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Judgment
JUDGMENTTAG-JUDGMENT
The Revision Petition has been filed under Section 21(b) of The Consumer Protection Act, 1986 against the Order dated 31.08.2017 of the State Commission, whereby the appeal filed by the Opposite Party - Standard Chartered Bank was dismissed in limine and the Order dated 07.06.2017 of the District Forum, allowing the Complaint, was affirmed.
The Petitioner was the Opposite Party (OP) and the Respondent was the Complainant in the Complaint and they are being accordingly referred to hereinafter.
Brief facts, shorn of unnecessary detail, are that the Complainant and his wife were the joint holders of an FDR issued on 06.05.1997 for Rs. 50,000/- by the OP - Bank. It was issued on the basis of a Reinvestment Deposit Plan. The initial date of maturity was 06.05.1999. The Complainant approached the OP - Bank for encashment of the amount in the year 2016; the OP - Bank refused.
The Complainant's case was that under the Reinvestment Deposit Plan of the OP - Bank the FDR was to get reinvested automatically till instructions were given by the account holder either to get the same encashed prematurely or to get the status of the same changed. The Complainant alleged deficiency in service on the part of OP - Bank and filed a Consumer Complaint before the District Forum on 15.09.2016 for payment of the maturity amount along with compensation of Rs. 1,00,000/- for mental agony and Rs. 22,000/- as costs.
The OP - Bank's contention was that the scheme of 2 in 1 reinvestment deposit is such that the savings account and the deposit account are linked. In the event of any shortfall in the savings account to meet any withdrawal the required sum is uplifted from the linked deposit account and credited to the savings account to make good the shortfall. According to the minimum balance clause and for the maintenance of savings account a minimum balance of Rs. 10,000/- is necessary to be maintained to avoid any deduction from the FDR account. The OP - bank has followed the said procedure and continued uplifting the required amount from the linked fixed deposit to make good the shortfall in minimum deposit in the savings account. The Complainant never approached the OP - Bank on the initial date of maturity i.e. 06.05.1999 and came in 2016. As per the Bank's archival report dated 14.10.1998 the FDR in question revealed account balance as 'Nil' and subsequently the account was marked for deletion. There was a delay of approximately 18 years in filing of the Complaint. According to the provisions of the Banking Companies (Period of Preservation of Records) Rules, 1985 a bank is required to preserve the records relating to a period not less than 8 years immediately preceding the current calendar year. The OP - Bank has never acted in a deficient manner.
The District Forum heard both sides, appraised the evidence, and, vide its Order dated 07.06.2017, allowed the Complaint:
It is not the denial of the case that the complainant is holder of the FDR bearing No. 016/Q2/07918/01 (copy of FDR accounts for Ex. C2) alongwith his wife Smt. Jasbir Kaur, issued from the Gandhi Bazar, Amritsar branch of Opposite Party which has now been merged in the present Opposite Party for Rs.50,000/- and said FDR was issued on the basis of 2 in 1 Reinvestment deposit plan, hence the complainant is consumer as provided under the Act. The only plea taken by the Opposite Party is that concept of 2 in 1 re-investment deposit is that it is liked to a saving bank account. As per the nature of a 2-in-1 account wherein a savings account and a deposit account is linked, should there be a shortfall in the savings account to meet any withdrawal, the required sum is uplifted from the linked deposit and credit to the savings account to make good the shortfall. In accordance to the above nature, the amount against the FDR had been uplifted from the FDR account in question to meet the requirements of the saving account held in the name of complainant and Jasbir Kaur. As per the Opposite Party bank's archival report dated 14.10.1998, the FDR amount was reflecting a Nil account balance and subsequently, marked for deletion. But in this regard, the Opposite Party has failed to produce on record any consent or request given by the complainant for uplifting the required amount from the linked deposit and credit to the saving account of the complainant(s) to make good the shortfall. The Opposite Party has no legal right to make its own rule to transfer the amount of FDR in the saving account of the complainant(s) without the written consent or without prior permission of the account holder(s). In such a situation, there is a great lapse and deficiency in service on the part of the Opposite Party who allegedly without any written consent and request of the complainant transferred the amount of FDR into the saving account of the complainant. In such a situation, we direct the Opposite Party to make the payment of FDR alongwith accrued rate of interest from the date of its deposit till its actual realization. Opposite Party is also directed to pay Rs. 2000/- to the complainant on account of compensation besides Rs. 1000/- as costs of litigation. - - -
