Andhra Pradesh

East Godwari-II at Rajahmundry

CC/77/2015

Akula Naga Sudhakar Rao - Complainant(s)

Versus

The Manager, Aryapuram Co-Operative Urban Bank Limited., - Opp.Party(s)

A.Ravindra Babu

26 Jul 2016

ORDER

                                                                                                Date of filing:   23.12.2015

                                                                                                Date of Order: 26.07.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

                          PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                      Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

                 Tuesday, the 26^th day of July, 2016

 

 

C.C.No.77 /2015

Between:-

 

1)  Akula Naga Sudhakar Rao, S/o.Akula Ranga Rao,

     Aged about 52 years, Business, C/o. Sri Akula Subbarao

     & Son, Dr.No.9-20-84, Main Road, Rajahmundry.

 

2)  Akula Trinadha Satya Srinivasa Rao, S/o.Akula Ranga Rao,

     Aged about 50 years, Business, C/o. Sri Akula Subbarao

     & Son, Dr.No.9-20-84, Main Road, Rajahmundry.                              …        Complainants

 

                                    And

 

1)  The Manager, the Aryapuram Co-operative Urban Bank Ltd.,

      Forte Gate Branch, Main Road, Rajahmundry.

 

2)  The President (Sri Challa Sankara Rao), Aryapuram Co-operative

      Urban Bank Ltd., Aryapuram, Rajahmundry.

 

3)  The Secretary (Sri CVS Subrahmanyam), Aryapuram Co-operative

      Urban Bank Ltd., Aryapuram, Rajahmundry.                                     …        Opposite parties

 

 

            This case coming on 20.07.2016 for final hearing before this Forum in the presence of Sri A. Ravindra Babu, Advocate for the complainant and Sri Ch.V. Prasad, Advocate for the opposite parties, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Smt.H.V. Ramana, President(FAC)] 

This is a complaint filed by the complainants U/Sec.12 of Consumer Protection Act 1986 to direct the opposite parties to refund the amount of Rs.20,368/- deducted illegally by the Bank, after deducting the 1/2% of the total FDR amount of Rs.3,00,000/-, and nominal process charges, if any or to give a direction to them to reimburse the same to the credit of Account of the 2^nd complainant; award interest at 24% on the Rs.20,368/- from date of the case till the date of realization; award damages of Rs.20,000/- for inconvenience, loss and mental agony caused on account of the deficiency in services by the Bank and award costs of the legal notice and complaint.

2.         The case of the complainants is as follows:-  It is submitted that the 2^nd complainant has a savings bank account under Account No.12928 in the 1^st opposite party bank. The complainants are brothers, since the 1^st complainant is a deaf and dumb person his brother 2^nd opposite party is looking of the matters on his behalf also. The complainants had deposited jointly an amount of Rs.3,00,000/- in the bank, in about 2011, for five years and the interest payable on such sum was Rs.2,234/- for every month, to the credit of the 2^nd complainant’s savings bank account bearing No.12928, which is maintained by him, at the said bank itself. The fixed deposit receipts for the same amount were issued in their favour by the said bank, which were eight in number. Out of 8 receipts, 6 receipts are of value of Rs.40,000/- each and 2 receipts are of value of Rs.30,000/- each, aggregating to the total amount of Rs.3,00,000/-. The opposite parties paid an interest for 4 years and 8 months and on 13.6.2015, the 2^nd complainant, in dire need of the above amount, approached the said bank, with the original receipts (FDRs). One Srinivas, who was the then Manager advised and lead the 2^nd complainant that they were free to withdraw the amount deposited with the bank, before the due date of the receipts, but one half percent (1/2%) of the said amount of Rs.3,00,000/- only would be deducted and nominal process charges, if any, would also be received from the said amount and remaining amount will be credited to the said account number. (That is none other than the process under the scheme of “Deposit Pre Closure Charges”, as per the pamphlet). Believing the same and on doing so by withdrawing all FDRs, surprisingly, only an amount of Rs.2,79,632/- was credited to his account. An amount of Rs.20,368/- was deducted , instead of deduction of Rs.1,500/- by the bank. It is clear that the bank misled the 2^nd complainant and cheated him for the wrongful gain from the complainants, to a tune of an amount of Rs.20,368/-, on such willful misrepresentation and on such acts done in bad faith. The complainant got issued a legal notice on 4.7.2015 to the opposite parties, but so far as the opposite parties did not give reply nor comply with the demand made by him. Hence, the complaint.

