National Consumer Disputes Redressal
P.B. Vishnu Alias Navneeth Vishnu vs The Thrissur District Co-Operative ... on 8 November, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 79 OF 2013 1. P.B. VISHNU ALIAS NAVNEETH VISHNU No. 4, 'Nirmalyam', Green Park, Peringavu, Thiruvambadi P.O., TRICHUR - 680022. ...........Complainant(s) Versus 1. THE THRISSUR DISTRICT CO-OPERATIVE BANK LTD. Through its General Manager, Head Office, Thrissur, THRISSUR - 680001. 2. SMT. C.B. MINI, NO.4, 'NIRMALYAM', GREEN PARK PERINGAVU, THIRUVAMBADI P.O. TRICHUR DISTRICT-680 022. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT
FOR THE COMPLAINANT : MR. JAIMON ANDREWS, ADVOCATE
MR. PIYO HAROLD JAINMON, ADVOCATE FOR THE OPP. PARTY : MS. USHA NANDINI V., ADVOCATE
MR. BIJU P. RAMAN, ADVOCATE
Dated : 08 November 2023 ORDER
1. The complainant was a minor child aged about 3½ years old when his father on 22.04.1996 and 23.04.1996 invested into 50 Fixed Deposits of Rs.50,000/- each in 25 branches of the respondent Trissur District Co-operative Bank Ltd. (hereinafter referred to as 'the Co-operative Bank'). Due to some internal family arrangement that was presumably on account of some dispute between the husband and the wife, the mother of the complainant was made the guardian in relation to the said deposits.
2. The deposits matured in the year 2012 that were to bear interest @18% per annum. The matured values, however, were not credited and it was after certain tax deductions that an amount of Rs.2,35,44,305/- was credited in the complainant's account. Aggrieved, a legal notice was issued calling upon the Bank to answer the same.
3. There is an important fact in this chain of events, which focuses on the bone of contentions of the parties and is stated by the complainant in paragraph 6 of the complaint. The same is extracted herein as under:-
"6. It is submitted that later on the complainant came to know after the maturity period of fixed deposits that while the complainant was a minor ,the opposite party issued a letter to the guardian mother of the complainant on 06.01.1999 demanding her to surrender the fixed deposit receipts for the purpose of reducing the rate of interest from 18% to 15% in all fixed deposits or to close the fixed deposits and accordingly the same was produced before the opposite party. A true copy of the letter dated 06.01.1999 issued by the opposite party to the mother of the complainant being the guardian is produced herewith and marked Annexure A/2."
4. The letter dated 06.01.1999 as referred to in the aforesaid paragraph is a crucial document for determining the dispute in the present complaint. The same is also extracted herein as under:-
"1. P.B.Vishnu, minor, represented by his mother, guardian and next friend, C.B.Mini, Nirmalyam, Peringavu.
2. Navneeth Vishnu, minor, represented by his mother, guardian and next friend, C.B.Mini, Nirmalyam.
Dear Sirs, Sub: Information regarding the inability of the bank to grant 18% interest and that legally permissible interest of 15% alone will be granted for those deposits.
Ref: Abhivardhini fixed deposit at the rate of Rs.50,000/- in 25branches of the bank - total a sum of Rs.12,50,000/- at the rate of 18% interest in the name of P.B.Vishnu and another fixed deposit at the rate of Rs.50,000/- in 25 branches of the bank amounting to another sum of Rs.12,50,000/- at the same interest rate.
Please see the above reference. 25 Fixed Deposits each at the rate of Rs.50,000/- in the Abhivardhini Deposit Scheme was made by you No.1 in 25 different branches of the Thrissur District Co-operative Bank Ltd., on 22-4-96 and 23-4-96 respectively for a period of 192 months.
Another 25 fixed deposits each at the rate of Rs.50,000/- were made by 25 different branches of the Thrissur District Co-op. Bank Ltd., by you No.2 under the Abhivardhini Deposit Scheme for a period of 192 months on 22-4-96 and 23-4-96 respectively.
The maximum percentage of interest allowable for those deposits as per the law on the date of deposit was 15% per annum. At the time of deposit that is on 22-4-96 and 23-4-96 respectively, there is no sanction given by the Board of Directors of the bank to vary or enhance the rate of interest for such fixed deposits. The Board of Directors of the bank alone is competent to either vary or enhance the rate of interest to the fixed deposits. But subsequently as decision No. 8 dated 11-6-96 of the Executive Committee of the Board of Directors of the bank, it has been decided to grant 18% for those deposits held by you. But the Executive Committee of the Board of Directors has no power to enhance or vary the rate of interest payable for fixed deposits. Only the Board of Directors of the bank is competent to enhance or vary the rate of interest. It is obvious that the grant of 18% interest in the above fixed deposit receipts issued to you is without any authority. The bank is initiating appropriate legal action against the former Executive Committee members and the then General Manager of the bank for committing such illegal acts.
