1.         Mohinder Singh Chera, son of Late Shri Mela Singh, resident of House No.1359, Sector 33-C, Chandigarh.  

                                                 .…Complainant.

                           Vs.

1.         M/s Indusland Bank, SCO No. 53-54, Madhya Marg, Sector 8-C, Chandigarh, through its Branch Manager.

2.         Chairman-cum-Managing Director, Indusland Bank Limited, Regd. Office: 2401, Gen. Thimmayya Rd. (Contonment), Pune 4110001 India.

…. Opposite parties

BEFORE:      JUSTICE SHAM SUNDER, PRESIDENT

                        MRS. NEENA SANDHU, MEMBER

                        S.  JAGROOP  SINGH   MAHAL, MEMBER

Present:       Sh. V.K. Sachdeva, Adv. for the complainant.

                   Sh. S.A. Sharma, Adv. for the OPs.

PER JAGROOP SINGH MAHAL, MEMBER

                        The brief facts of the case are that the complainant who is a NRI had deposited huge amounts with the OP-Bank in the shape of NRE FDRS and upon maturity of such FDRS, worth Rs. 72,44,802.10 the OPs induced the complainant to redeposit the same in the NRE Fixed Deposit Schemes on 20.2.2009 for a period of one year , which was to carry interest @ 8.75% per annum and the amount on maturity including the interest would be paid to the complainant without deductions on 20.2.2010. Accordingly on the agreement of the complainant the OPs, issued three FDRS from the funds of complainant already available with them reflecting therein date of issue, period or deposit, rate of interest and maturity and the amount to be paid on maturity. It was averred that on the date of maturity i.e. 20.2.2010 he sent all three FDRS in original duly signed to the OPs for paying the maturity amount of Rs.79,00,711.11  but they refused to pay the same on the ground that the signatures of the complainant  are different. On receiving the intimation regarding this objection, he again put his signature but to his utter shock the OP released only a sum of Rs.62,56,345.37 by way of 6 demand drafts instead of releasing full maturity amount of Rs.79,00,711.11. The complainant alleged that the OP-bank,  illegally retained a huge sum of Rs.16,44,365.74 without any reason, whereas the OP was bound by contractual obligation to not only pay the entire principle amount but also the interest which had accrued and became payable to the complainant on maturity.  The complaint made various enquiries from the OPs regarding the illegal deduction, even he had to come from U.K. several times to this effect and sent letters dated 9.3.2010 and 16.6.2010 to the OPs but to no effect. Ultimately the  complainant issued a legal notice to the OPs on 8.7.2010 but to no avail. Hence this complaint.

2.                     In their joint reply, the OPs admitted the factum of deposit of amounts with the OP-Bank in NRE-FDR. It was stated that the FDRS were of “Auto Roll Over” nature/category and after maturity the FDRs were automatically renewed for further period with same terms and conditions. It was further stated that the interest earned was capitalized in amount invested and the FDRs were Auto Roll Over.  It was further contended that interest @8.75% was not applicable to NRE fixed deposits and thus there was no assurance to the complainant regarding this. It was stated that the complainant has invested in NRE accounts which carry much lesser rates of interest than the domestic investors.  The FDRs were issued to him by bonafide inadvertent mistake and incorrect rate of interest was mentioned due to computer software.  The complainant had not deposited any amount on 20.9.2009 and  was not entitled to any such FDRs with interest rate applicable to domestic depositors and he could only claim interest and concessions of NRE deposits. It was stated that the maturity amount shown by computer was clearly wrong.  Therefore, interest amount was recalculated correctly and the correct balance arrived at Rs.62,56,345.37 and accordingly excess amount of interest of Rs.16,44,365.74 was reversed, which was duly informed to the complainant. Denying all other allegations of the complaint, a prayer for dismissal of the complaint has been made.

3.                     Parties led evidence in support of their contentions.

4.                              We have heard Counsel for the parties, and, have perused the record, carefully.

5.                              The OPs have admitted in opening line of para 3 of the reply that the complainant had deposited amounts with it in NRE FDR Accounts since long.  There was therefore, no concealment of fact by the complainant that he was an NRI and the FDRs were that of NRE accounts. The OPs have attached Annexure D-1 to D-3 which is the copy of the record maintained by the OP-bank regarding these FDRs and in each of which the category of the deposit was mentioned to be an NRE. These documents further show the various rates of interest promised by OP-bank to be given to the complainant, which are much higher than the rate of interest now mentioned by the OPs.  Even on 20.2.2009 when these FDRs were last renewed the type of term of deposit is mentioned as NRE. In all these Deposit Conformation/Renewal Advice letters Annexure C-2 to C-4 issued by the OP-bank the rate of interest mentioned is 8.75%. The issuance of these FDRs mentioning a higher rate of interest is not denied by the OPs.  Their contention is that NRE deposits carry a lesser rate of interest and it was inadvertently mentioned in the FDRs that the complainant would be entitled to the interest which is available to domestic depositors.  We are however, of the opinion that none of these contentions can deprive the complainant of the agreed rate of interest mentioned by the OPs.

