Punjab

StateCommission

FA/529/2013

State Bank of India - Complainant(s)

Versus

Pawan Kumar HUF - Opp.Party(s)

K.S. Arya

30 Jan 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,  PUNJAB DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.

 

(1)                                            First Appeal No.529 of 2013                                                      

                  Date of institution  :    07.05.2013.   

    Date of decision     :    30.01.2015

 

State Bank of India, Main Branch, Ferozepur Cantt., through its Manager.

                                                               

…….Appellant/OP

Versus

Pawan Kumar HUF, through its Karta Pawan Kumar, R/o House No.163 (P), B-7, Ferozepur Cantt.

                                                          …Respondent/Complainant

(2)                                            First Appeal No.528 of 2013                                                      

                 Date of institution  :    07.05.2013.   

    Date of decision     :    30.01.2015

 

State Bank of India, Main Branch, Ferozepur Cantt. through its Manager.

…….Appellant/OP

Versus

Shivji HUF, through its Karta, R/o House No.163 (P), B-7, Ferozepur Cantt.

                                                          …Respondent/Complainant

 

First Appeals against the orders dated 11.03.2013 of the District Consumer Disputes Redressal Forum, Ferozepur.

Quorum:- 

          Hon’ble Mr. Justice Gurdev Singh, President.

                        Mrs. Surinder Pal Kaur, Member.

Present:-

          For the appellant           : Shri K.S. Arya, Advocate.

          For the respondent       : Sh. Sandeep Khunger, Advocate.

JUSTICE GURDEV SINGH,  PRESIDENT :

 

                    The above noted appeals are being decided by this common order, as the facts involved therein are similar and same question of law is involved therein. The first appeal (F.A. No.529 of 2013) has been preferred by the appellant/OP against the order dated 11.03.2013 passed by District Consumer Disputes Redressal Forum, Ferozepur (in short, “District Forum”), vide which the complaint filed by the complainant, Pawan Kumar, HUF, under Section 12 of the Consumer Protection Act, 1986 (in short, “the Act”), was allowed with Rs.1,000/- as cost and Rs.1,000/- as litigation expenses and the opposite party was directed to pay an amount of Rs. 38,317/- to the complainant, along with interest  @ 9% per annum from 01.04.2012 till realization thereof. The second appeal (F.A. No.528 of 2013) has been filed by the opposite party against the order of the same date, vide which the complaint filed by the complainant, Shivji HUF, under Section 12 of the Act, was allowed with the same amounts as cost and litigation expenses and the opposite party was directed to pay an amount of Rs.16,838/-, along with interest at the same rate and for the same period.

1. The facts are taken from the complaint filed by Pawan Kumar. He alleged in his complaint that he was holder of PPF Account No.1225 in the name of his HUF with the opposite party since 03.03.1994 and on 01.03.2012, there was a balance of Rs.5,05,598.64P, including the interest, upto 31.03.2012. The opposite party, in order to discharge its legal liability, issued bankers cheque of Rs.4,66,696.64P and withheld the balance amount of Rs.38,902/- and its staff members did not give any satisfactory reply for withholding that amount. The last entry in his account is dated 31.03.2012, which was in respect of the interest. The non-payment of the balance amount amounts to deficiency in service on the part of the opposite party; which caused mental tension, pain and agony to him and for the same, he is entitled to Rs.50,000/- as damages. In addition to that, he is entitled to interest @ 18% per annum on account of non-payment of the said amount and that was the rate of interest prevalent in the local market as per the local custom and usage. He served a registered notice on the opposite party, to which a vague reply was given. It acted in a most negligent manner, by withholding the amount and not paying the interest. He prayed for the issuance of the following directions to the opposite party:-

   i)        to pay Rs.38,317/-, along with interest  @ 18 per annum from the date the said amount was withheld till payment thereof;

   ii)       to pay Rs.50,000/-, as compensation for the harassment,        inconvenience, frustration and mental agony suffered by him;        and

   iii)      to pay Rs.5,500/-, as cost of proceedings.