But the bank cannot implement the illegal decision taken by the Executive Committee of the Board of Directors as per decision No. 8/96 dated 11-6-96 to grant 18% interest to you for the said fixed deposits. As you are aware, the decision of the Executive Committee of the Board of Directors of the bank to grant you 18% interest illegally instead of the permissible rate of 15% interest is ab initio void and therefore not enforcible in law. Hence this is to inform you that the clause contained in the above mentioned fixed deposit receipts to the effect that 18% interest shall be granted on those fixed deposits and consequently the maturity value of Rs.8,36,397/- shown in each of those receipts is the result of illegal decision of the executive committee of the bank and therefore not binding on the bank and that the bank will be liable to pay only interest at the rate of 15% per annum on those receipts and that the actual maturity value of each of those fixed deposits will be only Rs.5,27,500/-.
Hence it is hereby requested that those fixed deposit receipts may be surrendered before the undersigned within 15 days from the date of receipt of this notice for making necessary corrections/ alterations in this regard, failing which please be informed that even in the absence of such correction/alteration, the bank will be liable to pay the legally permissible rate of 15% interest with maturity value of Rs.5,27,500/- for each fixed deposits.
It is further informed that in case you object to resort to the above course suggested by the bank, you will be at liberty to close the fixed deposits prematurely by obtaining prior sanction from the court of Wards and in such circumstances, you will be paid interest at the prevailing rate in the bank for premature closure of deposits."
5. In response to the aforesaid letter, the complainant's mother tendered a reply which does not find mention in the complaint and also did not form part of the pleadings of the complainant, but the same has been filed along with the reply of the opposite party bank in support of their contention narrated in Paragraph 5.5. of the written statement. The said paragraph is extracted herein as under:-
"5.5 It is submitted that if at all any challenge was there, the depositors were free to challenge the letter and they never challenged it. It is further submitted that on 31.01.2001, C. B Mini guardian and mother of the depositors Minor P.B.Vishnu and Minor Navaneeth Vishnu addressed a letter to the General Manager, Thrissur District Co-Operative Bank Ltd, Thrissur, surrendering the original Fixed Deposit Receipts for necessary correction in maturity value as agreed with the bank as per the letter dated 06.01.1999. It is respectfully submitted that this letter was intentionally not produced by the complainant and falsely stated in the complaint that the guardian Mini was forced to sign on the FD receipts. A true copy of the letter dated 31.01.2001 sent by C. B Mini, guardian and mother of the depositors Minor P.B. Vishnu and Minor Navaneeth Vishnu to the opposite party is produced herewith and marked as Annexure R/2."
6. The reply dated 31.01.2001 received from the complainant for carrying out the necessary corrections in the maturity value on reduction of interest to 15% was communicated. The same is extracted herein as under:-
"From Minor P.B. Vishnu and Minor Navaneeth Vishnu, represented by their mother, guardian and next friend, C.B. Mini, Nirmalyam, Peringavu, Thrissur.
To The General Manager, Thrissur District Co Operative Bank Ltd. Thrissur.
Sir, Ref: 1. Your letter No. AB (3) 10398/95-96 dt. 6-1-99.
2. Our letter dt. 8-2-99 addressed to president, Thrissur Dist. Co-operative Bank ltd.
As discussed with you, we are surrendering the original Fixed Deposit Receipts, for necessary correction in maturity value, as requested in your letter cited above.
Dated 31-1-2001.
Yours faithfully, C.B. Mini."
7. On having received the said letter from the mother of the complainant, the Bank called upon her for a consent letter from the natural guardian i.e. the father of the complainant and also to fill up an indemnity bond to that effect. The letter dated 03.04.2001 is extracted herein as under:-
"Smt.C.B.Mini, Nirmalayam, Peringavu, THRISSUR Madam, Sub: Abhivardhini deposits of Rs.25 lakhs in the name of your minor children -
change of maturity value - reg.
Ref: Your letter dated 31-1-2001.
