Delhi

New Delhi

CC/1197/2010

Prasad Bros & Co. - Complainant(s)

Versus

M/S. Allahabad Bank - Opp.Party(s)

07 Jun 2023

ORDER

 

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-VI

(NEW DELHI), ‘M’ BLOCK, 1STFLOOR, VIKAS BHAWAN,

I.P.ESTATE, NEW DELHI-110002

Case No.1197/2010

IN THE MATTER OF:

                                               

1. M/s. Prasad Bros. & Co.

At M-137, Jagat Ram Park,

Laxmi Nagar, Delhi-110092

Through its Managing Partner

Sh. Baleshwar Prasad

Since Deceased Through LR’s

1. Smt. Lily Prasad

Wd/o Late Sh. Baleshwar Prasad

2. Smt. Garima Prasad

D/o Late Sh. Baleshwar Prasad

3. Sh. Lokesh Kumar

S/o Late Sh. Baleshwar Prasad

All R/o M-137, Jagat Ram Park,

Laxmi Nagar, Delhi-110092

2. Sh. Baleshwar Prasad,

Managing Partner of

M/s Prasad Bros. and Company

(Since Deceased Through LR’s)

1. Smt. Lily Prasad

Wd/o Late Sh. Baleshwar Prasad

2. Smt. Garima Prasad

D/o Late Sh. Baleshwar Prasad

3. Sh. Lokesh Kumar

S/o Late Sh. Baleshwar Prasad

All R/o M-137, Jagat Ram Park,

Laxmi Nagar, Delhi-110092....Complainants

Versus

M/s. Indian Bank,

Through its Branch Manager,

17, Indian Bank Building,

Parliament Street,

New Delhi – 110001..... Opposite Party

 

 

 

Quorum:

 

Ms. PoonamChaudhry, President

Sh. Bariq Ahmad, Member

                                     

Date of Institution: 06.10.2010

Date of Order       : 07.06.2023

 

ORDER

 

BARIQ AHMAD, MEMBER

 

 

1. The present complaint has been filed under Section 12 of the Consumer Protection Act, 1986 (in short CP Act) against Respondents/Opposite Parties (in short OP) alleging deficiency of services. Briefly stated the facts of the case are that Complainant No.1 is a Partnership Firm duly constituted under the provisions of Indian Partnership Act, 1932 (as amended upto date) vide Partnership Deed dated 05.08.1991 and amended Partnership Deed dated 07.01.1995.
2. It is stated that the OP is a nationalized bank having its branch office at Laxmi Nagar, Delhi. It is further stated that 6 FDR’Ss were issued by the OP in the name of complainant no.1 deposited by complainant no. 2 which expired on 04.10.1997. The details of which are given as under:

1. 904406/447 dated 04.09.1997 Rs.214 /-
2. 904407/447 dated 04.09.1997 Rs.6,32,477/-
3. 904408/447 dated 04.09.1997 Rs.48,291/-
4. 904409/447 dated 04.09.1997 Rs.2,818/-
5. 904410/447 dated 04.09.1997 Rs.44,012/-
6. 904411/447 dated 04.09.1997 Rs.259/-

(Total amounting to Rs.7,28,071/- for six year with effect from 04.10.1997)

