State Consumer Disputes Redressal Commission
Allahabad Bank vs Jaswant Rai on 21 September, 2012
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.948 of 2010.
Date of Institution: 28.05.2010.
Date of Decision: 21.09.2012.
Allahabad Bank, Katra Ahluwalia Branch, Amritsar, through its Branch
Manager.
.....Appellant.
Versus
Jaswant Rai S/o late Sh. Tirath Ram Chugh, R/o Old Municipal No.290/2, and
New Municipal No.19/4, Gali Jaisi Ram Patti, Tehsil Patti, District Tarn Taran.
...Respondent.
First Appeal against the order dated
28.04.2010 of the District Consumer
Disputes Redressal Forum, Tarn Taran.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Piare Lal Garg, Member.
...................................
Present:- Sh. Sandeep Rathi, Advocate, for Sh. Ravinder Malik, Advocate, counsel for the appellant.
Sh. J.S. Verka, Advocate for Sh. Vikramjeet Arora, Advocate, counsel for the respondent.
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INDERJIT KAUSHIK, PRESIDING MEMBER:-
Allahabad Bank, Katra Ahluwalia Branch, Amritsar, appellant (In short "the appellant") has filed this appeal against the order dated 28.04.2010 passed by the learned District Consumer Disputes Redressal Forum, Tarn Taran (in short "the District Forum").
2. Facts in brief are that Jaswant Rai, respondent/complainant (hereinafter called as "the respondent") filed a complaint under section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the appellant, making the assertions that Sh. Tirath Ram Chugh son of Sh. Jai Kishan Mal, First Appeal No.948 of 2010 2 father of the respondent obtained three Fixed Deposits Receipts from the appellant, the detail of which is as under:-
a) FDR No.DDA 715072 for a sum of Rs.14,818/- dated 27.05.1994.
b) FDR No.DDA 715073 for a sum of Rs.27,475/- dated 27.05.1994.
c) FDR No.DDA 715074 for a sum of Rs.6328/- dated 27.05.1994.
3. The said FDRs were obtained for a period of 36 months and on maturity, the father of the respondent was entitled to maturity amount of Rs.21,130/-, Rs.39,179/- and Rs.9024/- respectively on 27.05.1997 and the interest was agreed @ 12% p.a. At the time of obtaining the said FDRs, the appellant assured the father of the respondent that on maturity of the FDRs, the same would be automatically renewed and he would be entitled to the agreed and settled rate of 12% p.a.
4. On the maturity of the aforesaid FDRs, the father of the respondent approached the appellant and requested it to release the amount of FDRs, but the appellant assured the father of the respondent that the FDRs stand automatically renewed at the same rate of interest and shall be released on demand.
5. The father of the respondent died on 14.09.2003 and after the death, the respondent along with Charan Singh, Ex-Sarpanch approached the appellant and requested to release the payment of the said FDRs and appellant assured to arrange the same along with the agreed and settled rate of interest @ 12% p.a. and asked the respondent to obtain the Succession Certificate regarding the said FDRs. The respondent obtained the Succession Certificate from a competent court and presented the same to the appellant and requested it to release the amount of the FDRs along with interest @ 12% p.a. The respondent kept on requesting the appellant to release the amount of the FDRs along with interest @ 12%, but in the month of May, 2009, the appellant refused to release the amount of the FDRs along with First Appeal No.948 of 2010 3 agreed rate of interest @ 12% p.a. and on the other hand, told the respondent that he is entitled to interest at the simple rate.
6. The appellants are estopped by their own act and conduct to deny the interest @ 12% p.a. A legal notice dated 04.05.2009 was served. The appellant did not release the amount of FDRs along with interest upto date @ 12% p.a. and not releasing the same along with said rate of interest amounts to deficiency in service and unfair trade practice.
7. It was prayed that the appellant be directed to release the maturity amount of aforesaid FDRs i.e. Rs.69,333/- along with interest @ 12% p.a. w.e.f. 27.05.1994 to 27.10.2009 which comes to Rs.1,03,306/- and future interest from 28.10.2009 till realization, and to pay compensation of Rs.2.00 lacs and Rs.20,000/- as litigation expenses.
8. In the reply filed on behalf of the appellant, preliminary objections were raised that the respondent is not a consumer, as the FDRs are not in the name of respondent. The complaint is not maintainable. The respondent is estopped by his own act and conduct from filing the present complaint. The respondent has applied for Succession Certificate which has been granted, but in the petition for grant of Succession Certificate, neither the interest was claimed nor the same was granted. There is no deficiency in service on the part of the appellant. The District Forum has no jurisdiction.
9. On merits, it was denied that the respondent was entitled to interest @ 12% p.a. As per the bank norms, after the date of maturity stipulated in the FDRs, if the same are not renewed by the concerned party, then only the simple interest is payable. In this case, after the maturity, the FDRs were not got matured and the respondent is not entitled to the interest as claimed. Other similar pleas as raised in preliminary objections were repeated and denying allegations of the complaint, it was prayed that the complaint may be dismissed with costs.
