Sri Shyamal Gupta, Member

The present Appeal is directed against the Order dated 11-03-2016 passed by the Ld. District Forum, Kolkata – II (Central) in C. C. No. 496/2015.

Case of the Complainants, in short, is that while making a Term Deposit with the OP Bank, crystal clear instruction was given to the Bank to renew the said Term Deposit from time to time irrespective of whether or not Complainants accord formal consent to do so.  Complainants availed of a loan of Rs. 6,50,000/- against the said Term deposit for the purpose of purchasing a car.  Subsequently, the Complainants started repayment of the loan amount and this continued till 02-08-2014 and during this entire period, the Complainants never gave any formal consent to renew the Term Deposit  and it was extended from time to time by the OPs.  On and from September, 2014, the Complainants found that the interest on fixed deposit which used to be credited to their savings account was not given.  On enquiry, they were told by the OP No. 1 that henceforth the interest amount would be adjusted against the overdraft account.  On 07-03-2015, when Complainant No. 2 visited the OP Bank for collecting a Statement of Account, he was completely taken aback to learn that the overdraft account had been closed after adjusting dues thereof from the principal amount of the Term Deposit as the said TD matured on 23-02-2015.  Although officials of the OP Bank could not offer any satisfactory explanation in this regard, at their insistence, the Complainant No. 2 wrote a letter addressed to the OP Bank to close the said OD account.  On being informed that a sum of Rs. 12,59,248/- was lying in their account, the Complainants issued a cheque of Rs. 12,37,000/-.  However, on 17-03-2015, the Complainants came to know that the said cheque was returned due to insufficient balance in the account.  After updating the passbook, the Complainants came to know that after transferring the account closure proceeds on 23-02-2015, a further sum of Rs. 39,263/- was debited to their account on 07-03-2015 on account of “Cr to Xfer Ac due to closure”.  Also, another sum of Rs. 393/- was debited from their account due to return of the cheque.  Aggrieved by such arbitrary act of the OPs, the Complainants filed the complaint before the Ld. District Forum.

Case of the OPs, on the other hand, is that the first Term Deposit that was opened by the Complainants was closed in the month of March, 2013 and then subsequently a new term deposit account was opened on 22-03-2013 which was due to mature on 22-02-2015.  The new term deposit account was opened with the instruction of “auto-closure” without any instruction for renewal.  Thus, the new term deposit was automatically closed on 22-02-2015.  However, since the overdraft account was still active, the new term deposit was marked lien.  Since the new term deposit account was slated to mature on 22-02-2015 with auto-closure mandate and the term deposit was marked as lien and on the date of maturity, the overdraft account was active, the OP Bank deducted the balance amount due to the overdraft account from the term deposit and thereby realizing their dues, credited the rest amount to the savings account of the Complainants.  In this regard, it is stated by the OPs that their system has been programmed in such a manner that it would automatically execute the function of every customer on the date fixed manually.  There is no scope of interference unless and until specific written request is received from the customer to alter any date of any function.  It is further stated that during the time when overdraft facility was availed of by the Complainants, due to some unforeseen reasons, interest on the overdraft account was not received from the Complainants.  As soon as the remaining amount due from the overdraft account was realized from the matured term deposit account and the balance transferred to the savings bank account, the OP Bank deducted an amount of Rs. 39,263/- being the unclaimed interest amount on the overdraft account.  Accordingly, the OPs prayed for dismissal of the complaint.

Decision with reasons         

          The dispute revolves over arbitrary closure of the Term deposit in question.  It is the case of the Respondents that at the time of opening the Term Deposit they instructed the Appellants to renew the said Term Deposit from time to time on their own, without waiting for their formal consent in this regard.  Therefore, when the Term Deposit was abruptly closed down by the Appellants behind their back, they were totally caught off-guard. 

On the other hand, it is the case of the Appellants that in the wake of closure of the first Term Deposit on 22-03-2013, a new term deposit was made with the auto-closure without any instruction for renewal. Therefore, when the new term deposit matured on 22-02-2015, proceeds thereof, after adjusting the outstanding loan amount, was credited to the savings account of the Respondents.

On the face of it, one may dither to find any fault with the action of the Appellants.  However, a deeper look into the documents on record depicts a totally different picture.