3.         The 3^rd opposite party filed its written version and the same was adopted by the         1^st & 2^nd opposite parties and denied the allegations made by the complainant and the complaint is not maintainable either under law or on facts. This opposite party submits that the opposite parties 1 and 2 were unnecessarily impleaded in the complaint. It is submitted that the Aryapuram Cooperative Urban Bank Limited, Rajahmundry is a cooperative society doing banking business. As per the byelaws of the bank, the bank has to sue or be sued in the name of Secretary of the bank who is its Chief Executive Officer. There is no post under the name and style of President of the Bank. The Chairman who is one of the Directors of the bank is in-charge of overall functioning of the bank. Under the byelaws, the Secretary of the bank who is the Chief Executive Officer is responsible for day to day administration. So, the complaint is bad for misjoinder of parties and it shall be dismissed on that ground. The names of Chairman and Secretary are unnecessarily mentioned in the complaint. They discharge their functions by virtue of their office only and they do not have any personal liability. As per the rules and regulations governing fixed deposits, the applicable rate of interest, when the complainants made fixed deposits was 9 per cent per annum for a period exceeding five years or more and 8.5% for deposits for the period from 3 to 5 years. If the deposits are withdrawn before the maturity period 1% penalty will be levied. It is true that the complainants have deposited a sum of Rs.3,00,000/- on 5.10.2010 with the Fortgate Branch of the bank. The agreed rate of interest is 9% per annum. The duration of deposits is five years. If the deposits are kept for the full period, the maturity of the deposits will be over 5.10.2015. The complainants withdrew interest at the rate of 9% till the deposits were prematurely withdrawn. The complainants know about the rules and regulations governing the payment of interest on fixed deposits. Even according to the complainants a sum of Rs.298/- per month (calculated at the rate of 9% per annum) was credited to second complainant’s S.B. A/c. No.12928 for Rs.298/- per month. When the complainants expressed their desire for withdrawal of the fixed deposits before its maturity period which is called as premature withdrawal, after knowing the rules and regulations governing the fixed deposits, this opposite party permitted them to withdraw the same subject to applicable rules. It is false to allege that one Srinivas, the then Manager of the bank informed the complainants that only 1/2% per cent of total fixed deposit of Rs.3.00 lakhs will be deducted and nominal processing charges will be levied and the balance amount of fixed deposit will be credited to the S.B. Account and based on the above said representation, the complainants cancelled F.D.Rs. and false to allege that instead of Rs.1,500/- to be deducted and an amount of Rs.20,638/- was deducted by this opposite party. As per the rules and regulations governing the fixed deposits, the fixed deposits made by the complainants will carry interest @ Rs.7.5% only as the F.D.Rs. were preclosed. The complainants are not entitled for interest 9% p.a. as alleged by them. The rates of interest applicable at the time of deposit made by complainants, is 8.5% for deposits more than three years and less than five years. If the deposit is made for five years or more the rate of interest is 9%. Apart from that 0.5% will be paid extra to the senior citizens who are more than 60 years old. The deposit made by the complainants is five years, but it was withdrawn before the expiry of five years. So, the rate of interest payable to the complainants is 8.5% only. Since they have resorted to preclosure of deposit 1% penalty will be levied and they are entitled for 7.5% interest only. Accordingly on the deposit of Rs.3.00 lakhs, the interest is calculated @ 7.5% and the penalty of Rs.20,368/- is levied. The balance amount of Rs.2,79,632/- was paid to the complainants. The complainants knew about the rules and regulations and filed the present complaint and also PLC before the District Legal Services Authority. This opposite party submits that it was represented before the District Legal Service authority also. It is false to allege that the complainant did not make any representation before the District Legal Service Authority about the above said fact. Therefore, this opposite party prays the Hon’ble Forum to dismiss the complaint with costs.  

