KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No. 633/2016

JUDGMENT DATED: 09.11.2021

(Against the Order in C.C. 205/2014 of CDRF, Kollam)

PRESENT:

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN              : PRESIDENT

SRI.T.S.P. MOOSATH                                                       : JUDICIAL MEMBER

SRI.RANJIT. R                                                                   : MEMBER

SMT. BEENA KUMARY. A                                              : MEMBER

SRI. RADHAKRISHNAN K.R.                                        : MEMBER

APPELLANT:

The Chief Manager,       Canara Bank, Kottarakkara Branch, Kottarakkara, Kollam- 691 506.

                                       (By Adv. E. Sulfickar)

                                                Vs.

RESPONDENT:

Rajendran . M,      S/o Muthuswami Reddiar, Ramakrishna Nivas, 106, Mythri Nagar, Kottarakkara P.O, Kollam- 691 506.

                                       (By Adv. S. Reghukumar )

JUDGMENT

SRI. RADHA KRISHNAN K.R.:   MEMBER 

The opposite party in C.C. No. 205/2014 on the file of the Consumer Disputes Redressal Forum, Kollam (District Forum for short) has filed this appeal against the order dated 22.07.2016 of the District Forum.  As per the order the opposite party has been directed to pay Rs.1,12,260/- being the difference in the rate of interest applicable to the Fixed Deposit No: 796 to the complainant with compensation and costs amounting to Rs.10,000/- and Rs.5000/- respectively.  District Forum also directed to comply with the order within one month from the date of receipt of the order failing which the amount entitled to the complainant will carry interest @9% till the date of realization.

            2.  The case of the complainant is briefly as follows:-

            The complaint pertains to a dispute regarding rate of interest on fixed deposit for the period in deposit after the due date of renewal.  The complainant  made a  Fixed Deposit of a sum of Rs. 8 lakhs, along with his  sister, with the opposite party bank on either or survivor basis on interest @9.75% per annum for a period of 35 months from 18.12.2007 to 17.11.2010.  Interest @ Rs.6447/- per month was credited to their joint S.B. Account.  An amount of Rs. 3 lakhs was withdrawn on 22.8.2009 for the treatment of his sister who passed away on 26.8.2009.   Her death was communicated to the Bank on 9.11.2009 and the same was endorsed in the F.D. certificate and the F.D. continued with the balance amount of Rs.5 lakhs and interest also used to be credited monthly at the same rate.  In the meantime the Sub Court, Kollam, issued a garnishee order in OS No: 192/2010 on 04.03.2010 restraining the opposite party Bank from disbursing the F.D. amount to anybody till the disposal of the case.   This case was disposed of in favour of the complainant on 29.10.2013.  Thereafter the complainant presented the F.D. receipt to the Bank on 17.9.2014 for withdrawing the amount of Rs. 500,000/- with interest.  The opposite party Bank closed the FD on 7.10.2014 and paid an amount of Rs. 579,124/- after deducting TDS of Rs. 15,803/-.  Though he was eligible for 9.75% interest per annum for the period after the due date also, he was given interest @ 3.5% to 4% only, applicable for Savings Bank Accounts.  Non-payment of interest @ 9.75% from 18.11.2010 to 7.10.2014 amounts to deficiency in service and unfair trade practice on the part of the opposite party Bank.  The complainant claimed an amount of Rs.124,448/- towards difference in the  rate of interest   plus compensation of Rs. 20,000/- and costs.

            3. The opposite party entered appearance and filed version stating that they have paid interest @ 9.75% per annum till the expiry date of the period of F.D. ie 17.11.2010.  The F.D. matured on that date and there was no communication from the complainant regarding renewal of the F.D.  The Bank had paid Rs. 579,124/- on 7.10.2014(after deducting TDS of Rs.15,803/-).  Thereafter an amount of Rs. 27,983/- was paid on 6.11.2014 towards refund of TDS amount of Rs. 15,803/- and difference in interest of Rs. 12,180/-.  Thus a total amount of Rs. 607,107/- was already paid and he is not entitled to get any further amount.  The complainant should have given a request to renew the F.D before the due date which was not done.  In view of the garnishee order of the Sub Court, Kollam, he should have obtained a direction for renewal of the F.D.  The complainant cannot blame the Bank for his lapses.  There was no unfair trade practice or deficiency in service on the part of the Bank.

            4. The evidence in the case consists of Exbts P1 to P4 marked on the side of the complainant and oral testimony of PW1 and Exbts D1 to D3 and X1 and deposition of DW1 for the opposite party.  On the basis of the evidence adduced, the District Forum found deficiency in service on the part of the opposite party and passed the impugned order.  Aggrieved by the order, opposite party has filed this appeal u/s 15 of the Consumer Protection Act, 1986.

