P.Nagabhushana Rao vs Union Bank of India

THE complainant deposited Rs. 50,000/- in the Union Bank of India, Ramkot Branch, Hyderabad under Deposit Re-Investment Certificate Scheme on November 4, 1988 repayable at the end of 24 months and was issued Deposit Re-Investment Certificate A.NO. 3824607 (hereinafter referred to as the Certificate). He is entitled to withdraw the money prematurely with eligible rate of interest at any time before the date of maturity. Due to pressing financial need, he wanted to prematurely withdraw the amount. It is stated that in March 1989, the complainant personally approached Shri T.L.V. Rao, Manager, Ramkot Branch, Union Bank of India and requested for premature encashment of the certificate. As the Branch Manager did not pay back the money, the complainant had submitted the certificate for encashment on April 20, 1989 through the Andhra Bank Narayanaguda Branch where he was holding S.B. Account No. 7662. That was returned on April 24, 1989 on the ground that the signature of the complainant did not tally. It is stated that thereafter, the complainant had resubmitted the certificate for encashment to the Manager, Ramkot Branch, Union Bank of India again through the Andhra Bank, Narayanaguda Branch vide his letter dated May 2, 1989. It was mentioned in that letter that the proceeds would be credited to the account of the complainant. According to the complainant Branch Manager, Andhra Bank. Narayanaguda attested the signature of the complainant whereas the opposite party No. 1 had denied it stating that the Andhra Bank had not taken any steps to resubmit the certificate with the attestation of the signature of the complainant.

THE complainant had been working at Bellampalli, Adilabad district. He executed a General Power of Attorney dated July 18, 1989 in favour of Sri P. Nagendra Prasad authorising him to tender the certificate to the opposite party No. 1 for encashment and to receive the amount thereof on his behalf. In the General Power of Attorney, it was mentioned that as the complainant was employed in Bellampalli, Adilabad district and the Branch Manager, Union Bank of India. Ramkot was creating hurdles in the encashment of certificate, it was not possible for him to pursue the matter at Hyderabad and therefore, he had appointed Sri P. Nagendra Prasad as his agent. THE General Power of Attorney was registered. The complainant got issued a legal notice dated August 24, 1989 to the Branch Manager, Union Bank of India, Ramkot. In that letter, the facts referred to above as well as the execution of the General Power of Attorney dated July 18, 1989 in favour of Sri P. Nagendra Prasad were mentioned. The relevant portion of the letter is as follows: "That you being my client''s banker is duty bound to render him services. Your persistent refusal to encash the said D.R.C., is motivated by malafide intention and amounts to deficiency of services. My client being a customer of your Bank is entitled to the benefits of Consumer Protection Act, 1986. The facts narrated above clearly show that you are not acting as a normal banker and your attitude is detrimental to the interest of my client. My client has suffered mental agony and financial loss due to the unreasonable behaviour on your part and he is entitled to collect damages on that account from you. I, therefore, call upon you to notify any acceptable mode of payment in respect of premature encashment of D.R.C. No. 3824607 dated 4.11.1988 within 7 days from the date of receipt of this notice as otherwise my client shall be constrained to initiate appropriate legal action against you for encashing the said D.R.C., and also for collecting damages from you and you will be held responsible for the costs and consequences thereof."

The Branch Manager, Union Bank of India, Ramkot sent a reply dated September 5, 1989. It was mentioned therein that the signature of the complainant affixed on the reverse of the deposit receipt differed with the signature of the complainant registered with them. It was further mentioned that the matter had been referred to higher authorities and the matter would be considered soon after their guidance was received.

