By Smt. C.S. Sulekha Beevi, President,<br /> <br /> 1. Facts in brief:-<br /> Complainant who worked abroad for several years is an NRE account holder with first opposite party Bank. He had also taken an Endowment Certificate with Peerless General Finance who are third and fourth opposite parties. The period of the Endowment Certificate was ten years commencing from 02-11-1993 and ending on 02-11-03. The instalments were payable half yearly as per the schedule given in the Certificate. On regular payment of instalments complainant would be entitled to receive Rs.68,520/- as maturity value on 02-11-03. Upto 02-5-1996 the instalments were paid by complainant himself. Thereafter since he had to go abroad he made arrangements with first opposite party Bank to pay the instalments on his behalf. As per the arrangement Bank was to remit Rs.2,000/- on 02-11-1996, and thereafter the same amount on 2nd of May and November of every year upto 2002 and also the last instalment of the same amount on 02-5-2003. That complainant had maintained sufficient balance in his account. That the instalment of 02-11-1996 only was remitted by Bank within the specified time. All subsequent instalments were remitted with much delay. When complainant approached Peerless after 02-11-2003 to receive the maturity value of Rs.68,520/- he was informed that, since the instalments were not paid regularly the Certificate has lapsed. Peerless informed him that he was entitled to receive only Rs.26,000/- upon the Certificate. That the instalments paid with delay is credited to the suspense account. That this amount which comes to Rs.16,000/- cannot be considered for calculation of the maturity value and that it will be send back to the Bank. Complainant is aggrieved that due to default on the part of Bank to remit the instalments within time he has incurred a loss of Rs.42,520/-. That complainant who had gone abroad returned to his native place after seven years. That he send a registered notice to Bank claiming compensation which was not heeded to. Hence this complaint.<br /> 2. First and second opposite parties which are separate officer of Canara Bank have filed a joint version disputing the complainant to be a consumer. It is submitted that the facility to pay installments on behalf of the complainant was a service rendered free of charge by the Bank. Due to lack of consideration the complaint will not fall within the ambit of Consumer Protection Act. That there is no consumer relationship since there was no hiring of service for any consideration. It is admitted by Bank that complainant had given standing instructions to remit the instalments of the Endowment Certificate from his NRE account with the Bank. That Rs.18,090/- was paid to the Peerless Finance and in the meantime few instalments were defaulted due to unfortunate mistake and lack of communication from Peerless and complainant. That Life Insurance Corporation and other insurance companies usually give notice of payment to Bank as well as to Customer. That Peerless never intimated the due dates or the lapse of policy. That complainant is a very good customer and he always maintained sufficient balance in his account. That Bank made an unforced error without any malafide intention. That Peerless has made illegal gain by keeping Rs.16,090/- in the suspense account without giving any benefits to the customer. Though Bank send two registered letters to Peerless, neither did they reply nor did they act upon. Peerless has exploited the funds of the customer without any prudence or reasonableness. That complainant has not taken care of his account and therefore is guilty of contributory negligence. That Peerless ought to have communicated the default to the Bank and complainant and ought not to have collected the sum which could not be credited to the Endowment Certificate. That therefore Peerless has committed deficiency in service and unfair trade practice. That Bank has to be exonerated from liability and Peerless may be directed to compensate the complainant.<br /> 3. Third and fourth opposite parties which are separate officers of Peerless Finance Company have filed a joint version. It is admitted that complainant had taken an Endowment Certificate from their Kozhikkode branch. The Certificate was under Table 23 Term 10 years with half yearly mode of payment. The commencement of the Certificate is 02-11-1993 and date of maturity is 02-11-2003. The correct due dates to pay the instalments are stated in the Certificate. If the Certificate holder pays all the instalments within time during the specified period of 10 years he will get full maturity value of Rs.68,520/-. If payments are discontinued, the amount deposited will be refunded as per clause 4 in the Certificate. Conditions of the scheme are stated in the