BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD

FA NO. 158 OF 2014 AGAINST CC NO.210 OF 2012

ON THE FILE OF DISTRICT FORUM-III,  HYDERABAD

Between:

Central Bank of India,

Monda Market branch,

Secunderabad, rep. by

their Manager.

… Appellant/Opposite party No.1

          And

1)       Sri M.Bali Reddy S/o Shyami Reddy,

          Aged about 65 years, Occ: Agriculture

          & Milk Vendor, R/o Ghanpur village,

          Medchal mandal, R.R. District – 501 401.

…Respondent/Complainant

2)       The Ombudsman,

          O/o The Banking Ombudsman,

          Reserve Bank of India,

          Annexe Building,

          Saifabad, Hyderabad.

… Respondent/Opposite party No.2

Counsel for the Appellant          :         Sri Y.Vasudeva Rao

Counsel for the Respondents               :         Sri P.Ramakrishna Rao     

Coram                  :

Hon’ble Sri Justice B.N.Rao Nalla   …      President

&

Sri Patil Vithal Rao  …           Member

Friday, the Nineteenth day of August

Two thousand Sixteen

Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)

***

1)       This is an appeal filed by the Opposite party No.1 aggrieved by the orders dated 19.02.2014 of the District Forum-III, Hyderabad made in C.C.No.210 of 2012, allowing the complaint of Complainant in part directing the Opposite party No.1 to pay a sum of Rs.30,000/- to the Complainant with prevailing banking interest from 17.12.1998 till realization and costs of Rs.3,000/-. 

2)       For the sake of convenience, the parties are described as arrayed in the complaint.

3)       The case of the complainant, in brief, is that the Complainant being an agriculturist and milk vendor deposited an amount of Rs.30,000/- on 17.12.1988 with the OP No.1 under short term deposit bearing SDR No.19/65 originally for a period of 91 days with interest @ 8% p.a.  Thereafter, the said short term deposit was neither renewed nor its proceeds were paid to the complainant along with interest despite constant approaches to the OP No.1 bank and it dodged the matter for no valid reasons.  On the firm insistence of Complainant for payment of the value of deposited amount with interest, the OP No.1 calculated the total proceeds to be at Rs.54,152/- as on 21.09.2008, as is evident from the scribbling on the face of the deposit receipt, which is also not paid.  Several requests of Complainant to repay the deposited amount were not complied with taking advantage of illiteracy, which amounts to deficiency in service and unfair trade practice.

4)       Complainant being illiterate and totally unaware of the procedural laws and also being a village rustic had to return home disappointedly with the original deposit receipt, which is still lying in his custody.  As such, Complainant got issued a notice on 23.09.2010 to OP No.1 which acknowledged the same but it neither chose to give any reply nor paid the deposited amount together with interest.  The OP No.1 neither discharged the liability of the instrument nor renewed it further.  On each and every visit of Complainant, the standard reply he received from the officials of OP No.1 was to ‘come again’. 

5)       On account of inaction on the part of the OP No.1, the matter was brought to the notice of OP No.2, who acknowledged the same on 28.03.2011 and on 07.04.2011 advised the Complainant to quote the number 201011009004089 and thereafter in spite of reminders sent by him on 03.05.2011 and 08.06.2011 there was no response.  Hence, both the Ops committed deficiency in service.  As per procedure, the deposited amount will be paid to the depositor only on surrender of original receipt duly discharged.  Though the Complainant discharged the original deposit receipt, the amount is not paid.  Hence the complaint praying to direct the OP No.1 to pay the amount of Rs.30,000/- covered by STD Receipt No.19/65, dated 17.12.1988 together with interest specified therein and also further interest till the date of repayment; to direct the OP No.2 to pursue the matter with OP No.1 for discharge of the liability and also to award costs of the proceeding. 

6)       Opposite party No.1 resisted the claim contending that avocation of Complainant is not known to it.  It was open to the Complainant to present the fixed deposit receipt and in case of dishonour to take legal action instead of waiting.  It denied about the bank officer admitting to pay Rs.54,152/- at any time and made alleged ‘scribbling’ on the deposit receipt.  There is no deficiency in service or any unfair banking practice on its part.  It denied to have presented the original deposit receipt for payment at any time.  As the matter was referred to higher authorities for instruction, no reply was given to the notice. 

