IN THE CONSUMER DISPUTES REDRESSAL FORUM, KANNUR

            Present:Sri.K.Gopalan                           : President

                         Smt.K.P.Preethakumari              : Member

                        Smt.M.D.Jessy                :  Member

                                       Dated this the 22^nd  day of     March 2010

CC/214/2008

Mrs.Thekkumbath Reetha Sadanandan,

Flat No.D4,

Summer Field Apartments,

Gokhale Road, Kannur 1                                                Complainant

(Rep. by Adv.K.L.Abdul Salam)

The Manger,

HDFC Bank,

South Basar Branch,

KVR Tower, Kannur.                                                      Opposite party

(Rep. by Adv.N.T.Ramakrishnan)

O R D E R

Sri.K.Gopalan, President

            This is a complaint filed under section 12 of consumer protection act for an order directing the opposite party to pay the interest on Fixed deposit from  23.7.07 for the term of  1 year and to pay Rs.1,00,000/- as compensation together with cost of this proceedings.

            The case of the complainant in brief is as follows: complainant is the account holder of the opposite party Bank. She deposited an amount of Rs.10, 00,000/- as fixed deposit for 1 year on 23.7.07. As per agreement the interest accrued on the fixed deposit shall be adjusted towards the monthly installment payment of Rs.6,555/- towards Auto loan taken by the complainant from opposite party having the number 117700 on the file of opposite party and the same auto loan account and the payment of the installment is going on. Moreover, the complainant deposited Rs.55, 000/- in advance as the payment of auto loan. The opposite party willfully discontinued the aforesaid fixed deposit account of the complainant within 6 months from the date of operation of account without the prior permission and consent of the complainant with an evil intention not to grant requisite interest thereon as the opposite party assured. The opposite party has not informed the fact of discontinuation of account even now. The opposite party cannot break such type of account as unilateral as they wishes. Opposite party has not adjusted the interest of FD towards Auto loan installment so far. More over, they have withdrawn Rs.13, 110/- from FD amount without informing the complainant. As per the assurance complainant is entitled to get 5.42% interest on the account. As such statement issued by the opposite party shows that they are liable to pay more than 1 lakh rupees as interest on FD. Complainant approached the opposite party several time but the negative approach of the opposite party did not solve the problem. So complainant was constrained to withdraw the amount on March 2008. The act of the opposite party is an unfair trade practice and deficiency in service. Complainant issued lawyer notice on 14.8.08 calling upon to  pay interest from23.7.07 for 1 year along with rupees one lakh as compensation. Opposite party sent a false and frivolous reply. Hence this complaint.

            In pursuance of notice opposite party entered appearance and filed version. The contentions of opposite party in brief are as follows: the complainant has an NRE SB account with the opposite party. On 20.7.07 a sum of Rs.10, 00,000/- was transferred from the said S.B account to NRE fixed deposit reinvestment scheme in her name and the FD receipt given to her. The maturity date is on 21.7.2008 for a total sum of Rs.1055537.57 paisa inclusive of interest  5.42% per annum. That is payment of interest is only on maturity. The application for this FD shows that she opted for the sweep in facility. As per this, incase of insufficient balance in the SB account funds are to be provided to the SB account by breaking the units of the fixed deposit. The complainant had availed an Auto loan as No.11770076 from the opposite party. She had given instructions to transfer the monthly installments of Rs.6555/- in the Auto Loan Account by debiting her SB account. The opposite party complied with this request and transferred the monthly dues to Auto Loan Account from August 2007. The SB account showed a debit balance of Rs.5331.37 ps. With the debit of installment on 7.2.08 and therefore Rs.5032 was transferred SB account from FD account. The dues of 7.3.08 in Auto Loan caused a debit in the SB account which was cleared by transfer of Rs.6555/- from the FD Account. These are clearly shown in the SB Account and are to the knowledge of the complainant, a highly dignified customer of the Bank. Complainant requested for the closure of FD account before the Minimum period as prescribed for NRE Term /deposit by RBI and therefore the Balance in the FD account was transferred to her SB account without interest (ie.Rs.988413/0 there was no request to transfer the interest on the FD to the SB Account or to the Auto Loan Account. On the contrary the FD receipt itself shows that the interest is to be paid only on maturity. The opposite party is not aware of Rs.55000/- said to have been deposited by the complainant to the ban k in advance as the payment of the Auto loan. The complainant is stopped from disputing her standing instructions to proper reply was given to the lawyer notice. Complainant is not entitled to any compensation interest or cost. Hence to dismiss the complaint.