Considering your letter referred to above, the bank has decided to correct the maturity, value of the Abhivardhini Deposit receipts changing the interest rate from 18% to 15%, after obtaining proper indemnity bond from Sri. P.N.Balram and Smt.C.B.Mini, father and mother of the minor depositors, and on formal request and consent letter from the natural guardian Sri.P.N.Balram. A draft of the indemnity bond to be executed is enclosed.
In order to proceed further in the matter we request you to send us the formal request and consent letter from Sri. P.N.Balram, the natural guardian of the minor depositors and also tender your willingness to execute the indemnity bond in the prescribed manner.
On hearing from you again we shall keep ready the indemnity bond duly prepared so as to enable yourself and your husband to come to my office and sign the indemnity bond.
Thanking you, Yours faithfully, GENERAL MANAGER."
8. This was followed by compliance by the complainant's parents through an indemnity bond that was duly singed by the father of the complainant Mr. P.N. Balaram as well as by the mother of the complainant Ms.C.B. Mini. The indemnity bond is extracted herein as under:-
"INDEMNITY BOND This deed of indemnity is made on the 21st day of May 2001, between [1] P.N.Balaram S/o Padinjarethalakkal Nanu Ezhuthassan [2] C.B. Mini, W/o P.N. Balaram both residing at Nirmalayam, Peringavu, Thrissur District (hereinafter called the Indemnifiers) as First Party and the Thrissur District co-operative Bank Ltd. Kuruppam Road, Thrissur, represented by its General Manager, Sri R.B. Ramesan S/o Balakrishnan Menon. Tharamel House, Ezhikkara, N. Parur [hereinafter called the lindemnified as the Second Party.
The No.[2] of the First Party as the mother and guardian of the minors P.B. Vishnu and Navaneeth Vishnu deposited an amount of Rs.25 lakhs in the name of the above said minors with the Second Party bank, the Thrissur District Co-operative Bank Ltd.. on 22.4.1996 and 23.4.1996, details of which are appended. These deposits were made for sixteen years with an interest of 18% per annum under the Abhivardhini Scheme. At the time of depositing the amount with the Second Party bank, the bank agreed to give 18% interest per annum and noted the maturity value accordingly in the deposit receipt instead of the then prevailing rate of interest of 15% per annum with the Second Party bank. As such the agreement to give interest @18% p.a. is against law and rules and regulations of the Second Party bank. The minor depositors can claim only maturity value worked out @ 15% p.a. for the whole amount deposited by them and the Second Party bank is liable only to pay the same as per law. When the above fact was brought to the notice of the mother and guardian of the minor depositors P.B. Vishnu and Navaneeth Vishnu, she has agreed to do in accordance with law and rules and regulations of the Second Party bank. Legal guardian Sri.P.N. Balaram has also requested and agreed to reduce the interest to the allowable rate of 15% p.a. In order to correct the maturity value of the deposit receipts by changing the rate of interest from 18% to 15% the No.[2] of the 1st party returned the deposit receipts to the bank.
And where as it is agreed that the First Party will compensate the Second Party bank, the damages if any that may sustain in future in the above action. Now this deed witnesses that in pursuance of the above said agreement the First Party (Indemnifiers) agrees with the Second Party bank (Indemnified) that they will at all times indemnify and keep harmless, the Second Party bank and the First Party will compensate all the losses and damages that may be sustained by the Second Party bank in future, consequent on any claim put forward by the minors on attaining majority.
No.[1] of the First Party, Sri.P.N.Balaram is the father and legal guardian of the above minor depositors.
Dated this the 21st day of May, 2001.
First Party [1] P.N.Balaram [2] C.B. Mini Second Party [1] R.B. Ramesan General Manager, T.D.C Bank Ltd. Witness :- 1] 2] Executed & signed before me"
9. The bank thereafter, intimated the mother of the complainant to collect the Fixed Deposit Receipts or may instruct the Bank to send it by registered post. This letter dated 08.08.2001 informs the mother of the complainant about the corrected rate of interest to 15%. The said letter is also extracted herein as under:-
"Smt. C. B. Mini, Nirmalayam, Green Park, Peringavu, THRISSUR.
Madam, Sub: Abhivardhini deposit in the name of your minor children P.B. Vishnu and Navaneeth Vishnu - change of interest rate reg.
Ref: Your request dated 31.1.2001 and documents dated 11.6.2001.
This is to inform you that the Maturity value of the Abhivardhini deposits in the name of your Minor childran P.B. Vishnu and Navaneeth Vishnu has been got corrected at the rate of 15% from the concerned branches and kept at our Head Office. You or your duly authorised agent may personally call us at the earliest convenience and accept the receipts from the Head Office of this bank. If you have any in-convenience to the above and want to get the Deposit Receipts by Registered Post, the fact may be intimated to us at an early date so that we shall send the deposit receipts to you above mentioned address.
