National Consumer Disputes Redressal
Navodaya Vidalaya Samiti vs Chief Manager, Allahabad Bank & Ors. on 20 October, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 90 OF 2009 1. NAVODAYA VIDALAYA SAMITI A-28, Kailash Colony
New Delhi - 110 048 ...........Complainant(s) Versus 1. CHIEF MANAGER, ALLAHABAD BANK & ORS. Allahabad Bank,
Rajouri Garden Branch New Delhi 2. GENERAL MANAGER Zonal Office, 17, Parliament Street, 3rd Floor New Delhi - 110 001 3. ALLAHABAD BANK Head Office, Netaji Subhash Road Kolkata - 700 001 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE DR. B.C. GUPTA, MEMBER
For the Complainant : Mr. S. Rajappa, Advocate For the Opp.Party : Mr. Amit Kasera, Advocate with
Mr. Harpal Rajda, Sr. Manager
Dated : 20 Oct 2015 ORDER HON'BLE MR.JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)
1.The complainant Navodaya Vidyalaya Samiti is an autonomous organization under the Ministry of Human Resource Development, Govt. of India. In March, 2006, the complainant called for quotation offering interest on the amount of Rs. 15 crores which it wanted to keep in an FDR. The opposite party Allahabad Bank gave an offer dated 29.03.2006 offering interest @ 8.5 % per annum on deposit of one year and above. It was also stated in the aforesaid offer letter that on premature encashment, no penal charges will be imposed. The offer was valid only upto 30.03.2006.
2. On 31.03.2006, the competent authority of the complainant sanctioned release of a sum of Rs. 15 crores from NVS Contributory Fund Account, for investment for the opposite party bank, in a special term deposit for a period of three years. On the same date, an FDR of Rs. 15 crores was issued to the complainant with 31.03.2009 as the maturity date for a sum of Rs. 193052795/-. One of the terms prescribed on the FDR was that no part of the deposit could be withdrawn before due date.
3. Vide letter dated 30.03.2007, the complainant informed the bank that it had decided to prematurely withdraw the aforesaid deposit of Rs. 15 crore and asked the bank to remit the amount of the FDR alongwith interest. The bank, vide its letter dated 30.03.2007, informed the complainant that their Head Office had not allowed permission for discounting/premature payment of the deposit received under differential rate of interest.
4. Vide letter dated 12.04.2007, the complainant referring to the offer of the opposite party dated 29.03.2006, intimated the bank that refusal to disallow premature withdrawal amounted to breach of contract and a loss of Rs. 40 lacs would be suffered by them, since Syndicate Bank had offered interest @ 11.56 % per annum for a period of two years. The bank responded to the aforesaid letter on 15.05.2007, expressing its disability to discount the FDR. Being aggrieved, the complainant has, after maturity of the FDR, approached this Commission by way of this complaint seeking the aforesaid amount with interest. Since the opposite party bank, while paying the amount of deposit on its maturity, had also deducted income tax at source amounting to Rs. 2675965/-, the aforesaid amount has also been claimed by the complainant from the bank.
5. The complaint has been opposed by the bank primarily on the ground that as a matter of policy, it does not allow premature withdrawal of a deposit where a differential rate of interest over the normal rate is allowed. A copy of the aforesaid policy decision is annexed to the reply. On merits, it is alleged that the offer made to the complainant had expired on 30.03.2006 but the complainant opted for investing the money with the opposite party only on 31.03.2006 when the aforesaid offer was not valid and therefore, the deposit was made on the terms and conditions provided on the TDR. As regards deduction of income tax at source, it is stated in the reply that in case complainant is exempted from payment of income tax, it can seek refund from the Income Tax Department. It is also claimed that the complainant never intimated the opposite party that it was exempt from payment of income tax.
6. It is an admitted position that the amount of Rs. 15 crores was deposited with the bank only on 31.03.2006. Before making deposit with the bank, the complainant did not ask for extension of the period for which the offer dated 29.03.2006 was made valid by the bank. Therefore, there is merit in the contention that the offer having expired on 30.03.2006, the bank was not bound by the same on 31.03.2006 and therefore, it cannot be said to have accepted the deposit on 31.03.2006, on the terms contained in the offer letter dated 29.03.2006.
7. More importantly, we find that the FDR was issued to the complainant on the same date on which the deposit was made i.e. 31.03.2006. It was clearly stated on the TDR that the deposit could not be withdrawn before the due date. If complainant had deposited money on the terms and conditions mentioned in the offer letter dated 29.03.2006 which envisaged prematurely withdrawn, it would have protested on inclusion of a contrary term in the TDR issued to it on 31.03.2006. The complainant sat silent for more than one year and did not raise any objection at all to the term stipulating that the deposit could not be withdrawn before the due date. The above referred conduct of the complainant, coupled with the fact that the deposit was made after the offer given by the bank had already lapsed, we have no hesitation in holding that the opposite party bank was not bound to allow premature termination of the TDR, in terms of the request made by the complainant.
8. The learned counsel for the complainant has drawn our attention to para 2 of the rejoinder wherein it has been stated that the bank had accepted the investment of Rs. 15 crores on 31.03.2006 on the same terms and conditions as were mentioned in the offer letter. However, the facts and circumstances as discussed hereinabove, particularly, the conduct of the complainant in sitting silent for more than a year and not protesting against the inclusion of a clause prohibiting premature withdrawal of the TDR clearly shows that the aforesaid plea is not correct. As noted earlier, had the term prohibiting premature withdrawal of the TDR not been acceptable to the complainant, it would have, immediately on receipt of the TDR, returned it to the bank, protesting the inclusion of the above referred clause and asking the bank either to delete the said clause or to return the amount paid by it. That having not been done, the irresistible inference is that the deposit was made on the terms and conditions mentioned in the TDR and that is why there was no protest from the complainant for more than one year. It appears to us that the complainant thought of prematurely withdrawing the FDR only on the rate of interest prevailing in the market having gone high and Syndicate Bank having offered higher interest on deposit of two years and above. We therefore, hold that there was no deficiency on the part of the bank in rendering services to the complainant.
9. As regards deduction of income tax, it was a statutory obligation of the bank to deduct income tax from the interest payable to the complainant. There is no evidence of the requisite certificates prescribed under the Income Tax Act having been given to the opposite party, on or before the financial year 2006-2007, 2007-2008 and 2008-2009 in which interest accrued on the aforesaid deposit made by the complainant and deduction of income tax became obligatory for the bank.
In any case, the complainant is entitled in law to claim refund of the aforesaid amount from the Income Tax Department alongwith prescribed interest, in case it is exempted from Income Tax Act.
10. It is also pointed out by the learned counsel for the opposite party that the complaint is patently barred by limitation having been filed on 22.06.2009. We find merit in the submissions. Vide letter dated 30.03.2007, followed by the letter dated 15.05.2007, the bank had clearly declined to allow premature withdrawal of the FDR. The cause of action therefore accrued for the first time when the bank declined to allow the aforesaid prematurely withdrawal. Whether we compute from 30.03.2007 or from 15.05.2007, having been filed on 22.06.2009, the complaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act, and therefore liable to be dismissed even if no such plea has been taken in the reply.
For the reasons stated hereinabove, the complaint is dismissed with no order as to cost.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER