry market risk. This has been made clear in clause (ix) of the application form itself. 40. The Kerala High Court in O.P. No. 27838 of 2000, dated 16-2-2001 speaking through the Chief Justice Mrs. K.K. Usha while dealing with the validity of the very impugned decision of the corporation observed : "We do not find any merit in the contention that the 3rd respondent is estopped from taking a decision to terminate the scheme midway. The circumstances under which the 3rd respondent was compelled to take such a decision have been already explained in detail. The decision was necessitated due to the fluctuation in the market conditions during the last about seven years. The schemes formulated by the 3rd respondent are securities based schemes and like all security investments, these schemes also carry market risks. This has been made clear as mentioned earlier in Clause 9 of the application form itself. Under these circumstances, those who had infested in Raj Lakshmi Unit Scheme 1992 are expected to foresee a situation where by a prudent mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83) In the instant case, nothing is stated in the affidavit filed by the petitioners as to how the doctrine of promissory estoppel would be applicable to the facts on hand. We have already noticed the facts and circumstances of the case, under which the impugned decision has been taken. In fact, there is no assurance or promise as such by the respondent-corporation that the Scheme would be continued under all and any circumstances. On the other hand, the units were issued subject to the Scheme itself. The Scheme itself contains a clause enabling the Board to amend the scheme and terminate if circumstances so prevail not being in the interest of the unit holders or the trust. The contention lacks merit. The same is accordingly rejected. 41. It is noteworthy that the Scheme stood terminated on 30-9-2000 itself. It is stated that about more than 6 lakh investors have already accepted the redemption or expressed their choice for conversion to other schemes made by the first respondent-corporation. 42. This Court, in my considered opinion, in exercise of its jurisdiction under article 226 of the Constitution cannot compel the respondent- corporation to continue the scheme. Any such m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