7)       On receipt of notice from the OP No.2, it appeared and made submissions before Respondent No.2.  Since the complaint was time-barred and the bank had no records, the Ombudsman closed the case.  The present complaint ought to have been filed within 3 years of date of maturity, hence, barred by limitation.  Admittedly, the last renewal of the fixed deposit was on 18.03.1989, hence the delay computed is totally wrong.  During the course of shifting of the bank premises, all the previous records which were more than 10 years old were destroyed as per rules of the bank.  The fixed deposit of the Complainant is not outstanding in the accounts of the bank.  Generally, as per rules, the books are maintained for 10 years, thereafter they would be destroyed.  After introduction of computer system, all the running accounts only are continued since 2000 and closed accounts were deleted.  In all probability, the complainant is making a double claim.  Complainant might have withdrawn the amount with the help of duplicate receipt long ago and now making a claim with the help of original receipt.  Hence prayed to dismiss the complaint with exemplary costs.

8)       OP No.2 filed its written version contending that the complaint is not maintainable either on law or on facts and liable to be dismissed against it.  The OP No.2 is appointed under the Banking Ombudsman Scheme, 2006 with an object of enabling resolution of complaints relating to certain identified services rendered by banks and to facilitate the satisfaction or settlement of complaints.  There is any contractual obligation nor any privity of contract between the Complainant and this Opposite party, hence, it is outside the scope of the Act, as such, complainant is neither ‘consumer’ of this OP nor has provided any ‘service’ in connection with banking or financing or any other service.  Upon receipt of complaint from the Complainant, after following due procedure, it closed the complaint vide order dated 19.05.2011 observing that the complaint has not been filed within the time frame.  The orders were also communicated to the complainant.  Hence prayed to dismiss the complaint against it as frivolous and vexatious.

9)       During the course of enquiry before the District Forum, in order to prove their case, the complainant filed evidence affidavit and got marked Exs.A1 to A6 and on behalf of Opposite party No.1, the affidavit of one Jamex Xavier, Manager was filed and on behalf of OP No.2, the affidavit of one T.Govind Rao, Assistant General Manager was filed and marked no documents.  Both got filed written arguments on their behalf.  

10)     The District Forum after considering the material available on record, allowed the complaint in part, as stated in paragraph No.1, supra.

11)     Aggrieved by the said orders, the present appeal is filed contending that the forum below allowed the complaint without considering its contentions and the legal position.  It failed to appreciate that the complaint was barred by law of limitation as the cause of action for the claim arose on maturity of the short term deposit dated 18.03.1989 and not on 21.09.2008 and it erred in holding that the endorsement or writing on the reverse of the deposit was that of the bank official as the same was not proved and was not authenticated by any official of the bank and does not have any bank seal.  The forum below failed to note that even as per the terms of deposit receipt, particularly, clause-4 “interest on deposit ceases at maturity of the receipt” and thereby erred in awarding interest from 1988. 

12)     The forum below has not afforded sufficient opportunity to the Appellant.  The appellant being nationalized bank is functioning as per the directions of Reserve Bank of India and other regulatory authorities.  The books of accounts are maintained according to the standards prescribed by the regulatory authorities, hence, forum below ought to have rejected the claim of complainant.  As per the banking Regulation Act, the records relating to recall, short, fixed deposit registers, ledgers shall be preserved for 8 years only.  The finding of the District Forum that the bank should have preserved the records of the deposit receipts for a further period of 10 years from 21.09.2008 is unfounded and perverse.  The deposit receipt is not found payable in the books of account maintained in regular course of business following the accounting standards and audit.  Hence prayed to allow the appeal by setting aside the orders impugned.

13)     The point that arises for consideration is whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner?  To what relief ?

14)     It is not in dispute that the Respondent No.1 herein deposited an amount of Rs.30,000/- with the Appellant bank on 17.12.1988 for a period of 91 days.  It is also not in dispute that the Respondent No.1 got issued a notice on 23.09.2010 to the Appellant and immediately upon receipt of the same, the Appellant referred the same to its original office for guidance and instructions, however, no reply was received from them, as such, it could not respond.  The only dispute is that after its maturity, there was no request for renewal and by the time the Respondent No.1 has turned-up, entire records were destroyed as per the guidelines of regulatory authority.

