Andhra Pradesh

Chittoor-II at triputi

CC/10/2018

A.Padmanabha Reddy, S/o Late A.Doraswamy Reddy - Complainant(s)

Versus

State Bank of India, Pakala Branch, Rep. by its Branch Manager - Opp.Party(s)

A.Sudarsana Babu

23 Nov 2018

ORDER

                                                                                                                                                                            Filing Date: 07-02-2018                                                                                                       Order Date: 23-11-2018

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, CHITTOOR AT TIRUPATI.

 

Present:-  Sri. T.Anand, President (FAC)

      Smt.T.Anitha, Member

 

FRIDAY THE TWENTY THIRD DAY OF NOVEMBER, TWO THOUSAND AND EIGHTEEN

 

C.C.No.10/2018

Between

A.Padmanabha Reddy,

S/o. Late A.Doraswamy Reddy, Hindu,

Aged about 50 years, Agriculturist, residing at

Dommandlapalle Village, P. Kothakota Post,

Puthalapattu Mandal, Chittoor District.                                … Complainant

 

And

State Bank of India, Pakala Branch,

Rep. by its Branch Manager, having its

Office at Pakala, Chittoor District.                                       … Opposite Party

 

         This complaint coming on before us for final hearing on 22.11.2018 and upon perusing the complaint and other relevant material papers on record and on hearing of Sri. A. Sudarsana Babu, counsel for the complainant and Sri. D. Jayachandra, counsel for the opposite party having stood over till this day for consideration, the Forum made the following.

ORDER

DELIVERED BY SRI. T.ANAND, PRESIDENT (FAC)

ON BEHALF OF THE BENCH

         This complaint is filed by the complainant under section 12(1) of the Consumer Protection Act 1986,  seeking direction to the opposite party to pay the balance maturity amount of Rs. 66,573/- with interest @ 24% per annum from the date of its actual payment i.e., 26.08.2016 till the date of realization after deducting the deposited amount of Rs. 43,095/- from the maturity amount of Rs.1,09,668/- by cancelling the term deposit dt: 26.08.2013 vide account No. 11496972311 and also to pay Rs.50,000/- with interest @ 13% per annum towards damages and mental agony suffered by the complainant and to pay costs of the complaint.

         2.  The facts in brief as disclosed in the complaint as follows:-   the complainant and his father A.Doraswamy Reddy jointly invested amount in  recurring deposit under EWS Scheme started by SBI in the year 1992. As per RD pass book the date of maturity is 26.08.2016 and the maturity amount is 1,09,668/-, the RD account No. 231/12 dt: 26.08.1992. A.Doraswamy Reddy died on 15.03.2009 and his wife died in the year 2007 leaving behind as the complainant only legal heir of them. In the month of August 2017, the complainant casually verified bank transaction and noticed that Rs.43,095/- was credited in to his account which is deposited in opposite party bank under the said RD Scheme. When the complainant sought explanation for the same, the opposite party bank gave a evasive reply stating that it is a part of term deposit maturity amount and an amount of Rs.31,094/- has been converted term deposit in the names of complainant and his father with mode of operation as E or S, vide account No. 11496972311 with interest at 8.75% with effect from 26.08.2013 and the maturity amount of Rs. 73,890/- calculated at 8.75% will be paid on 26.08.2023.

         The opposite party bank manager informed that the amount of Rs.43,095/- was already deposited and if that is added to the maturity amount of Rs.73,890/- , it will come to 1,16,985/-. As per the original scheme as on date of maturity i.e. 26.08.2016 the amount payable is Rs.1,09,668/-  and the same is borne out the record i.e., pass book and the opposite party is bound to pay that amount on 26.08.2016. But without intimation and consent of the complainant, the opposite party arbitrarily deposited Rs.43,095/- in to his account and balance of Rs.31,094/- was converted in to FDR for 10 years and the maturity amount will be paid on 26.8.2023 and this is nothing but unfair trade practice and deficiency in service on part of the opposite party bank. One more astonishing fact is when the father of the complainant who is a joint account holder died in the year 2009 itself, how the opposite party bank will open a term deposit in the year 2013 i.e. four years after his death? The complainant therefore issued legal notice on 12.10.2017 and having received the same on 17.10.2017, the opposite party bank manager called the complainant and reiterated their stand. The complainant is a consumer under the provision of Consumer Protection Act and as such approached this forum seeking justice. 