Certificate. Complainant paid six instalments within time. One instalment paid through First opposite party Bank was also within the grace period. Subsequent instalments were not paid with due dates or period of grace. As per the conditions the Certificate thus lapsed and additional interest has to be paid to revive the policy. The instalments were paid with much delay and was not accompanied by additional interest needed to revive the Certificate. Therefore these 8 instalments; the total of Rs.16,000/- was kept in the suspense account. Complainant was intimated about the default and the lapse of Certificate. The receipts were duly send to the complainant. Upon these receipts sufficient endorsements were made intimating the complainant about delay, default of instalments and lapse of Certificate to alert the complainant. Complainant failed to respond. That Peerless is totally unaware of the arrangement made between Bank and complainant. The details of payment are also given in the version. The last instalment was received after the maturity date. Complainant is therefore entitled to Rs.26,000/- only as per the Endowment Certificate taking into consideration the seven instalments paid by him within time. Peerless had offered to pay this amount and a discharge voucher to this effect was send to the complainant. He has not returned the same. That Peerless is ready to pay Rs.26,000/- upon the Endowment Certificate and is also willing to refund Rs.16,000/- kept in suspense account to the complainant. That opposite parties have not refused to pay these amounts to the complainant. That loss occurred to the complainant only due to omission on the part of his bank and therefore the liability cannot be fastened upon third and fourth opposite parties. That Peerless is dragged into the litigation unnecessarily. That the dispute exists only between Bank and complainant and hence the complaint may be dismissed against third and fourth opposite parties.<br /> 4. Evidence consists of affidavits filed by complainant and Exts.A1 to A6 marked on his side. First and second opposite parties have filed joint affidavit. Third and fourth opposite parties have filed affidavit. No documents marked on the side of opposite parties. Either side has not adduced any oral evidence.<br /> 5. Points for consideration:-<br /> (i) Whether complainant is a consumer?<br /> (ii) Whether opposite parties have committed any deficiency in service?<br /> (iii) If so, reliefs and costs.<br /> 6. Point (i):-<br /> First and second opposite parties dispute the complainant to be a consumer. It is contended by Bank that the service of remitting instalments on behalf of the complainant was provided free by the Bank. That the Bank has given additional facility to the account holder free of charge and the service is not supported by any consideration. That for this reason complainant would not fall within the definition of consumer as defined under the consumer Protection Act. Admittedly complainant is an NRE account holder of the Bank. The definition of service under 2(o) of Consumer Protection Act includes facilities in connection with banking. The definition does exclude the rendering of any service free of charge. The question is whether the service of paying instalments on behalf of complainant was rendered for consideration or not. It is sufficiently comprehensible that the Bank had agreed to remit the instalment on behalf of the complainant only because complainant held an account with opposite party Bank. On maintaining this NRE account complainant has put his funds at the disposal of the Bank. The account holders take into consideration the various facilities provided by Banks. In many cases, these facilities attract customers more than the rate of interest. If the Bank renders service as a general practice, without charging the customer separately for it, it cannot be said that the facility is provided free of charge. The funds in the account of the complainant are at the disposal of the Bank. Bank is sure to utilise these funds in it's business. Hon'ble Supreme Court has held in Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi 2000 CTJ (SC) CP that consideration means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee. This decision was applied by Hon'ble National commission in UCO Bank and others Vs. M.R.Pandit 2004 CTJ 815(CP) NCDRC and is also applicable to the present case. We are therefore able to conclude that the service is obtained by complainant in consideration of putting his funds at the disposal of the Bank and is therefore not given to him free of charge or without any consideration. We find that complainant is a consumer and the complaint is maintainable. Point found in favour of complainant.