3. It is also alleged the OP renewed the said FDR’S in the year 1997 @ 6% per annum. The said FDR’s were consolidated and converted into one FDR’S under Double deposit plan by the OP and OP issued a Special Term Deposit receipt dated 27.03.2003 bearing receipt no. DDH/767184/44543 for 12 months @ 6% per annum for maturity value of Rs.10,56,459/- against the principle amount of Rs.9,95,379/-. The said amount was due on 27.03.2004. It is also alleged that FDR’s the interest give on FDR’s was 6% whereas the interest applicable in October, 1997 was 12% p.a.
4. It is further alleged that the complainant suffered a loss of Rs.2,86,241/- (Rupees Two Lakh Eighty Six Thousand Two Hundred Forty One) on account of difference of interest. It is also alleged that OP refused to renew the same without assigning any reason nor was any communication given to the complainants. The conduct of the OP was objected to by the complainants vide a letter dated 21.04.2003. Thereafter, the complainant received a letter from Assistant General Manager (PR & DEV) of OP on 05.05.2003 and came to know that complaint of the complainant has been referred to Branch Controlling Office for necessary action but to no avail.
5. It is also stated that during the relevant period, the complainant no. 1 had remained almost non-functional while the said deposit remained with the OP. The OP did not inform the fate of action taken in terms of said letter dated 05.05.2003. The complainant remained in touch with the officials of the bank/OP but OP prolonged the matter on one pretext or other and unlawfully withheld the entire deposit of the complainants.
6. It is also alleged that during the month of March, 2010, when complainant no. 2 finally approached the concerned officials of the OP it transpired that the bank has failed to prepare the cheque of maturity value amount in terms of the letter of complainant dated 21.04.2003.
7. It is also alleged that in the month of March, 2010 when the complainant requested the bank to release the said amount in the name of complainant no. 1, the OP/bank refused to do so on the ground that they cannot release the amount to complainant no.2. it is stated that complainant no. 2 being Managing Partner was the person dealing on behalf of complainant no.1 with the OP and the entire transactions relating to the said deposit had been done under signatures of complainant no.2 alone being the sole authorized signatory on behalf of the firm i.e. complainant no.1.
8. It was alleged that complainant no. 2 under the compelling circumstances sent  a legal notice dated 07.04.2010 to OP, OP gave a vague reply to the same dated 07.07.2010 and made false excuses for their deficiency of services. That the complainant again sent a legal notice dated 20.07.2010 to the OP again OP gave a vague reply.
9. It is stated the OP is enjoying the fruits of the huge amounts of the complainants and has retained the same illegally excuse,  causing a serious financial crisis to the complainants. The act of OP amounts to deficiency of service as such  the complainants are entitled for compensation and interest over the said deposit, along with cost. It is also stated that the complainants are consumer as defined under the Consumer Protection Act. It is also alleged that the act of OP also amounts to unfair trade practice.
10. It is stated the complainant is entitled to a compensation of Rs.5,00,000/- (Rupees Five Lacs only) from the OP as the OP has deprived the complainants of the legitimate dues for a long span of time. Hence, the complaint. It is also stated that this Commission has the pecuniary jurisdiction and the territorial jurisdiction to entertain the complaint.
11. It is prayed that OP be directed to return back the said entire deposited amount having maturity value of Rs.10,56,459/- alongwith pendentelite and future interest @ 24% per annum from the date of initiation of present proceedings till the final realization thereof.
12. OP also be directed to pay Rs.5,00,000/- (Rupees Five Lacs only) towards compensation for harassment, agony and financial losses suffered by the complainant being deprived from the utilization of their own money and approaching this Commission for redressal of its grievances. OP also be directed to award costs of proceedings.
13. Notice of the complaint was issued to OP, upon which OP entered appearance and filed written statement contesting the case on various grounds taking preliminary objection that complaint is liable to be dismissed as the same has not been filed by a competent person. It was also stated that though the present complaint has been filed on behalf of M/s  Prasad Bros. & Company a partnership firm however complainant No.2 has miserably failed to file any document or proof with regard to his authority to file the present complaint on behalf of partnership firm or the consent of other partners of the said firm in this regard as such the present complaint is not maintainable.
14. It was further alleged that the present complaint is liable to be dismissed as some other partner of the firm have filed objections to the authority of the complainant No.2 to act for and on behalf of the partnership firm.
15. It was also stated that the dispute amongst the partners of the complainant firm can only be decided by a competent court of law i.e. Civil Court as such the present complaint is liable to be dismissed.
16. It was also alleged that as the OP has not committed by deficiency of services or any unfair trade practice as such complaint is not maintainable and the present complaint is barred by the law of limitation.
17. On merits it was stated that the execution and validity of alleged partnership deed dated 05.08.1991 or any subsequent amendment dated 07.01.1995 are denied for want of knowledge.
18. It was stated that certain FDR’s were issued and subsequently renewed from time to time as per RBI guidelines and regulations of the Bank. The applicable rate of interest has been applied and given to the FDR’s in accordance with RBI guidelines and banking rules. It was specifically denied that the interest rate was 12% p.a. in October, 1997.
19. It was further denied that there has been any difference of interest or any loss was suffered by the complainant to the tune of Rs.2,86,241/- (Rupees Two Lakh Eighty Six Thousand Two Hundred Forty One). It was further specifically denied that the OP ever refused to renew the FDR’s without assigning any reason or communication to the complainant as alleged. It was alleged that the letter dated 21.04.2003 of the complainant was duly responded. It was also denied that the OP did not inform the fate of action taken in terms of letter dated 05.05.2003 of complainant.
20. It was denied that any official of the OP failed to prepare the cheque of maturity value as alleged. It was submitted that the bank immediately on the receipt of objections of the other partners of the firm intimated the complainant of the same however the complainant was not in a position to show his authority on behalf of the complainant no.1 and the consent of other partners of the said firm. The complainant could not produce any substantive and sound proof hence it was not possible for the bank to prepare the said cheque and this was duly communicated to the complainant no.2.
21. It was denied that the complainant no. 2 is the managing partner or he was the only person dealing on behalf of the complainant no.1 as alleged. It was alleged that as per the settled proposition of law, a single partner of any partnership firm cannot act on behalf of partnership firm until he is authorized by other partners of the firm or by virtue of the terms and conditions of the partnership deed. The complainant no.2 did not produced any document to OP/bank to show that he had the authority to receive the amount on behalf of the complainant no.1. It was alleged that the legal notice issued by the complainant was false and frivolous which duly reply by the OP.
22. It was denied that the OP is enjoying the fruits of the alleged huge amount or has retained the same illegally and without any legal excuse as alleged. It was stated that the OP is a nationalized bank which is governed by the guidelines of the Government of India as such the amount which is deposited with the OP would certainly be released to the rightful person in accordance with law. It was submitted that the OP is not responsible for any alleged financial crisis of the complainants nor the same has been caused on account of any act on the part of the OP.  It was denied that the relief claim by the complainant falls within the ambit of CP Act or deficiency of service. It was prayed that the complaint be dismissed.
23. Complainant thereafter filed rejoinder reiterating therein the averments made in the complaint and denying all the allegations made in the written statement. Both parties filed their evidence by affidavit.
24. During the pendency of the complaint, complainant No.2 died  and an application was moved to bring on record his Legal heirs was allowed vide order dated 15.12.2021 bringing on record his wife Lily Prasad, daughter Garima, Son Lokesh Kumar.
25. An application was also moved on behalf of complainant for amendment of memo of parties as OP had merged with Indian Bank. In this regard OP had stated in its written submission that OP had been merged with Indian Bank following the amalgamation vide RBI notification dated 28.03.2020. The application was accordingly allowed and amended memo of parties was taken on record.
26. We have heard the Ld. counsel for parties and perused the record.
27. We shall first decide the objection of OP/Bank. As regards the objection taken by OP that complainant is not a consumer. It is to be noted that Section 2(d) of the Consumer Protection Act, 1986 defines consumers as under:

“(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) [hires or avails of]any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose];

[Explanation-For the purpose of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood by means of self-employment].

 

28. As regards the next objection taken by OP that complainant No.2 did not file any documents to show that he was authorized to file the present complaint. It is to be noted that in Para 3 of the complaint it has been alleged that 6 (Six) FDR’Ss were issued by bank in the name of complainant No.1, deposited by complainant No.2. In the rejoinder complainant stated that he was the MD of the firm and at the time deposit of the amount/making FDR’S it was the duty of OP to satisfy the of authority of complainant No.2.
29. It was the case of complainant No.2 (deceased through Legal Heirs) that he had approached the OP several times for release of the amount, for returning of the deposited amount with interest but it failed to do so. It has been contended on behalf of OP that complainant No.2 did not produce any document to show that he was authorized by other Partners to get the amount released.
30. As regards the contention of complainant that interest given on the FDR’s @ 6% whereas the rate of interest applicable was 12% p.a. in this regard OP contended that complainant has filed copy of receipts of FDR’s according to which rate of interest payable was 7% p.a. The consolidated FDR’s also states that interest payable was @ 6% p.a. It was contended on behalf of OP that complainant agreed to invest in Double Deposit Scheme by consolidating all the FDR’s into one FDR’s and renewal of the same for 6 years at the agreed interest @ 6% p.a. We agree with the said contention of OP.
31. It is to be noted the OP had renewed the FDR’S from time to time on the instructions of Complainant No 2. It is to be noted that partnership firm is not a independent legal entity, it is only a group of individual partners. The partners are the real owners of the assets of the firm. The partnership property belongs to all partners. The assets of the partnership belong to and are owned by the partners of the firm. So long as partnership continues each partner is interested in all the assets of the partnership firm as each partner is owner of the assets to the extent of his share in the partnership. On dissolution of the partnership firm, accounts are settled amongst the partners and the assets of the partnership are distributed amongst the partners as per their respective shares in the partnership firm. 
32. We are of the view that OP cannot be allowed to retain the amount of FDR’S of the partnership firm indefinitely as the said act of OP amounts to deficiency of services. We direct OP to release the FDR’s with the accrued interest as per RBI rates from the date of deposit of FDR’s till realization within 6 weeks from the date of order, failing which OP Bank is liable to pay interest @ 12% per annum till payment. The OP bank will also pay Rs.1,50,000/- (Rupees One Lakh Fifty Thousand) towards compensation for mental agony, harassment and further to pay Rs.25,000/- (Rupees Twenty Five Thousand) as cost of litigation  to the Legal Heirs of complainant No.2, subject to legal heirs  of complainant No.2 furnishing  indemnity bond to the OP bank. The complaint stands disposed off accordingly.

A copy of order be sent/provided to all the parties free of cost. The order be also uploaded on the website of the Commission (www.confonet.nic.in).

File be consigned to the record room along with a copy of the order.

 

 

Poonam Chaudhry

(President)

 

 

 

 

Bariq Ahmad

                                                                                                   (Member)