DISTRICT COOPERATIVE CENTRAL BANK LTD. vs Kailash Prasad Tiwari

THIS appeal is directed against the order dated 29.6.2001 passed in Case No. 69/2000 by the District Consumer Disputes Redressal Forum, Shahdol (for short the ''District Forum''). Facts giving rise to this appeal are thus : The respondent deposited an amount of Rs. 1,50,000/- on 28.10.1992 in the appellant Bank for a period of 63 months of which double deposit receipt was issued by the appellant Bank. According to the respondent on maturity i.e. after 63 months i.e. 18.2.1998 the amount payable was double of Rs. 3,00,000/- under the double deposit scheme but, a bank draft of Rs. 2,85,522/- was given which was less by Rs. 14,478/- hence, respondent served a notice and thereafter filed a complaint which was resisted.

IN reply, appellant stated that the Reserve Bank of INdia (RBI) on such deposits or Fixed Deposit Receipts reduced the rate of interest from 13% to 12% w.e.f. 8.10.1992. The double deposit scheme does not mean that the amount payable would be double of the deposit. It only meant that the compound interest was payable on the amount of deposit. As RBI reduced the rate of interest, the amount payable after calculating the interest rate fixed by RBI was paid to the respondent. The Bank could not pay interest on the amount more than the rate fixed by the RBI in view of Circular dated 8.10.1992 which was reduced from 13% to 12% on a fixed deposit for a period of one year and 12.5% interest on the amount of deposit for the period more than one year. The District Forum after appreciation of evidence held that the respondent deposited the amount in double deposit scheme which is evident from the receipt wherein the word ''fixed'' has been struck off and by hand ''double'' has been written. It is on the representation of the Manager of the Bank, the respondent deposited the amount for 63 months in a hope that he will receive the double amount of the amount deposited after 63 months hence, found the Bank deficient in service and ordered to pay the amount Rs. 14,478/- with interest thereon at the rate of 12.5% for the period 18.2.1998 to 20.8.2000 and from 21.8.2000 at the rate of 9% p.a. along with Rs. 150/- as costs of the proceedings. The submission of the appellant that the complaint was not maintainable under the Act as it relates to the touching the business of Cooperative Society Bank, therefore, the remedy for the respondent was to raise the dispute under Section 64 of the M.P. Co-operative Societies Act, 1960 before the Deputy Registrar of Co-operative Societies as Section 82 of the said Act bars the jurisdiction of Civil Courts. Counsel placed reliance on the decision of National Commission in Dilip Bapat & Anr. v. Panchayati Cooperative Housing Society Ltd., I (1993) CPJ 68 (NC), followed by this Commission in Varhanpur Cloth Corporation v. State of M.P., III (1995) CPJ 239, and a decision of Delhi State Commission in R.V. Vaswani v. N.K. Arora, President, New Subhas Coop. Group Housing Society, II (1996) CPJ 203.

The submission cannot be accepted in view of the fact that the Bank was carrying on financial activities i.e. of investment etc. and if there is deficiency in service certainly complaint would be maintainable under the Act, in view of the recent decision of the National Commission in Smt. Kalawati & Ors. v. United Vaish Co-operative Thrift and Credit Society Ltd., I (2002) CPJ 71 (NC)=2002 CTJ 477 (CP)(NC), wherein the National Commission observed that the Co-operative Societies Act does not bar the jurisdiction of Consumer Fora. This Commission also considered the question in Karamchari Grih Nirman Sahakari Samiti v. Niranjanlal Mehar & Anr., I (1999) CPJ 723, and observed that Section 82 of the Co-operative Societies Act does not bar the jurisdiction of Consumer Fora.

THE submission that the Bank could not have paid interest contrary to RBI prescribed rates of interest placing reliance on the decision of Supreme Court in Konkan Mercantile Coop. Bank Ltd. v. Abdul Sattar Ahmed Bendre, 1998 (2) CCC 11, followed by the National Commission in Indian Overseas Bank v. Klebert Pierre, III (2002) CPJ 77 (NC), deserves consideration wherein it has been held that a depositor could not be paid interest at the rate higher than the maximum prescribed by RBI and applicable at the time of acceptance of the FDRs. In view of the above, in our opinion, as admittedly, the amount was deposited in the fixed deposit for a period of 63 months, the receipt of which was issued wherein the word ''fixed'' was substituted by ''double'' wherein the rate of interest has not been specified which has been explained by the appellant vide letter No. 18/Lekha/1512 dated 21.10.1999/17.11.1999 that double deposit scheme does not mean that the amount deposited would be paid in double but, on the principal amount compound interest is payable which mean that the amount deposited in Fixed Deposit interest of which is re-invested in the scheme known as double deposit scheme.

HOWEVER, we are of the view that the respondent has come with a specific case that on the representation made by the Manager of the Bank that the amount deposited will be double in 63 months he deposited the amount for 63 months, wherein the rate of interest was not specified which ought to have been explained and that the rate of interest @ 12.5% on a deposit for more than an year has been fixed by the RBI ought to have been communicated to the respondent which was not communicated. If that would have been disclosed or told at the time of the deposit, the respondent certainly would have given a second thought that amount for such a long period should be deposited or not, hence, for that the Bank was deficient in service. In view of the above, we are of the view that in the circumstances of the case the ends of justice would meet if the appellant is ordered to pay compensation of Rs. 5,000/- along with Rs. 1,000/- as costs of the proceedings throughout to the respondent within a period of two months from the date of receipt of the certified copy of this order failing which interest would be payable at the rate of 9% p.a. from the date of this order. Accordingly, the appeal is allowed. The order of the District Forum shall stand substituted as indicated hereinabove. A copy of this order be conveyed to the parties and a copy be sent to the District Forum along with the record of the case. Appeal allowed.