JAGDISH CHAND SHARMA vs PUNJAB NATIONAL BANK

CHALLENGE in this Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), is to order dated 30.9.2013 in First Appeal No. 515 of 2013 passed by the State Consumer Disputes Redressal Commission, Haryana, Panchkula (for short "the State Commission"). By the impugned order, the State Commission modified the order of the District Forum, Panchkula dated 19.6.2013 in C.C. no. 57 of 2012 and enhanced the compensation to be paid to the Petitioner from Rs. 3,000/ - to Rs. 10,000/ -.

BRIEFLY put, the facts in the Complaint are: that the Complainants'' son availed a loan of Rs. 72,000/ - from SBI, the second Opposite Party, under the Prime Minister Rozgar Yojna Scheme (''PMRY Scheme'') on 4.9.2002. As security for the said loan, the Bank took two FDRs bearing Nos. 439812 and 439813 dated 1.5.2002, amounting to Rs. 40,000/ - each from the Complainants. A receipt for having taken the two FDRs as security was also issued by SBI. Thereafter, the Complainants'' son realised that no security is required to be taken by the Bank under the ''PMRY'' loan scheme and therefore, he requested the Bank officials to return the two FDRs. Inspite of repeated requests, only one FDR No. 439812 was returned and the other FDR bearing No. 439813 dated 1.5.2002 for Rs. 40,000/ -, maturing on 1.5.2003, the maturity amount being Rs. 42,980/ -, was never returned, even after the Complainants'' son discharged the entire loan amount of Rs. 72,000/ -.

THE Complainants made an application to Punjab National Bank, Kalka through State Bank of India, Kalka for transfer of proceeds of FDR No. 439813 to their Account no. 01190004493. This application was duly received by PNB, Kalka on 8.5.2003. The Complainants pleaded that SBI obtained their signatures on blank paper and collected the proceeds of the FDRs in question without their knowledge and consent. As per the stand taken by Punjab National Bank, on receiving the authorisation, their Bank transferred the proceeds of FDR No. 439813 amounting to Rs. 42,915/ - to State Bank of India, Kalka on 8.5.2003.

AS per the Accounts Statement issued by SBI, the Second Opposite Party, out of Rs. 42,915/ - received from Punjab National Bank, an amount of Rs. 12,915/ - was credited to Account No. 01190004493 (new Account No. 10755829150 of the Complainants) on 12.5.2003. The balance amount of Rs. 30,000/ - was invested in an FDR vide Account No. 01292004493 on 12.5.2003.

THE Complainants pleaded that the amount was re -invested in the shape of an FDR without their consent and sought for release of the FDR amount of Rs. 40,000/ - together with interest at 14% per annum from 1.5.2002 till payment, costs of Rs. 10,000/ - and compensation of Rs. 25,000/ -.

THE District Forum observed that SBI, the second Opposite Party did not produce any cogent evidence that the amount was reinvested with the consent of the Complainants, which act amounts to deficiency of service and directed SBI as under: "To release an amount of Rs. 30,000/ - re -invested in FDR/STDR with Bank of O.P. No. 2 on 12.5.2003 alongwith upto date interest. To pay a sum of Rs. 3,000/ - (Three thousand only) to the complainants towards lump sum compensation on account of deficiency in service, mental agony and harassment. Further to pay Rs. 2,000/ - (Two thousand only) towards cost of litigation."

AGGRIEVED by this order, the Complainants preferred First Appeal No. 515 of 2013 before the State Consumer Disputes Redressal Commission, Haryana. The State Commission observed as follows: "Arguments heard. File perused. Learned counsel appearing on behalf of the respondent -opposite party No. 2 has argued that the order dated 10.6.2013 under challenge in this appeal has been complied and therefore the appeal has been rendered as infructuous. In support of his contention learned counsel for the respondent -opposite party No. 2 has made statement recorded separately as under: -

"That the awarded amount of Rs. 5,000/ - has been deposited with the District Forum along with the duplicate copy of the FDR in terms of application dated 15.7.2013 and the documents enclosed". The perusal of the impugned order dated 19.6.2013 reveals that Part -I of the relief pertains to release an amount of Rs. 30,000/ - re -invested in FDR/STDR with Bank of OP No. 2 on 12.5.2003 alongwith upto date interest. But instead of making the payment of FDR amount, the Bank has prepared the FDR and retained it with itself which was not the relief granted by the District Consumer Forum under Part -1 of the relief clause. On the other hand, it is the case of the complainant that the order of the court has not been complied and therefore he is entitled to higher compensation. Though the compensation of Rs. 3,000/ - and cost of litigation Rs. 2,000/ -total Rs. 5,000/ - have already been deposited with the District Consumer Forum in favour of the complainant but the amount pertaining to the FDR has not been released. We, therefore, feel that Part -1 of the relief granted by the District Forum has not been complied as per the order of the District Consumer Forum and as such the complainant is entitled to the higher compensation which we increase from Rs. 3,000/ - to Rs. 10,000/ -. The impugned order is modified on the terms indicated above and the appeal stands disposed of accordingly".

DIS -satisfied with the interest and compensation awarded by the State Commission, the Complainants/Petitioners preferred this Revision Petition.

