KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD,THIRUVANANTHAPURAM.
APPEAL No: 560/2010
JUDGMENT DATED:25-07-2011
PRESENT:
SHRI. M.V. VISWANATHAN : JUDICIAL MEMBER
SHRI.M.K. ABDULLA SONA : MEMBER
ICICI Bank Ltd
Edappally branch, B.M. complex,
Opposite St. George Church, : APPELLANT
Edappally, Ernakulam.
Pin – 682024- rep. by its authorized
Officer, Branch Manager
(By Adv:Smt.R.Suja)
Vs.
Joy Mathew,
S/o Late M.C. Mathew,
Maliakal House, Judge Mukku, : RESPONDENT
Thrikkakkara-682 021.
(By Adv:Sri.S.Reghukuar)
JUDGMENT
SHRI. M.V. VISWANATHAN : JUDICIAL MEMBER
Appellant is the opposite party and respondent is the complainant in CC.496/08 on the file of CDRF, Ernakulam. The complaint therein was filed alleging deficiency of service on the part of the opposite party in deducting Rs.25,400/- towards the penal charges out of the interest due on the fixed deposits effected by the complainant and also for the failure of the opposite party in not paying the interest agreed on the fixed deposits for the period from 5/9/2008 to 18/10/2008. Thus, the complaint was filed claiming a sum of Rs.59,710/- with compensation and costs.
2. The opposite party entered appearance and filed written version denying the alleged deficiency of service. It was contended that the complainant prematurely closed the 5 fixed deposits of Rs.10.lakhs each and so the opposite party bank was only liable to pay interest at the rate of 9% per annum by deducting interest at the rate of 1% for premature closure of the fixed deposits. The aforesaid deduction of Rs.25,400/- was effected accordingly and as per the rules laid down by the Reserve Bank of India and the internal circulars issued by the opposite party bank. It was further contended that the complainant closed the fixed deposits on 15/10/2008 and that he has been paid interest up to 15/10/2008. Hence the opposite party prayed for dismissal of the complaint in CC.496/08.
3. Before the Forum below Exts.A1 and A2; B1 and B2 documents were produced and marked on the side of the parties to the complaint. On an appreciation of the documentary evidence on record, the Forum below passed the impugned order dated:10th May 2010 directing the opposite party to pay interest at the rate of 10% per annum on the fixed deposits for the period from 5/9/2008 to 18/10/2008 and also to pay interest at the rate of 9% per annum from the date of the complaint till payment. Aggrieved by the said order, the present appeal is preferred by the opposite party therein.
4. We heard, the learned counsel for the appellant/opposite party and the respondent/complainant. The counsel for the appellant submitted her arguments on the basis of the grounds urged in the memorandum of the present appeal. She relied on Ext.B1 statement of account maintained by the appellant bank and submitted that the deduction of Rs.25,400/- was effected by calculating penal charges at the rate of 1% per annum. She further submitted that the appellant bank can very well reduce 1% interest from the normal and agreed rate of interest on the fixed deposits by way of penal charges for premature closure of the fixed deposits. Thus, the appellant prayed for setting aside the impugned order passed by the Forum below and for dismissal of the complaint in CC.496/08. On the other hand, the learned counsel for the respondent/complainant supported the impugned order passed by the Forum below. He much relied on Ext.A1 letter dated:13th October 2008 issued by the opposite party and submitted that the appellant bank can only deduct Rs.25,400/- towards penal charge/penal interest and that the appellant bank is liable to pay interest on the fixed deposits up to 15/10/2008, the date on which fixed deposits were closed. Thus, the respondent prayed for dismissal of the present appeal.
