Tamil Nadu

StateCommission

A/245/2015

State Bank of India, The Manager - Complainant(s)

Versus

R. Ramaselvan - Opp.Party(s)

P.P. Adikesavalu

06 Apr 2022

ORDER

IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

 

     BEFORE :       Hon’ble Thiru Justice R. SUBBIAH               PRESIDENT

                               Thiru R. VENKATESAPERUMAL                   MEMBER

                        

F.A.NO.245/2015

(Against order in CC.NO.185/2011 on the file of the DCDRC, Chennai (South)

 

      DATED THIS THE 6^th DAY OF APRIL 2022    

 

1.   State Bank of India

Rep. by its Manager

K.K.Nagar Branch

No.207, Dr. Ramaswamy Salai

K.K.Nagar, Chennai – 600 078

 

2.       State Bank of India

(BO & PM) Division

Rep. by its Assistant General Manager

Circle Top House, Aparna Complex                                           M/s. K. Kumaran

No.16, College Lane                                                                 Counsel for

Chennai – 600 006                                                          Appellants / Opposite parties

 

                                                         Vs.

 

R. Ramaseshan

S/o. K.V.Ramachandran

Flat No.3, Jothi Adithya                                           M/s. S. Karthigai Balan

No.60, Dr.Ramasamy Salai                                              Counsel for

K.K.Nagar, Chennai – 600 078                           Respondent/ Complainant

 

          The Respondent as complainant filed a complaint before the District Commission against the opposite parties praying for certain direction. The District Commission allowed the complaint. Against the said order, this appeal is preferred by the opposite parties praying to set aside the order of the District Commission dt.17.6.2015 in CC.No.185/2011.

          This appeal coming before us for hearing finally today, upon hearing the arguments of the counsel appearing for the appellant and on perusing the documents, lower court records, and the order passed by the District Commission, this commission made the following order in the open court:

                                                                            ORDER

JUSTICE R. SUBBIAH,  PRESIDENT  (Open court)

1.       This appeal has been filed by the appellants/ opposite parties as against the order dt.17.6.2015 in CC.No.185/2011 passed by the District Consumer Disputes Redressal Commission, Chennai (South), by directing the Appellants/ Opposite parties herein to continue with 3^rd phase i.e., 201.20210 to 19.1.2020 under the Super Saving Package for the complainant without any loss of interest for the period from 20.1.2010 as per the original schedule introduced in the year 1990 and allow the complainant to remit Rs.100/- every month from 20.1.2010 to 19.1.2020, and to convert the maturity amount of the second phase as Fixed Deposit and further to pay a sum of Rs.2,00,000/- as damages for unilateral disconnection of Super Saving Package as per the original commitment, and to pay the same alongwith interest, and also to pay a sum of Rs.50000/- towards compensation for mental agony, and Rs.5000/- as cost .

 

2.       The brief facts which are necessary to decide the appeal is as follows:

           In the year 1990, the opposite parties have introduced a small savings scheme called as Super Saving package, a long term investment for small investors/ depositors.  As per the above said scheme a depositor should deposit a sum of Rs.100/- every month without any interruption for a period of 30 years in three phases and each phase shall cover 10 years.  The 1^st phase for the year 20.1.1990 to 19.1.2000, the 2^nd phase for the year 20.1.2000 to 19.1.2010 and the 3^rd phase for the year 20.1.2010 to 19.1.2020.  The matured amount shall be converted into Fixed Deposit at the end of each phase and entire amount shall be released together with cumulative interest at the end of 3^rd phase on the matured amount and the opposite parties assured that the complainant will get the matured amount at the end of 3^rd phase not less than Rs.5 lakhs.  Based on the representations and assurance and on the credentials of the opposite parties the complainant had subscribed to the scheme and remitted a sum of Rs.100/- every month without any interruption for the first and second phase of the scheme i.e., for the year 20.1.1990 to 19.1.2000 and 20.1.2000 to 19.1.2010.  The complainant approached the 1^st opposite party to remit the first instalment of the 3^rd phase during the month of February 2010.  But the opposite party not only refused to accept the first instalment of remittance but also refused to convert the matured amount of the 2^nd phase as Fixed Deposit. When the complainant again visited the opposite party office in the first week of March 2010, it was informed that they have discontinued the scheme vide letter dt.12.3.2010.  It was most unfortunate and disappointing to note that a reputed institution like the opposite party had chosen to discontinue the scheme specially designed for the benefit of small investors including the complainant.  Therefore the complainant had to face not only the conversion into Fixed Deposit but also prevented from getting interest in the cumulative rate. The complainant sent a letter dt.28.4.2010 to the Banking Ombudsman by expressing his grievance, for which a reply was received from Banking Ombudsman stating that a letter has been forwarded to the opposite party for necessary action.   The opposite party vide their reply dt.12.8.2010 stated that they have unilaterally discontinued the scheme, but no reason had been assigned for the discontinuance. The Banking Ombudsman also vide their letter dt.26.8.2010 sent a reply stating that they have closed the complaint, and instructed the complainant to approach the proper forum.  Therefore he filed a complaint before the District Commission praying for a direction to the opposite parties to continue the 3^rd phase of the Super Saving Package and allow the complainant to remit Rs.100/- per month under the said scheme and to convert the matured amount for the 2^nd phase as Fixed Deposit inclusive of cumulative interest, and also direct the opposite parties to pay a sum of Rs.2 lakhs towards compensation for the unilateral discontinuation of the Super Savings Package and a sum of Rs.50000/- towards compensation for mental agony alongwith cost. 

