UNIT TRUST OF INDIA Vs. IQBAL CHAND ARORA

JUDGEMENT

(1.) IN this case, Mr. Iqbal Chand Arora, the complainant had invested Rs. 2,00,000 in the Monthly Income Plan, 1994 (III) {in short MIP 94 (III)} and encashed it after one year, on which date the Net Asset Value (NAV) went below the face value of Rs. 10 and accordingly he got back Rs. 1,83,000 instead of Rs. 2,00,000 and he felt cheated because he lost Rs. 17,000 of his hard earned money invested after retirement, blissfully forgetting that this MIP 94 (III) is a mutual fund where the investor has also to bear some risk. Case of the complainant:

(2.) THE case of the complainant is that on retirement, he invested Rs. 2,00,000 in MIP (III) with monthly option on 10.11.1994 keeping in mind that he would take back his money any day after 1.1.1996. The scheme had two options, namely (i) monthly income option and (ii) cumulative option for a period of five years, with the option of repurchase on the basis of NAV after one year i.e., w.e.f. 1.1.1996. According to the complainant, on 3.1.1996, the UTI fixed repurchase price of the Units at Rs. 8.65 per unit against its face value of Rs. 10 which meant that the investment of Rs. 2,00,000 of the complainant was reduced to Rs. 1,73,000. As per the scheme, at least 80% of the funds under the plan were to be invested in fixed income securities while only 20% were to be invested in equities and equity related instruments. Due to poor fund management by the UTI the complainant has suffered the loss. The complainant requested that his deposit of Rs. 20,000 may be refunded to him.

(3.) IN this rejoinder the complainant had stated that he had received Rs. 1,83,000 from the respondent on 29.7.1996.