Ajmer Urban Co-Operative Bank Ltd vs Shyamsundar Dani & Anr

V.K. Jain, J.

The complainant / respondent purchased 500 shares of the petitioner bank for a consideration of Rs.50,000/- He also deposited several amounts with the petitioner bank by way of term deposits. He also had a saving bank account with the petitioner bank and there was a balance of Rs.27,54,544/- in the saving bank account of complainant on 18.10.2012. Since neither the proceeds of the term deposits were paid to him on maturity nor the amount available in his saving bank account was allowed to be taken out by him, the complainant approached the concerned State Commission by way of a consumer complaint, seeking payment of the aforesaid amounts as well as the share money along with compensation.

The complaint was resisted by the petitioner, which inter-alia alleged that the sanctions were imposed upon the bank and only payment of Rs.1,000/- was initially allowed vide Circular dated 24.10.2011. The bank therefore, expressed its inability to pay the amount claimed by the complainant

The State Commission vide its order dated 24.3.2017 directed the appellant bank to make payment to the complainants, noticing that the Official Liquidator had since been appointed for the bank. Being aggrieved the appellant bank is before this Commission.

The learned counsel for the appellant has drawn my attention to Section 16 of the Deposit Insurance & Credit Guarantee Corporation Act, 1961, which reads as under:

"16. Liability of Corporation in respect of insured deposits -

Where an order for the winding up or liquidation of an insured bank is made, the Corporation shall, subject to the other provisions of this Act, be liable to pay to every depositor of that bank in accordance with the provisions of Section 17 an amount equal to the amount due to him in respect of his deposit in that bank at the time when such order is made: provided that the liability of the Corporation in respect of an insured bank referred to in clause (a) or clause (b) of sub-section (1) of section 13) (or clause (a) or clause (b) of section 13C) shall be limited to the deposits as on the date of the cancellation of the registration: provided further that the total amount payable by the Corporation to any one depositor in respect of his deposit in that bank in the same capacity and in the same right shall not exceed one thousand and five hundred rupees: provided further that the Corporation may, from time tot time having regard to its financial position and to the interests of the banking system of the country as a whole, raise, with the previous approval of the Central Government, the aforesaid limits of one thousand and five hundred rupees.

Where in respect of an insured bank a scheme of compromise or arrangement or of reconstruction or amalgamation has been sanctioned by any competent authority and the said scheme provides for each depositor being paid or credited with, on the date on which the scheme come into force, an amount which is less than the original amount and also the specified amount, the Corporation shall be liable to pay to every such depositor in accordance with the provisions of section 18 an amount equivalent to the difference between the amount so paid or credited and the original amount, or the difference between the amount so paid or credited and the specified amount, whichever is less: provided that where any such scheme also provides that any payment made to a depositor before the coming into force of the scheme shall be reckoned towards the payment due to him under that scheme, then the scheme shall be deemed to have provided for that payment being made on the date of its coming into force.

For the purpose of this section, the amount of a deposit shall be determined after deducting therefrom any ascertained sum of money which the insured bank may be legally entitled to claim by way of set off against the depositor in the same capacity and in the same right.

In this section -

'original amount' in relation to a depositor means the total amount due by the insured bank immediately before the date of coming into force of scheme of compromise or arrangement or, as the case may be, of reconstruction or amalgamation to the depositor in respect of his deposit in the bank in the same capacity and in the same right: provided that where under the provision to sub-section (2) the scheme is deemed to have provided for any payment being made on the date of its coming into force, the amount of such payment shall be included in calculating the original amount

'specified amount' means one thousand and five hundred rupees, or as the case may be, the amount fixed by the Corporation under the third proviso to sub-section (1).

This is also the contention of the learned counsel for the appellant that in view of the prohibition contained in Section 16 referred hereinabove, the appellant is unable to make payment except to the extent of Rs.5.00 lacs, which is the last revised amount for payment to the depositors / account holders of the bank.

I am in agreement with the learned counsel for the appellant that in view of the statutory bar contained in Section 16 of the Deposit Insurance & Credit Guarantee Corporation Act, 1961, the appellant cannot be directed to pay more the permitted amount to each complainant. The permitted amount since stands revised to Rs.5.00 lacs, which the appellant is ready to pay to the complainant Shyamsundar Dani. This will be in addition to the amount of Rs.1.00 lac, which the appellant had already agreed to pay to the complainant, but was refused by him. Ordered accordingly.

As far as the amount payable to the complainant Smt. Vimla Dani is concerned, the amount payable to her is stated to be less than Rs.5.00 lacs. The appellant shall therefore pay the whole of the amount payable to the complainant Smt. Vimla Dani, along with interest on that amount @ 9% per annum from the date on which the said amount became payable to her provided that the aggregate of the principal amount and interest payable to her does not exceed Rs.5.00 lacs.

As far as the share money is concerned, a letter issued by the Reserve Bank of India to the appellant on 06.5.2011, clearly shows that the share money cannot be paid out of the amount belonging to the depositor of the bank. Therefore, no direction for payment of share money of Rs.50,000/- can be given.

The learned counsel for the complainant relies upon the decision of this Commission dated 02.11.2017 in RP/2177/2013 Ajmer Urban Cooperative Bank Ltd. Vs. Manish Williams and connected matters, in support of his contention that the share money can be directed to be paid to the complainant. However, the above referred decision is clearly distinguishable on facts since the complaint in that had been instituted before the issuance of the RBI Circular, whereas in the present case, the complaint was instituted much after the aforesaid letter dated 06.5.2011 was issued by the RBI to the appellant bank.

The FA stands disposed of.