 

3.       The case of the complainant was resisted by the 1^st opposite party as follows:

          The Super Savings Package introduced by the opposite party was conceived as a long term investments for small investors/ depositors by requiring them to save a specified sum every month for a period of 10 years in recurring deposit and recycle the accumulated amount of Fixed Deposit thereafter to get maximum benefit of compound interest.  However said scheme was not contemplated to be in force in perpetuity of three phases of 10 years each for a total period of 30 years so as to get a sum not less than Rs.5 lakhs.  The complainant had subscribed to the said scheme of recurring deposit for 10 years from 20.1.1990 to 19.1.2000 and on completion of that period the aggregate amount with accrued interest was reinvested in Fixed Deposit.  The complainant had again subscribed another recurring deposit under the said scheme for a period of 10 years from 20.1.2000 to 19.1.2010 and on completion of that period, he was entitled to deal with the aggregate amount with accrued interest.  Since the acceptance of fresh subscription for the said Super Savings Scheme had been discontinued by the opposite parties, it was not possible to accept the subscription from the complainant for the third term from 20.1.2010 to 19.1.2020.  In such circumstances the complainant was advised to open recurring deposit under some other existing schemes of the opposite parties, but for the reason best known to the complainant, he refused, but proceeded to lodge a complaint before the Banking Ombudsman.  But the said complaint was closed by the Banking Ombudsman leaving it open to the complainant to approach the proper forum, whereupon this complaint had been filed.  The period of accepting subscription to any Savings Scheme by a banker is purely a commercial decision taken at its highest level bearing in mind various relevant factors and public interest.  The complaint is purely illusory and cannot be countenanced in law.  The complaint is speculative and made only with ulterior motives to make an unjust enrichment at the cost of the public exchequer abusing the legal process.  Thus they sought for dismissal of the complaint. 

4.       In order to prove the claim, before the District Commission, proof affidavits alongwith documents were filed by the parties, which were marked as Ex.A1 to A8 on the side of the complainant and Ex.B1 & B2 on the side of the opposite parties. 

5.       The District Commission after analysing the evidence had come to the conclusion that as per Ex.B2 circular, the Super Savings Package is discontinued and opening new account under the said scheme alone are discontinued w.e.f 15.6.1990.  Whereas the complaint mentioned account of the complainant under the said scheme was opened on 20.1.1990.  Therefore, as per the above said circular there is no whisper about the already opened and existing accounts.  Hence the refusal of the opposite parties in permitting the complainant to continue the said super savings scheme is not correct.  Thus holding that there is deficiency in service on the part of the opposite parties, the District Commission has ordered the opposite parties jointly and severally to continue with the 3^rd phase of deposit by the complainant i.e., 20.1.2010 to 19.1.2020 as per the scheme introduced in the year 1990, and also to pay a sum of Rs.50000/- towards compensation alongwith cost of Rs.5000/-. 

6.       The Respondent/complainant, though appeared through counsel, remained continuously absent before this commission.  Written arguments were also not filed on the side of the Respondent.  Hence we have heard the appellant, perused the records and passed the following order.