            On the above pleadings the following issues have been taken for consideration

1. Whether there is any deficiency in-service on the part of opposite prty?

2. Whether the complaint is entitled for the remedy as prayed in the complaint?

3. Relief and cost.

            The evidence consists of Exts.A1 to A4 and B1 to B5. No oral evidence on both sides.

Issue Nos. 1 to 3

            Admittedly complainant is an account holder vide No.2703060000793 of opposite party where complainant had also a fixed deposit for an amount of Rs.10, 00,000/- for tenure of 12 months. Complainant’s  case is that as per the agreement executed between the opposite party and the complainant the interest accrued on the fixed deposit shall be adjusted towards the monthly installment payment of Rs.6, 555/- of an Auto Loan taken by the complainant from opposite party. Moreover, complainant deposited Rs.55, 000/- in advance as the payment of the auto loan.

            The main averment of the complaint is that the opposite party had willfully discontinued the above said fixed deposit account within 6 months without the prior permission and consent of the complainant. The opposite party has not informed the complainant the fact of discontinuation of account to the complainant even now. Complainant further alleged hat opposite party hasn’t followed the legal procedures in breaking the fixed deposit. Further they have not adjusted the interest of FD amount towards Auto Loan installment so far and withdrawn an amount of Rs.13, 110/-from FD amount without informing the complainant.

The opposite party contended that the FD is due for payment on maturity on 21.7.08 for a total sum of Rs.1055537.57 p.s. Inclusive of the interest at 5.42% per annum. Opposite party further contended that the application for this FD shows that she opted for the sweep to facility. As per this, incase of insufficient balance in the SB account funds  to be provided to the SB account by breaking the units of the fixed deposit.

            Ext.A1statement of Account No.2703060000793 reveals that the current FD amount as on 31.12.07 is Rs.10, 13,661.37. It also shows Rs.10, 988/-has been accorded as interest and the maturity date is 21.7.08 with maturity amount Rs.10, 55,537.57 ps. Period of Tenure shown is 12 months. Ext.A2 Account No.02703060000793 as on 29.2.08 shows current FD amount Rs.10, 22,331.16 ps. Interest accrued Rs.6, 207.17 ps, maturity date 21.7.08 and maturity amount Rs.10, 50,226.10 ps. It can be seen that interest accrued as on 31.12.07 is Rs.10, 988 whereas on 29.2.08 it is seen reduced to Rs.6, 207/-. In the normal course the interest would have been increased but it is reduced. But here it is seen less than that of accrued interest amount of ;previous entry. Where is the reduced amount of interest? What happened to reduced amount of interest? The specific case of the opposite party is that there was no request to transfer the interest on the FD to the SB account or to the Auto Loan account. If so there is no reason to reduce the accrued amount of interest in subsequent period. It is the definite case of the opposite party that the interest is to be paid only on maturity since the FD receipt is shown so. If that be so, the accrued interest amount need not be decreased. Thus there is no doubt the amount reduce is withdrawn or adjusted  though account and thereby shows that there was some agreement or understanding to adjust the amount from the interest. Otherwise opposite party should explain the reason why the accrued amount of interest happened to be reduced. If it is payable only on maturity there is no question of decreasing of the accrued interest amount. That will go on accruing more and more and not decreasing less and less. This only show opposite party’s contention is a cooked up story. The available evidence leads to assume that the amount has been adjusted to the Auto Loan. Hence it is also false to say that there was no request to transfer the interest so as to adjust the payment of the Auto loan. Opposite party has the case that as per the standing instruction of the complainant her SB Account was debited with Rs.6555/- towards credit to her auto loan account every month. It is clear that no depositor will intended to break the FD and to adjust the amount. But it stands as security ever ready to cease as and when required inevitable to recover the amount. It is only a  step that one could take as a part of recovery. The party should be given enough opportunity to avoid his heavy loss by taking measures. The question of recovery or else adjustment of amount do arise only on the failure of this attempt.