Thanking you Yours faithfully, GENERAL MANAGER."
10. In the rejoinder, the complainant has come up with a plea that his mother was forced to surrender the fixed deposits on account of compulsion and coercion by the officials of the Bank, who were in a dominating position. It is also alleged in the rejoinder that the complainant's mother had not voluntarily agreed to the reduction. This rejoinder was filed by the complainant himself, who after attaining majority had filed the affidavit raising this fresh contention of coercion and compulsion, which was never narrated or stated in any form by the mother of the complainant in the complaint. The complainant's mother does not seem to have sought any amendment in the complaint or otherwise even after receiving the counter affidavit/reply that was filed by the Bank way back in the year 2014 with all the material and allegations indicated above.
11. Learned Counsel for the complainant contends that the mother could not have compromised any benefit that had accrued to the minor complainant by issuing any letter or filling up any indemnity bond. He submits that the acceptance of any reduction in the rate of interest by the mother was clearly against the interest of the minor and therefore, such transactions are void.
12. He next contends that such reduction in rate of interest cannot be deployed in as much as the rights had accrued finally at the time of the deposit itself and if the Bank was willing to offer a higher rate of interest, the same was a reason for making such heavy deposits with the respondent Bank for earning interest. Learned Counsel submits that had the Bank indicated any terms of floating rate of interest or reduction in future, the complainant's father may have decided not to deposit the money with the respondent Bank. The contention is that the offer of the Bank was accepted only at the rate of 18% interest and this acceptance having become final, amounts to a concluded contract which cannot be repudiated unilaterally for no valid reason. It is, therefore, urged that such a reduction is legally not permissible and he relies on the judgment of the Kerala High Court in the case Paravur S.N.V. Regional Co-Operative Bank Ltd. v. Kerala Co-Operative Ombudsman, (2013) 4 KLT 520.
13. Advancing his submissions, learned Counsel submits that it was due to the persistent compulsion and coercion by the officials of the Bank that led to the surrender of the Fixed Deposit Certificates by the mother of the complainant, who involuntarily agreed to reduction of interest @15%.
14. In the evidence filed by the complainant, it is alleged that he had made a protest to the Bank after having consulted his father, who had informed him that it was on account of the rates of interest offered by the Bank that the deposits made with them.
15. There is yet another fact, which deserves to be noted about an application moved by the complainant for impleading his mother after an objection had been raised by the Bank. This application IA/2860/2015 was objected to and a reply to the same has been filed denying all the allegations in detail. The same shall be dealt with later on in this order.
16. Countering the submissions raised by the learned Counsel for the complainant, learned Counsel for the Bank invited the attention of the Bench to the preliminary submissions raised contending that the complaint was highly belated and should be dismissed on the ground of limitation itself. In paragraph 5.4 of the reply it has been categorically stated that the rate of 18% interest was fixed by the Executive Committee of the Board of Directors without any legal authority in as much as the power to decide or fix the rate of interest is vested solely with the Board of Directors and not with the Executive Committee. The Executive Committee had acted illegally, therefore, the Bank was not bound by any unlawful transaction. It is for this reason that the letter dated 06.01.1999 was dispatched to the depositor/account holder for rectifying the said error and the same was voluntarily accepted by the complainant's parents. It is also urged that the contract relating to the rate of interest bilaterally and voluntarily stood modified reducing the rate of interest to 15% that was accepted by the complainant's guardians. Learned Counsel further submits that the plea of compulsion and coercion that has been voiced in the rejoinder affidavit was nowhere a case taken up in the complaint. The allegation in the complaint is that the mother of the complainant had told him that she has been forced to sign on the documents and accept the modified rate of interest. It is urged that no evidence worth the name was led before this Commission nor it has been filed so as to demonstrate any element of compulsion, coercion or undue influence having been exercised by the officials of the Bank. The averments made in this respect are bald and unacceptable and have been made with a view to mis-lead the Commission.
17. It has been finally urged that on the own admission of the complainant, the claim cannot be rejuvenated or infused with life in the absence of any proof to substantiate the same.