THE Branch Manager, Union Bank of India, Ramkot had written a letter dated February 14, 1990 to the advocate through whom the complainant had issued the registered notice requesting him to advise the complainant to go to the Bank on any working day to settle the matter. In that letter it was mentioned that several letters were written to the complainant requesting him to call on them for settling the matter and he did not turn up. It is mentioned in the complaint that Sri P. Nagendra Prasad, General Power of Attorney holder of the complainant approached the Branch Manager, Union Bank of India, Ramkot after receipt of the letter dated February 14, 1990 and the Branch Manager asked him to submit the certificate for encashment. Accordingly, the complainant re-submitted the certificate on March 21, 1990 for encashment to the Branch Manager, Union Bank of India, Ramkot through the Andhra Bank, Narayanaguda Branch requesting to send the proceeds to his banker, viz., Andhra Bank, Narayanaguda Branch. In that letter it was specified that he was submitting the certificate in view of the discussions the General Power of Attorney holder Sri P. Nagendra Prasad had with the Branch Manager, Union Bank of India, Ramkot. THE complainant was informed by the Andhra Bank that the Union Bank of India had returned the certificate, stating that the authorisation letter of the complainant did not contain the endorsement of the Andhra Bank. THE Branch Manager, Andhra Bank, Narayanaguda obliged the request of the complainant and re-submitted the certificate with its requisite endorsement on April 12, 1990 to the Union Bank of India. Through the letter dated April 19, 1990 addressed by the Branch Manager, Union Bank of India, Ramkot to the advocate of the complainant, he was requested to send a copy of the General Power of Attorney executed by the complainant in favour of Sri P. Nagendra Prasad. A reply was sent to that letter on April 23, 1990 by the advocate under the instructions of both the complainant as well as the General Power of Attorney holder. In that reply, reference was made to the earlier correspondence and the sequence of events. THE relevant portion of the letter is as follows: ".THErefore, my client Sri P. Nagabhushana Rao submitted the said DRIC through his account for encashment. My client was informed that you returned the same to my client''s bankers on the lame ground that my bankers did not of fix their signature on the said DRIC. This objection besides being opposed to banking conventions, is taken for the first time. However, my client''s Bankers obliged my client and returned the same to you after signing it. At this juncture, when my client''s G.P.A. holder met you, you informed him to ask Mr. P. Nagabhushana Rao to come and talk with you. Accordingly, Mr. P. Nagabhushana Rao called on you. This being the state of affairs, I do not find any reason for withholding the payment of my client''s DRIC on the pretext of existence of G.P.A. Nowhere in our correspondence G.P.A. holder and original depositor have expressed any conflicting claims. THEy are trying to collect DRIC amount from your Bank. My client is well aware that you are playing delaying tactics to evade payment. I believe, that irrespective of the encashment of the DRIC this is a fit case for "Consumer Forum". Though my client is fully aware that you will search for new grounds to return the DRIC, he decided to comply with your latest request. Please find herewith, a copy of the G.P.A. and a letter from G.P.A. holder requesting you to encash the DRIC and to credit the proceeds to original depositor''s account in Andhra Bank. Please take notice that if you return the DRIC, preventing the premature encashment, my client shall be entitled to claim Rs. 1,00,000/- as damages from you together with amounts covered by the said DRIC and you will be held responsible for the costs and consequences thereof."

The letter of the General Power of Attorney holder addressed to the Branch Manager, Union Bank of India, Ramkot dated April 23,1990 which was enclosed to the letter referred to above reads as follows : "I am the General Power of Attorney holder of Sri P. Nagabhushana Rao. The G.P.A. is executed in respect of D.R.I.C. No. 3824607, dated 4.11.1988.1 request you to pay the proceeds of the same to Sri P. Nagabhushana Rao''s account in Andhra Bank. The D.R.I.C. is already sent to you by the Andhra Bank for collection."

THE Union Bank of India sent a reply on April 30, 1990 to the letter dated April 23, 1990 in the following terms: "THEre is nothing mentioned in your Notice dated 23.4.1990 about the authorisation for payment of DRIC Receipts for encashment. You have also not mentioned that you issued the legal notice on behalf of the original depositor Shri P. Nagabhushana Rao and the G.P.A. holder Shri P.L. Prasad. THErefore, there must be an authorisation. Hence, please clarify whether you are appearing on behalf of the original depositor and also the G.P.A. Holder to enable the Bank to take further steps. Soon after the confirmation from your side on behalf of your clients, the Bank will take appropriate steps."