15)     It is argued by the counsel for the Appellant that they replied to the Ombudsman that the branch premises were shifted to another place and as the appeal matter is old one, the bank was helpless to consider the claim of the Respondent No.1, whereupon the Banking Ombudsman closed the claim.  Relying on the citations put-forth by him, the learned counsel argued that while deciding any matter under the provisions of C.P. Act, it has to take into account the provisions of Section 3 of Indian Limitation Act.  The reasonable time as referred to in the provisions of Section 3 of the Limitation Act has got to be decided having regard to the facts and circumstances of the case and that too, on merits. In so far as the case on hand is concerned, the delay is more than 20 years and whether it can be construed as a reasonable time is the question.  The Judgment law is to the effect that the equitable considerations do not find place in considering the period of limitation.  The counsel relied on the following judgments.

a)         AIR 2000 Supreme Court 761 in the matter of Corporation Bank and another Vs. Navin J.Shah, decided on 25.01.2000.

In the above case, an exporter of tea who had credit facilities with an Indian Bank entrusted the documents relating to export of tea for the purpose of realizing the proceeds thereof from the consignee.  The Indian Bank issued advice of purchase of bills to the exporter in respect of the goods covered by several invoices.  The Indian Bank negotiated the export documents through a foreign bank.  The foreign bank however failed to realize the export value from the consignee in U.S. Dollars.  It was claimed by the exporter that the Indian Bank had totally failed to execute the specific instructions of the exporter to realize the export documents to the consignee only after accepting in cash in U.S. Dollars but were negligent in handling the consignment given to them as a result whereof the goods were released to the consignee without realizing the export proceeds for and on behalf of the respondent.  Wherein the Hon’ble court held that foreign bank unable to covert money realized under the document in US dollars due to policy of foreign government – service rendered by Indian Bank cannot be said to be deficient on that ground.

b)            2006 (4) ALT 30 (NC) (CPA) in the matter of Alok Kumar Mukherjee and another Vs. Dr.Tapas Roy Choudhury, decided on 16.12.2005.

In the above case the deceased boy was diagnosed to be suffering from congenital heart disease – Appellants-complainants claim that period of limitation would start from the date of death of child in July, 2003 while State Commission took the view that it started from the date when the complainants were told by doctor to whom the boy was referred to by treating doctor that they were misguided by the treating doctor (respondent) that surgery be done after the child grew a little taller and after he achieved target weight of 20/25 kgs and complaint was filed about 7/8 years thereafter, State Commission held that complaint was barred by limitation – National Commission agreed with the view taken by State Commission and dismissed appeal.

c)             AIR 2009 SUPREME COURT 2210 in the matter of State Bank of India Vs. M/s B.S. Agricultural Industries (I), decided on 20.03.2009

In the above case, it is held that provision as to limitation is peremptory in nature and requires consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action.  The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown.  The expression, ‘shall not admit a complaint’ occurring in Section 24A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within limitation period prescribed thereunder.  As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, sufficient cause has been shown and delay condoned for the reasons recorded in writing.

The facts of the case are that Complainant sending bills for collection to bank - Instructions to bank to return the document if not honoured by certain date – Complaint filed more than 2 years after such date – Barred by limitation.

d)            AIR 1962 Supreme Court 1716 (V.49 C 240) (from Punjab) in the matter of Boota Mal Vs. Union of India, decided on 27.03.1962.

Limitation Act (1908), Article-31, preamble – “When the goods ought to be delivered in Art.31 – Meaning of – Time would run after elapsing of reasonable time, on the expiry of which delivery ought to have been made – Interpretation of statutes – Statute of limitation – Equitable considerations are out of question.  AIR 1923 All 22(2) & AIR 1933 Pat 45 and AIR 1951 Cal 462 and AIR 1952 Nag 77, over ruled.  In this case, since the goods were not delivered on time, a complaint was initiated.

e)             AIR 2001 Supreme Court 2967 (from: 1994 (1) Mad LJ 570 Madras), in the matter of Antonysami Vs. Arulanandam Pillai (D) by L.Rs and another, decided on 30.10.2001.

Wherein, it is held : Limitation Act (36 of 1963), Art. 136 – Execution of decree – Limitation – Decree for specific performance of contract of sale – Directions given to judgment debtor and decree holder to measure and demarcate land and deposit balance consideration respectively by specified date – Decree becomes executable on specified date – Notwithstanding fact that judgment debtor had not measured and demarcated land by that date – Limitation runs from specified date.