            5. Heard the counsel on both sides.

            6. The learned counsel for the appellant/opposite party submitted that the Bank has already paid an amount of  Rs. 607,107/- being the balance amount of Rs. 5 lakhs in the F.D plus interest.  An interest @ 9.75% was paid monthly up to the date of maturity and applicable S.B. Account interest thereafter as no request was received from the Respondent/ Complainant for renewal of the F.D.  As per circular ref: 55/2011 dated 19.02.2011(Exbt. X1) of the Bank, only S.B. Account rate of interest can be given for overdue deposits, which is already paid.  There was a garnishee order from the Sub Court, Kollam, directing the Appellant/opposite party not to pay the F.D amount to anyone.  It was for the respondent/Complainant to have obtained a direction from the court regarding the continuance of the F.D.  It is the responsibility of the customer to advise the Bank regarding renewal of the F.D. with the desired period which was not done.  F.D. is a specific contract for a specific period which ends on the date of maturity and renewal and its terms are optional.  If at all they are liable to pay F.D interest rate, their maximum liability would be, the then prevailing rate of 7.5% only.  There is no deficiency or unfair trade practice on the part of the appellant and hence the learned counsel prayed for setting aside the order of the District Forum.

            7. The learned counsel for the Respondent/ Complainant submitted that he has not received any notice from the Appellant Bank regarding renewal of the F.D or regarding the revised guidelines. Though DW1 deposed that notice was sent to the respondent/complainant, nothing was produced to prove the same.  Renewal of the period of the F.D. is automatic on same terms unless otherwise advised and hence he is entitled to get the interest @ 9.75% till closure of the F.D.  Garnishee order prohibited only disbursal of the amount and not continuance of the FD.  By reducing the eligible interest, the appellant Bank has committed gross deficiency in service and hence learned counsel prayed for dismissed of the appeal with costs.

            8.  We have considered the submissions made by the learned counsel for both parties and perused the records.  It is admitted that the amount in F.D at the time of maturity on 17.11.2010 was Rs. 5 lakhs.  The dispute is regarding the interest payable from 18.11.2010 till the date of closing of the F.D on 7.10.2014.   The precise contention of the appellant is that there should be a request from the customer for renewal of the F.D and if not, only S.B. Account rate of interest is payable as per guidelines.  On the other hand the respondent contends that the Bank has to send a notice to the customer before maturity and they are bound to renew the F.D automatically even if no request is given.   There is no evidence to show that notice was sent to the respondent.  There is also no communication seen sent to him regarding keeping the FD amount in overdue account after the maturity.  The appellant Bank mainly relied on the guidelines issued by their Head office on 19.02.2011 regarding interest payable on FDs after maturity where there is no request to renewal. A relevant portion of the said circular is reproduced below:

“The revised guidelines will be applicable for renewal/ encashment of all existing as well as prospective overdue deposits w.e.f 01.03.2011. 

Sending due notice well in advance assumes greater importance in the light of the modified guidelines, as the depositor will not be able to renew the overdue deposit from the date of maturity. Hence, branches should ensure that the deposit due notice, duly incorporating the revised guidelines, is sent promptly to avoid customer complaint at a later date”

9.  Evidently, these guidelines are applicable prospectively from 01.03.2011.  In this case these guidelines have no relevance at all as the F.D. was due for renewal on 18.11.2010, much prior to the effective date of the said guidelines.  If at all it is relevant at any point of time after the due date, the Bank should have given due notice as clearly advised in the guidelines.  There is no substance in the contention of the appellant so long as these guidelines are not made known to the customer.  As regards the garnishee order issued by Sub Court, Kollam, it only restrained the appellant Bank to pay the F.D proceeds to anyone and there was no bar to renew it.  In fact it was only an order to keep the F.D with the Bank till final disposal of the case and only the disbursal of the amount is subject to the final order of the court.  Hence we are of the view that the deposit is to be treated as F.D till it was closed on 07.10. 2014.

10.  The learned counsel for the appellant submitted that if they are found to be liable to pay F.D. rate of interest, their liability is only 7.5% per annum which was the prevalent rate on maturity.  However nothing was produced to prove the prevailing rate of interest on F.D on the due date of renewal.  Hence this contention is not sustainable and we are inclined to take the applicable rate of interest as 9.75 %.  We are of the view that the appellant Bank is liable to pay the same rate of interest of 9.75% till the date of closure.  In view of the foregoing reasons we concur with the finding of District Forum that there is deficiency in service on the part of the appellant/opposite party.  We find no grounds to interfere with the order of the District Forum as sought for by the appellant/ opposite party.

            In the result, the appeal is dismissed.  The order dated 22.07.2016 in C.C. No. 205/2014 of the District Forum, Kollam is confirmed.  The sum of Rs.25,000/- deposited by the appellant on filing this appeal shall be released to the respondent/complainant on proper application before this Commission.  The balance amount due as directed by the District Forum shall be paid by the appellants within two months from the date of receipt of the copy of the judgment, failing  which  the  respondent can initiate appropriate proceedings for  executing the order.  There is no order as to costs.

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

                                T.S.P. MOOSATH   : JUDICIAL MEMBER

                   RANJIT. R                : MEMBER

                                                                                                   BEENA KUMARY. A         : MEMBER

jb                                                                                                  RADHAKRISHNAN K.R.  : MEMBER