18. Having heard learned Counsel for the parties and having perused the record, the deposits made and maturity amount already paid with 15% interest remain undisputed. It is evident from a perusal of the complaint that a very sketchy averment has been made in paragraph 16 that the complainant's mother had informed him that she was forced to do so and to accept the conditions mentioned in the letter dated 06.01.1999. No material or evidence, except the reiteration in the rejoinder affidavit is on record to demonstrate that any coercion, undue influence or compulsion was exercised by the Bank for compelling the complainant to accept the reduced rate of interest. To the contrary, the documentary evidence on record is clearly to the effect that the rate of interest was reduced on the ground that the Executive Committee of the Board of Directors of the Bank had no authority in law to offer 18% interest. This clinching stand taken by the Bank could not be disputed or dislodged by the complainant either through any fact or by any legal provision. The argument advanced is that there was a binding of contract with the rate of interest at 18% which was a clear representation to the depositor. The said representation if not supported in law, cannot be a ground to force the Bank to pay any interest beyond the permissible limits. The provisions of the Banking Regulations Act, 1949 and the Reserve Bank of India's circulars as well as the Rules and Regulations governing the functioning of the authorities of the Bank have been taken into account and the complainant was informed that the said rate of interest of 18% was without authority in law. The complainant or his counsel could not demonstrate that this rate of interest could have been offered by the Bank. The judgment relied on by the learned Counsel of the Kerala High Court (supra) is therefore, clearly distinguishable in as much as that was a case of simple reduction of the rate of interest, whereas in the present case the offering of the rate of interest is without authority in law. Consequently, the judgment of the Kerala High Court cannot in any way aid the arguments on behalf of the complainant.
19. The second ground which is clearly visible is that the complainant's mother after receiving the information dated 06.01.1999 from the Bank voluntarily surrendered the Fixed Deposit Receipts vide letter dated 31.01.2001, which came to be issued under a fresh rate of interest and was accepted vide letter dated 3rd of April, 2001 without any protest from the depositors. The said contract therefore, stood re-visited with a revised rate of interest of 15% and hence the Fixed Deposit Receipts were accepted and admitted by the complainant through the guardians at a reduced rate of interest @15%. This was admitted also by the father of the complainant, who is a signatory to the indemnity bond. Not only this, the Fixed Deposit Receipts upon being re-issued were duly intimated and sent to the complainant's mother, who accepted the same without any demur and did not raise any dispute. Thus the depositors are clearly estopped from raising any such plea after having waived their rights to receive interest at the rate of 18%. The principle of waiver and estoppel upon the new fixed deposit receipts being acknowledged and accepted are clearly applicable on the facts of the present case against the guardians/parents and consequently against the complainant as well.
20. Additionally, in view of this conclusion of the transaction, the issue of limitation also arises as against the original depositors. If the fixed deposits were encashed on maturity and the original depositors did not raise any claim or dispute prior to that, any such money claim would obviously be barred by limitation as the transaction stood concluded way back in the year 2001. It is in this background the mother was sought to be impleaded through IA/2860/2015 presumably to allow her to support the claim. This cannot be permitted through this indirect method hence the said application deserves rejection.
21. Being faced with this, the learned Counsel appears to have raised the arguments of the contract having been modified against the interest of the minor. This argument is an argument of desperation in as much as the deposit was admittedly made by the father and the mother was made the guardian on account of their internal family arrangement in respect of the deposits made. Both of them accepted the reduced rate of interest and filled the indemnity bond and did not raise any protest. The minor's interest is nowhere defeated, in as much as, it is the receipt of the lawful amount under the fixed deposits negotiated by the parents and accepted by them, which the minor is entitled to receive. The minor cannot claim protection in respect of anything which was transacted unlawfully, namely the higher rate of interest without sanction of law, and claim something, which cannot be against the interest of minor, if it is against law.
22. The status of a minor does not mature so as to establish a right that cannot be conferred in law. Consequently, this argument deserves to be rejected outright. Even otherwise such a claim cannot be a matter of consideration by a Consumer Commission as, to establish that it was against the interest of the minor, a Civil Suit may have to be instituted. This Commission is therefore, not even otherwise an appropriate Forum for such a declaration.
23. Coming to the facts as pleaded, the complainant did not place all the documents pertaining to the acceptance of the reduced rate of interest, except one letter dated 06.01.1999. This also amounts to a deliberate attempt on the part of the complainant to withhold the entire correspondence including the letters, the indemnity bond and the new Fixed Deposit Receipts, which ought to have been fairly disclosed in the complaint itself. This act on the part of the complainant also dis-entitles the complainant from seeking any relief from this Commission.
24. Consequently, in view of the findings recorded herein above, the complaint cannot succeed on any of the grounds that have been raised, which is accordingly dismissed.
.........................J A. P. SAHI PRESIDENT