JUSTICE V.K. JAIN, PRESIDING MEMBER

                The complainants / respondents in these petitions had savings bank accounts as also FFD Accounts with the Nanded Branch of the petitioner bank.  According to the complainants in FFD Account, the account holder could make deposit as well as withdrawal any time and is paid interest as applicable on the date of deposit for the period the deposits remain with the Bank.  The complainants had been withdrawing interest on such deposits after every 46 days.  This is also their case that in the year 1997-98 they wanted to reduce the deposits but the then Branch Manager Mr. Mohan Rao told them that they will continue to receive the same facility as was available in FFD Account.  Accordingly, the complainants did not transfer the deposits to other banks.  The petitioner bank stopped paying interest in FFD account after every 46 days with effect from 28.02.1997 and the said accounts were converted into ADR Accounts.  The complainant however, continued to make deposits even thereafter.  It is also alleged by them that Mr. R.K. Shetty of the petitioner bank had agreed to pay compound interest @ 15% per annum on the FFD Account as on 28.2.1997 as also to pay interest at the prevailing rate on the deposits made thereafter.  Since the complainants were not paid compound interest at the rate of 15% on the deposits as on 28.2.1997, nor were they paid prevailing interest rates on the deposits made after 28.2.1997, they approached the concerned District Forum by way of separate consumer complaints.

2.      The complaints were resisted by the petitioner bank, which took a preliminary objection that the same were patently barred by limitation having not been filed in the year 2009 though the cause of action to file the complaints accrued on 26.7.2002 when the complainants were informed that the petitioner bank had closed the subject, in dispute.  The opposite party denied the alleged assurance by the then Manager Mr. Mohan Rao and inter-alia stated that it was on the request of the complainants that the amount of FFD was converted into ADR with effect from 01.3.1997.  It was further stated in the written version filed by the petitioner that no deposit as such was made by the complainants after 28.2.1997 and only dividend received from the companies was deposited.  The original ADR receipts are stated to have been collected by the complainants from the bank, from time to time.  It was further stated in the written version that after receiving the complaint from the complainant, the bank, considering the long standing relationship with him had offered to pay interest on FFD @ 15% per annum with effect from 28.2.1997 and offered actual rate of applicable interest on the deposits made after 28.2.1997, subject to submission of required details and / or forms at the Branch.  The proposal was conveyed to the complainant vide letter dated 09.3.2002, but the said opportunity was not availed by him and therefore, stood withdrawn on 15.3.2002.  The complainant was informed vide letter dated 16.4.2002 that since he had not availed offer made by the petitioner bank till 15.3.2002, it was not liable to pay interest to him, in terms of the said offer.  It is further stated that the bank had sent 14 pay orders for a total sum of Rs.12,52,221/- to the complainant vide letter dated 6.7.2002 but the complainant refused to accept the same. 

3.      A perusal of the proceedings of the District Forum dated 16.12.2009 would show that the sealed envelope addressed to the complainant was opened and was found to contain the letter dated 6.7.2002, along with as many as 14 pay orders.  Statements of account were also found in the said envelope.

          It was stated in the written version that the current interest rate is 6.75% per annum and the interest rate changes from time to time.

4.      The District Forum allowed the consumer complaints with the following directions:-

“2.     The non-applicant Nos. 1 & 2 to pay the amount along with interest @ 15% as agreed in the letter dated 09.3.2002 on the amount in FFD / ADR accounts of all the applicants as on 28.2.1997 and to pay quarterly interest at the compounded rate till the full and final payment; and also to pay the interest @ 13% on deposits made after 28.2.1997 and to pay quarterly interest at the compounded rate till the full and final payment.  For this purpose, the applicant to approach Bank personally and complete the formalities by signing the Discharge Voucher.

3.      No separate compensation as the interest being paid.

4.      To pay Rs.25,000/- on account of the mental harassment and Rs.2000/- as the dispute expenses to each and every applicant.”

5.      Being aggrieved from the order passed by the District Forum, the petitioner bank approached the concerned State Commission by way of separate appeal.  The said appeals were allowed only to the extent that the compensation awarded by the District Forum was reduced from Rs.25,000/- each to Rs.10,000/- each.  The State Commission took the view that since the complainant had approached the Banking Ombudsman, the date on which his complaint to the banking Ombudsman was disposed of should be taken as the starting point of limitation. 

