Ram, Thor:
Thank you for the advice about fish. I've shuffled plants and equipment inside the tank, the outcome was pretty much the same - shy Tetras in the corner. But with every day they are more interested in food and moving toward the aquarium front during the feeding time. I see that pellets are consumed so I have no worries about starved fish. I'm thinking about changing or mixing the substrate.
The biggest problem right now is poor health of the plants - big black spots on leaves, brown and sludgy leaves. I think I have red algae so need to adjust the lighting first.
What do you think bout UV treatment of the water? Will it improve the plants health and look?