1995 (11) TMI 313 - Commission - Companies Law

NCDRC clarifies promissory estoppel in consumer dispute jurisdiction

The National Consumer Disputes Redressal Commission (NCDRC) held that the doctrine of promissory estoppel was not applicable against the statutory scheme. ... Deficiency in service Issues Involved:1. Applicability of the doctrine of promissory estoppel.2. Correctness of the maturity dates as per the scheme.3. Authority of the Chairman or Executive Trustee to exercise discretionary power under Clause XXXII.4. Jurisdiction of the State Commission and District Forum.Issue-wise Detailed Analysis:1. Applicability of the Doctrine of Promissory Estoppel:The District Forum applied the doctrine of promissory estoppel, stating that the complainants' grandfather invested based on the representation made in the brochure issued in October 1992. The Forum held that the exceptions to promissory estoppel, such as legislative functions or statutory provisions, did not apply here. The State Commission upheld this view, emphasizing that the complainant's grandfather relied on the brochure's promise for the maturity amount upon the complainants reaching 20 years of age. However, the National Consumer Disputes Redressal Commission (NCDRC) concluded that the doctrine of promissory estoppel was not applicable. The NCDRC reasoned that the scheme, being a statutory one framed under Section 21 of the Unit Trust of India Act, 1963, and published in the Gazette, overrides the brochure. The Supreme Court's decision in Post Master, Dargamitta H.P.O. Nellore v. Ms. Raja Prameelamma was cited, where it was held that promissory estoppel does not apply against statutory provisions.2. Correctness of the Maturity Dates as per the Scheme:The complainants argued that the maturity dates should align with the completion of 20 years of age, as initially stated in the October 1992 brochure. UTI contended that the maturity dates were correctly calculated based on the 'lock-in-period' introduced in the revised brochure. The District Forum and State Commission found in favor of the complainants, directing UTI to rectify the maturity dates to when the complainants would turn 20. However, the NCDRC held that the scheme as published in the Gazette, which included the 'lock-in-period', was the authoritative document. The NCDRC found that the initial brochure's terms were not in accordance with the approved scheme and thus were rightly withdrawn and corrected by UTI.3. Authority of the Chairman or Executive Trustee to Exercise Discretionary Power under Clause XXXII:Both the District Forum and State Commission relied on Clause XXXII, which allows the Chairman or Executive Trustee to relax, vary, or modify scheme provisions to mitigate hardship. They suggested that the Chairman should exercise this power in favor of the complainants. The NCDRC disagreed, stating that no court or authority could compel the Chairman or Executive Trustee to exercise discretionary power in a particular way. It is within their discretion to determine if any hardship warrants such an exercise of power.4. Jurisdiction of the State Commission and District Forum:The NCDRC found that the State Commission had exercised its jurisdiction with material irregularity by rejecting UTI's appeal and confirming the District Forum's order. The NCDRC emphasized that the scheme, as published in the Gazette, is the binding document, and any terms in the initial brochure that contradicted the scheme were invalid. Hence, the orders of the District Forum and the State Commission were set aside, and the complaint was dismissed.Conclusion:The NCDRC concluded that the principles of promissory estoppel were not applicable against the statutory scheme. The maturity dates as per the revised scheme were correct, and the discretionary power under Clause XXXII could not be compelled. The State Commission's jurisdiction was exercised with material irregularity, leading to the dismissal of the complaint.