As the certificate was not encashed and the amount was not paid by the opposite party-Bank, this complaint was filed on June 1, 1990 seeking a direction to the respondents to encash the certificate dated November 4, 1988 and payment of damages of Rs. 1,00,000/-. The opposite party Bank informed this Commission through its letter dated June 11, 1990 that the "DRIC No. 3824607 dated 4.11.1988 for Rs. 50,000/- in the name of Sri P. Nagabhushana Rao was paid" through the Andhra Bank, Narayanaguda Branch, Hyderabad on June 1, 1990 to the beneficiary.

THE written statement had been filed on behalf of the opposite parties admitting that the complainant had kept fixed deposit of Rs. 50,000/- in the opposite party Bank on November 4, 1988 and that he wanted to withdraw the amount prematurely. It was stated that the complainant never approached the Bank personally requesting for premature encashment and that he had submitted the certificate for encasement for the first time through the Andhra Bank, Narayanaguda Branch. It was averred that the signature of the complainant on the receipt differed with the one on the application submitted by him for encashment through the Andhra Bank and therefore, the application was returned as it was the bounden duty of the officer to verify the signature before the payment was made. THE allegation made in the complaint that the Andhra Bank, Narayanaguda Branch had returned the certificate with, the counter signature of the Manager of that Branch had been denied in the written statement. But, it has been admitted that in the letter written through the Andhra Bank, Narayanaguda Branch, it has been stated "that the proceeds will be credited to the account of the party only". After legal notice was issued by the complainant to the opposite party on August 28, 1989 intimating that he had executed the General Power of Attorney in favour of Sri P. Nagendra Prasad, the complainant had not taken any steps to encash the receipt though the opposite party had requested the complainant to approach the Bank with the receipt to enable them to make the payment. It was further stated that on November 17, 1989, November 30, 1989 and December 13, 1989, the opposite party had asked the complainant to appear before the Bank to settle the claim and he did not respond to those letters. It is admitted that on February 14, 1990 the opposite party Bank addressed a letter to the complainant to approach them for settlement, of account and then only the complainant had submitted the receipt for encashment through the Andhra Bank. It is admitted in the written statement that the application was returned to the Andhra Bank as it did not contain the endorsement of that Bank. THE Andhra Bank re-submitted the covering letter with the endorsement on April 12, 1990, and it was received by the opposite party on April 18, 1990. THEreafter, the Branch Manager, Union Bank of India, Ramkot had sought clarification from the higher authorities regarding the encashment and requested the advocate who issued legal notice on behalf of the complainant to furnish a copy of the General Power of Attorney to enable the opposite party to settle the matter. Again the matter was referred to the Regional Office by the Branch Manager, Union Bank of India, Ramkot seeking clarification whether the amount shall be paid to the General Power of Attorney holder or the complainant himself. It is stated that after receiving the clarification from the Regional Office, the amount was paid to the complainant with the eligible interest at the rate of 8% from the date of deposit till the date of payment.