4.         The proof affidavit filed by the 2^nd complainant and Exs.A1 to A4 have been marked for the complainants. The proof affidavit filed by the 3^rd opposite party and Exs.B1 to B4 have been marked for the opposite parties.

5.         Heard both sides. The complainant filed written arguments.

6.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite parties?

            2. Whether the complainants are entitled for the reliefs asked for?

            3. To what relief?

 

7.  POINT Nos.1 & 2:  The admitted facts of the complaint are that the complainants are the brothers and the 2^nd complainant looks after the money transactions of the 1^st complainant since he being deaf and dumb person. The complainants deposited an amount of Rs.3,00,000/- to the opposite parties in the year 2011 and the interest is payable every month i.e. an amount of Rs.2,234/- and the rate of interest is 9% p.a. The said amount is deposited under six receipts with a value of Rs.40,000/- and two receipts are value of Rs.30,000/- each vide Ex.B2. After 4 years, 8 months i.e. on 13.6.2015, the 2^nd complainant approached the opposite parties’ bank and informed that he wants to withdraw the above said deposited amount.

            The complainant contended that when he pre-closed the deposited amount, the opposite parties deducted to a tune of Rs.20,368/-, but as per the pamphlet given by the opposite parties, the pre-closure charges for more than one year deposit is half percent only vide Ex.A3. The complainant also filed the copy of S.B. Account vide Ex.A2. The complainant got issued legal notice to the 1^st opposite party dt.4.7.2015 vide Ex.A1, but the 1^st opposite party failed to give reply notice. The complainant also approached the Legal Service Authority  vide  PLC No.3329/2015 vide Ex.A4, but the opposite parties were absent and there was no representation on their behalf. Here, the main contention of the complainant is that the opposite parties deducted a total amount of Rs.20,368/- unlawfully instead of half per cent on the deposited amount.

            The opposite parties denied the allegations made by the complainant and they admitted the deposit of amount by the complainants i.e. Rs.3,00,000/- with interest of 9% p.a. and the duration of deposit is 5 years, but in this case, the complainant withdraw the amount before maturity period i.e. (within 5 years).  Therefore, the opposite parties made 1%  was levied as penalty. If the complainants kept the amount for full period, they will get total maturity value, but the complainant withdrew the amount prematurely. As per the instructions of the complainants, the opposite parties depositing interest every month to their S.B. Account i.e. 12928 vide Ex.B3. They also filed administrative order dated 27.8.2010 with regard to the rate of interest given by them during the various periods of various deposits vide Ex.B4 along with this they also filed administrative instructions under  R.B.I. instructions in which it is mentioned there is a pre-closure for deposits 3 years and above will be 1% as penalty charges. They also filed the byelaws vide Ex.B1. During the arguments, the opposite parties filed Master circular circulated by the R.B.I., in which Point-8 i.e. premature withdrawal of term deposits, it is clearly mentioned as

8.1   A primary (urban) co-operative bank, on request from the depositor, should allow withdrawal of a term deposit before  completion of the period of the deposit agreed upon at the time of making the deposit. Banks are free to determine their own penal interest rates for premature withdrawal of term deposits.

