IN THE CONSUMER DISPUTES REDRESSAL FORUM, PATHANAMTHITTA,
Dated this the 23rd day of September, 2011.
Present : Sri. Jacob Stephen (President).
Sri. N. Premkumar (Member)
O.P.No.51/05 (Filed on 23.03.2005)
Between:
Ramachandran Nair,
Koikkalazhikathu Vadakkethil,
Enathu.P.O., Adoor.
(By Adv. G.M. Idiculla) ..... Complainant
And:
Enathu Service Co-operative Bank Ltd.
No.2529, Enathu.P.O., Pin – 691 526,
represented by its Secretary.
(By Adv. S. Ajith Prabhav) .... Opposite party.
O R D E R
Sri. Jacob Stephen (President):
The complainant has filed this complaint against the opposite parties for getting a relief from the Forum.
2. Complainant’s case is that the opposite party is a Co-operative Society represented by its Secretary and the complainant is a consumer of the opposite party. Being a consumer of the opposite party, the complainant opened a recurring account of the opposite party vide account No.717. As per the terms and conditions of the said Recurring Deposit Scheme, complainant had to pay ` 4,000 per month for 120 months and if the complainant regularly paid the said amount for 120 months an amount of ` 9,78,400 will be returned as its maturity value. The passbook to that effect is also issued by the opposite party in the name of the complainant and he started payment on 11.09.2002 and he had remitted the monthly instalments regularly up to March 2005. While so on 10.01.2005, the opposite party served an intimation to the complainant stating that the agreed amount of ` 9,78,400 will not be paid by the bank and they will give only a reduced amount than the agreed amount. On getting the said intimation, the complainant send a notice on 25.2.2005 directly and a lawyers notice on 28.01.2005 requesting the opposite party not to retract from the terms and conditions of the recurring account of the complainant. The opposite party also intimated the complainant that they will pay only 7.5% interest to the deposited amount and they will not pay the maturity value offered and they also informed the complainant that they will not collect the future instalments. The stand of the opposite party is unilateral and the unilateral withdrawal from a concluded contract is a violation of Contract Act and it is illegal. The above said act of the opposite party is a clear deficiency in service, which caused financial loss and mental agony to the complainant and the opposite parties are liable for the same. Hence this complaint for an order directing the opposite party to continue and operate the account as per the terms and conditions of the scheme along with compensation of ` 10,000 and cost of ` 5,000.
3. Opposite party entered appearance and filed their version with the following main contentions: The 1st contention is that this complaint is not maintainable before this Forum as the complainant had remedies under Co-operative Societies Act. This question was decided against the opposite party as per the order in IA. No.112/07. Other contentions are as follows: Opposite party has framed a sub rule by name Group Recurring Deposit and Credit Scheme by the decision No.9 dated 27.11.1996, which was approved by the Joint Registrar of Co-operative Societies by order dated 05.02.1998. The recurring deposit scheme was started on the basis of the said sub rule. The normal period of the said recurring deposit was 60 months. As per the said sub rules, opposite party has got the right to vary the rate of interest and the amount payable on maturity had the right to amend the said rules. As per the sub rules, the depositor on joining the scheme is deemed to have approved the sub rules. As per the said sub rules, there is no provision for 120 monthly instalments or any bonus as claimed by the complainant. The sub rule also does not contain the payment of the double of the deposited amount on maturity. It is admitted that the complainant had joined in the recurring deposit scheme on 11.09.2002 at the rate of ` 4,000 per month. It was as per the desire of the complainant that period was fixed at 120 months and the maturity amount shown in the passbook is only the maximum sum which a depositor is entitled if the interest rate was not altered. So the amount of ` 9,78,400 is shown in the passbook only means that the complainant is entitled to receive the said amount if the bank does not alter the interest rate. While so on 30.12.2004, the director board of the opposite party has decided to vary the interest rate of the recurring deposits with effect from 01.01.05 from 18% to 7.5% and the said decision was also intimated to the depositors. The depositors were also given the option to cancel the account or to continue the account as per the revised interest rate. The opposite party was constrained to reduce the interest rate as the interest offered at the time of starting the scheme had caused heavy loss to the bank. Since the opposite party had every right to revise the rate of interest from time to time and the complainant joined the scheme with full knowledge of the opposite party’s rights, there is no violation of the contract act as alleged. The terms and conditions of fixed deposits and recurring deposits are different. Opposite party is ready to pay the interest at the rate of 18% till 31.12.2004 and opposite party is not bound to pay 18% interest for the instalments paid after 31.12.2005. With the above contentions, opposite party prays for the dismissal of the complaint, as they have not committed any deficiency of service.
