PER BHARATKUMAR PANDYA, MEMBER

1.         This complaint involves allegation of deficient banking service on the part of the OP State Bank of India on the ground that the two fixed deposits of Rs.50 lakhs each held by the complainant were illegally and unduly withheld by the OP even after the request in writing for release of the FD and for depositing the maturity amount in the account of the complainant was made. The complainant is therefore seeking release of the two FDRs bearing no. 651945261152 and 651945260130 (since released with stipulated interest at 8.75%)  and for compensation of Rs.10 lakhs for mental torture, etc. along with interest.  The brief facts are that the with regard to a contract of the complainant with M/s Larsen & Toubro, bank guarantee was issued by the OP bank against the security of these two FDRs. It was informed to the OP Bank by letter dated 05.01.2015 that the bank guarantee has been released by M/s Larsen & Toubro and therefore the FDRs may be released. The OP endorsed a noting that the FDRs shall be released on the next date i.e. on 06.01.2015. However, the FDRs were not released and, on the contrary, the OP bank moved an IA/15/2015 in an ongoing proceeding bearing number OA/172/2014 before the Debt Recovery Tribunal with a prayer for adjusting the amount of FDR against the debt of an alleged associate of the complainant against whom the recovery proceedings were initiated by the OP bank. This IA was rejected by the DRT in its order dated 02.03.2015 by observing that the applicant failed to establish any prima facie case. The matter was further litigated by the OP before DRAT who also rejected the appeal of the OP bank vide order dated 28.09.2015. Thereafter, the OP released the FDs on 05.10.2015 with 8.75% stipulated interest till the date of release. Thus, the delay of nearly 9 months in release of the FDs is stated by the complainant to be deficiency in service which made the complainant run from pillar to post and caused mental agony and distress. As per the complainant, such unprofessional approach of the OP bank in unreasonably withholding the fixed deposit amount of the complainant on an unsubstantiated and flimsy ground is clearly deficiency in service as per section 2(1)(o) read with Section 2(1)(g) of the Consumer Protection Act for which appropriate compensation needs to be awarded. The complainant relied on - (i) Canara Bank Vs. M/s Jain Motor Trading Company 2013 SCC Online NCDRC 656, (ii) V and S International (P) Ltd. Vs. Axis Bank through its Manager 2019 SCC Online NCDRC 299, (iii) Corporation Bank Vs. I.S.E. Card India Ltd. 2018 SCC Online NCDRC 887, (iv) The Branch Manager, Union Bank of India Vs. S. Rajamanickam Mudaliar Company 2008 SCC Online NCDRC 29, (v) Citibank N.A. Vs. Geekay Agropack Pvt. Ltd. & Anr. (2008) 15 SCC 102, Anil Milkhiram Goyal Vs. HSBC Ltd. (CC No. 507/2023) 2023 SCC Online NCDRC 216, (vi) Rajesh Gupta Vs. M/s Axis Bank Ltd. (CC No. 46 of 2014) and Binod Dokania & Anr.Vs. IDBI Bank Ltd. (CC No. 2218 of 2018). 

2.         The OPs filed their reply and stated that (i) firstly the complainant is not a consumer under Section 2(1)(d) in view of Regl. Provident Fund Commissioner Vs. Shiv Kumar Joshi, III (1999) CPJ 36 (SC) and Harsolia Motors Vs. National Insurance Co. Ltd. I 2005 CPJ 27 (NC), (ii) the complaint is barred on the principle of res judicata and also because the interest for the delay period amounting to Rs.12,14,455/- at 8.75% has already been accepted by the complainant without any demur in terms of DRAT order, (iii) there was reasonable ground for non-release of the FDs and therefore no deficient service can be alleged, (iv) that no complaint can be filed before the Commission after the complainant has failed before Banking Ombudsman who has rejected the complaint of the complainant on 01.04.2015.

3.         We have heard the counsel, perused the record and carefully considered the matter. The complainant obtained the fixed deposits and related services of bank guarantee from the OP bank not as part of any profit earning activity. The key relevant transaction with the OP Bank of availing service with regard to which the deficiency is alleged, is that of opening FDs and services of the OP with regard to such FDs. The complainant’s profit earning commercial activity is not that of opening FDs. So, though transaction of opening FD and obtaining bank guarantee is incidental to complainant’s business activity, it is certainly not directly a part of its profit generating activity. In other words, there is no “profit element” in the transaction of availing services of the OP so as to constitute “availing of such service for any commercial purpose” within the meaning of section 2(1)(d) of the CP Act, 1986. Supreme Court is Harsolia Motors (supra) laid down that the question whether the availing of service is for any commercial purpose is a question of fact. In our opinion, the service availing transaction of the complainant is not for “commercial purpose”. Similarly, the complainant’s complaint before Banking Ombudsman in itself can be no bar because the CP Act 1986 is not in derogation of but is in addition to any other remedy which the complainant may have. The acceptance of the discharge with 8.75% interest happened after the complaint is filed before us therefore such acceptance also cannot be a ground for not entertaining the complaint, particularly when the OP itself has not “fully and finally settled” the matter with the complainant while making the payment.

4.         Turning to the merits of the case, we are of the considered opinion that withholding the deposits by a Bank after the withdrawal is validly sought by a customer is a clear deficiency in service. The denial of such entitlement to withdraw the customer’s own funds can be justified only when  permitted under law or under the conditions agreed between the parties. The only justification advanced by the OP Bank is that the interim application before DRT and thereafter appeal before DRAT were filed, though both of which were dismissed. Having perused the respective orders of the DRT and DRAT, we find that the OP Bank could not make out even a prima facie ground before DRT and DRAT. Therefore we are constrained to hold that there is no valid ground for the OP Bank to have withheld the FDs when withdrawal was validly sought by the complainant. The purported and colorable grounds which are held untenable even on prima facie consideration  by the respective Tribunal and Appellate Tribunal cannot be accepted by this Commission as valid justification. We therefore hold that the OP Bank is liable for deficiency in service for which the complainant is entitled to be compensated. As the complainant has already received the amount of FD with 8.75% interest for the whole period of delay, we are of the opinion that direction to the Bank to pay an additional 1.8 lacs (2% for 9 months delay) as compensation would serve the ends of justice. Hence the following order:

ORDER

The complaint is partly allowed. The OP bank is directed to pay compensation of Rs.1.8 lakhs along with interest at 9% on such compensation from 05.01.2015 upto the date from which the payment is made. The compliance shall be made within a period of two months.