B.S. Andotra vs STATE BANK OF INDIA

THIS appeal is filed against the order of 6.6.2013 passed by the Punjab State Consumer Disputes Redressal Commission in Consumer Complaint No. 13 of 2008. The State Commission has dismissed the complaint for want of merit and hence the appeal filed by the Complainant Shri B.S. Andotra.

THE case of the Appellant/Complainant has been represented and argued by Shri Prateek Kumar, Advocate. Mr. R.P. Vats, Advocate has represented the Respondent/State Bank of India. During the course of the proceedings, counsel for the Respondent/Bank has, under the direction of this Commission, filed calculation of interest paid to the Complainant, instructions of Reserve Bank of India dated 15.7.2014 on the subject of waiver of penalty on interest on ineligible/excess investment and, other related documents together with affidavit of the Chief Manager, SBI. The matter was heard at length and reserved on 15.5.2015 for orders.

AT the outset, it needs to be noted that the appeal of the complainant was filed with delay of 165 days. We have perused the application for condonation in which this delay has been explained. We are satisfied that the Appellant has made out sufficient cause for the delay. Accordingly, we condone the delay. The Appellant/Complainant is a retired officer of the Geological Survey of India. Upon his retirement on 30.4.1997, all his retirement benefits like Death -cum -Retirement Gratuity (DCRG), General Provident Fund, commuted amount of pension and leave encashment etc. had become payable on 1.5.1997. As per the complaint petition before the State Commission, he was entitled to receive - -

However, there was delay in payment of these retirement benefits to him, for which the Complainant was to get Rs. 28,486/ - towards interest from the Bank.

ON 20.1.2003 the Complainant invested Rs. 6.5 lakhs in RBI Relief Bond, 2001. Apparently, another 3.5 lakhs was invested by his wife. Therefore, it is claimed in the complaint petition that together they were holders of RBI Relief Bonds 2001 worth Rs. 10 lakhs, having maturity value of Rs. 14.8 lakhs as on 20.1.2008. On 29.1.2008 a letter was addressed to the Complainant by OP/State Bank of India asking him to present the bonds for payment and informing that the maximum investment limit in these bonds was Rs. 2 lakhs. Therefore, the letter stated that: - "Please note that payment will be made strictly in terms of RBI Circular number 256/2007 and Govt. of India Ministry of Finance Department of Economic Affairs, New Delhi Notification dt.22 April 2002 (copy enclosed for ready reference.)"

IN this background, a Consumer Complaint was filed on 10.3.2008, praying for direction to the SBI to pay back the invested amount with ''the agreed rate of interest'' and future interest, until such payment. The case of the Complainant as brought out in the complaint is that - "i. The investment was made only from the retirement benefits and not from any other source.

ii. Every relevant factor/information was disclosed to the Bank at the time of making the investment. Admittedly under the extant instructions, investment in these bonds is required to be made within three months of receipt of retirement benefits, but instructions also provide that the depositor is entitled to the same rate of interest if the amount is reinvested within three months from the date of the notification or the date of the maturity. The RBI bonds in this case were purchased on maturity of the FDR/RD accounts."

PER contra, the case of the Respondent/SBI before the State Commission was that in terms of the Government of India notification No. F 4(5) W&M/2002 dated 28.02.2002, the Complainant was not entitled to the benefit sought as neither the investment in RBI Bonds was made within three months of his retirement in 1997 nor was this a case of reinvestment within a period of three months from the date of encashment of the Bonds. As per the reply of RBI, ''the amount invested by the Appellant was not retiral benefits as alleged hence Appellant is not liable for any benefit claimed by him.''

BEFORE the State Commission, the stand of the OP/SBI was that, having retired on 30.4.1997, the Complainant had received all his retirement benefits on that date itself and the same remained deposited with the UCO Bank till 16.1.2003. Only thereafter, investment in RBI Bonds was made on 21.1.2003. Since the retirement benefits had remained in fixed deposits from 1997 to 2003, they had lost their character as ''retirement benefits''.