    

2. The complaint was contested by the opposite party, who filed detailed written reply before the District Forum. In that written reply, it admitted that the PPF account, as mentioned in the complaint, was held by the complainant (HUF) and that bankers cheque of Rs.4,66,696.64P was issued. While denying the other allegations made in the complaint, it pleaded that the account was opened by the complainant for 15 years and thereafter, the same could have been renewed from time to time as per the guidelines and notification of the Govt. of India. As per the Govt. of India notification No.GSR956E dated 07.12.2010 (hereinafter referred to as, “the notification”), a new proviso was added below sub section 3 of paragraph-9 of PPF Scheme, 1968 (in short, “the scheme”), according to which, the PPF accounts opened on behalf of HUFs prior to 13.05.2005, stood closed after the expiry of 15 years from the end of the year, in which the initial subscription was made and after the closing of those accounts, no interest was to accrue on the amounts standing therein. It was bound by the notification and, as such, no interest was to be paid by it after the closing of that account i.e. 31.03.2011. That notification was displayed on the notice board of the branch premises for notice to all such account holders. The account of the complainant is supposed to have been closed with effect from 31.03.2011. The Govt. of India issued revised/latest instructions of closure of HUF and PPF accounts, vide letter No.RBI/2010-11/578 dated 17.06.2011 and made publicity of those instructions in the public. That letter completely restricted the payment of further interest on those accounts after 31.03.2011. In view of the notification and the said letter, the interest for the period from 31.03.2011 onwards was not to be capitalized in the account of the complainant. All the adjustments were made at the time of closure of account and the amount due to the complainant was paid to him. No such amount was ever withheld, nor it is liable to pay any interest, as prayed for by the complainant. There is no such deficiency in service on its part and it strictly acted as per the notification. The Govt. of India, who had issued the scheme and the notification through its Finance Department, is necessary and proper party and the complaint is bad for its non-joinder. It is only doing agency business on behalf of the Govt. of India and the amounts deposited in PPF accounts belong to the Govt. of India and not to it. The interest, accruing on the deposits in this account, is being paid by the Govt. of India. As the complainant did not close his account within prescribed time, so he is estopped by his act and conduct from filing this complaint. His account had already matured in the year 2007 and the same is supposed to have been closed at the end of 31.03.2011. After that date, he is not entitled to any such interest.

3. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, allowed the complaints, vide aforesaid orders.

4. We have heard learned counsel for both the sides and have carefully gone through the records of the case.

5. It was submitted by the learned counsel for the opposite party that the scheme of PPF was floated by the Govt. of India and the opposite party merely acted as its agent. All the liabilities, in respect thereof, were to be incurred by the Govt. of India and, as such, it is necessary party and the complaint is bad for its non-joinder. He further submitted that the District Forum failed to consider the evidence produced on the record by the opposite party, produced in the form of the notification Ex.R-5, vide which the amendment was made in the scheme and a new proviso was added to sub paragraph-3 of paragraph-9 and as per that proviso, all the PPF accounts opened by HUF were to be closed at the end of 31.03.2011 and the amounts, standing to the credit of the subscribers, were to be refunded. As per that notification, the account of the complainant, which was opened in the name of HUF, was deemed to have been closed with effect from the said date and thereafter, no interest was to accrue to him on the amount outstanding in the account. The amount so standing to his credit, along with interest calculated upto that date, was paid to him; which totally absolves the opposite party of its liability. The District Forum committed an illegality, by ignoring that notification and issuing the directions without recording a finding regarding the deficiency in service on the part of the opposite party. In these circumstances, the impugned order cannot be sustained and is liable to be set aside.

