The Monopolies and Restrictive Trade Practices Commission has issued notice to Unit Trust of India on a complaint challenging UTI's decision to terminate its Children's Gift Growth Fund Unit Scheme, 1986, with effect from April 1, 2004.

A bench of MRTPC chairman C M Nayar and member Moksh Mahajan asked UTI to reply to the complaint filed by Kiran Midha by March 25, the next date of hearing.

Under the scheme, a gift can be made to a child under 15 years of age which shall be converted into units of face value of Rs 10 and dividends on the said units would automatically get reinvested in units. Thus, the gift grows at a compound rate and becomes 15-and-a-half times the original investment in 21 years. Further, it was assured that there shall be an assured dividend of 14 per cent every year.

The gift would mature when the child reaches 21 years and till then nobody, not even parents, could touch it.

Midha, a resident of Mayur Vihar in East Delhi, who had invested Rs 90,000 in the said scheme in the names of her two minor children, asked the commission to stay its termination, claiming there was no termination clause in the scheme.

Midha's 7,000 units invested in 1994-95 were due to mature in 2006 while the rest 2,000 were to mature in 2011.

The complainant approached MRTPC after she received letters from UTI in January last regarding the decision to terminate the scheme with effect from April 1, 2004 and she was given an option for redemption or conversion to 6.6 per cent tax free ARS (assured return scheme) bonds, her counsel J R Midha said.