<br /> 7. Point (ii):-<br /> The admitted facts of this case are that complainant had an NRE account with first opposite party Bank and also had an Endowment Certificate with third opposite party. Ext.A1 is the Endowment Certificate issued by third opposite party. The date of commencement of Endowment Certificate is 02-11-1993 and the date of maturity is 02-11-2003. The schedule of payment of premium/instalment along with the terms and conditions of the Endowment Scheme are stated in Ext.A1. As per the schedule the instalments are payable half yearly and each instalment falls due on 2nd of May and November of every year upto 2002. The last instalment is payable on 02-5-03. On making regular remittances without default complainant would be entitled to receive the maturity value of Rs.68,520/- on 02-11-2003. the instalments upto 02-5-1996 were paid by the complainant directly. Since complainant had to go abroad he made arrangements with first opposite party Bank to pay the instalments on his behalf. As per the arrangement, Bank was entrusted to remit Rs.2,000/- on 02-11-1996 and thereafter the same amount was to be remitted on 2nd of May and November of every year upto 2002, and also to pay the last instalment of Rs.2,000/- on 02-5-2003. According to complainant Bank had remitted only one instalment of Rs.2,000/- within the specified due date. The subsequent instalments were remitted by Bank beyond due dates and with much delay. A total of Rs.16,000/- was remitted by Bank belatedly. Due to the delay in payment and default, third opposite party did not adjust these instalments to the Endowment Certificate account. Instead, these delayed instalments which comes to a total of Rs.16,000/- is kept in the suspense account. After the date of maturity of the Endowment Certificate when complainant approached third opposite party to receive the maturity value of Rs.68,520/-, he was informed that due to default in paying instalments the Certificate has lapsed after 02-11-1996. That complainant would be entitled to only Rs.26,000/- upon the Endowment Certificate instead of Rs.68,520/-. Complainant alleges that due to willful default on the part of Bank in remitting the instalments within time he incurred a loss of Rs.42,520/-.<br /> 8. The arrangement/agreement to pay the instalments on behalf of the complainant is not disputed by bank. The omission to pay the instalments within specified due date is also admitted. It is contended by Bank that the omission is an unfortunate unforced error. It is also contended that the mistake occurred only because complainant and Peerless Finance failed to intimate the bank about the due dates and default. Admittedly all the instalments except one was paid by bank belatedly. The details of due dates of payment, date of actual payment and amount paid are stated by Peerless in their version as well as counter affidavit. It is as follows:-<br /> Due dates Date on which Amount paid <br /> of payment payment made Rs. Remarks<br /> <br /> <br /> Instalments Paid in correct 14,000 Accounted<br /> from 2-11-93 due dates properly <br /> to 2-11-96<br /> 2-5-1997 10-11-1997 2,000 Kept in suspense (SD)<br /> Account for want of<br /> interest for delayed<br /> payment.<br /> 2-11-1997 23-11-1998 2,000 “<br /> 2-5-1998 )<br /> 2-11-1998 ) 28—6-2002 6,000 “<br /> 2-5-1999 ) <br /> <br /> 2-11-1999 5-11-2002 2,000 “<br /> 2-5-2000 7--1-2003 2,000 “<br /> 2-11-2000 No remittances<br /> 2-5-2001 “<br /> 2-11-2001 “<br /> 2-5-2002 “<br /> 2-11-2002 “<br /> 2-5-2003 No remittance <br /> -- Amount paid after )<br /> maturity date of ) 2,000 <br /> 2-11-2003 paid on )<br /> 4-11-2003 )<br /> <br /> Bank does not dispute the remittances made as above. It can be seen that the delay in remitting<br /> <br /> the instalments is more than ordinary. The instalment due on 02-11-1997 was remitted on 23-11-1998 ie., after almost one year. Bank has not remitted any instalments thereafter upto 28-6-2002. This means for almost three years no instalments were remitted by bank. At the outset it is clear that Bank has committed series of serious omissions. Much stress was laid by the counsel appearing for Bank that the omission occurred only because complainant as well as Peerless failed to inform Bank when the instalments fell due. We do not find any force in this contention. Bank does not have a case that complainant did not give specific instructions for making the remittances. The remittances made by Bank reveal that Bank was all the time aware of the duty to make payments but has been negligent in remitting promptly and regularly. When Bank agreed to shoulder the responsibility to make payments on behalf of complainant Bank was duty bound to follow the instructions of the customer. Complainant had maintained sufficient balance in his account. The omission on the part of Bank is not confined to a single incident of lapse. Further, even while making payments with delay Bank has not bothered to intimate the complainant about the delayed remittances. No single communication has been send by Bank to complainant on this regard. An omission to be a bonafide one, the person committing such omission should not be guilty of dereliction of duty and callous indifference in the performance of function. In the present case Bank has commited a series of serious omissions by which complainant had to incur loss of Rs.42,520/-. Complainant has succeeded in establishing a case in his favour against the Bank. We therefore hold first and 2nd opposite parties to be deficient in service.