7.       The main submission of the learned counsel for the appellant is that the Super Savings Package was introduced by the opposite parties in the year 1990, As per the said scheme a depositor should deposit a sum of Rs.100/- every month without any interruption for a period of 30 years in these phases and each phase shall cover 10 years.  The first phase for the year 20.1.1990 to 19.1.2000, the 2^nd phase for the year 20.1.2000 to 19.1.2010 and the 3^rd phase for the year 20.1.2010 to 19.1.2020.  The depositor will get the matured amount at the end of 3^rd phase not less than Rs.5 lakhs .  While so, unilaterally the said scheme was discontinued by the opposite parties vide their letter dt.12.3.2010 with effect from 15.6.1990.  Since the said scheme was not in existence, it was not possible to accept the subscription from the Respondent/ complainant for the 3^rd term i.e., from 20.1.2010 to 19.1.2020 under the said scheme.  The Respondent was rightly advised to take Recurring Deposit or someother scheme, which is available, but the complainant refused.  However the District Commission, by relying upon Ex.B2 had come to the conclusion that though it had been decided by the bank to discontinue the said scheme w.e.f.15.6.1990, they have not mentioned any bar with respect to the existing scheme. 

          The learned counsel for the appellant by attacking the said conclusion of the District Commission would submit that when the bank decided to discontinue the said scheme, it would automatically follow that the Respondent could not claim any right for opening and operating the recurring deposit account for the next phase merely because two earlier phases of that scheme had been completed.   It is also further submitted that an unfettered discretion has been conferred on banks to formulate deposit schemes for the general public to invest which forms the corpus to lend by way of loans, and prudent and judicious administration of those scheme necessarily also requires flexibility to make changes suiting the needs of the time including its discontinuance and no exception could be taken for the same. 

          In this connection the learned counsel for the appellant also relied upon a judgement of the Hon’ble Supreme Court in U.P.Financial Corporation Vs. Nalini Oxygen & Acetylene Gas Ltd., reported in (1995 ) 2 SCC 754, in which it was held that “ a financial institution being an independent autonomous statutory body having its own constitution and rules to abide by and functions and obligations to discharge of its functions , it is free to act according to its own right......”

8.       Keeping the submissions in mind, we have also gone through the materials placed on record, and we find some force in the argument of the appellant. 

          As contended by the learned counsel for the appellant that a financial institution being an autonomous statutory body they are free to act according to its own right.  In this connection the learned counsel had drawn our attention to Ex.B1, a draft letter of authority.  As per the terms mentioned therein under clause 3, it was mentioned as “the Bank may at its discretion refuse to open the accounts as requested above, due to discontinuance of any of the schemes or otherwise, without assigning any reason and that the rules of the different accounts are subject to change”.  Therefore there is no deficiency in service on their part in discontinuing the said scheme.

But as per Ex.B2, it is stated that “the existing accounts opened under the scheme, will however continue till their maturity as per the provisions of the scheme”.  As per the above statement of the opposite party, it is not clear as to whether the word “maturity“ denotes the full tenure of three phases, or only upto the end of the phase in which the consumer was depositing at that point of time.  Therefore, as was held by the District Commission,  as per the above clause it is not clear as to whether the existing accounts under the said scheme also has to be discontinued when completing the present phase in which they are remitting their money.  

Accordingly, we are of the considered opinion that the appellants/ opposite parties have not proved that they are eligible to discontinue the scheme for the complainant who had already completed two phases of the scheme. Therefore,   the fond hope of the complainant that he could get a lumpsum of Rs.5 lakhs at the end of the third phase, would have been shattered.  So far as this aspect is concerned we hold that the service of the opposite parties is deficient and we do concur with the direction of the District Commission in awarding a sum of Rs.50000/- towards compensation.

Whereas, we hereby concur with the submission of the learned counsel for the appellants that the direction with regard to the permitting of the complainant to continue the said scheme by allowing him to remit a sum of Rs.100/- per month from 20.1.2010 till 19.1.2020 cannot be done for the complainant alone since there is no such scheme that is effective now.  Therefore we hold that the said direction is liable to be set aside and the order of the District Commission is to be modified accordingly.   

 

9.       In the result, the appeal is allowed in part by setting aside the order of the District Commission, Chennai (South) in CC.No.185/2011 dt.17.6.2015 with regard to the direction for permitting the complainant to continue the 3^rd phase of Super Savings Package for the complainant by remitting a sum of Rs.100/- per month, till 20.1.2020 and also a direction with regard to the conversion of matured amount for the 2^nd phase as fixed deposit inclusive of cumulative interest. 

            The direction with regard to the award of compensation of Rs.50000/- and cost of Rs.5000/- is hereby confirmed.  Time for payment two months from the date of receipt of copy of the order, failing which the interest @9% p.a., as awarded by the District Commission shall be applicable from the date of the complaint till realisation.  There is no order as to cost in this appeal.

 

 

          R. VENKATESAPERUMAL                                                       R. SUBBIAH

                    MEMBER                                                                            PRESIDENT