(para 8 of the District Forum's Order)
(underlining supplied)
The State Commission also heard both sides, appraised the evidence, and, vide its Order dated 31.08.2017, dismissed the appeal in limine:
Learned counsel for the opposite party - Bank has failed to point out from the record of the District Forum, which was summoned by this Commission at the initial stage before issuance of notice, any document i.e. Proposal Form containing the terms and conditions of the Reinvestment Plan, which is known as 2 in 1 account and is in the nature of savings bank linked with FDR account also known as linked deposits. Unless a document is brought on record indicating the terms of the Agreement, this Commission cannot presume that the upliftment can be done without the permission of the holders of the FDR into the savings account. The Bank has not produced even any document on record to show that it had been sending the account statement of the savings bank account to the complainant, from time to time and had also informed the complainant or his wife regarding the deductions being made from the FDRs. It is settled principle of law that no one can be condemned unheard. The Bank was required to inform the account holders of the savings bank account that their savings bank account is not maintaining minimum balance and for that reason the Bank is uplifting the required amount from the FDR account, which has been consumed in this manner. It appears that the Bank has failed to inform the complainant about the non-maintenance of minimum balance in the savings bank account and also to inform the consumer regarding the uplifting of the required amount from the FDR account i.e. linked deposits.
In view of this, we are of the view that the opposite party - Bank has failed to comply with the minimum principle of natural justice and also failed to fulfil its obligation. Once the opposite party - Bank has failed to produce on record any document indicating the terms and conditions on the basis of which the savings bank account and the FDR account were linked, an adverse inference is to be drawn against the opposite party - Bank.
In view of our above discussion, we do not find any illegality or perversity in the order passed by the District Forum. There is no merit in the present appeal and the same is dismissed in limine.
(paras 9, 10 and 11 of the State Commission's Order)
(underlining supplied)
This Revision Petition has been filed against the said Order dated 31.08.2017 of the State Commission.
The Complainant reiterated his averments and submitted that the Complainant and his wife were joint holder of the FDR for Rs. 50,000/-, which was issued from Gandhi Bazar, Amritsar branch of the OP - Bank. The said FDR was issued on the basis of 2 in 1 Reinvestment Deposit Plan. The Complainant was a consumer as provided under the Act 1986. The money in the FDR in question was never encashed either by the Complainant or by his wife. Earliest date of maturity of the said FDR as endorsed on the instrument was 06.05.1999 and since the same was under 'reinvestment deposit scheme' of the bank, the same was to get reinvested automatically till the instructions were given by the account holder either to get the same encashed prematurely or to get the status of the same changed. So far, the Complainant neither got the said instrument encashed, nor got its status changed from 'Reinvestment Deposit Plan'. Since, the Complainant wanted to get the said instrument encashed, he visited the OP - Bank with the original instrument in 2016. But the encashment was refused without any justified reason. The act of the OP - Bank in refusing to encash the FDR without giving any valid reason amounts to gross deficiency in service.
Learned counsel for the OP - Bank argued that the Complaint was filed after 18 years of delay and it was barred by limitation, thus it was not maintainable. The learned counsel further submitted that as per the Circular of Reserve Bank of India regarding the guidelines pertaining to preservation of record, the bank is required to preserve record for at least 10 years after the business relationship has ended. The learned counsel further submitted and produced a copy of an online article published in Financial Express dated 10.03.1999 about the closure of three branches of the OP - Bank situated in Amritsar, Goa and Calicut, which states that: existing StanChart customers at these branches will be able to transact their accounts up to end-April '99, and arrangements have been made for continuation of term deposits through the Chennai branch. The last date for accepting cheques for collection will, however, be the 15th of this month.