8.2    Banks should ensure that the depositors are made aware of the applicable penal rate along with the deposit rate.   

            The main contention of the opposite parties is that the complainant pre-closed the fixed deposits and during that period the rate of interest is 8.5%. They further submitted that as per their rules and regulations and the circular given by the R.B.I., if the deposits are withdrawn before the maturity period, 1% penalty will be levied. As per the instructions of the complainants, at the time of making the deposit, the opposite parties deposited the monthly interest in the S.B. Account f the complainants. The complainants also know the rules and regulations governing to fixed deposits and permitted them to withdraw the same subject to applicable rules. As per the rules and regulations, the fixed deposits made by the complainants will carry interest only at the rate of 7.5% as they have pre-closed the deposits and the complainants are not entitled for an interest of 9% p.a.

            After perusing the material on record and other documents, it is evident that the complainants deposited an amount of Rs.3,00,000/- with the opposite parties at the rate of 9% for a period of 5 years. The opposite parties deposited monthly interest in the S.B. Account of the complainants. The complainants approached the opposite parties after a period of 4 years, 8 months for pre-closure of the fixed deposits, the opposite parties accepted and deducted 1% as pre-closure charges i.e. Rs.20,368/-. The complainant also contended that at the time of deposit, the opposite parties gave a pamphlet, in which it is clearly mentioned that the deposits which are less than one year if pre-closed, the charges are nil and the other deposits which are more than one year, the pre-closure charges will be 0.5% only.  Basing on this pamphlet, the complainant demanded the 0.5% of pre-closure charges deducted by the opposite parties. As per our observation, the opposite parties have a right to decide the pre-closure charges as per Point No.8 (1) & (2), “the Banks are free to determine their own penal interest rates for premature withdrawal of term deposits”. As per this Point No.8(1), the opposite parties have at liberty to choose the pre-closure charges according to them. If they want make the pre-closure charges are 1% on deposits more than one year, they cannot circulate the pamphlets i.e. Ex.A3 to their deposit holders.  Therefore, basing on the pamphlet circulated by them, it is their bounden duty to pay 0.5% of interest rate which is deducted additionally by them from the fixed deposit amount of the complainants.

            With the discussion held supra and under the facts and circumstances of the case, we opined that the opposite parties have to bind on their circulated pamphlets and have to charge only 0.5% as pre-closure charges and they have to repay the excess amount which was collected from the complainants. The opposite parties are also directed to pay damages to make the complainants to approach the Forum unnecessarily and they are also entitled for costs of the complaint.    

               

8.   POINT No.3:  In the result, the complaint is allowed in part, directing the opposite parties to refund the excess amount over and above 0.5% which was deducted from the complainants fixed deposits and to pay Rs.2,000/- towards damages for mental agony and to pay Rs.1,000/- towards costs of the complaint to the complainants. Time for compliance is two months from the date of this order.

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the  26^th day of July, 2016.

    

                     Sd/-                                                                                         Sd/-

               MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANTS: None.                                      FOR OPPOSITE PARTIES: None.

 

DOCUMENTS MARKED

 

FOR COMPLAINANTS:

 

 

Ex.A1    Office copy of the Notice dt.4.7.2015 issued to the opposite parties, with Ack due

             cards.

Ex.A2    Self attested true copy of “particular relevant entries of the Passbook, made by the

              opposite parties’ bank relating to the cause of action on 13.6.2015”, given by the 2^nd

      complainant.

Ex.A3    Pamphlet distributed by the ACUBL relating to FDR Pre Closure Charges.

Ex.A4    Order dt.10.12.2015 in PLC No.3329 of 2015 passed by the Lok Adalat at

              Rajahmundry.

 

 

FOR OPPOSITE PARTIES:-  

 

Ex.B1    copy of Byelaws of the Aryapuram Cooperative Urban Bank Ltd.

Ex.B2    copy of Discharged Fixed deposit receipt.

Ex.B3    copy of Statement of account of 2^nd complainant.

Ex.B4    copy of Administrative order along with Administrative instructions dated

              27.8.2010.

 

                  Sd/-                                                                                          Sd/-

              MEMBER                                                                              PRESIDENT(FAC)