6. On the other hand, it was submitted by the learned counsel for the complainant that after carefully going through the evidence produced on the record and the surrounding circumstances, it was correctly concluded by the District Forum that there was deficiency in service on the part of the opposite party, for which it was liable to pay the litigation cost and was also liable to pay the amount in dispute, along with interest @ 9% per annum from 01.04.2012. Even if there was such a notification, the same was never brought to the notice of the complainant and the officials of the opposite party continued to collect the amounts from him and depositing that in his account even after 31.03.2011. As per the evidence produced by the opposite party itself, it was required to give due publicity to the notification, by displaying it at the public place and by bringing the same to the notice of the depositors. The same was never done. This clearly amounts to deficiency in service on its part, for which the District Forum has suitably penalized it. There is no ground for upsetting the findings of the District Forum and appeal is liable to be dismissed.

7. Admittedly, the PPF account was opened by the complainant in the name of HUF as per the scheme of the Government. Cognizance can be taken of the fact that amendments were made in that scheme from time to time. One of such amendment was made, vide notification Ex.R-5 and the relevant portion of that notification is reproduced below:-

    

   “2.     In the Public Provident Fund Scheme, 1968 in paragraph 9, in sub-paragraph (3), after the proviso, the following proviso shall be inserted, namely:-

   ‘Provided further that an account opened on behalf of a Hindu Undivided Family prior to the 13^th day of May, 2005, shall be closed after expiry of fifteen years from the end of the year in which the initial subscription was made and the entire amount standing at the credit of the subscriber shall be refunded, after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him. In the case of accounts opened on behalf of Hindu Undivided Family, where fifteen years from end of the year in which initial subscription was made, has already been completed, they shall also be closed at the end of the current year, i.e. the 31^st day of March, 2011 and the entire amount standing at the credit of the subscriber shall be refunded, after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him.”

    

8. It is very much clear from the document Ex.R-5 itself, that this notification was sent to different banks by the Reserve Bank of India, vide covering letter dated 27.12.2010. In that letter itself, it was mentioned that the contents of the notification be brought to the notice of the branches of the banks, operating PPF scheme and be displayed on the notice boards, for information of the PPF subscribers. No evidence was produced by the opposite party that this notification was displayed on the notice board of the branch concerned. No doubt, the opposite party proved on record the affidavit Ex.R-1 of Inderjeet Narula, Manager, but he nowhere deposed in his affidavit that this notification was displayed on the notice board of the bank, for bringing the contents thereof to the knowledge of the PPF subscribers, including the complainant. Even otherwise, this affidavit Ex.R-1 is no affidavit in the eyes of law, as only the written reply filed by the opposite party, has been given the form of affidavit. The deponent has not specifically deposed about any fact therein.

9. The opposite party owed a duty to the subscribers of PPF account and it failed to perform its duty, by not displaying the notification on the notice board of different branches.

10. Even if there was such a deficiency in service, can it be said that the complainant was entitled to the benefit of the scheme even after the closing thereof? Any act, done in pursuance of the Act, Rule or Regulation of the Govt., cannot be said to be a deficiency in service, even if a person is being adversely affected thereby. As per the amendment made in the scheme, the account in question of the complainant is deemed to have been closed with effect from 31.03.2011 and thereafter, he was not entitled to deposit any amount therein, nor was entitled to any interest after that date. Therefore, the District Forum was not justified in directing the opposite party to pay Rs.38,317/-, along with interest @ 9% per annum.