4. On the basis of the pleadings of the parties, the only point to be considered at present is whether this complaint can be allowed or not?
5. The evidence of the complaint consists of the oral deposition of PW1, DW1 and DW2 and Exts.A1 to A7 and B1 and B2. After closure of evidence, both sides filed their argument notes and the counsels representing for both parties were also heard.
6. The Point:- The complainant’s allegation is that he had opened a recurring deposit of the opposite party on 11.09.2002 and as per the terms and conditions of the said recurring deposit scheme, the complainant had to pay 120 monthly instalments of ` 4,000 for each and the maturity value of the said deposit is ` 9,78,400. Accordingly, he had been paying the monthly instalment regularly. While so, the opposite party intimated the complainant that the interest rate fixed for the said scheme did not tally with the prevailing rate of interest and the opposite party is not in a position to continue the said scheme as such and directed the complainant either to continue the account with the present rate of interest or to close the account on the basis of the prevailing interest rate, vide letter dated 10.01.2005 issued by the opposite party. On getting the said letter, the complainant sent a letter on 25.01.2005 and issued an advocate notice on 28.01.2005 to the opposite party demanding not to retract from the aforesaid transaction. But instead of accepting the complainant’s demand, opposite party sent a reply stating that their earlier notice was based on the direction of the co-operative department and on the basis of the said notice complainant can continue the account with 7.5% interest. According to the complainant, the above said act of the opposite party is illegal and the opposite party is not entitled to withdraw from the terms and conditions of the said scheme.
7. In order to prove the complainant’s case, complainant filed a proof affidavit in lieu of his chief examination along with 7 documents. On the basis of the proof affidavit, the complainant was examined as PW1 and the documents produced were marked as Exts.A1 to A7. Ext.A1 is the letter-dated 10.1.05 issued by the opposite party in the name of the complainant stating their inability to continue the scheme. Ext.A2 is the attested photocopy of the passbook issued by the opposite party in the name of the complainant in respect of the disputed recurring deposit account. Ext.A2(a) is the photocopy of the 1st entry in Ext.A2 passbook showing the 1st payment of the monthly instalment by the complainant on 11.09.2002. Ext.A2(b) is the photocopy of the entry in Ext.A2 passbook regarding the payment of `4,000 as the 47th instalment made on 06.07.2006. Ext.A2(c) is the photocopy of the 1st page of Ext.A2 passbook showing the account No.as 717, number of instalment as 120 and the total amount of deposit as ` 4,80,000 and amount repayable as ` 9,78,400. Ext.A3 is the copy of reply-dated 21.05.2005 submitted by the complainant before the opposite party in reply to Ext.A1 letter. Ext.A4 is the copy of the advocate notice dated 28.01.2005 issued by the opposite party to the complainant. Exts.A5 and A6 are the postal receipt and acknowledgment card of Ext.A4 notice. Ext.A7 is the reply of Ext.A4 issued by the opposite party.