6.      The learned senior counsel for the petitioner stated on instruction at the time of hearing that the petitioner bank was ready to pay interest @ 15% per annum with effect from 28.2.1997 till 30.4.2002 on the amount which had been deposited upto 28.2.1997 and saving account interest rate for the period subsequent to 30.4.2002.   He also offered to pay saving bank account interest rates on the deposits made after 28.2.1997. 

7.      Vide letter dated 01.2.2002, the Bank had informed the complainant that the SIFFD scheme was closed by the bank on 27.12.1996 and a notice to this effect was displayed on the Notice Board.  Thereafter, the Bank Manager had also informed him regarding closure of the SIFFD Scheme.  It was also stated in the said letter that the accounts were converted into ADR Accounts on the request of the complainant.  Vide letter dated 9.3.2002 he was informed that considering his longstanding relationship with the bank, he would be paid 15% interest on FFD amount with effect from 28.2.1997 and actual rate of interest for applicable period on each deposit made after 28.2.1997.  He was also informed that the said offer was valid till 15.3.2002.

          The settlement offer was extended vide letter dated 16.4.2002 and the complainant was given fifteen days to respond.  Vide letter dated 6.5.2002, he was informed that since he had not accepted the offer, the bank was no longer liable to pay any overdue interest on the deposits made by him.

8.      The petitioner bank having closed the FFD scheme, it could not have been compelled by the complainant to retain the deposits at the interest, which the bank had been paying on the FFD deposits.  The bank had a unqualified and absolute right to stop extending such deposits.  In that event, it was liable to pay agreed interest only till the deposits which it had accepted till the closure of the scheme, matured.  In the absence of a contract to the contrary, the bank cannot compelled to accept the deposits or renew them at the rate which it is unwilling to offer to the account holder.  This is not the case where the bank refused to pay the agreed interest for the period for which the deposit was accepted by it. 

9.       In my opinion, the letter dated 09.3.2002 cannot be interpreted to me that the complainants became entitled to interest @ 15% per annum, for all times to come till they chose to retain their deposits with the bank.  The said letter, in my opinion can be interpreted to mean that the bank was ready to pay 15% interest on FFD amount only till the date on which the said letter was written and that too, subject to his accepting the offer on or before 15.3.2002.  At best, the bank can be liable to pay the said interest, till the date on which the principal amount was tendered to the complainants, along with the letter dated 06.7.2002.

10.    The act of the complainant in refusing to accept the pay orders of Rs.12,52,221/- cannot be approved.  If he was getting a higher interest from some other bank he ought to have accepted the pay orders sent to him vide letter dated 06.7.2002 and deposited the amount of those pay order with the bank willing to pay a higher interest.  The petitioner bank even in a worst scenario against it cannot be compelled to pay interest on such FFD deposits, i.e. the deposits made till 28.2.1997, after 06.7.2002, when the amount of Rs.12,52,221/- was tendered by it to the complainants by way of pay orders.

11.    The deposits made by the complainant after 28.2.1997 cannot be treated as FFD deposits the said scheme having already been closed and therefore, the offer of the petitioner bank to pay saving bank account rate on the deposits made after 28.2.1997 is also eminently justified. 

12.    In his arguments, the complainant time and again emphasized upon the letter dated 09.3.2002, sent to him by R.K. Shetty of the petitioner bank.  Even the letter of Mr. Shetty cannot be interpreted to mean that the petitioner bank became bound to pay compounded interest to the complainants for all times to come @ 15% per annum, despite the FFD Scheme having already been closed by it.  In any case, such interest will not be payable, even on the deposits made upto  28.2.1997, once the pay orders of Rs.12,52,221/-  were sent to the complainants on 06.7.2002.

13.    For the reasons stated hereinabove the consumer complaints are disposed of with the following directions:

(i)      The petitioner bank shall pay compound interest @ 15% per annum to the complainants till 06.7.2002, on the entire FFD deposits made upto 28.2.1997.  The petitioner shall also pay savings account interest as applicable from time to time, on the aforesaid deposits with effect from 07.07.2002 till the date of payment;

(ii)      On the deposits made by the complainants after 28.2.1997, the petitioner bank shall pay savings account interest as applicable from time to time, from the date of each deposit till the date of payment;

(iii)     No compensation would be payable to the complainants though, all of them together shall be entitled to the cost of litigation quantified at Rs.25,000/-.

The Revision Petitions stand disposed of accordingly.