            It may further be stated here when there s a possibility of heavy loss to complainant if an action taken, the opposite party is morally and legally obliged to bring the fact within the knowledge of complainant paying the way to take measures for  this to avoid the avoidable heavy loss. The action of the opposite party herein resulted in spoiling the very purpose for which the deposit was made by the complainant. Ext.B1 or B2 does not permit opposite party to break the FD without notice. Under such circumstances it is the bounden duty to send a notice to complainant, which the opposite party failed purposefully. The degree of obligation to send the notice is very high, herein for two reasons. The first one is the amount is very high more than Rs.10 lakh. The other one, perhaps most important is that the complainant is admittedly a highly dignified customer of the Bank. Opposite party  called him highly dignified customer of the bank in the version. Whether it is called so sincerely or not is a question of analysis. If it called so not sincerely the act of opposite party amounts to unfair trade practice or if it is called sincerely the act amounts only deficiency in service.

            It can be seen that the insufficient balance in the SB account of complainant had been adjusted providing the amount by breaking the fixed account without issuing notice to complainant for the purpose of protecting the promise given to complainant in the case of paying installment towards Auto Loan taken from them. In other words, the opposite party’s contention is that funds provided to the SB account by breaking the units of the fixed deposit for the protection of the best interest of complainant, knowingly well that it will be resulted in to heavy loss to complainant, the most dignified customer of the bank, which in the natural process flow best profit to the fund of opposite party. The close analysis reveals that the act of opposite party is as  they had been waiting for a chance to utilize an opportunity to break the fixed deposit of the complainant. Opposite party has not produced any evidence to show that they are entitled to break the fixed deposit without issuing notice. This is the case wherein the complainant is a dignified customer, which itself declare he is capable of affording funds for meeting such contingencies if the matter is being made known to him. The undoing of sending notice to complainant in this matter is thus, a purposeful act that amounts to unfair trade practice. The breaking of FD account without notice to complainant is an open denial of natural justice which cannot be accepted in the sake of technicalities allowing a literal interpretation of a term to bring about absurd result or inconveniences and loss. It is pertinent to note the principle lies in the Maximum “Incante factum pro non facto habitur” which means a thing done unwarily will be taken as not done.

            In the light of the above discussion we have no hesitation to hold that there is deficiency in service on the part of opposite party and the opposite party is liable to meet the loss sustained by the complainant. Thus we are of opinion that opposite party has to pay the interest on fixed deposit @ 5.42% per annum for a period of 12 months. Complainant is also entitled for compensation for a sum of Rs.5000/- together with Rs.250/- as cost of these proceedings. Thus issues 1 to 3 are found in favour of complainant and order passed accordingly.

            In the result, the complaint is allowed directing the opposite party to pay interest on the fixed deposit of complainant from 23.7.2007 @ 5.42% per annum for a period of 12 months and amount of Rs.5000/- as compensation together with a cost of Rs.250/- to the complainant within one month from the date of receipt of this order, failing which the interest amount will attract interest @ 10% from 23.7.2007 till the realization for the amount. Complainant is at liberty to execute the order after the expiry of 30days as per the provisions of consumer protection act.

                   Sd/-                              Sd/-             Sd/-

President                      Member           Member

APPENDIX

Exhibits for the complainant

A1&2.Copy of statement of accounts issued by OP31.12.07 and29.2.08

A3.&4.Copy of the lawyer notice and reply

Exhibits for the opposite party

B1.Copy of FD application of NRE by complainant

B2.Standinginstruction given by complainant

B3.FDNRE.2703060000793 of complainant

BN4.SB account pass sheet of complainant

B5.Copy of the circular RBI 2008-09/76 dt.1.7.08.

Witness examined for either side: Nil

                                                           /forwarded by order/

                                                             Senior Superintendent

Consumer Disputes Redressal Forum, Kannur