<br /> 9. The next aspect to be considered is the liability if any on the part of third and fourth opposite parties, which is Peerless General Finance. Third and Fourth opposite parties were subsequently impleaded. Surprisingly it is the Bank who mainly alleges deficiency on the part of Peerless. It is contended by Bank that the omission to pay instalments happened because Peerless failed to intimate the due dates and the default. It is also contended that since Peerless has receive the delayed instalments they are bound to pay interest upon the amount and thus liable to compensate the complainant. The evidence tendered by Peerless by affidavit supported by specific pleadings prove that Peerless was unaware of the arrangement between complainant and Bank. In our view, when complainant has given specific instructions to the Bank with respect to his funds left with the Bank, there is no further obligation on the part of complainant or Peerless to alert the Bank on each due date. The arrangement/facility enjoyed by complainant would then be meaningless. It is also contended by Bank that though two registered letters dated, 02-01-03 and 29-6-03 were sent to Peerless they failed to respond. But these letters are neither produced by bank along with the counter affidavit nor are they exhibited. Production of these letters however would not improve the case of the Bank since these letters are send only in 2003. Further Peerless is not privy to the arrangement between Bank and complainant. It is contended by Peerless that terms and conditions of the Endowment Certificate is binding upon the complainant. As per clause (2) of the Certificate, a grace period of 30 days is allowed for payment of instalments. Clause (4) states that if any instalment is not paid within the days of grace, the Certificate will be treated as discontinued. Clause (3) gives the conditions for revival of a discontinued Certificate. As per this clause a discontinued Certificate may be revived on payment of all dues together with compound interest @ 15% on arrear deposit. It is expressly stated that No waiver of interest shall be allowed under any circumstances. In the present case, the instalments were paid with much delay and well beyond the grace period. The instalments were not accompanied by default interest which is necessary for revival of the Certificate. Peerless has therefore not credited the delayed instalments (Rs.16,000/-) to the Certificate. It was kept in suspense account and necessary intimations were given to complainant about default and the need to revive the policy. It is the case of Peerless that receipts for the instalments paid were duly send to the complainant to his address as shown in the cause title. That upon these receipts specific instructions were endorsed by Peerless intimating the complainant to approach their office and to do the needful for revival of Certificate. That these intimations did not elicite any response from the complainant. Photocopy of these receipts are produced by complainant along with the complaint. The receipts do have endorsements as contended by Peerless in their version and affidavit. But these receipts are not brought on record by complainant for reasons best known to him. Complainant has no allegation against Peerless that they failed to inform him about the default committed by Bank. What we are able to infer is that since the complainant was abroad, he was not able to respond to the intimations send by Peerless and the default on the part of Bank continued to his detriment. It is stated by complainant that after going abroad in 1996 he returned to his native place after seven years. The conditions in Ext.A1 Certificate are not only binding upon Peerless but also upon the complainant. From the above discussions we are able to conclude that Peerless cannot be blamed for not taking into consideration the delayed instalments for calculation of the maturity value of the Certificate. All the instalments remitted within time has been properly accounted by Peerless and there is no cause for complain. If all certificate holders are to be given the full maturity value inspite of their default it would certainly create chaos in the management of any financial scheme. In the version as well as in the affidavit Peerless has reiterated that they are ready to pay Rs.26,000/- upon the Endowment Certificate and refund Rs.16,000/- which is kept in suspense account. The allegations by Bank against Peerless is only a futile attempt on their part to bye pass their liability and to shift it upon the shoulders of Peerless. We do not find any deficiency in service on the part of third and fourth opposite parties.