16)     We have perused the above citations relied on by the learned counsel for the Appellant.  The facts in the above cases are different to the facts in the case on hand.  It is an admitted fact that the Respondent herein is an illiterate person, as is evident from the Ex.A1 original short term deposit receipt in dispute.  As a general procedure, the limitation would start from the date of demand for making the payment.  In the instant case, the Respondent got issued a notice on 23.09.2010 to the Appellant bank Manager demanding to pay the amount covered by short term deposit receipt and immediately on failure to act upon the said notice, he initiated proceedings before the Banking Ombudsman, the Respondent No.2 herein and on its failure to act upon his request, the complaint is filed before the forum below which is under challenge in this appeal.  Hence, the limitation for filing the complaint would arise only from the date of demand.  In this regard, we rely on the following decisions rendered by Hon’ble Apex Court of India and various other courts.

i)        Decision rendered by Hon’ble Supreme Court of India, in the matter of Mr.Krishna Gopal Kakani Vs. Bank of Baroda, in Civil Appeal No.8448 of 2001, decided on 30.09.2008.  Wherein, the Hon’ble Court held that the suit is to be filed within two years from the date of making demand. 

ii)       1971 AIR 2551, 1971 SCR (3) 573 in the matter of Ram Janki Devi & Anr Vs. M/s Juggilal Kamlapat, decided on 28.01.1971, it is held by Hon’ble Supreme Court of India that the limitation starts from the date of demand.

iii)      Decision rendered by Hon’ble Supreme Court of India, in the matter of Goaplast Pvt., Ltd., Vs. Shri Chico D’souz & anr, decided on 07.03.2003 in Appeal (crl) of 2003 arising out of SLP (Crl.) 2742/02 with other appeals.  Wherein it is observed that a post-dated cheque becomes a cheque only on the date it bears when it becomes payable on demand, and therefore, the limitation will start from that date.

iv)      AIR 1984 All 267, in the matter of Mansa Ram & Sons (Bankers) and others Vs. Janki Dass Om Prakash and Ors., decided on 09.04.1984, wherein the Hon’ble Allahabad High Court observed that ‘the characteristic feature of deposit as distinct from loan is that it becomes repayable upon demand being made and the limitation does not commence to run unless the demand has been made’.  

We are fortified with the above decisions rendered by Hon’ble Courts.  In the instant case, though the subject short term deposit was kept for a period of 91 days, still the amount is lying with the Appellant and it was obligatory on the part of the Appellant to put the depositor on notice as to the maturity of the deposit, which is not done in the instant case.  After a gap of long time, when the depositor knocked the doors of the Appellant bank by way of notice on 23.09.2010, the Appellant bank informed that they referred the matter to higher authorities for instructions but no instructions are forth-coming as on date.  It is also the case of the Appellant that its “premises were shifted in the month ……..(left blank in the counter) and all the previous records which were more than 10 years old were destroyed as per rules of the bank”.  Admittedly, no where in the rules, there is a mention authorizing the bank to destroy the live deposit records.  Even the bank failed to take steps to procure the record pertaining to non-discharge payments.  For the appellant bank, the amount of a depositor lying with it is repayable.  This amount is not repaid to the depositor.

17)     The Reserve Bank of India on its website in frequently asked questions (FAQ), for one of the question regards to “what are the guidelines for renewal of overdue deposits?”, it answered as below:

All aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Board laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal, including interest rate, at the time of acceptance of the deposit. The policy should be non-discretionary and non-discriminatory.

Even the above principle was not followed by the Appellant bank to make repayment of the deposited amount to its own customer, which amounts to deficiency in service and negligence on its part.  From the above answer, it is also clear that the policy should be non-discretionary and non-discriminatory but in the case on hand, there is no policy made by the Appellant bank at all.  And the Respondent was not notified of the destruction of records since his interest was involved.

18)     Be that as it may, the Appellant has no right or authority to keep the deposited amount with it for years and years together.  It is also not the case of Appellant that the deposited amount of Rs.30,000/- together with agreed interest was kept aside from the very next day of maturity of SDR No.19/65, dt.17.12.1988 which matured on 18.03.1989.   Having utilized the amount lying with it all these days, the Appellant cannot seek the shelter of barring of limitation, which is not at all a ground.  We are very much convinced that the complaint of the Respondent is not barred by limitation.

19)     In the above facts and circumstances, we do not see any infirmities in the order of the District Forum to interfere with.  Hence, the point framed in paragraph No.13, supra, is answered accordingly. 

20)     In the result, the appeal fails and is accordingly dismissed with costs of Rs.5,000/- to be payable to the Respondent.  Time for compliance four weeks.

MEMBER   PRESIDENT

Dt. 19.08.2016

JBNRN (P) & PVR (M)

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