10. Parties led evidence in support of their respective contentions by way of affidavits and documents.
First Appeal No.948 of 2010 4
11. After going through the documents and material placed on file and after hearing the learned counsel for the parties, the learned District Forum observed that as per the instructions, the FDRs are automatically renewed and no formal application for renewal of the FDRs is required. The appellant informed the respondent vide letters Ex.R-1 to Ex.R-5 that he is entitled to interest which is applicable on saving deposit rate. All these letters were created in the year 2008 and January, 2009 to May, 2009. The appellant has delayed the payment on flimsy grounds. The complaint was allowed and the appellant was directed to release the entire amount of the said FDRs in favour of the respondent and other legal heirs in whose favour the Succession Certificate Ex.C-4 has been issued, along with interest on the prevailing rate of the FDRs from time to time till the entire amount is paid. Rs.10,000/- was awarded as compensation and Rs.5,000/- as litigation expenses.
12. Aggrieved by the impugned order dated 28.04.2010, the appellant has come up in appeal.
13. We have gone through the pleadings of the parties, perused the record of the learned District Forum and have heard the arguments advanced by the learned counsel for the parties.
14. It was contended on behalf of the appellant bank that the FDRs were not got released on maturity and as per the instructions, the same were renewed and the prevalent rate of interest on the date of renewal is payable and not the interest which was payable at the time of deposit. As per Instruction No.18.2 of Branch Instruction Manual, the interest on the date of renewal is payable and not the interest @ 12% p.a. which was not prevalent at the time of renewal. The order of the District Forum is against the instructions and is liable to be set aside.
15. On the other hand, learned counsel for the respondent has argued that at the time of initial deposits, the rate of interest was agreed at 12% p.a., but later on the same was reduced and the appellant has no right to First Appeal No.948 of 2010 5 do so. It was contended that there is no illegality in the impugned order and the appeal deserves dismissal.
16. We have considered the respective submissions made by the learned counsel for the parties and have carefully examined the entire record placed on the file.
17. The admitted facts are that father of the respondent deposited the above mentioned amounts with the appellant in FDRs on 27.05.1994 and the maturity date was 27.05.1997. The interest was 12% p.a. Admittedly, the father of the respondent never withdrew the amount on maturity and the same were renewed. The FDRs matured on 27.05.1997, but the same were automatically renewed as the father of the respondent did not request to release the amount of the FDRs. Even no such request was made till his death on 14.09.2003 and the appellant bank kept on renewing the said FDRs.
18. The renewal of the FDRs is subject to Branch Instruction Manual Part 1-A and as per Instruction No.18.1, renewal of FDRs and the interest for the overdue period are governed by Reserve Bank of India directives issued from time to time. Instruction No.18.2 is the Instruction/Rule, governing the renewal of overdue deposits and payment of interest and the relevant portions are reproduced as under:-
"Renewal of overdue Term Deposit Receipt will be allowed at the rate of interest prevailing on the date of maturity, provided overdue period does not exceed 14 days from the date of maturity.
Where overdue period exceeds 14 days, renewal will be permitted only if the depositor agrees to renew the deposit for a further period of minimum 15 days from the date of presentation. The interest for the period will be paid at the rate prevailing on the date of maturity or on the date of renewal whichever is less. This interest may be paid to the depositor or clubbed with the depositor for renewal". First Appeal No.948 of 2010 6
19. From the above Instructions/Rules, it is clear that the prevalent rate of interest is permissible on the date of maturity or on the date of renewal. The District Forum has also passed the order on similar lines and passed the following order:-
"opposite party is directed to release the entire amount of above said FDRs in favour of complainant and other legal heirs in whose favour succession certificate Ex.C-4 has been issued by the court, along with interest on the prevailing rate on the FDR from time to time till the entire amount is paid. The opposite party has harassed the complainant by not releasing the amount of FDR for which the complainant was entitled, hence the opposite party is liable to pay compensation of Rs.10,000/- with litigation charges of Rs.5000/-. The entire amount shall be paid by the opposite party within 30 days from receipt of copy of order, through bank draft or payees account cheque failing which the proceedings u/s 27 of the Consumer Protection Act would be initiated against the opposite party".
20. Perusal of the order of the District Forum shows that the order to release the entire amount of the FDRs has been passed along with interest on the prevailing rate on the FDRs from time to time. To make it further clear, it is clarified that at the time of first deposit in the year 1994, the rate of interest was 12% p.a. and thereafter, the said FDRs got matured in May, 1997 and were automatically renewed and the rate of interest as applicable on 27.05.1997 shall be payable for the next three years and likewise thereafter. Except the above clarification, there is no infirmity in the order passed by the District Forum.
21. In view of above discussion, the appeal filed by the appellant is dismissed and the impugned order under appeal dated 28.04.2010 passed by the District Forum is affirmed and upheld, subject to above clarification. No order as to costs.
First Appeal No.948 of 2010 7
22. The appellant had deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, is remitted by the registry to the respondent/ complainant by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellant.
23. Remaining amount as per order of the District Forum shall be paid by the appellant to the respondent/complainant within 45 days of the receipt of copy of the order.
24. The arguments in this appeal were heard on 13.09.2012 and the order was reserved. Now the order be communicated to the parties.
25. The appeal could not be decided within the stipulated timeframe due to heavy pendency of court cases.
(Inderjit Kaushik) Presiding Member (Piare Lal Garg) Member September 21, 2012.
(Gurmeet S)