LAXMI VILAS BANK LTD. vs P.R.KRISHNAN

THESE are two cross appeals arising out of an order dated 6.11.1992 passed by the State Commission, Tamil Nadu, on a complaint preferred by the Appellants in F.A. No. 16/93. The First Appeal No. 614/92 has been brought by the Lakshmi Vilas Bank Ltd. & Anr., who were the Opposite Parties before the State Commission.

AFTER having heard the Counsel appearing on both sides we have come to the conclusion that there is no merit in First Appeal No. 16/93 wherein the prayer is for enhancement of the compensation awarded to the Complainants by the State Commission. That appeal will, therefore, stand dismissed without costs. Coming to First Appeal No. 614/92 filed by the Bank we are clearly of the view that while the State Commission was perfectly correct in holding that there was deficiency in service on the part of the Bank in failing to pay to the Complainants the amounts due under fixed deposit which had matured on 30th November, 1988 without any good, valid or sufficient reason, we are unable to sustain the award made by the State Commission of a lump sum compensation of Rs. 25,000/- to the Complainants in addition granting 18% interest on the full amount covered by the fixed deposit receipt from the date on which it matured for payment. In our opinion all that the Complainants were entitled to was to be compensated for the loss sustained by them by reason of the failure on the part of the Bank to pay the amount due under the fixed deposit on the date when it matured for payment. This could be done either by awarding them interest in lieu of damages or by awarding a lump sum compensation based on the evidence, if any, adduced by the complainants regarding the actual loss sustained by them. The conference of a double benefit by awarding both interst as well as lump sum compensation in our opinion is not justified in law. We have also to observe that the State Commission has given no indication whatever in its order as to how it has arrived at the figure of Rs. 25,000/- as the amount of compensation that should be allowed to the Complainants. The arbitrary fixation of the compensation at Rs. 25,000/- is not just, fair at proper.

WE accordingly hold that the Complainants shall be entitled only to receive interest at 18% on the full amount covered by the fixed deposit from 30.11.1988 uptil the date of actual payment to them. We are informed that despite the order passed by the State Commission the Bank has not, so far, paid to the Complainants even the amount of interest directed to be paid under the impugned order We consider that this conduct on the part of the Bank is highly objectionable, particularly when no order of stay had been passed by this Commission in this appeal.

THE appeal is accordingly allowed to the extent of disallowing the lump sum compensation of Rs. 25,000/- that has been allowed to the Complainants by the State Commission. In the circumstances we consider it just and proper to direct that the Appellants in this case shall pay to the Complainants a sum of Rs. 5,000/-by way of costs. The principal amount due under the fixed deposit together with interest thereon at 18% and costs of Rs. 5,000/- shall be paid by the Bank to the Complainants within six weeks from today failing which action under Section 27 of the Consumer Protection Act, shall be initiated against the Bank of the State Commission.