11. The complainant proved on record the passbook of the account, as Ex.C-7. Entries thereof make it clear that the interest on the amount lying deposited in this PPF account was calculated on 31.03.2011 and that interest amounting to Rs.34,576/- was credited to his account. No further subscription was made and in violation of the notification, the interest was calculated from 31.03.2011 to 31.03.2012 at Rs.38,317/-. That interest is being claimed by the complainant as less payment. It cannot be said to be less payment, by virtue of the notification. However, the opposite party did not refund the amount immediately after the closing of the account and that amount remained lying deposited for one year. The question arises, whether for this deficiency in service on the part of the opposite party, the complainant is entitled to any interest? Similar matter came up for consideration before the Hon’ble National Commission in (Sr. Supdt. of Post Office, Amritsar & Anr. Vs. Ashok Kumar, HUF) (I) (2011) CPJ 41 (NC). In that case, like the present one, the complainant had opened PPF account in the name of HUF and as on 13.05.2008, an amount of Rs.9,74,664/-, including that of the principal and interest accrued thereon, was standing in that account. However, on maturity of the scheme, the opposite parties paid only Rs.8,02,582/-, which fell short of the maturity amount by Rs.1,72,082/-. Alleging deficiency in service on the part of the opposite parties, the complainant filed the complaint, seeking the payment of the said amount of Rs.1,72,082/-, along with compensation and interest. His claim was resisted by the opposite parties, on the ground that the Govt. of India stopped continuance of PPF account in favour of HUF with effect from 31.12.2005 and, as such, the complainant was not entitled to any interest after that date. The District Forum accepted the complaint, by overruling the contentions of the opposite parties, and granted the substantial relief to the complainant, by directing the opposite parties to pay Rs.1,72,082/-, along with compensation. However, the State Commission in appeal, by taking notice of the decision of the Hon’ble National Commission in Revision Petition No.2180 of 2004 (Sr. Post Master Vs. Arvind Industries), held that the complainant was entitled for interest @ 6% per annum. Aggrieved by that finding, the opposite parties preferred the revision before the Hon’ble National Commission. It was held in that revision that the State Commission, taking most pragmatic view, held that a balance is to be struck between the two extreme views on the basis of equitable justice, as neither interest would be payable at permissible rate of PPF, nor at Savings Bank rate, and that the award of interest @ 6% per annum on the deposits made after 31.12.2005 was most equitable and rationale. That finding of the State Commission was upheld.

12. Applying the ratio of the above said judgment, the interest is to be allowed on the amount as standing on 31.03.2011 @ 6% per annum for the period from that date, upto the date of refund of that amount.

13. A perusal of the order passed by the District Forum shows that Rs.1,000/- was allowed, as cost and Rs.1,000/- as litigation expenses. Only one such amount was to be allowed on account of cost/litigation expenses. The allowing of those two amounts, as such, amounts to illegality.

14. It has already been held above that there was deficiency in service on the part of the opposite party, as it failed to display the notification on the notice board of the Bank for the information of the complainant and other subscribers and it is for that deficiency in service, that the opposite party has been directed to pay interest on the amount, as it was standing in the PPF account on 31.03.2011. In these circumstances, it cannot be held that the Govt. of India was necessary party to the complaint.

15. In view of the above discussion, the order passed by the District Forum is modified. The complaint is allowed, subject to Rs.1,000/- as litigation expenses and the opposite party is directed to pay interest @ 6% per annum on the sum of Rs.4,67,281.64P from 31.03.2011 to 13.04.2012.

16. The sum of Rs.22,026/- deposited at the time of filing of the appeal (FA No.529 of 2013), along with interest which has accrued thereon, if any, shall be remitted by the registry to the respondent/complainant

    F.A. No.528 of 2013:

17. In view of the observations made above, the order under challenge in this appeal, is also modified. The complaint filed by the complainant is allowed with Rs.1,000/- as litigation expenses and the opposite party is directed to pay interest @ 6% per annum on the sum of Rs. 2,02,106.85P from 31.03.2011 to 13.04.2012.

18. The sum of Rs.10,240/- deposited at the time of filing of the appeal (FA No.528 of 2013) along with interest which has accrued thereon, if any, shall be remitted by the registry to the respondent/complainant

19. The arguments in these cases were heard on 15.01.2015 and the order was reserved.Now, the order be communicated to the parties.

20.           The appeals could not be decided within the statutory period due to heavy pendency of court cases.

     

     

                                                              (JUSTICE GURDEV SINGH)

                                                                             PRESIDENT                                                          

     

     

                                                           (MRS. SURINDER PAL KAUR)

    January 30, 2015                                         MEMBER

    (Gurmeet S)