THE State Commission has dismissed the complaint observing that the dispute between the two parties revolves around interpretation of the notification dated 22.4.2002. The scheme of 8% Relief Bonds was subject to amendments in that notification. The State Commission did not accept the plea of the Complainant that retirement benefits received in 1997 would continue to retain their character as retirement benefits, even after having remained invested in fixed deposits of a Bank for five years. The State Commission also did not accept the contention put forth by the counsel for the Complainant that Clause II of above notification would be applicable to a case such as this. Accordingly, the complaint was dismissed for want of merit.

IN the appeal before us, the main ground of challenge relied upon by the Appellant/Complainant is that under the Government notification of 22.4.2002, the investment has to be made in the RBI Bonds within three month by retiring employees. In case of already retired employees, reinvestment should be made within three months from the date of the notification or date of maturity of investment whichever is later. It was orally argued that in this case, retirement benefits received were invested with UCO Bank on 17.7.1997 i.e. within three months of the retirement. The same matured on 16.1.2003 and were invested in RBI Bonds on 20.1.2003. Therefore, it is contended that the State Commission was wrong in holding that the retirement benefits have lost their character as such, only on account of being invested in FDs of the Bank from 1997 to 2003.

IN support of this contention the Appellant/Complainant has relied upon the decision of Hon''ble Supreme Court of India in Radhey Shyam Gupta v. Punjab National Bank and Anr. : (2009) 1 SCC 376. This was a matter arising under Section 60(1) of the Civil Procedure Code, 1908. The Respondent Bank had advanced a loan which was not repaid by the principal debtor. The Bank, therefore, filed the suit for recovery against the Appellant. The Trial Court decreed the suit and ordered that the decretal amount and costs of litigation should be recovered by auction sale of the hypothecated vehicle. In execution proceedings though warrants for attachment of hypothecated vehicle were issued, they were not executed by the Bank. Instead, the Bank sought attachment of Appellant''s fixed deposits with the Bank which comprised the pension and gratuity of the Appellant. The Executing Court allowed the Bank to proceed with the attachment of these FDRs. It was in this context, that Hon''ble Supreme Court held that the High Court had erred in altering the decree of the Trial Court, particularly when pension and gratuity of the Appellant could not be attached under the provisions of the CPC. Even after retirement benefits, such as pension and gratuity, had been received by the Appellant, they did not lose their character and continued to be covered by Section 60(1) CPC. We, therefore, agree with the State Commission that the ratio in this decision will not be of any help to the case of the Appellant/Complainant.

THE Complaint and the Appeal Memorandum both have sought to rely upon the following paragraph in the relevant notification of the Government of India on the subject of 8% Relief Bonds 2002. "II. Reinvestments to be made by already retired employees of the Government, Public Sector, Banks, Local Bodies and Private Sector of the maturity proceeds of the Relief Bonds initially purchased out of their retirement/terminal benefit/Voluntary Retirement Scheme Compensations. Such investments should be made within 3 months from the date of issue of this Notification or date of maturity/encashment of the Bond, whichever is later."

FROM a plain reading of the above provision in the relevant notification, it is clear that the word ''reinvestment'' is applicable only to those funds (being part of the retirement benefits) which, in the first place, were invested in the Relief Bonds and the Bonds had since matured. It will therefore have no application to the facts of this case. The investment of retirement benefits by the Appellant/Complainant in the year 1997 was not in Relief Bonds but admittedly, in fixed deposit of a Bank. Investment of such a deposit on maturity will therefore not fall within the meaning of ''reinvestment'' under the scheme of the Relief Bonds. The argument of retirement benefits not losing their character at the end of their maturity is not applicable to funds, though partly or fully coming from retirement benefits, but not invested in the Relief Bonds within three months of the retirement, in the first place.

WE , therefore, find no merit in this Appeal. The impugned order is held to be based on correct appreciation of the pleadings and evidence on record. The Appeal is consequently dismissed with no order as to costs.