In their arriving at the findings of deficiency in service on the part of the opposite party, we find the Orders of the District Forum and the State Commission to be well-appraised and well-reasoned. After re-appraising the evidence, the State Commission concurred with the findings of the District Forum. We note in particular the observations of the two fora quoted in para 4 and 5 above. We find no palpable error in appreciating the evidence by the two fora below. And, on the face of it, we find no jurisdictional error, or a legal principle ignored, or miscarriage of justice.
We have perused the record including inter alia the 2 in 1 Reinvestment Deposit Plan; the archival report; the RBI Circular and the copy of the Scheme of 2 in 1 account and given our thoughtful consideration to the arguments advanced by the two parties. It is pertinent to note that the FDR in question was a Reinvestment Deposit. Any consumer of the bank, who deposits the amount under such a plan, is under the (right) assumption that the FDR will be renewed either till he approaches or gives any other specific instruction to the bank. We specifically note the terms and conditions for deposit accounts (printed on the back side of the said FDR) which states the following:
Kindly furnish us with your instructions for renewal or disbursement of the principal amount of the deposit and interest due thereon upon maturity of the deposit in the absence of your instructions the Bank will renew the deposit for a similar term at the interest rate prevailing at the time of renewal at to seleguard you from any loss of interest.
In the instant case, the Complainant had deposited Rs. 50,000/- on 06.05.1997 with the OP - Bank under the (bonafide) assumption that his FDR will be reinvested after maturity date i.e. 06.05.1999 for a similar term. The OP-Bank, but, mentioned in its archival report dated 14.10.1998 that the balance was "Nil" in the FD account. Meaning thereby that within a span of approximately 17 months the OP - Bank had withdrawn the amount from the FDR, (ostensibly) to make good the shortfall of minimum balance in the savings account. Pertinently, however, the OP - Bank did not produce any cogent evidence like statements of the savings account or the FD account. The OP - Bank has attempted to condone its deficiency by relying on its archival report, which is a report without any relevant or material details regarding deductions made from the FD account etc. The publication of closure of their branches was made in the 'Financial Express' in the month of March 1999, but this does not absolve the OP - Bank from its deficient act. The OP - Bank was duty bound to intimate/inform about the same to every consumer who held FDRs in its said branches. This is neither evident from the submissions nor from the evidence adduced by the OP - Bank. It is very significant that the OP-Bank has not produced any withdrawal details whatsoever of the FDR account, in which the account balance was reduced from Rs. 50,000/- to zero. (Nor has it produced the corresponding details of the savings account.)
Considering the entirety of the facts, we do not find any merit in the Revision Petition. We concur with the State Commission.
The Revision Petition is dismissed. The reasons have been given hereinabove.
Vide Order dated 10-09-2018, this Commission had dismissed the Revision Petition noting that the reasoned judgement will follow. The OP - Bank approached the Hon'ble High Court, under Article 227 of the Indian Constitution, which, vide its Order dated 16-10-2018 2018 in CM (M) 1266 / 2018 & CM APPL. 43443 - 43444 / 2018, stayed the proceedings before this Commission till 03.12.2018.
CM APPL. 43444/2018 (Exemption)
Exemption allowed, subject to just exceptions.
CM(M) 1266/2018 & CM APPL. 43443/2018
Initial submissions have been made on behalf of the petitioner.
Notice of the petition and of CM APPL 43443/2018 be issued to the respondent on taking of steps by the petitioner, process returnable on 03.12.2018, till which date, proceedings before NCDRC in relation to Rev. Petition No. 3080/2017 are stayed.
Copy of this order be also served on the Registrar of the National Consumer Disputes Redressal Commission.
The operation of this Commission's Order dated 10.09.2018 shall be subject to the orders of Hon'ble High Court.
The operation of the instant Order of this Commission shall be subject to the orders of Hon'ble High Court.
Disposed