A preliminary objection has been raised on behalf of the opposite parties that the complainant is not a consumer within the meaning of the Consumer Protection Act, 1986 (for short the Act) and therefore, the complaint filed by him is not maintainable, "Consumer" means any person who hires any services for a consideration. "Service" is defined in Clause(o) of Sub-section (1) of Section 2 as inclusive of the provision of facilities in connection with banking. Union Bank of India, the opposite party No. 1 is one of the Nationalised Banks carrying on banking business in the country. The complainant offered to deposit Rs. 50,000/- in the opposite party Bank by way of Fixed Deposit. The Bank accepted the offer and received the amount, thereby agreeing to render banking service to the complainant. The Bank had issued the certificate dated November 4, 1988 acknowledging the deposit of Rs. 50,000/- by the complainant. It was mentioned therein that the deposit was repayable at the end of 24 months the due date being November 4, 1990 at Rs. 60,920/-. It is a matter of common knowledge that the interest paid by the Bank on the deposit made by any person is much less than what the Bank charges on the advances made by it to the borrowers. Therefore, it can be said that the complainant had hired the banking services of the opposite party for a consideration. Thus the complainant answers the description of consumer and therefore, he is entitled to file a complaint if the services rendered by the Bank suffer from deficiency in any respect. It has to be considered whether the services mentioned in the complaint suffer from any deficiency. There is no dispute that the complainant had deposited a sum of Rs. 50,000/- with the opposite party No. 1 on November 4, 1988 by way of fixed deposit. There is also no dispute that the depositor can withdraw the amount prematurely at any time before the due date subject to the condition that he will not be entitled to claim agreed rate of interest, but will be entitled only to the reduced rate of eligible interest. In the complaint, it was mentioned that due to the pressing financial need of the complainant, he had approached the Branch Manager, Union Bank of India, Ramkot in March 1989 for premature encashment of the certificate with eligible rate of interest and the Branch Manager had declined to pay back the money. In the written statement filed on behalf of the opposite parties, it was denied that the complainant had approached them. It was stated that for the first time the complainant submitted the certificate for encashment through the Andhra Bank, Narayanaguda Branch only on April 20, 1989. The certificate was returned by the Branch Manager, Union Bank of India, Ramkot to the Branch Manager, Andhra Bank, Narayanaguda on April 24, 1989 stating that the signature of the depositor differed from the signature registered with them. Though the Branch Manager, Union Bank of India, Ramkot had denied in his written statement that the complainant resubmitted the certificate for encashment after getting his signature attested by the Branch Manager, Andhra Bank, Narayanaguda, the complainant has produced a copy of the letter dated May 2, 1989 addressed by him to the Branch Manager, Union Bank of India, Ramkot. It contains an endorsement of attestation of the signature of the complainant by the Branch Manager, Andhra Bank, Narayanaguda. This fact was categorically mentioned in the legal notice dated August 24, 1989 got issued by the complainant to the Branch Manager, Union Bank of India, Ramkot. In the written statement, the Branch Manager, Union Bank of India, Ramkot had admitted that the Branch Manager, Andhra Bank, Narayanaguda had stated in his letter while forwarding the certificate for encashment that the proceeds will be credited to the account of the party only. Thus, the Branch Manager, Union Bank of India, Ramkot did not encash the certificate even after the letter dated May 2, 1989 written by the complainant to the Branch Manager, Union Bank of India, Ramkot with his signature attested by the Branch Manager, Andhra Bank, Narayanaguda was received by him. In those circumstances, legal notice dated August 24, 1989 was got issued by the complainant requesting the Branch Manager, Union Bank of India, Ramkot to encash the certificate.

As the complainant was not residing in Hyderabad and was working at Bellampally, Adilabad district, a place far away from Hyderabad, he executed a General Power of Attorney dated July 18, 1989 in favour of Sri P. Nagendra Prasad authorising him to encash the certificate. The General Power of Attorney was registered. That fact was intimated to the Branch Manager, Union Bank of India, Ramkot through the legal notice dated August 24, 1989. The Branch Manager, Union Bank of India, Ramkot gave a reply dated September 5, 1989 to that notice stating that the matter had been referred to the higher authorities.