         3. In the written version the opposite party raised following contentions:-  At the outset the complaint averments are denied. It is admitted that the complainant and his father A.Doraswamy Reddy deposited Rs.5,400/- in RD Scheme in the year 1993 under EWS and the maturity amount of Rs.1,09,817/- has to be paid in 2016. This scheme is called EWS Scheme i.e. Employment Welfare Scheme specifically meant for government employees and the rate of interest under the said scheme was 13% per annum. It is stated that the banks are under the control of Reserve Bank of India and as per their norms and guidelines the term deposit shall not be more than 10 years and the rate of interest applicable to term deposits shall be in accordance with the Reserve Bank of India guidelines which changes from time to time. In the year 1993 on the date of introduction of EWS Scheme, interest rate was 13% and as such the said rate is mentioned in the passbook issued to the complainant. It does not mean that the said interest is fixed and throughout the period interest will be given at that. No bank has authority to fix the interest on its own without following Reserve Bank of India guidelines. The recitals in the pass book are only a guidelines and not a contract between the bank and the depositor. Originally the father of the complainant deposited Rs.5,400/- on 26.08.1992 under EWS Scheme. The father of the complainant is aware of the terms and conditions including rate of interest that would be applicable as per the guidelines of RBI. At the time of starting scheme, the banks were not computerized and the entries of deposits are made through manual entry in the account books. Subsequently the RBI and other banks came under the purview of core banking solutions. In the instant case the deposit amount has to be renewed on the expiry of 10 years and fresh deposit receipt has to be raised after the expiry of 10 years and again it has to be renewed on completion of 20 years to be payable on 23^rd year and due to computerization the bank could not update the same and could not renew the deposit after expiry of 10 years as per RBI guidelines. It came to light on 26.08.2013 that there was EWS Scheme deposit of the father of the complainant and on verification and in consultation with the complainant term deposit was raised for Rs.31,094/- as per their advise and consent and the maturity amount of Rs.73,890/- will be paid on the maturity date i.e. 26.08.2023. The complainant never revealed the fact of death of his father to the bank till 2017 and as such the term deposit for Rs.31,094/- was issued in the name of complainant and his father. The complainant has submitted a letter to the bank on 12.07.2017 by intimating death of his father. Till then bank has no knowledge about death of original depositor. In order to save limitation the complainant addressed letter informing about death of his father and made claim in 2017 i.e. four years after the term deposit date i.e. 26.08.2013.This complaint is therefore barred by limitation.

         Receipt of alleged notice on 12.10.2017 the opposite party bank manager intimated to the complainant with regard to the settlement of the issue. It is false to say that the complainant was surprised to know that the EWS deposit has been closed in the year 2013 itself to raise term deposit for Rs.31,094/- till 26.08.2023 which is maturity date. At request of the complainant only the EWS deposit was closed and Rs.43,094/- was deposited in his bank account and the money was also withdrawn by the complainant. The bank is not at fault. There is no deficiency of service on their part. The specific denial is with regard to allegations in Para 7 of the complaint.

         4.  Complainant filed chief evidence affidavit as PW-1 and Ex:A1 to A6 were marked. On behalf of opposite party, K. Paridulla Saheb, Branch Manager, State Bank of India, Pakala Branch filed chief evidence affidavit as RW-1 and marked Ex:B1.

        5.  Now the Point for consideration is:-

         Whether there is deficiency of service and unfair trade practice on part of the opposite party? If so, to what extent, the complainant is entitled for the reliefs sought in the complaint?

