BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL COMMISSION, JALANDHAR.

Complaint No.399 of 2021

      Date of Instt. 02.12.2021

      Date of Decision: 26.06.2024

Kamal Gupta (aged 62 years) s/o Late Sh. Vidya Sagar r/o 509, Cheema Nagar, Near PPR Mall, Mithapur Road, Jalandhar.

..........Complainant

Versus

1.       State Bank of India, Jalandhar personal banking branch, 37 Cool      Road, Jalandhar City, through its Manager.

2.       Senior Manager, State Bank of India, Jalandhar personal, banking     branch, 37 Cool Road, Jalandhar City.

….…..Opposite Parties

Complaint Under the Consumer Protection Act.

Before:        Dr. Harveen Bhardwaj             (President)

                   Smt. Jyotsna                            (Member)                                          Sh. Jaswant Singh Dhillon       (Member)   

Present:       Sh. V. K. Gupta, Adv. Counsel for Complainant.

                    Sh. A. K. Arora, Adv. Counsel for OPs.

Order

Dr. Harveen Bhardwaj (President)

1.                The instant complaint has been filed by the complainant, wherein it is alleged that the complainant is the account holder of saving account No.65271176856 with the OPs as such is the consumer of the OP. The complainant had opened some FDR accounts with the OPs, which are on record. The complainant has opened this FDR account with long tenure intentionally with an objective for future requirements and to earn more interest. During the tenure of said FDR, complainant was in need of money as such he approached OP to liquidate above FDR, however concerned Manager of the OP have advised complainant that there is no need to liquidate the FDR as complainant is getting good interest thereon.

The concerned branch manager has advised complainant that bank/OP can provide overdraft facility to complainant up to 85% of face value of the FDR and the interest thereon will be one 1% more than the rate applicable to the FDR. It was also intimated to complainant that margin is kept by the bank so that interest in the overdraft account does not increase the interest on FDR, and in case dues in overdraft account increase the margin then Bank will liquidate the FDR and will refund the margin amount to the account holder. It is made clear that it was confirmed to complainant by the concerned Branch Manager that, there will not be any financial loss to complainant as he will get the margin amount at the time of maturity or at the time of liquidation of the FDR by the Bank. It is only on the assurances and guarantees given by OP complainant agreed to obtain over draft loan in place of early liquidation of FDR. Thereafter as per advice of the then branch manager of OP complainant has availed Over-draft facility for a sum of Rs.28,90,000.00 @ ROI Rs.10.25% (i.e. 1% above FDR interest) from OP. The said FDR was matured on 10-10-2018, and there was no communication from the Bank, however on 13-09-2018 it was intimated to complainant that there was overdue amount of Rs.7,53,547-00 + intt., in the overdraft account. The complainant was highly surprised after receipt of demand from the side of OP to the effect that there is overdue amount of Rs.7,53,547-00 + intt., in the overdraft account of complainant after adjusting the FDR. The complainant immediately enquired from OP that once the Bank is supposed to liquidate the FDR as soon as overdue amount increases margin of FDR and by no stretch of imagination Bank can permit the overdue above the face value of the FDR, as such bank is not entitled to claim any amount from complainant. Thereafter, complainant moved the complaint before the Banking Ombudsman against OP but OP malafidely and illegally during the pendency of said complaint, on 10.10.2018 have liquidated said FDR of complainant as mentioned above without the knowledge and consent of complainant, apart from this OP has also liquidated other FDRs belonging to sons of complainant i.e. Arnav Gupta and Akshat Gupta on 03.12.2019 as per details placed on record. It is important to mention here that original FDR's are still in possession of sons of complainant. The complainant many times requested OP to refund the margin amount of FDR and the amount wrongly deducted from the FDR accounts of sons of complainant, and also to withdraw the above-mentioned demand but no result. It is made clear that sons of complainant have already initiated respective legal action for the recovery of their respective dues which the Bank has illegally deducted. Later on 12.10.2021 OP has illegally has imposed hold on funds in account of sons of complainant i.e. in account No.65045006348, 65119424004, 65119424559 with respect of above mentioned overdraft facility, which also amount to deficiency in service and unfair trade practice and not acceptable. The complainant got issued legal notice dated 21.10.2021 to the OP through his counsel, but all in vain and as such, necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OPs be directed to immediately recall the demand of Rs.7,53,547 + intt raised against complainant and to refund the 15% margin amount kept at the time of advancing overdraft limit alongwith interest @ 9.25% per annum till recovery. Further, OPs be directed to refund amounts of sons of complainant alongwith interest @ 9.25%  up to the date of maturity of FDR and to pay future interest as per applicable rate on FDR and to pay a sum of Rs.5,00,000/- on account of mental tension and harassment suffered by the complainant and Rs.50,000/- as legal charges and to remove hold on funds in the account No.65045006348, 65119424004, 65119424559 imposed in connection with the overdraft facility mentioned above.