6.                              It was a conscious decision on the part of the OPs to give the complainant a higher rate of interest even in spite of the fact that it was an NRE deposit.  The grant of higher rate of interest by a banking institution to its depositors cannot be said to be illegal because the rate of interest depends upon the mutual agreement between the parties.  The mere fact that the OPs have issued certain letters Annexure D-4 to D-9 regarding the different rates of interest is of no consequence, because knowing these circulars fully well, the OP-bank decided to grant a higher rate of interest to the complainant, may be in view of the fact that the amount of deposit was heavy.  One thing more is clear  that Annexures D-4 to D-9 did not prohibit the higher rate of interest,  though they suggest that this rate of interest shall be available on NRE deposits.  The learned counsel for the OPs has not been able to produce any such document which prohibits the OP-bank to allow a higher rate of interest to the complainant than the one mentioned in Annexures D-4 to D-9.

7.                              The OPs deprived the complainant to the higher rate of interest by taking shelter behind an inadvertent mistake or a computer software error. We are unable to believe the OPs in this respect. According to the OPs itself the deposits were first made by the complainant on 19.2.2001 and since then  these are being automatically renewed from year to year. It is therefore, the 10^th occasion, that a higher rate of interest was allowed to the complainant in each of the three FDRs. Inadvertent mistake could be once and twice but if it is occurring regularly, we cannot term it a mistake. Further more whenever the FDR is issued it is verified or signed by a superior officer and if there is any error the same would have been rectified at that stage. If it was not done, the only conclusion is that the complainant was assured to be given a higher rate of interest. As regards the computer software error, this argument is also devoid of merit because the computer does not generate anything from its own. Whatever data is fed in the computer software the output/result thereof would follow.  The OPs have not produced any record to suggest if the same rate of interest was given to other depositors also because only then we could say that there was an error in the computer software.

8.                              The learned counsel for the complainant has also argued that not only this, the   OPs had been furnishing Income Tax Returns to the Reserve Bank of India and claiming rebate in the tax on account of interest of Rs.16,44,365.74, which is being withheld now. In their Income Tax Returns the OPs  have shown that they paid so much amount by way of interest to the complainant and were entitled to rebate on their profits.  It is alleged that the OPs had been misleading not only the Reserve Bank of India authorities and the complainant but are now misleading this Commission also. We are therefore, of the opinion that there was no mistake or error on the part of the OPs or their computers, the OPs have now concoctated this false story to deprive the complainant of his higher rate of interest.

9.                              The contention of the complainant is that if the OPs had told him that he would get lower rate of interest , he would have withdrawn the amount and invested the same in some other project where he could get higher returns.  His contention is that he kept the amounts with the OPs only due to the said assurance and now they cannot back out of it.  We are also of the opinion that the OPs are estopped from alleging that a lower rate of interest would be available to the complainant, because acting on their assurance the complainant invested the amounts and if the lower rate of interest is awarded the complainant would suffer a huge loss of more than Rs.16.00 lacs.

10.                         Annexure C-2 to C-4 show that till 20.2.2009 the complainant was entitled to a particular amount mentioned in these confirmation letters.  The OPs cannot re-open the transaction and withdraw from the admission made by them to this effect.  The complainant was entitled to the sum mentioned therein.  The OPs undertook to pay interest at the rate of 8.75% p.a. knowing fully well that it was an NRE deposit.  We are therefore of the opinion that the OPs cannot reverse the interest amount of Rs. Rs.16,44,365.74.

11.                         Withdrawing a huge amount of more than 16.00 lac from the entitlement of a person would naturally cause him mental harassment.  The complainant has placed on file his Passport Anneuxre C-1 and the entries at pages 19C,D & E showing that he made a number of rounds to India to withdraw the amount to get back his money.  The OPs therefore, not only caused mental and physical harassment to complainant but a financial loss also due to which he had to shuttle between India and Britain to get back the amount to which he is otherwise entitled. 

12.                         In view of the above discussion, we are of the opinion that the present complaint must succeed and the same is accordingly allowed. The OPs are directed to pay to the complainant Rs.16,44,365.74 along with interest @8.75% w.e.f. 20.2.2010 till the amount is paid.  The OPs shall also pay Rs.1.00  lac towards compensation and Rs.10,000/- towards costs of litigation.  If the entire amount is not paid within 30 days from the receipt of copy of the order the OPs would be liable to pay penal interest @12% p.a. on the entire amount w.e.f. today i.e. 26.8.2011 till the payment is made to the complainant.

13.                         In case the OPs feel that any of their officials committed a mistake, they would be free to recover the aforesaid amount from those employees due to whose fault the OPs have been burdened to pay the aforesaid amount with interest and costs, of course after following the procedure applicable to the concerned employees.   

                        Copies of this order be sent to the parties, free of charge.