8. The contention of the opposite party is that they have started the recurring deposit scheme on the basis of the sub rule by name Group Recurring Deposit and Credit Scheme as per the decision No.9 dated 27.11.1996, which was also approved by the Joint Registrar of Co-operative Societies by order dated 05.02.1998. As per the said sub rule, the period of the said recurring deposit is 60 months and the opposite party has the right to vary the rate of interest and the amount payable on maturity by virtue of Clause 7 of the said sub rule. There is no provision in the said sub rule for 120 monthly instalments. The sub rule does not contain the payment of the double of the deposited amount on maturity. The complainant had joined in the scheme on 11.09.2002 and started paying the monthly instalment of ` 4,000. It was as per the desire of the complainant the period was fixed as 120 months and the final amount shown in the passbook is only the maximum sum which a depositor is entitled if the interest rate is not altered. But the Director Board of the bank has decided to vary the interest rate of the recurring deposits with effect from 01.01.2005. Accordingly, interest rate was reduced from 18% to 7.5% and the same was intimated to the depositors and were given option to cancel the account or to continue the account at the revised interest. The opposite party has constrained to reduce the interest rate as the original rate of interest of the said scheme as caused heavy loss to the bank. The opposite party has got every right to revise the rate of interest on recurring deposits and the opposite party is ready to pay 18% interest till 31.12.2004 and they are not bound to pay 18% interest to the instalments paid after 31.12.2004. With the above contentions, opposite party argued that in the light of the sub rule referred above the complainant is not entitled to get any of the reliefs prayed for. In order to prove the contentions of the opposite party, the present Secretary and the previous Secretary of the opposite party filed proof affidavits in lieu of their chief examination along with 2 documents. On the basis of the proof affidavit they were examined as DW1 and DW2 and the documents produced were marked as Exts.B1 and B2. Ext.B1 is the copy of the sub rule passed by the Director Board of the opposite party in its meeting held on 26.11.1996. Ext.B2 is the acknowledgment card signed by the complainant.
9. On the basis of the averments and contentions of the parties, we have perused the entire materials on record and found that there is no dispute between the parties with regard to the opening of the recurring deposit account by the complainant and the payments made by the complainant. The only dispute is with regard to the maturity period and the maturity amount. According to the complainant, the maturity period is 120 months and the maturity amount is ` 9,78,400. According to the opposite party, they have started such a scheme and the complainant and others joined in that scheme. But later the opposite party cancelled the said scheme as per the provisions of the sub rule passed by the opposite party for starting the said scheme and decided to reduce the rate of interest of the said scheme from 18% to 7.5%. According to the opposite party, they are legally entitled to cancel the scheme and reduce the interest rate as per the provisions of sub rules passed by the opposite party. The said sub rule is marked as Ext.B1.
10. On a perusal of Ext.B1, it is seen that the name of Ext.B2 sub rule is Group Recurring Deposit and Credit Scheme and the maximum monthly instalment mentioned in Ext.B1 is ` 1,000 and the maturity period is 60 months. On a perusal of Ext.A2 and A2(c) passbook, it is seen that the complainant is an recurring deposit account holder of the opposite party and his account number is 717 and the number of instalment of the said account is 120 months and the amount to be deposited is ` 4,80,000 and the amount repayable is ` 9,78,400. DW1 is the present secretary of the opposite party bank and DW2 was the previous secretary of the said bank. Both of them admitted in the cross-examination that Ext.A2 passbook was issued by the opposite party and all the entries contained therein were made by the staff of the opposite parties. It is seen that Ext.B1 sub rule is framed for Group Recurring Deposit Scheme for 60 months and the maximum monthly instalment amount mentioned in the said sub rule is only ` 1,000 whereas Ext.A2 passbook shows the instalment as 120 months and the total instalment amount to be remitted is ` 4,80,000 and the maturity value is shown as `9,78,400. So it is very clear that Ext.B1 sub rule is not applicable to the complainant’s account. Further in the deposition of DW1 and DW2, they clearly admitted that Ext.A2 passbook is issued from the bank and the entries therein was made by the employees of the bank. At the same time they contended that the opposite party has no recurring deposit scheme for 120 months and the entries made in the passbook was on the basis of the request made by the complainant. But the said contention is a strange contention, which is not acceptable. DW1 and 2 are the chief executives of the opposite party and the entries made by the chief executives of institution in the capacity of an executive can be treated as an official entry of that institution unless disproved otherwise. In this case, the opposite party have no case that the entire entries seen in Ext.A2 passbook is a fabricating entry made by the complainant. Moreover, opposite party has not produced any evidence to show that they have not started recurring deposit scheme like the complainant’s recurring deposit scheme. The oral testimony of DWs.1 and 2 and Ext.B1 and B2 are not sufficient for upholding the contentions of the opposite party.