2.                Notice of the complaint was sent to the OPs, who filed reply and contested the complaint by taking preliminary objections that the complainant is estopped by his own act & conduct from filing the present complaint. It is further averred that the present dispute cannot be settled in a summary manner, since complicated questions of law and facts are involved in the present case, thus this commission is not an appropriate forum to decide the present dispute between the complainant and the OPs. The said case cannot be decided without leading evidence and as such the matter is liable to be referred to the Civil Court, which is the only Forum for decision of the said case on merits after leading evidence by both the parties and giving opportunity of cross examination of the witnesses. It is further averred that the present complaint is hopelessly barred by limitation. The FDRs of the complainant were adjusted by the respondent bank on 10.10.2018 in the loan account of the complainant along with Yoshita Gupta and the said fact was well within the knowledge of the complainant that the FDRs, which is the subject matter of the present complaint has been adjusted by the respondent bank on 10.10.2018. The complainant kept mum over the matter for a period of more than two years and has no right whatsoever to file the present complaint after the expiry of period of two years from the date of cause of action. It is further averred that there is no deficiency of service or unfair trade practices on the part of the OPs and that being so, the present complaint is not maintainable before this Commission. On merits, the factum with regard to open some FDR account with the OPs by the complainant is admitted, but the other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.

3.                Rejoinder to the written statement filed by the complainant, whereby reasserted the entire facts as narrated in the complaint and denied the allegations raised in the written statement. 

4.                In order to prove their respective versions, both the parties have produced on the file their respective evidence.

5.                We have heard the learned counsel for the respective parties and have also gone through the case file very minutely.

6.                It is admitted and proved that the complainant is the account holder of saving account No.65271176856. The passbook of the account of the complainant of account No.65271176856 has been proved as Ex.C-1. It is also not disputed that the complainant has opened another FDR account with the OPs with different account No.65045009791. The complainant has proved the copy of the FDR as mentioned above as Ex.C2. It is also not disputed that the complainant had availed the over draft facility for a sum of Rs.28,90,000/- from the OP against FDR No.65045009791 from the OP. It is also not disputed that the sons of the complainant namely Akshat Gupta and Arnav Gupta have also got opened the FDRs, which have been proved by the complainant. The copies of the FDRs and statement of accounts of the children have been proved by the complainant as Ex.C-4 to Ex.C-17. There is a dispute regarding liquidation of the FDRs of the sons of the complainant by the bank alongwith other FDRs of the complainant by the bank in order to adjust the overdue amount left in the over draft account of the complainant. The sons of the complainant alongwith the complainant and husband of the complainant have filed four complaints challenging the deficiency in service by the OPs for liquidating the FDRs of the complainant without the consent of the complainant and without notice to the complainant and her sons and husband illegally and unlawfully. The unfair trade practice has been alleged by the complainant and his family members. The family members have filed four complaints. The present complaint alongwith three other complaints pending in this commission are being decided today only since the subject matter in all the complaints is interlinked.

7.                The complainant has alleged that the complainant was informed about the interest of 10.25% i.e. 1% above FDR interest against FDR No.65045009791 on the over draft facility for sum of Rs.28,90,000/-, but this fact has been denied by the OP. It has been alleged by the OP that the interest rate was settled at 10.25%. This fact has been denied by the complainant. It is not disputed that the FDR was to mature on 10.10.2018 and the maturity value was Rs.84,84,510/-. It has been alleged by the complainant that on 13.09.2018, the complainant was intimated that there was overdue amount of Rs.7,53,547/- + interest in the over draft account. The complainant has alleged that the complainant was intimated that the margin is kept by the bank, so that interest in the over draft account does not increase the interest on FDR, but this fact has also been denied by the OP rather it has been alleged by the OP that there is general practice to adjust the loan given on security of FDR at the time of maturity of FDR and there are no strict guidelines of the bank that the bank was supposed to liquidate the FDR as soon as overdue amount increases the margin of FDR. The complainant moved complaint before the Banking Ombudsman, but during the pendency of the complaint before the Banking Ombudsman, the OPs have liquidated the FDR of the complainant on 10.10.2018 without the knowledge and consent of the complainant. The complainant requested the OP number of times to refund the margin amount of the FDR against which the overdraft facility was obtained and the amount wrongly deducted from the FDR accounts of sons of complainant and also to withdraw the demand, but to no effect rather the OP has put on hold illegally on funds in account of sons of complainant i.e. in account number 65045006348, 65119424004 and 65119424559. Ex.C-27 to Ex.C-29 are the messages vide which the accounts of the complainant joint with her sons were put on hold by the OP. The complainant has also produced and proved on record the FDRs and the statement of accounts as Ex.C18 to Ex.C23. Perusal of the FDRs Ex.C-18 to Ex.C23 show that in these FDRs, the first account holder is either Mr. Akshat Gupta or Mr. Arnav Gupta and the statement of the account is also of Mr.Akshat Gupta or Mr.Arnav Gupta, though joint with the complainant. The FDRs Ex.C-2 to Ex.C-4 and Ex.C-18 to Ex.C-23 nowhere show that there are any instructions or undertaking by the complainant or her sons to the bank to disburse or adjust the amount in any other account of the FDR or in the account of the complainant. The instructions on the back side of the FDRs Ex.C-18 to Ex.C-23 only relate to the renewal of the deposit automatically in order to save the customer/consumer from any loss of interest. From the statements of accounts produced on record by both the parties, it is proved that the FDRs of the complainant, her sons were liquidated without the consent of the complainant or his sons and without any notice and this act of the OP is wrong, illegal and clear cut unfair trade practice.