FROM September 5, 1989 for more than five months, the complainant did not hear anything from the Branch Manager, Union Bank of India, Ramkot and the certificate was not encashed. He received a letter dated February 14, 1990 written by the Branch Manager, Union Bank of India, Ramkot to his advocate, Sri H. Satish. In that letter, reference was made to the legal notice dated August 24, 1989 and it was mentioned that the complainant failed to turn up to settle the issue inspite of several letters written by him. It is pertinent to note that no copy of any such letter stated to have been written by the Branch Manager, Union Bank of India, Ramkot to the complainant, is produced before the Commission. The case of the complainant was that no letter was written by the Branch Manager, Union Bank of India, Ramkot to him between September 5, 1989 and February 14, 1990. It is mentioned in the written statement filed on behalf of the Union Bank of India that the registered letter dated December 13, 1989 written to the complainant was returned unserved with the postal acknowledgement "party left". It is curious to note how the Branch Manager, Union Bank of India addressed a letter to the complainant to his address at Hyderabad when he was not staying at Hyderabad and was working at Bellampally, Adilabad district. It is mentioned in the complaint that immediately after the letter dated February 14, 1990 written by the Branch Manager, Union Bank of India, Ramkot was received, the General Power of Attorney holder of the complainant met the Branch Manager, Union Bank of India, Ramkot and insisted on encashment of the certificate. When the Branch Manager asked him to resubmit the certificate, the same was resubmitted again through the Branch Manager, Andhra Bank, Narayanaguda on March 21, 1990. This averment is not denied in the written statement filed on behalf of the Union Bank of India. The Branch Manager, Union Bank of India, Ramkot had written a letter dated April 19, 1990 to the advocate of the complainant asking him to furnish a copy of the General Power of Attorney executed by the complainant in favour of Sri P. Nagendra Prasad. In that letter, no reference was made to the letter dated March 21, 1990 written by the complainant through the Branch Manager, Andhra Bank, Narayanaguda for encashment of the certificate. The certificate was again returned by the Branch Manager, Union Bank of India, Ramkot stating that the Andhra Bank had not counter-signed the certificate. However, the certificate was resubmitted by the complainant with the counter signature of the Manager, Andhra Bank, Narayanaguda Branch. The complainant gave a reply dated April 23, 1990 to the letter dated April 19, 1990 specifying that the Branch Manager, Union Bank of India, Ramkot was playing delaying tactics in making the payment. Along with that letter, a copy of the General Power of Attorney holder, Sri P. Nagendra Prasad requesting to credit the proceeds to the complainant''s account in Andhra Bank, Narayanaguda Branch were also enclosed. Even then, for a considerable time, the amount was not paid. Then, the present complaint was filed under the Consumer Protection Act, 1986 on June 1, 1990. On June 2, 1990 notice was ordered in the complaint by this Commission. The Branch Manager, Union Bank of India, Ramkot informed this Commission through his letter dated June 11, 1990 that the amount of Rs. 50,000/- was paid to the complainant through Andhra Bank, Narayanaguda Branch on June 1, 1990.

FROM the facts referred to above, we are fully convinced that the Branch Manager, Union Bank of India, Ramkot had deliberately delayed the payment of the amount to the complainant by encashment of the Deposit Re-Investment Certificate dated November 4, 1988. The complainant is entitled to encash the certificate at any time before the date of maturity. Due to his pressing financial need, the complainant wanted to encash the certificate before it matured, with eligible rate of interest. He had submitted the certificate for encashment on innumerable occasions right from April 20, 1989 and the certificate was encashed only in June 1990 i.e., after a lapse of more than an year. The reasons given by the Branch Manager, Union Bank of India, Ramkot for the delay in encashment of the certificate are not at all convincing. We do not see any justification for not encashing the certificate when it was submitted through the Andhra Bank, Narayanaguda Branch, in particular when the Andhra Bank made it clear that the proceeds will be credited to the account of the complainant in their Bank. Having regard to the material on record, we have no doubt in our mind that the Branch Office, Union Bank of India, Ramkot was at fault in not encashing the certificate submitted by the complainant, for such a long period and the quality, nature and manner of performance of the service which the Bank had undertaken to be performed was hopelessly inadequate. Thus, its service suffered from deficiency. All this had happened due to the wanton and deliberate acts of commission and omission on the part of the Ramkot Branch Office, Union Bank of India. A nationalised Bank should not have acted in the manner in which it had acted in this case. It is stated that the complainant was put to lot of financial hardship and had suffered mental agony due to the inordinate delay in encashment of the certificate. Therefore, he claimed damages of Rs. 1,00,000/-. On the basis of the material referred to above, we do not have any doubt that the complainant should have been put to stringent financial hardship and must have undergone acute menial agony which cannot be adequately compensated in terms of money. Therefore, he is entitled to claim compensation for the loss and the injury suffered by him due to the delay in the payment of the amount. In our view, this is a fit case where not only adequate compensation but also penal damages shall be awarded against the Union Bank of India for the loss and injury suffered by the complainant. Having regard to the facts and circumstances of the case, we determine the quantum of compensation and damages at Rs. 25,000/- and direct that the opposite party No. 1 Union Bank of India shall pay Rs. 25,000/- to the complainant within four weeks from today. It shall also pay Rs. 500/- to the complainant towards costs in this appeal, within four weeks from today. Complaint allowed accordingly.