State Consumer Disputes Redressal Commission
Smt. Devi Sharma vs Punjab National Bank on 18 November, 2008
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRA DUN
FIRST APPEAL NO. 255 / 2006
Smt. Devi Sharma W/o Sh. Purushottam Lal Sharma
R/o Ramanuj Kutir, Near Arya Inter College
Kankhal, Pargana Jwalapur
Tehsil and District Haridwar
......Appellant / Complainant
Versus
Punjab National Bank through Branch Manager
Branch Kankhal, Pargana Jwalapur
Tehsil and District Haridwar
.....Respondent / Opposite Party
Sh. Rajesh Singh Rathore, Learned Counsel for the Appellant
Sh. Vijay Kumar Gupta, Learned Counsel for Respondent
Coram: Hon'ble Justice Irshad Hussain, President
C.C. Pant, Member
Smt. Kusum Lata Sharma, Member
Dated: 18/11/2008
ORDER
(Per: Justice Irshad Hussain, President):
This is complainant's appeal against the order dated 18.09.2006 passed by the District Forum, Haridwar, dismissing the consumer complaint No. 226 / 2003, on the ground that the opposite party - bank has not made any deficiency in service in not paying compound interest on the FDR's.
2. It had been accepted that the bank had paid interest according to the provision of para 25 of the Circular of Reserve Bank of India relating to the interest on term deposit in the account of the deceased - investor.
3. We have heard the learned counsel for the parties and have considered their submissions in the light of the facts and legal aspects 2 of the matter in issue. We may state at the outset that there being no merit in this appeal, the same is liable to be dismissed.
4. Two FDR's of Rs. 35,000/- each were issued by the Punjab National Bank on 18.07.1970 in favour of Sh. Raghunath Vyas and others. These FDR's were to mature on expiry of 84 months from the date of issuance, i.e., 18.07.1970. Sh. Raghunath Vyas died in the month of May, 1976 and dispute among his legal representatives arose with regard to the estate and properties left behind by the deceased. This resulted into litigation before court of law and the legal proceedings were finally terminated in favour of the complainant Smt. Devi Sharma by the decision of the High Court of Uttaranchal passed on 01.07.2002 in Second Appeal No. 299 / 2001 (Old No. 1243 / 1997). Complainant thereafter applied for payment of maturity amount of the FDR's together with interest from the bank and alleged that she was entitled to compound interest on the FDR's, which have, in fact, matured much prior to her demanding matured sum of the FDR's with interest from the bank. She was, however, paid maturity amount together with interest according to the relevant provisions of the Circular of the Reserve Bank of India and was refused compound interest. Aggrieved by the refusal, complainant alleged deficiency in service on the part of the bank and filed the above complaint with a prayer that the bank be directed to pay her arrears of compound interest from the date of renewal of the FDR's till payment.
5. Facts of the case reveal that the complainant had, on 26.02.2003, applied for renewal of the FDR's, which were renewed w.e.f. 01.07.1977 with interest @7% p.a. and intimation was sent to the complainant on 28.03.2003. Later on, the amount due under both these FDR's with the said rate of interest, was also realized by the complainant, whereafter she gave notice alleging deficiency in service 3 on the part of the bank in not paying compound interest and filed consumer complaint for redressal of her grievance.
6. Learned counsel for the complainant submitted that the bank was not legally obliged to renew the FDR's w.e.f. 01.07.1977 with interest @7% p.a. and that the FDR's were required to be renewed with compound interest and in not doing so, the bank made deficiency in service. He pressed into service the decision of the Hon'ble National Commission in the case of Zila Sahkari Bank Limited Vs. Uttar Pradesh Police Avas Nigam Limited; 2005 (1) CPR 124 (NC). On the other hand, learned counsel for the bank supported the order of the District Forum, by submitting that it had rightly been accepted that compound interest was not payable on the renewed FDR's, on which, the interest was allowed according to para 25 of the Circular of the Reserve Bank of India. Considering the facts and circumstances of the case, the complainant was not legally entitled to claim compound interest on the FDR's at the time of renewal w.e.f. 01.07.1977, as there was no such provision or circular of the Reserve Bank of India, which may have entitled the complainant to claim compound interest on the renewal of the FDR's, which have matured much earlier before their renewal was sought by the complainant on 26.02.2003. As is evident from the facts of the case, the FDR's issued in favour of Sh. Raghunath Vyas and others have matured in the year 1977 and no provision was brought to light, so as to indicate that at the time of renewal of the FDR's, compound interest was to be paid by the bank. It is well settled that on a FDR, depositor could not be paid interest at the rate higher than what is prescribed by the Reserve Bank of India. [See III (2002) CPJ 77 (NC); Indian Overseas Bank Vs. Klebert Pierre]. Moreover, on the renewal of overdue term deposits, complainant was not entitled to claim interest at the time of renewal at the rate prevailing on the date of maturity. It has so been held by the 4 Hon'ble National Commission in the case of Om Prakash Vs. Allahabad Bank, Daliganj Branch, Lucknow; III (2006) CPJ 418 (NC). In the case before the Hon'ble National Commission, FDR's were matured in 1995 and 1997 and the complainant of that case approached the bank for renewal of FDR's on 08.08.2004 and sought interest at the rate prevalent on the date of maturity, i.e., 12% p.a. The same was denied in terms of Reserve Bank of India directives and complainant was allowed interest prevailing at relevant period for saving bank account. In the instant case, the rate of interest on the FDR's renewed on 01.07.1977, had been paid at the rate per directive of the Circular of the Reserve Bank of India and, therefore, the bank has not made any deficiency in service in not paying the compound interest claimed by the complainant.
7. In the face of the facts of the case, the case law cited by the learned counsel for the complainant, would not help the cause of the complainant, in as much as, in the reported case, the interest on the FDR's had been paid according to the guidelines issued by the Reserve Bank of India.
8. In view of above, this appeal fail and is liable to be dismissed.
9. Appeal is dismissed. No order as to cost.
(SMT. KUSUM LATA SHARMA) (C.C. PANT) (JUSTICE IRSHAD HUSSAIN) Kawal