8.                The OP has proved on record the loan/over draft form executed by the complainant as Ex.OP1-2/7. As per this document, the loan of Rs.32,69,000/- was sanctioned @10.75% per annum. In this document, nothing has been mentioned that in case of overdue towards the FDR, the FDRs of the sons of the complainant or the other FDRs of the complainant can be liquidated, no condition is there in the document Ex.OP1-2/7. Similarly, Ex.OP1-2/2 is the promissory note executed by the complainant and in this promissory note also, there is no mention of this fact of liquidation of other FDRs in order to satisfy the overdue, if, any. The OP has alleged that letters were written to the complainant from time to time to clear the overdue against the FDR. The letters have been proved as Ex.OP1-2/3 to Ex.OP1-2/6. Perusal of Ex.OP1-2/3 nowhere shows the account regarding which the overdue interest is pending or regarding which they have put on the hold of Rs.1,70,000/-, which account has been put hold, no intimation has been given vide this letter. This letter is dated 25.09.2014. In Ex.OP1-2/4 dated 24.04.2015, there is a reference of the loan accounts. No amount has been mentioned in this letter. Simply it has been mentioned that Kamal Gupta is advised to deposit overdue amount in the above said loan accounts, but the amount has not been mentioned in this letter. Similarly, no amount has been mentioned in the letter Ex.OP1-2/5 and the last letter Ex.OP1-2/6 in which the amount has been mentioned as Rs.6,20,268/- + interest in account No.65058560064 and Rs.7,53,547/- + interest in account No.65058560417. One fine morning, suddenly the amount has been mentioned in this letter. The complainant has moved to the Banking Ombudsman, but without waiting for the result of Ombudsman, the FDRs have been liquidated. The Ombudsman has clearly observed that the bank has liquidated the FDRs, which are not related with the loan taken by Kamal Gupta or by Yoshita Gupta. It has also been observed by the Ombudsman that bank to charge 10.25% and excess charged may be refunded as per Ex.C-31. This complaint was decided on 03.12.2019. As per Ex.C-32, the banking Ombudsman has clearly mentioned that in Ex.C-32 and Ex.C-33, the Banking Ombudsman has categorically mentioned the rules in its decision and has observed that ‘With reference to the trailing mail, we advise that bank's submission w.r.t. the captioned complaint has been examined and accordingly Banking Ombudsman's decision in this regard is "We may close it. But one thing is clear that in FD margin is kept so that overdue does not exceed the face value and interest thereon. This was not followed which bank should keep in mind in future".

9.                The OP has proved on record the document Ex.OP1-2/7 which is the decision of BO’s i.e. Banking Ombudsman. Bank to act as per the existing banking loan and practice and another point was decided by the Ombudsman that overdue charges/interest should not be charged. Thus, as per the Banking Ombudsman, the bank is to act as per the laws, but no law or guidelines have been produced by the OPs. It has been mentioned in the written statement there are no strict guidelines to this effects, this means that the OP is not following the rules and financial loss of RBI and are working as per their own desire, which is unfair trade practice. This is the responsibility of the OPs to inform the consumers about the overdue towards the over draft facility and again it is the responsibility of the OPs to calculate the amount and fix the margin in the FDRs. Merely on the ground that the audits have taken the objection they cannot forcibly liquidate the FDRs of other persons for the repayment of the loan without the consent of the owner. No such guidelines have been produced by the OP. This is clear cut unfair trade practice and negligence on the part of the OPs. The Banking Ombudsman is a position created by the Government of India to address the issues and complaints of the customers. A senior, experienced official appointed by the Reserve Bank of India, to offer redress and offer amends, if possible, to the consumer complaints regarding the shortcomings in the banking sector. The Banking Ombudsman is a significant position and is a step in the right direction toward consumer complaints and redressal. The powers and duties of a Banking Ombudsman are vast and comprehensive.

