PER SHRI. S.M. RATNAKAR – HON’BLE PRESIDENT
1) By this complaint the Complainant has prayed to hold and declare that the Opposite Parties are guilty of deficiency of service as per the provisions of the Consumer Protection Act, 1986. It is prayed that the Opposite Parties be directed to refund the principal amount of Rs.4,20,000/- with interest @18% p.a. accrued thereon from 05/06/2006 till 25/06/2012. It is also prayed that the Opposite Parties be directed to pay compensation for mental as well as financial loss caused to the Complainant to the tune of Rs.2,00,000/- and Rs.50,000/- towards the cost of this complaint.
2) According to the Complainant, he had opened PPF Account with the Opposite Party No.1 on 05/06/2006 in the name of Mr.Satish Chhotelal Trivedi (HUF) under Provident Funds Scheme, 1968. The Complainant till 05/04/2011 contributed Rs.4,20,000/- and the total interest shown in his Provident Fund Account by the Opposite Party to the tune of Rs.90,435/-. The copy of the Pass-Book is marked as Exh.‘A’. It is submitted that the Complainant received letter from Opposite Party No.1 dtd.27/07/2011 showing balance of Rs.5,10,435/- and asking to call the Opposite Party No.1 immediately. The Complainant then called the Chief Manager of Opposite Party No.1 – Mr. S. Venkateshwaran on telephone who informed the Complainant that the PPF Account in the name of Satish C. Trivedi (HUF) has to be closed. The Complainant thereafter vide letter 17/08/2011 requested to Opposite Party No.1 to convert the PPF (HUF) account in the personal name of the Complainant Mr. Satish C. Trivedi or issue the Demand Draft of the Complainant’s balance outstanding amount with interest thereon since the Bank Officers orally informed to close the account. The copy of the letter issued by the Complainant is marked as Exh.‘B’. According to the Complainant, he then visited to the Opposite Party No.1 on 27/08/2011 and he was shocked and surprised when he was informed that he will be issued a cheque of Rs.4,20,000/- which was of the principal amount without interest and no satisfactory reasons were given by the Chief Manager, while denying the interest accrued on the principal amount. The Complainant also issued letter dtd.27/08/2011 to the Opposite Party No.1. The copy of which is at Exh.‘C’. The Complainant thereafter approached the Banking Ombudsman and the copies of correspondence regarding it between the Banking Ombudsman and the Complainant are marked at Exh.‘D’ to ‘G’.
3) It is submitted that in the letter of Ombudsman dtd.11/01/2012 (Exh.‘G’) the reference of Reserve Bank of India circular dtd.25/05/2005 was made and the Complainant came to know that the scope of investment in PPF was restricted only to individuals and not HUF account by amendment dtd13/05/2005 in the PPF Scheme 1968. It is submitted that the copy of the said circular is at Exh.‘H’. According to the Complainant despite having such condition in the scheme the Opposite Party No.1 suppressed the said facts and allowed to open the account of the Complainant in the name PPF (HUF) without mentioning the condition of circular dtd.25/05/2005. It is alleged that despite having knowledge of the circular dtd.25/05/2005 the Opposite Parties allowed to open the account under PPF Scheme (HUF) after a period of 13 months from the date of issue of circular and has received the Complainant’s deposit every year until the financial year and credited interest upto 31/03/2011. The said action of the Opposite Parties amounts to misguiding the Complainant to open an account prohibited by law is deficiency in service under the provisions of the Consumer Protection Act, 1986. The Complainant therefore, sent notice through the Advocate to the Opposite Parties dtd.27/03/2012 which is marked as Exh.‘J’. It is submitted that meanwhile the Opposite Party No.1 sent letter dtd.26/03/2012 informing the Complainant to collect the cheque of the principal amount. The copy of the said letter is marked as Exh.‘K’. The Opposite Parties replied to the notice of the Complainant through their advocate on 22/04/2012, the copy of which is marked as Exh.‘L’. It is alleged that the Opposite Parties are liable to refund the principal amount and the claims made in para 1 of this order.
