VILLUPURAM DISTRICT CENTRAL CO-OPERATIVE BANK vs GOPAL REDDOAR

THIS revision petition has been filed by the petitioner, the Villupuram District Central Co-operative Bank against the order of the State Commission dismissing its appeal and upholding the order of the District Forum.

BRIEF facts of the case are that the respondent/complainant, Gopal Reddiar had made two term deposits with the 2nd respondent, Nolumbur Primary Agriculture Co-operative Bank on 24.5.1996 and 5.6.1996 for a period of one year @ interest of 13%. The fixed deposit receipts carried the message that these deposits are guaranteed by the South Arcot District Co-operative Bank. When on maturity 2nd respondent was unable to return the money, he approached the petitioner and upon not getting any satisfactory response from them approached the District Forum, who after hearing the parties directed the petitioner and the 2nd respondent to pay the deposited amount with interest-compensation of Rs. 500 for the delay and cost of Rs. 500 within one month and in case of default, to pay the deposited amount along with interest @ 18%. Petitioner alone went in appeal before the State Commission who after hearing parties dismissed the appeal except that the rate of interest @ 18% for alleged payment shall not be applicable and interest @ 13% shall be payable from 4.6.1997. It is against this order that this revision petition has been filed.

The main ground of revision is that the petitioner and the 2nd respondent are two separate authorities. In fact they were not in existence when the deposits were taken; moreover deposits were not guaranteed by the petitioner bank as stated in the Term Deposit Receipt, hence they cannot be held responsible for any act on the part of 2nd respondent. Revision petition need to be allowed and orders of the Fora below need to be set aside.

ON perusal of material on record and hearing the learned Counsel for the petitioner, we find that there are certain undisputed facts. There is no dispute that the 1st respondent/complainant had indeed made two term deposits with the 2nd respondent. It is also admitted that there was a "Guarantee Scheme" of the term deposits, even though it is contended by the petitioner, that it was subject to certain conditions and it was optional. Since, the 2nd respondent did not fulfil the conditions, the guarantee provision of the petitioner bank was not extended to the 2nd respondent bank. It is true that petitioner bank came into existence after the term deposit was made. This was on account of the fact that the District of South Arcot was bifurcated into two Districts of which Villupuram was one. District level Central Co-operative Bank, Villupuram came to acquire assets and liabilities of the Co-op. Bank in the area of the new District, this argument does not help him. The fact remains that in the co-operative credit heirerely the relationship between the Primary Credit Societies/Bank and the District Central Co-operative Bank is umblical. Ground reality is that they cannot survive without each other''s help even though both are registered separately under Co-operative Societies Act. It is not denied that the scheme was there, of giving guarantee to the Primary Agriculture Co-operative Bank. Record before the State Commission also showed that the FDRs bore the counter-guarantee clause of the District Bank. Change of the name consequent to the bifurcation of the Revenue District and resultant constitution of new District Co-operative Central Bank does not absolve the new successor Bank of its liability. FDR had a guarantee clause. The depositor does not go and verify the facts on record of a Government controlled Institution. On presentation of FDR on maturity, the 1st respondent does not get his money back, he invokes the counter-guarantee clause and both the lower Fora, in our view, rightly holding directed the petitioner and the 2nd respondent to pay the 1st respondent. We do not find any infirmity in the order. For any inter se dispute between the two banks, they should resolve it within the provisions of law applicable in their case. Revision petition is dismissed. No orders as to costs. R.P. dismissed.