         6.Point:-  The RD pass book is marked as Ex:A1 and it shows that initial by Rs.5,400/- was deposited in the said RD account in 1992. It is an admitted fact that the RD scheme is meant for welfare of employees and as such it is named EWS Scheme. Ex:A2 is certificate issued by Village Revenue Officer, P.Kothakota stating that A.Doraswamy Reddy father of the complainant died in 2007 and he is the original account holder along with the complainant. Ex:A3 is the Xerox copy of FDR bearing No. 11496972311 and it shows that Rs.31,094/- is the principal amount as on date of 26.08.2013 and the maturity amount @ 8.75% on principal amount which comes to 73,890/- has to be paid on the maturity date i.e. on 26.08.2023. Ex:A4 is legal notice dt: 12.10.2017 issued by the complainant’s counsel calling upon the opposite party to pay maturity amount of Rs.1,09,668/- with interest @ 24% p.a. from 26.08.2016 till its realization. Ex:A5 is track consignment along with postal receipt for Ex:A4. Ex:A6 is statement of account showing that Rs.43,094/- has been credited in to complainant’s account on 24.08.2017. On opposite party side Ex:B1 was marked which is letter dt: 12.07.2017addressed by  complainant stating that his father A.Doraswamy Reddy and himself invested amount under EWS Scheme and that the said amount may be credited in to account of complainant.

        As per the written arguments filed by the complainant it is contended that he and his deceased father joined under EWS Scheme and invested money in RD on 26.08.1992 by agreeing to received Rs.1,09,668/-  on 26.08.2016 under EWS Scheme. But without the consent of the complainant the opposite party has credited Rs.43,094/- in his account on 24.08.2017contrary to the terms and conditions of EWS Scheme. It is further contended that his father A.Doraswamy Reddy died in 2009 and same was informed to opposite party under Ex:B1 and asked the bank to credit the amount in his account bearing No. 30362530567. The counsel for the complainant contended that Ex:B1 is not a consent letter to convert the amount accumulated in RD account in to term deposit. It is the contention of the complainant’s counsel that the complainant never agreed for converting part of amount under EWS Scheme in to term deposit and therefore issuing Ex:A3 by the bank is nothing but unfair trade practice and also amounts to deficiency in service on part of the opposite party.

        7.  As per the written arguments filed by opposite party it is argued that the bank is always bound by rules and regulations of RBI and the rate of interest will not remain static and bound to change as per RBI guidelines and in the instant case also, the interest rate prevailing as on date of FDR was 8.75% is and at that rate maturity amount was calculated and the complainant will be receive the maturity amount of Rs.73,890/- on the date of maturity i.e. on 26.08.2023. The FDR commenced on 26.08.2013. It is further contended that only after getting consent and informing the complainant the amount was invested in FDR for 10 years and as such the complainant cannot now contend that bank has illegallyconverted the amount accrued under EWS Scheme into 10 years term deposit to the disadvantage of complainant.

           The opposite party counsel denied that there is unfair trade practice by opposite party and the question of deficiency in service also does not arise in this case.

         8. It is not in dispute that originally complainant and his father joined EWS Scheme in 1992 by investing Rs.5,400/- in RD scheme by agreeing to receive the maturity amount of Rs.1,09,668/- on 26.08.2016. It is not in dispute that the rate of interest at that time was 13% per annum. It is also not in dispute that Ex:A3 was issued by opposite party and the rate of interest is shown as 8.75% in Ex:A3. It is also not in dispute that an amount of Rs.43,094/- was credited in to account of complainant on 24.08.2017 under Ex:A6. It is also not in dispute that Rs.31,094/- which is the principal amount under Ex:A3 is part of accumulated amount under EWS Scheme which means as on date of 26.08.2013 an amount of Rs.74,188/-(31,094+43,094) is the total accumulated amount under EWS Scheme. It is not in dispute that under EWS Scheme the maturity amount of Rs.1,09,668/- has  to be paid to the complainant on 26.08.2016. The contention of opposite party that they are bound by RBI guidelines and that no term deposit shall exceed more than 10years as per RBI guidelines cannot be accepted as no documentary proof is filed to that effect. Further the opposite party counsel argued that they intimated the complainant before converting part of EWS Scheme amount in to term deposit also cannot be accepted, since no document is filed to show that, complainant was duly informed about conversion part of accumulated amount under EWS Scheme in to term deposit. Ex:B1 on which the complainant counsel relies will not be of  any help to opposite party to prove that the complainant was put on notice about Ex:A3, because Ex:B1 is dt: 12.07.2017 whereas Ex:A3 is dt: 26.08.2013 which is much earlier to Ex:B1.