4) The Opposite Parties No.1 & 2 contested the claim by filing their written statement. It is contended that the complaint is bad-in-law and not maintainable and liable to be dismissed with cost. According to the Opposite Parties, the Complainant who is practicing Chartered Accountant suppose to know every regulations/rules and notification of RBI, knowingly had started the account with the Opposite Parties and he is trying to extort money from them. It is submitted that in June, 2006 the Complainant approached the Opposite Party No.1 and represented that the Complainant himself as a Chartered Account and his HUF is eligible to open PPF Account in the name of Satish C. Trivedi (HUF). It is contended that the Complainant also represented that he is fully conversant with the applicable rules and regulations and the Complainant’s HUF was entitled to seek benefits of the amount depositing in the PPF Account from the Income Tax. It is submitted that relying upon the aforesaid submission made by practicing Chartered Accountant and believing the same to be true, the Opposite Party bonafiedly permitted the said HUF to open PPF Account and in order to claim income tax benefits. The Complainant thereafter, had from time to time deposited the amounts aggregating to Rs.4,20,000/- in the said account. It is submitted that recently the Opposite Parties noticed that by notification dtd.13/05/2005 the opening of PPF Account got restricted only to “Individuals” and juridical persons including Trust & HUF become ineligible to invest any amount under the Public Provident Fund Scheme, 1968. It is contended that so the said PPF Account opened after notification dtd.13/05/05 on representation of the Complainant is void-ab-initio. It is submitted that the Reserve Bank of India had directed the Banks that the Government Account should not be debited for the interest on deposits in the PPF Accounts after 13/05/2005. It is contended that the Opposite Party has informed the Complainant and closed the PPF (HUF) Account of the Complainant and issued Demand Draft for Rs.4,20,000/- deposited in the said account. It is contended that the Complainant is not entitled to claim any interest in terms of the notification dtd.13/05/2005 particularly when RBI has directed the Banks not to credit any interest on deposit made in PPF (HUF) Account opened after 13/05/2005. The Opposite Parties have denied parawise all the allegations made by the Complainant and submitted that the complaint be dismissed without any reliefs.
5) The Complainant has filed his affidavit of evidence and the original documents. The Opposite Party No.1 & 2 have filed the affidavit of Jayram Sahu, Chief Manager of the Opposite Party No.1. Both the parties have filed their written arguments. We have heard Shri. K.G. Rikame, Ld.Adv. on behalf of Sagar Talekar, Advocate for the Complainant and Shri. Biju Jecob, Ld.Advocate for the Opposite Party Nos.1 & 2. We have perused the documents produced by both sides.
6) From the averments made by the parties to this complaint it is undisputed that the Complainant had opened PPF (HUF) Account under Public Provident Fund Act, 1968 after 13/05/2005 while considering the claim made in the complaint it is necessary to be seen that the Reserve Bank of India by circular dtd.25/05/2005 which is at Exh.‘H’ has given specific clarification in view of Government of India Notification dtd.13/05/2005 issued by Ministry of Finance amending the provisions of PPF Scheme, 1968 w.e.f. May, 13 2005. The said clarification is quoted in the document at Exh.‘H’ as under –
“(i) Sequel to amendments to various small saving schemes to restrict the scope of investment only to individuals, the accounts, if any, opened by the juristic persons (HUFs, Trust, Provident Funds, etc.) i.e. persons other than individuals (Through single or joint accounts or deposits by guardians on behalf of minors and persons of unsound mind as per rules). On or after May, 13 2005 under any of the Small Saving Schemes including Public Provident Scheme, 1968, shall be treated as void-ab-initio and immediate action should be taken to close such accounts and to refund the deposits without any interest to the depositors.”
The copy of the said circulars appears to have been issued to all Nationalized Banks and State Bank of India including the Opposite Parties. In our view in view of the amendment in the PPF Scheme noted in the above circular made by the Government of India, the account which was opened with the Opposite Parties by the Complainant in the month of June, 2006 can be treated as void-ab-initio and therefore, the claim made by the Complainant in spite of depositing the regular deposit for 6 years @ 70,000/- by the Complainant and crediting the interest amount by the Opposite Parties in the PPF (HUF) Account of the Complainant itself being null & void, the claim made by the Complainant for grant of interest @ 18% p.a. on the amount of Rs.4,20,000/- in this complaint is not maintainable. The submissions made by the Advocate for the Complainant relying upon the guidelines for interest of deposits issued by RBI in the 7th Edition 2010 published by Taxmann in our view cannot be accepted as legal and proper. Furthermore, the Hon’ble State Commission in 14 appeals filed by the State Bank of India bearing Nos.675/2010, 462/2010, 463/2010, 676/2010 to 684/2010 and 718 & 719/2010 decided on 15/10/2010 quashed and set aside the decisions given by the Sangli District Consumer Forum against the complaints filed by various consumers against the State Bank of India involving the similar point as involved in this complaint with the following observations –
“Government has every right and empowerment to take policy decision in respect of PPF Scheme. Under the circumstances, instructions given are binding to all the participants as well as to the facilitators who are responsible to the implementation of the scheme on behalf of Government.
Even if the interest is wrongly shown as credited beyond the period of maturity in the pass book, those entries can be reversed since those entries are contrary to the instructions given. There cannot be any service deficiency, if the appellant bank acted according to those instructions which are binding upon it. There is no breach of any statutory or contractual obligation. Under the circumstances, the issue before us is well covered by the decision of the Apex Court in the case of Post Master Dagarmitta HPO, Nellore V/s. Raja Prameelamma (Ms) reported in (1998) 9 Supreme Court 776.”
Considering the aforesaid observations we find on the basis of the subjective and legal aspects involved in this complaint as the Complainants HUF Account opened after 13/05/2005 being itself ab-intio-void the Opposite Parties cannot be held liable to pay interest as claimed on the amount of Rs.4,20,000/- and the compensation and cost as claimed by the Complainant. In the result we pass the following order –
O R D E R
i. Complaint No.134/2012 is dismissed with no orders as to costs.
ii. Certified copies of this order be furnished to the parties.
