State Bank Of India vs M.H. Patel & 3 Ors

V.K. Jain, J

The complainant purchased two gold bars of 999.9 purity and weighing 500 grams each from Bank of India and deposited the same with the petitioner State Bank of India, under a scheme namely 'SBI Gold Deposit Scheme'. Since, the scheme envisaged determination of the actual weight and purity of the gold by ASSAY, done after melting the gold bars were sent by the petitioner to Respondent No.4 India Government Mint for testing their purity by melting. On melting, the gold bars, their purity was found to be 999.9 purity. However there was a nominal loss in the weight of the gold bars during the process of melting, the said loss being to the extent of 0.04%.

It was also certified by India Government Mint that the weight of the gold in 995 purity would be 502.161 for one bar and 501.809gms for the other bar. It was also certified that the weight in 999.0 purity would be 500.150 gms in respect of one bar and 499.800 gms in respect of the other bar. Based upon the purity and weight so determined by the Government Mint, the petitioner State Bank of India sent certificates in terms of the scheme under which the gold bars were deposited by the complainant and he was informed that the weight of the gold bars was 499.8 in respect of one bar and 500.150 in respect of the other bar in 999 purity. The complainant there-upon approached the concerned District Forum by way of a consumer complaint, disputing the weight given in the certificates issued by the petitioner and seeking compensation. Bank of India, petitioner the state Bank of India and Government Mint were impleaded as the opposite parties in the consumer complaint.

The complaint was resisted by the petitioner, which inter-alia stated in its reply that the gold bars deposited by the complainant were sent to Government Mint as per terms of the scheme and actual weight and purity, as verified by Government Mint was notified to the complainant and was binding upon him.

The District Forum vide its order dated 03.8.2017 directed as under:

"2. It is being declared that the respondent No.3 and 4 have committed deficiency in providing service and adopted unfair trade practice in respect of the gold kept with them towards Gold Deposit Scheme

The gold of whatever purity and weight was deposited with the respondent No.3 by the complainant they should return back the gold to the complainant with same purity and weight after completion of tenure of the scheme."

Being aggrieved from the order passed by the District Forum, the petitioner approached the concerned State Commission by way of an appeal. The said appeal having been dismissed, the petitioner is before this Commission by way of this revision petition.

The SBI Gold Deposit Scheme under which gold bars was deposited by the complainant with the petitioner bank to the extent it is relevant reads as under:

"5. Rate of Interest

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Interest will be payable from the effective date of deposit which will be the date of completion of melting / assaying by India Government Mint (IGM) to ascertain the actual quantity of gold content of uniform fineness available for deposit or after expiry of 30 days from the date of deposit of gold whichever occurs earlier.

Acceptance of Deposit

(i) Gold 9i.e. gold bars, coins jewellery etc.) will be accepted in scrap from only. The gold jewellery will be accepted without any stone, gem, etc. and will have to be crushed by the tenderer before depositing, for which facility available at the branch may be used. These should not have any ornamental or antique value.

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(vi) The actual weight and the purity content of the gold for deposit will be determined only after the final assay is done after melting of gold as per the arrangement made by the Bank and the results of this assaying shall be final and binding on all. GDS certificate will be issued based on the final assay report which will be held as an internal document by the Bank.

Repayment / Redemption

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For redemption in gold, the deposit will be redeemed in gold of 995/999 fineness in the multiple of 10 gm bars, at the discretion of the bank.In case the deposit is redeemed by the bank in 995 fineness, the equivalent weight of gold (i.e. equivalent to the deposit in 999 fineness) will be delivered in multiple of 10 gm bars.Any fraction quantity in excess of multiple of 10 gms bars will be repaid in rupees only at the conversion rate prescribed at para 11.5(v) for the date of transaction, both on maturity and at the time of premature payment.The physical gold will be delivered against receipt (GDS-6) through DB ( i.e. the gold deposit receiving branch) or any other convenient branch as decided by the Bank."

It would thus be seen that the scheme envisaged acceptance of the gold only in scrap form. Therefore, the petitioner bank had to send the gold deposited with it to the Government Mint for the purpose of melting the same and determining its purity. The complainant having accepted all the terms and conditions of the scheme and having deposited the gold thereunder can therefore have no grievance on account of the petitioner bank sending the gold bars to the Government Mint, for the purpose of ascertaining their weight and purity. In fact, without melting the gold bars the purity of the gold could not have been correctly determined. Since the bank was to accept the gold only in melted form and even otherwise it was necessary to melt the gold bars in order to verify their purity, the loss which happened during the process of melting has to be borne by the complainant and not by the petitioner bank. The bank was to pay interest in respect of only that much quantity as was left after the process of melting was over and the purity and weight of the gold was finally determined by Government Mint. The Bank is required to return only that much gold as is left after the process of melting and verifying the purity and gold of the weight was complete.

As per Clause 9(iii) of the scheme, the bank is required to redeem the gold in 995 / 999 purity at its discretion, meaning thereby that the bank can return the gold either in 995 or 999 purity. In the present case, the certificates sent to the complainant gave their weight as determined by the Government Mint in 999 purity. The complainant therefore, can have no grievance with respect to the quantity or the purity of the gold which the petitioner Bank has promised to return to him.

The contention of the complainant during the course of arguments was that he having purchased the gold bars of 999.9 purity, is entitled to redemption of the gold of the same purity. I however, find no merit in the contention since the scheme does not envisage redemption of the gold in 999.9 purity. In fact, the scheme gave discretion to the bank to redeem gold in 999 purity or 995 purity.

For the reasons stated hereinabove, I find no deficiency on the part of the petitioner bank in rendering services to the complainant. The orders passed by the fora below therefore cannot be sustained and the same are hereby set aside. The complaint is consequently dismissed, with no order as to cost.