        Hence we are of the considered view that, when the scheme is initiated by bank and the customers are made to believe that they will get certain amount after the end of the scheme (in the instant case EWS scheme) and in the middle of the scheme terms and conditions are changed to the disadvantage of the customer, it amounts to unfair trade practice. In the instant case the complainant ought to have received Rs.1,09,668/- on 26.08.2016 but only Rs.43,094/- was credited in to his account and the balance amount of Rs.31,094/- as on 26.08.2013 was converted in to FDR for 10 years with maturity value of Rs.73,890/- and it certainly  works out to the disadvantage of complainant. Hence we hold that there is deficiency of service as well as unfair trade practice on part of the opposite party. Accordingly this complaint is partly allowed. 

         In the result, complaint is partly allowed directing the opposite party to pay         Rs. 66,573/- (Rupees sixty six thousand five hundred and seventy three only) being a balance amount under EWS Scheme with interest at13 percent per annum from the date of actual payment i.e. 26.08.2013 till the date of realization by cancelling term deposit vide account No. 11496972311 under Ex:A3 and further directed to pay Rs.5,000/- (Rupees five thousand only) towards compensation for mental agony suffered by the complainant due to deficiency of service and unfair trade practice on part of the opposite party and further a sum of Rs.3,000/- (Rupees three thousand only)  is awarded towards the cost of the litigation. The opposite party is further directed to comply with the order within eight weeks from the date of receipt of copy of this order failing which, the above said compensation amount of Rs.3,000/- (Rupees three thousand only) also shall carry interest at 9 percent per annum from the date of this order till realization. 

         Dictated to the stenographer, transcribed and typed by her, corrected and pronounced by me in the Open Forum this the 23^rd day of November, 2018.

            Sd/-                                                                                                     Sd/-

   Lady Member                                                                                          President (FAC)

 

APPENDIX OF EVIDENCE

Witnesses Examined on behalf of Complainant/s.

PW-1: A. Padmanabha Reddy (Evidence Affidavit filed).

Witnesses Examined on behalf of Opposite PartY/S.

RW-1: K. Pareedulla Saheb (Evidence Affidavit filed).

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/s

Exhibits (Ex.A)	Description of Documents
	SBI Recurring Deposit Pass Book filed by the complainant in original.
	Certificate given by the Village Revenue Officer, P.Kothakota (Village), Puthalapattu (Mandal) in original. Dt: 12.12.2017.
	Photo copy of Term Deposit Receipt of State Bank of India, Pakala Branch submitted by the complainant.
	Office copy of Legal Notice, Dt: 12.10.2017.
	Photo copy of Track Consignment (Delivery Dt:17.10.2017) along with Postal Receipt in original (Dt: 16.10.2017).
	Photo copy of Statement of Account for the period from 01.08.2017 to 01.10.2018 given by the SBI, Pakala Branch submitted by the complainant.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY/s

 

Exhibits (Ex.B)	Description of Documents
	SBI, Pakala Branch, Chittoor District Reply Letter Dt: 29.09.2018 regarding the request letter Dt: 12.07.2017 given by A. Padmanabha Reddy (Complainant) to submit the same to the Forum in Original.

 

 

         Sd/-

                                                         President (FAC)

 

 

// TRUE COPY //

// BY ORDER //

 

 

 

Head Clerk/Sheristadar,

Dist. Consumer Forum-II, Tirupati.

 

Copies to:  1) The Complainant, 

                   2) The Opposite party.