5. There is no dispute that the respondent/complainant effected 5 fixed deposits of Rs.10.lakhs each with the appellant/opposite party, ICICI Bank Limited. The aforesaid fixed deposits were for a period of 5 years. The agreed rate of interest was 10% per annum. The deposits were effected on 5/3/2007. No doubt that the respondent/complainant was a senior citizen on the date of the said fixed deposits and thereby he was offered interest on the fixed deposits at the rate of 10% per annum. It is also an admitted fact that the respondent/complainant prematurely closed the aforesaid fixed deposits on 15/10/2008. It is not disputed that on premature closure of fixed deposits, the bank can very well deduct 1% interest on the fixed deposits by way of penal charges or penal interest. It is the definite case of the appellant bank that deduction of interest at the rate of 1% from the agreed rate of interest is the normal practice of all the banks and the said practice is being followed on the strength of the guide lines of Reserve Bank of India and the circular issued by the appellant bank and other banks in accordance with the Reserve Bank guidelines. The appellant has also produced the circular which was issued on 21st July 2006 by the appellant/ICICI bank. The said circular would also make it clear that 1% of interest can be deducted by way of penalty or penal interest for premature closure of fixed deposits. If that be so, the respondent/complainant being the fixed deposit holder can only claim interest at the rate of 9% per annum on the fixed deposits, from the date of deposits ie on 5/3/2007.
6. Ext.B1 statement of account produced from the side of the appellant/opposite party bank would make it clear that the appellant/opposite party bank had credited interest on the aforesaid 5 fixed deposits at the rate of 10% per annum, after deducting the income tax at source. There can be no doubt that the respondent/complainant effected deposit of the aforesaid 5 fixed deposits for a total period of 587 days (5.3.2007 to 15.10.2008). The interest on the said 5 fixed deposits of Rs.10.lakhs each would fetch Rs.1,49,987/-, if the rate of interest is taken at 10%. But if the rate of interest is taken at 9%, the aforesaid fixed deposit would fetch a sum of Rs.1,44,907/- by way of interest. Thus, the difference in interest would come to Rs.5,080/- for each fixed deposits. So, for the above said 5 fixed deposits the total difference would come to Rs.25,400/-. Then, the sum of Rs.25,400/- deducted by the appellant/opposite party bank by way of penal interest or penal charge for premature closure of the fixed deposits can be treated as just and reasonable deduction made by the bank. So, the alleged deficiency of service on the part of the opposite party bank in deducting Rs.25,400/- cannot be upheld. Hence we hold that there was no deficiency of service on the part of the appellant/opposite party bank in deducting Rs.25,400/- by way of penal interest or penal charges for premature closure of the fixed deposits.
7. The aforesaid calculation would make it clear that interest has already been calculated at the rate of 9% per annum on the above 5 fixed deposits for 587 days ie; from 5/3/2007 to 15/10/2008. If that be so, further claim made by the respondent/complainant for interest on the fixed deposits from 5/9/2008 up to 18/10/2008 cannot be upheld. It is to be noted that the fixed deposits were prematurely closed on 15/10/2008. Then, the question of payment of interest on the fixed deposits up to 18/10/2008 does not arise at all. It is pertinent to note at this juncture that the actual period of the deposits would come to 587 days and interest has already been calculated on the said 5 fixed deposits for the period of 587 days. It is further to be noted that the respondent/complainant is only entitled to get interest at the rate of 9% per annum on the said 5 fixed deposits for a period of 587 days. That has already been calculated and paid by the appellant/opposite party bank. Thus, in all respects, the claim preferred by the complainant in CC.496/08 can be considered as unreasonable and unsustainable. But the Forum below failed to consider the relevant aspects of the case that the complainant prematurely closed the fixed deposits and thereby he was entitled to claim interest at the rate of 9% per annum on the said 5 fixed deposits. It has also failed to note the fact that the respondent/fixed deposit holder was given interest at the rate of 10% per annum on the aforesaid 5 fixed deposits. Then the opposite party/bank can very well deduct the excess interest paid to the complainant by way of penal charges or penal interest for premature closure of the fixed deposits. If that be so, the impugned order passed by the Forum below is legally unsustainable and the same is liable to be set aside. Hence we do so.
In the result appeal is allowed. The impugned order dated:10th May 2010 passed by CDRF, Ernakulam in CC.496/08 is set aside and the complaint therein is dismissed. As far as the present appeal is concerned, the parties are directed to suffer their respective cost.
M.V. VISWANATHAN: JUDICIAL MEMBER
M.K. ABDULLA SONA: MEMBER
VL.
