The Liquidator vs Malakappa

Anand Byrareddy, J.—Smt. H.R. Bentur takes notice for Reserve Bank of India.

Heard the learned counsel for the petitioners and the learned counsel for the respondents.

The brief facts are as follows:

It transpires that during March 2006, respondent No. 3, which is a body corporate under the control and management of the Reserve Bank of India, had issued guidelines to all Banks and Co-operative societies which were under liquidation that an account holder of any savings account or any other deposit would be entitled to receive a lump sum of Rs. 1,00,000/- in lieu of their deposit irrespective of the quantum of such deposits. Thereafter, the Reserve Bank of India by order dated 30/10/2007 is said to have cancelled the license of the petitioner-bank to carry on the banking business in terms of Section 22(4) of the Banking Regulation Act, 1949. The respondents 1 and 2 are said to have filed application dated 15/12/2009 claiming repayment of the deposits under the Deposit Insurance guarantee Corporation Act and Rules and had restricted their claim to a sum of Rs. 1,00,000/- in full and final settlement of their claim in respect of all deposits with the petitioner-bank and an affidavit was also filed in support of the application stating that a sum of Rs. 1,00,000/- is being received in lieu of the entire amount as per the guidelines of respondent No. 3 and that the said respondents would not lay any claim or file any suit for claiming the deposits. This being so, it is the case of the petitioners that respondents 1 and 2 having accepted an amount of Rs. 1,00,000/- in full and final settlement of their claim are not eligible to seek for further amount, contrary to their undertaking. An Execution petition has been filed in case No. 17/2013 before the District Forum under Section 25 of the Consumer Protection Act claiming a sum of Rs. 5,91,305/-. The petitioner-bank is said to have filed its statement of objections and the execution petition was posted for further orders. It is the apprehension of the petitioners that coercive measures would follow pursuant to the execution petition being filed and though the petitioners have filed serious objections to the execution petition, the Forum is not inclined to consider the same, as it would take a stand that it was not possible to go behind the decree or the award and hence the petitioner-bank would suffer if coercive measures are implemented in executing the order in favour of respondent Nos. 1 and 2. It is in that background, the present petition is filed.

The learned counsel for the respondent on the other hand submitted that there is no such waiver of the amounts due to the respondents as claimed by the petitioners. The sum of Rs. 1,00,000/- was not largesse conferred on the respondents but was merely a partial refund of the entire amount that was in deposit with the petitioner bank. Therefore, to claim that there has been full and final settlement not withstanding that there are large amounts yet outstanding with the petitioner bank and the petitioner bank being in a position to refund those amount notwithstanding that it is in liquidation, would not merit consideration. In any event, the petitioner bank had taken recourse to challenge the orders passed by the District Forum before the State Commission and has suffered an order whereby the State Commission has rejected their appeal against the order of the District Forum. Therefore, the petitioners having exhausted their remedies insofar as proceedings that are pending, the present writ petition is only a ruse in the procrastinating the matter denying the respondents their due payments. In fact, respondent No. 1 is stated to be 74 years old and has undergone heart surgery and is in dire need of funds for his livelihood and hence would seek to contend that the present petition is an abuse of the process of Court, which ought to be rejected with costs.

The learned counsel for the petitioners, however, would contend that several other valid and legal objections are raised before the Consumer Forum and since there is no likelihood that the same would be considered, his prayer is that the same be considered by the District Forum before taking recourse to any coercive measures against the petitioner-Bank, while the learned counsel would also submit that RBI would be broached as regards the relaxation of guidelines in order to refund the respondents from out of any excess amount that may be available, though the amount claimed by respondents 1 and 2 is vehemently disputed.

In this view of the matter, the writ petition is disposed of with a direction to the District Consumer Forum to consider the objections filed by the petitioner-bank before it takes recourse to any coercive measures in pursuance of the execution petition. Since the proceedings have been stayed before the Consumer Forum pursuant to the orders of this Court, it is appropriate that the proceedings are taken up and expedited on the disposal of this writ petition. Consumer Forum shall accordingly consider the objections filed by the petitioner-bank before it and pass appropriate orders and take further proceedings within three weeks form the date of receipt of a certified copy of this order.