It is stated by Mr. Rajarshi Rakshit, Dy. Vice-President & Branch Head, Axis Bank, Shyambazar branch in his Affidavit-in-Chief that the Term Deposit was opened for the first time on 22-08-2008 with an instruction for auto-renewal on and from the date of maturity of the term deposit.

It is stated by Mr. Rakshit in his reply to the questionnaire put forth by the Respondents that the said term deposit was renewed after its maturity on 22-04-2011.  Admittedly, in absence of formal requests from the side of the Respondents, the Bank on their own renewed it for a further period of 23 months, i.e., till 22-03-2013.

It is also stated by Mr. Rakshit that after expiry of the validity period of the Term Deposit for the second time, the same was further renewed for another 23 months, i.e., till 22-02-2015.  According to Mr. Rakshit, as there was no instruction from the customer but OD account was in operation, the bank renewed the Term Deposit account at that time.

From such candid admission of the Dy. Vice-President & Branch Head of the Appellant Bank, it transpires that after making the Term Deposit for the first time in the year 2008, the Respondents never made any formal/official/written request to the Appellants to renew the Term Deposit in question; yet the Appellants, on their own renewed it twice in a row. 

It is indeed surprising that although on earlier occasions, the Appellants renewed the Term Deposit twice without waiting for formal written consent from the side of the Respondents, most amazingly; they deviated from their old practice and closed the account on 22-02-2015.  

There is every reason to believe that, since on earlier occasions, the Appellants suo mottu renewed the Term Deposit, the Respondents did not feel the necessity of harping on the same string and were of the impression that the Appellants would renew the Term Deposit for another 23 months automatically.  In view of the precedents set by the Appellants themselves, the reason for doing a volte face on 22-02-2015 was highly questionable, particularly, when admittedly, the Respondents gave clear instruction for auto-renewal from time to time at the time of making the Term Deposit for the first time in the year 2008.

It is to be kept in mind that when the said Term Deposit was renewed for the first time on 22-04-2011, it was done by the Appellants themselves without any written request to that effect from the side of the Respondents.  Therefore, it is for them to explain as to why they did not keep the option of auto-renewal of the Term Deposit while renewing the same for another 23 months on that day. 

Ld. Advocate appearing on behalf of the Appellants argued that the Respondents, while availing of the loan, executed a Demand Promissory Note dated 18-06-2008 which signifies the acknowledgement of a debt. It is further argued by him that since a DP remains valid for three years, it is mandatory for any customer to sign fresh DP Note after every three years unless the loan/overdraft as extended has been repaid.  I, however, find no force in such contention of the Ld. Advocate given that save and except signing the DP Note on 18-06-2008, the Respondents never executed any fresh DP Note in favour of the Appellants.  However, most surprisingly, it did not pose any deterrence in the matter of extension of the  OD facility in favour of the Respondents till 22-02-2015.  I am afraid, Appellants’ own conduct belies their contention.

As regards deduction of Rs. 39,263/-, it is clarified by the Appellants that due to some reasons, interest on the overdraft account was not realized from the Respondents and so the unclaimed interest amount on the overdraft account was debited from the account of the Respondents on 07-03-2015. 

Given that the calculation of outstanding due in respect of the overdraft account of the Respondents was done by computer, such a gross mistake does raise eyebrows.  To err may be human; but this cannot be said about computers/machines which does such calculation with unsurpassed precision. Although Appellants submitted a Statement of Account in respect of the OD account concerned; however, since the same does not contain month-wise accumulation of interest in respect of the OD account and most importantly, the rate of interest applied is not mentioned in the statement, veracity of such calculation could not be independently ascertained. 

No doubt, thanks to the arbitrary act of the Appellants, the Respondents suffered a lot.  By allowing the complaint, the Ld. District Forum, therefore, committed no jurisdictional error.  However, since the awarded sum appears to be on the higher side, I deem it just and proper to trim the same to some extent.

Accordingly, the Appeal stands allowed in part.

Hence,

O R D E R E D

that A/387/2016 be and the same is allowed in part on contest.  Appellants shall pay a sum of Rs. 2,00,000/- as compensation together with litigation cost for a sum of Rs. 10,000/- to the Respondents within 45 days hence, i.d., the compensation amount shall carry simple interest @ 9% p.a. from 08-10-2015 (date of filing of complaint) till full and final payment is made. The impugned Order stands modified accordingly.