10.              It has been held by the Hon'ble National Commission in a Revision Petition No.2227 of 2007, decided on 16.08.2007, titled as ‘Sangli Bank Ltd. Vs. Mrs. Sushila Bajaj & Anr.’ that ‘Nonpayment of a matured Fixed Deposit Receipts by bank Deficiency in service Complaint allowed by forum below Revision petition filed Held, bank had an intention to recover loan taken by complainant's son against such Fixed Deposit Receipts though plea of Bank's lien over such Fixed Deposit Receipts was not taken Deficiency in service proved No case made out for interference’. It has been held by the Hon’ble Supreme Court in Civil Appeal No.6945 of 2004, decided on 25.10.2004, titled as ‘Anumati Vs. Punjab National Bank’ that ‘Joint Fixed Deposit Receipt Attachment and set-off of joint account against individual liability of one of the joint holders of account/receipt is not permissible in the absence of express consent or undertaking of the other joint holder of it If the amount of joint account is appropriated by the bank for individual liability of one, and other joint holder is refused the payment against the terms of option allowed to be exercised at the time of opening of the account, it is certainly a deficiency and defect in the service and the Bank is liable to make good the loss to the account.’ It has been held by the Hon’ble State Commission, in an Appeal No.1238 of 2004, decided on 05.04.2006 titled as ‘Kewal Krishan & another Vs. Allahabad Bank’ that ‘Complainant along with his wile had made a fixed deposit of Rs. 38,982/- is respondent bank which was to mature on 14.07.04 on 'either or survivor basis' - Maturity value of the same was Rs. 52,426/- Complainant had an unregistered firm in the name of M/s R.C. Sales Corporation of which he was the sole proprietor The firm had taken loan from the bank to the tune of Rs. 20,000/- A sum of Rs. 24,457,65/- was outstanding against the firm which was deducted from the amount of complainant as per order of District Forum giving rise to present appeal. The complainant had never given any authority to bank to appropriate the amount from his personal account for non-payment of loan by Corporation Appropriation of amount is not in consonance with the spirit of Section 171 of the Contract Act Amount of complainant and his wife could not be appropriated without the permission of both of them Respondent's Bank directed to pay the entire maturity value along with interest is the date of payment Appeal allowed.’ It has been held by the Hon’ble State Commission, Maharashtra, in First Appeal Nos.166 to 168 of 2009, decided on 13.01.2012, titled as ‘Shriman Malojiraje Sahakari Bank Ltd. & Anr. Vs. Shri Atmaram Pandurang Bobade’ that ‘Plea of Bank that deposit receipts stand as security for a loan taken by another person - No documents were produced regarding consent of complainant for such security - Held, said dishonour is a failure on part of opponent Bank in discharging their contractual obligation - Deficiency in service - Direction to Bank opponent to honour payment of fix deposit.’

11.              In view of the above detailed discussion, the complaint of the complainant is partly allowed and OPs are directed to remove hold on funds in the account no.65045006348, 65119424004, 65119424559 imposed in connection with the overdraf/t facility. Further, OPs are directed to recalculate the interest of over draft loan as decided by the Ombudsman @ 10.25% and adjust the amount of the FDR of the complainant bearing account No.65045009791 for overdraft loan and further directed to refund the over charged amount, if any, to the complainant. If after recalculation and adjustment of the amount of FDR, if any amount becomes due towards the complainant, the OP can adopt due course of law and avail any other remedy available to him for the recovery of due amount. Further, OPs are directed to refund amounts of sons of complainant alongwith interest @9% per annum from the date closing/liquidation the FDRs till its realization. Further, OPs are directed to pay a compensation of Rs.20,000/- to the complainant for causing mental tension and harassment to the complainant and Rs.10,000/- as litigation expenses. The entire compliance be made within 45 days from the date of receipt of the copy of order. This complaint could not be decided within stipulated time frame due to rush of work.  

12.              Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.

Dated          Jaswant Singh Dhillon    Jyotsna               Dr. Harveen Bhardwaj     

26.06.2024         Member                    Member               President