<br /> 10. Point (iii):-<br /> The maturity value which the complainant would have received on 02-11-03 upon the Certificate, if not for the default of Bank, is Rs.68,520/-. Presently the amount offered and payable by Peerless in the strict sense of the certificate is Rs.42,000/- (Rs.26,000/- + Rs.16,000/-). We consider that Bank is definitely liable to pay the difference which is Rs.26,520/- as well as to compensate the complainant for the deficiency. Due to deficiency complainant has been deprived of his earnings and investment. It was submitted on behalf of the Bank that complainant has not incurred any monetary loss due to delay in payment of instalment. That the amount at the time when it was not paid was not lying idle but was incurring interest in the NRE account of the complainant. We find no merit in this contention. Complainant had taken the Endowment Certificate with specific intention to make an investment of his choice. Any sort of deprivation in the fruits of this investment is definitely loss to the complainant. Instead of disputing the undisputed facts, Bank ought to have attempted to resolve the grievance of the consumer at the earliest, and thus minimise loss and hardships. We consider that Bank is liable to pay the sum of Rs.26,520/- along with interest @ 9% from 02-11-2003.<br /> 1. It is contended by Peerless that although they send the discharge voucher for Rs.26,000/- to complainant it was not returned duly discharged. Complainant has not collected the amount of Rs.26,000/- which was offered by Peerless. The amount of Rs.42,000/- still remains at the disposal of Peerless Company. We consider that Peerless is liable to return this amount with interest @ 3% from 02-11-2003. Complainant would thus totally get a sum of Rs.68,520/-together with total interest @ 12% upon this sum from 02-11-2003 which in our view would be sufficient compensation for his monetary loss hardships and mental agony.<br /> <br /> 12. In the result, we allow the complaint and order the following:-<br /> (i) First and second opposite parties shall jointly and severally pay a sum of Rs.26,520/- (Rupees Twenty six thousand five hundred and twenty only) to the complainant along with interest @ 9% per annum from 02-11-2003 till payment, within one month from the date of receipt of copy of this order. In case of default the complainant shall be entitled to further interest @ 12% on the sum of Rs.26,520/- from the date of this order till realisation.<br /> (ii) Third and Fourth opposite parties shall jointly and severally pay a sum of R.42,000/- (Rupees Forty two thousand only) to the complainant along with interest @3% per annum from 02-11-2003 till payment within one month from <br /> the date of receipt of copy of this order failing which complainant shall be entitled to further interest @ 6% per annum on the sum of Rs.42,000/- from the date of this order till realisation.<br /> (iii) First and second opposite parties shall also jointly and severally pay Rs.1,000/- (Rupees one thousand only) being the cost of this litigation. <br /> Dated this 28th day of July, 2008.<br /> <br /> <br /> Sd/-<br /> C.S. SULEKHA BEEVI, PRESIDENT<br /> <br /> <br /> Sd/-<br /> E. AYISHAKUTTY, MEMBER<br /> <br /> <br /> <br /> <br /> <br /> <br /> APPENDIX<br /> <br /> <br /> Witness examined on the side of the complainant : Nil <br /> Documents marked on the side of the complainant : Ext.A1 to A6<br /> Ext.A1 : Endowment Certificate issued by third opposite party to complainant.<br /> Ext.A2 : Savings Bank account Pass Book issued by 2nd opposite party to <br /> complainant.<br /> Ext.A3 : Letter dated, 05-6-2003 send by complainant to 2nd opposite party.<br /> Ext.A4 : Photo copy of the request dated, 09-6-2003 send by complainant<br /> to 3rd opposite party.<br /> Ext.A5 : Photo copy of the registered Lawyer notice dated, 28-7-2003<br /> send by complainant's counsel to 2nd opposite party.<br /> Ext.A6 : Reply letter dated, 06-8-2003 send by 2nd opposite party to<br /> complainant's counsel.<br /> Witness examined on the side of the opposite parties : Nil<br /> Documents marked on the side of the opposite parties : Nil<br /> <br /> <br /> <br /> Sd/-<br /> C.S. SULEKHA BEEVI, PRESIDENT<br /> <br /> <br /> Sd/-<br /> E. AYISHAKUTTY, MEMBER<br />