11. Further as per the deposition of DW1, the present secretary of the opposite party clearly stated that the entries seen in Ext.A2(c) was made by DW2 who was the secretary in charge at the time of issuing Ext.A2 passbook to the complainant. At the same time, DW2 admitted this fact in his cross-examination. The relevant portion of DW2’s deposition is as follows:- “Ext.A2(c) bn FgpXnbn«pÅ Imcyw icnbmWv. AXn FgpXnbncn¡p¶Xv Rm\mWv“. DW2 had no case that the said entry was made by him under any compelling circumstances. As per Ext.A2, A2(a), A2(b) and A2(c), the complainant’s recurring deposit account was smoothly operated, without any objection of the opposite party, from 11.09.2002 to 06.07.2006, which means that the complainant’s account was opened and operated with the full knowledge and consent of the opposite party. In such a situation, the opposite party is not entitled to close the said account arbitrarily at their will and pleasure and hence it is an illegal act and it is not justifiable. Therefore, we find that the cancellation of the complainant’s recurring deposit scheme by the opposite party is an illegal act and is a clear deficiency in service and hence this complaint is allowable as prayed for.
12. In the result, this complaint is allowed, thereby the decision of the opposite party, cancelling the complainant’s account, is set aside and the opposite party is directed to continue the complainant’s recurring deposit scheme by accepting the monthly instalment of ` 4,000 each from the complainant till the 120th instalment and pay the maturity amount of ` 9,78,400 on the maturity of the said account. The opposite party is also directed to credit the amount with them, received as per the order in I.A.No.46/11, in the complainant’s recurring deposit account and to receive all unpaid instalments till the receipt of this order. The opposite party is further directed to pay an amount of `10,000 (Rupees Ten thousand only) as compensation for the mental agony of the complainant and ` 5,000 (Rupees Five thousand only) as cost to the complainant within 15 days from the date of receipt of this order, failing which the complainant is allowed to realise the said amount with interest at the rate of 10% per annum from today till the realisation of the whole amount.
Declared in the Open Forum on this the 23rd day of September,
2011. (Sd/-)
Jacob Stephen,
(President)
Sri. N. Premkumar (Member) : (Sd/-)
Appendix:
Witness examined on the side of the complainant:
PW1 : N. Ramachandran Nair.
Exhibits marked on the side of the complainant:
A1 : Letter dated 10.01.2005 issued by the opposite party to the
complainant.
A2 : True copy of the passbook issued by the opposite party in the
name of the complainant.
A2(a) : True copy of the 1st entry in Ext.A2 passbook showing the 1st
payment of the monthly instalment by the complainant on
11.09.02.
A2(b) : True copy of the entry in Ext.A2 passbook regarding the
payment of `4,000 as the 47th instalment made on 6.7.06.
A2(c) : True copy of the 1st page of Ext.A2 passbook.
A3 : True copy of reply letter dated 21.5.05 submitted by the
complainant before the opposite party in reply to Ext.A1 letter.
A4 : True copy of the Advocate Notice dated 28.1.05 issued by the
complainant to the opposite party.
A5 : Postal receipt of Ext.A4 Advocate Notice.
A6 : Acknowledgment card of Ext.A4 Advocate Notice.
A7 : Reply notice dated 01.03.2005 of Ext.A4 issued by the opposite
party.
Witness examined on the side of the opposite party:
DW1 : K.M. Raghavan Unnithan.
DW2 : Rajendran Nair.
Exhibits marked on the side of the opposite party:
B1 : True copy of the sub rule passed by the Director Board of the
opposite party in its meeting dated 26.11.1996.
B2 : Acknowledgment card signed by the complainant.
(By Order)
Senior Superintendent
Copy to:- (1) Ramachandran Nair, Koikkalazhikathu Vadakkethil,
Enathu.P.O., Adoor.
(2) The Secretary, Enathu Service Co-operative Bank Ltd.No.2529,
Enathu.P.O., Pin – 691 526.
(3) The Stock File.
