Delhi

StateCommission

A/248/2018

M.L. MARWAH - Complainant(s)

Versus

CANARA BANK - Opp.Party(s)

23 Jul 2019

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments:23.07.2019

Date of Decision:  01.08.2019

First Appeal No.248/2018

In the matter of:-

M.L. Marwah,

Flat 5, Vandana Apartments,

Plot-42, I.P. Extn.,

Patpargunj, Delhi-92..........Appellant

Versus

Canara Bank,

Atlantic Arcade,

I.P. Extn. Branch,

Patpargunj, Delhi-92.  …....Respondent

CORAM

    Sh. O. P. Gupta, Member (Judicial)

1.     Whether reporters of local newspaper be allowed to see the judgment?                                        Yes/No

2.      To be referred to the reporter or not?                                                                                                     Yes/No

 Sh. O.P. Gupta, Member (Judicial)

JUDGEMENT

1. This appeal is directed against order dated 26.03.18 passed by District Forum East vide which complaint of the appellant was partly allowed and the OP/ respondent was directed to pay Rs.45,000/- as compensation on account of mental agony and pain, Rs.5,000/- as cost of litigation.
2. The facts of the case are very disturbing. The appellant had Saving Bank Account No.2756101002172, OD Account No.2756257000068, 7 CDRs for Rs.3 lakhs, Rs.4 lakhs, Rs.2 lakhs, Rs.2 lakhs, Rs.26,785/- Rs.2,00,902/- and Rs.2 lakhs. Total of the CDRs comes to Rs.15,27,687/- with OP/ respondent. He also had FDR for Rs.2,00,000/- for 10 years from 30.05.11 to 02.05.21 with interest @10.5% per annum. The respondent closed the said FD on 06.09.14. Appellant approached banking ombudsman which ordered the respondent either to give 30 days notice for closing the FD or 30 days interest in lieu thereof. The respondent handed over a cheque of Rs.15,936/- to the appellant on 04.02.15 alongwith cheque for Rs.19,43,611.02 which was revalidated on 23.01.15. The respondent paid interest in all the accounts upto 06.09.14 and the cheque dated 06.09.14 was revalidated on 23.01.15. The same was received by the appellant which resulted in loss of Rs.2,47,457/-.
3. The respondent deducted 2% penalty on premature payment of all deposits which should not have been deducted as the respondent closed appellants account without his consent. The respondent did not pay half prercent interest extra payable to senior citizen. Hence the appellant filed a complaint to pay Rs.2,44,031/- as interest on 06.09.14 to 06.02.15, Rs.3,426/- as penalty directed to be paid by banking ombudsman, Rs.50,000/- for conveyance expenses for 8 months. Sum total of all this claims comes to Rs.2,97,457/-. Complainant had also prayed for interest on the said sum @10.5%.
4. The respondent remained exparte before the District Forum. The appellant filed copies of deposits, email written to respondent, order dated 09.02.15 by bank ombudsman, copy of DD dated 06.07.14 revalidated on 23.01.15, copy of his pass book and letter written by him to respondent.
5. The impugned order gives an impression that counsel for respondent appeared before the District Forum at the stage of arguments. He contended that appellant was dealing in old currency note and was interrupting with the smooth working of the bank by misbehaving with the staff. Due to this reason, the bank account and fixed deposit of appellant were closed. However he was unable to show any guidelines to establish that the act of the respondent was not arbitrary.
6. The District Forum returned a finding that deduction of penalty on premature closure was arbitrary act of respondent as respondent itself closed the FD without consent of the appellant and without giving prior notice. This amounted to deficiency in service as well as unfair trade practice on the part of respondent.
7. The respondent was served by RAD, in appeal for 11.03.19. It remained absent. It was proceeded exparte vide order dated 04.04.19.
8. I have gone through the material on record and heard arguments. The copy of the FD is Annexurue-14 to appeal. In the absence of any denial on the part of respondent, there is no reason to disbelieve the contention of the appellant that the FD was closed prematurely by the respondent, without any instructions or request on behalf of the appellant. The arguments advanced by counsel for the respondent before the District Forum that appellant used to misbehave with the staff is no ground to prematurely close the FD.
9. The act of respondent in charging penalty @2% per annum for premature encashment is an additional punishment. On the one hand the appellant has lost interest for the remaining period of 7 years at the agreed rate of 10.5% per annum. It is a matter of common knowledge that in 2014 rates of interest has gone down. Probably that was the reason behind premature closer of FD but that is not permissible under the banking law. FD is in nature of contact and both the parties are bound by terms of the contract. If rate of interest increase, the account holder cannot claim enhanced interest. Vis versa if the rates of interest are reduced, bank cannot close the account prematurely so as to avoid liability to pay interest at more rate.
10. It is only on the request of account holder that FD can be encashed prematurely and in that event the bank can charge penalty also. But that is not the situation in the present case.
11. It is manifest from the record that DD No.275613007490 dated 060914 for Rs.19,45,611.02/- was sent by the respondent to the appellant. The same was revalidated on 23.01.15 and sent to the appellant which was received by the appellant on 04.02.15. Since the amount remained with the bank during the period 06.09.14 to 04.02.15, the bank is liable to pay interest upon the same for 5 months @10.5% per annum which was the agreed rate of interest on FD.
12. The order of the District Forum in awarding Rs.45,000/- as compensation in lump-sum. It is a compensation for mental agony and pain only. It is not clear as to why the amount of interest was not directed to be paid inspite of the fact that District Forum was convinced that  there was deficiency in service as well as unfair trade practice on the part of respondent.
13. In view of the above discussion the appeal is accepted, impugned order is modified to the effect that respondent would pay interest @10.5% per annum on Rs.19,43,611.02 for the period 06.09.14 to 23.01.15 which was the value of DD No.275613007490 dated 06.09.14. The respondent is also directed to pay difference in amount payable to appellant at the agreed rate till 06.09.14 and amount actually paid  by respondent. The difference of half percentage in interest payable to senior citizen is already included in the rate of interest @10.5% per annum. So the same cannot be directed to be paid separately. In addition the respondent would pay Rs.45,000/- as compensation on account of harassment, mental agony and pain. The appellant had been running from pillar to post from five years from 2014 till date. The appellant is senior citizen aged about 70 years and cannot be expected to run here and there for his own money for five years.
14. The amount of compensation will take care of cost of litigation also. So directions given by the District Forum to pay Rs.5,000/- as cost of litigation is set aside. Order to be complied within 45 days from receipt of copy of this order.
15. Copy of the order be sent to all the parties free of cost.
16. One copy of the order be sent to District Forum for information.
17. It is a serious matter in which the bank and concerned officer have caused huge financial loss to the bank by their irresponsible act of not defending the case in District Forum as well as this Commission. One copy of the order be sent to Chief Manager, Head Office of respondent bank with directions to take action against the erring officer of the bank and informed the same to this Commission.
18. File be consigned to Record Room.

 

(O.P. Gupta)

Member (Judicial)