MS . Surekha Raman, learned Amicus Curiae appearing for the Petitioners submitted that an amount of Rs. 30,000/ - was invested in FDR/STDR without the consent of the Petitioners herein. Therefore, the rate of interest at 14% per annum with quarterly rests as claimed by the Petitioners should be allowed. The State Commission ought to have awarded amount of Rs. 30,000/ -, which was prayed for, as the Petitioners herein have invested the said amounts out of their terminal benefits. The Petitioners have also prayed for a reasonable amount of Rs. 10,000/ - towards costs, which was not awarded by the State Commission. It is submitted that an amount of Rs. 61,672/ - was paid to the Petitioners herein on 11.11.2013. SBI, Kalka has paid an average interest @ 7% per annum for the period from 12.5.2003 to 24.10.2013.

MS . Surekha Raman, learned Amicus Curiae relied on the judgment of the Hon''ble Supreme Court in Sovintorg (India Ltd.) vs. State Bank of India, New Delhi, in which the Hon''ble Apex Court decided as under: "We are of the opinion that awarding interest at the rate of 15 per cent per annum would have served the ends of justice. Under the facts and circumstances of the case the appeal is partly allowed by modifying the orders of the State Commission as well as the National Commission with direction that the appellant shall be entitled to the payment of Rs. One lakh with interest at the rate of 15% per annum with quarterly rests from the date when the amount was received by it till the date of payment. The difference of the amount on account of enhancement of the rate of interest shall be paid to the appellant within a period of six weeks from the date of this judgment".

THE brief point that falls for consideration at this stage is whether the Bank can renew the FDRs without instructions from the depositor ? The Respondent No. 2/SBI Bank filed affidavit of their Branch Manager, Statement of FDR Account, copy of the Master Circular dated 1.1.2013 and interest rates on Term Deposits. Clause 15 of the Master Circular of the Term Deposits reads as follows: "15. Repayment/Renewal of Deposits on Maturity Recording of "Maturity Mandate" at the time of opening of Deposits, for the disposal of deposit on maturity has been made mandatory by RBI. The Account Opening Form already has the provision for recording the mandate given by the customer to be implemented on maturity. The necessary software changes to record the maturity mandate have been made by our GITC, Belapur. Provisions have also been made to change the Maturity Mandate any time during the period of the deposit, if a request to this effect is made by the depositor, by invoking the ''Amend Account Details'' option. Where a customer does not indicate the course of action to be taken by the Bank on maturity of deposit, the bank will as a rule send this intimation of impending due date of maturity of the deposit well in advance on modified form RF 24 and instructions from the depositor be disposed of accordingly. In the absence of a demand for payment or instruction to the contrary on or before the date of maturity, the deposit will be renewed/continued to be renewed for the similar period(s) at the then prevailing rate of interest.

The branches shall generate and dispatch Term Deposit/Special Term Deposit Advices to the customer at his/her recorded address at each automatic renewal or transfer of domestic TD/STD account".

A brief reading of the Master Circular issued by the Reserve Bank of India on 1.7.2014 with respect to Renewal of Overdue Deposits, clause 2.12 reads as follows: "All aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Board laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal including interest rates, at the time of acceptance of deposit. The policy should be non -discretionary and non -discriminatory".

THE afore -mentioned two conditions clearly stipulate that the Bank cannot renew any overdue deposit without intimating the depositor about the terms and conditions with respect to interest rates. It is clear that when the customer did not indicate the course of action to be taken by the Bank, the Bank shall intimate the due date of maturity well in advance to the depositor.

IN the instant case, the FDR was kept with the Bank from 12.5.2003 to 24.10.2013 and in the Execution Application No. 10/13 filed before the District Forum, an amount of Rs. 61,672/ - was paid to the Petitioners calculating interest at the rate of 7%. It is pertinent to note that the Respondent/SBI Bank did not prefer any appeal. The Respondent/SBI Bank has not stated anywhere in their reply before the fora below as to the basis on which the interest rate was calculated at an average of 7% per annum, when they have not specifically been instructed by the Petitioners herein to renew their deposits. In fact the Petitioners had to run from pillar to post to ascertain the position of their Fixed Deposits. It is pertinent to note that consent cannot be implied but should be explicitly stated in a written form. We are of the considered view that having kept the FDR without the consent of the Petitioners herein for a period of 10 years, against the terms of the Master Circular, issued by the Reserve Bank of India, the Bank should pay the interest on Rs. 30,000/ - at a reasonable rate of 9% per annum from 12.5.2003 till 24.10.2013. The State Commission awarded an amount of Rs. 10,000/ - towards compensation and we find it a fit case to enhance the same to Rs. 25,000/ - for the mental agony suffered by the Petitioners herein for having kept the Petitioners in the dark about the factual position with respect to the FDR in question.

THIS Revision Petition is partly allowed modifying the order of the State Commission. We direct the second Respondent/SBI Bank to refund Rs. 30,000/ - with interest @ 9% per annum calculated from 12.5.2003 to 24.10.2013, after deducting the amount already paid i.e. Rs. 61,672/ -, together with compensation of Rs. 25,000/ - and costs of Rs. 5,000/ -. Time for compliance four weeks from the date of receipt of this order.

BEFORE parting with the case, we place on record our appreciation for the valuable assistance rendered by the learned amicus curiae.