Complainant : K.K.Chandran, Kallayil House, Onappara, Post Mattom,
Thrissur.
(By Adv.A.D.Benny, Thrissur)
Respondent : 1. The Managing Director, Federal Bank Ltd., Head
Office, Aluva.
2. The Manager, Federal Bank Ltd., Chowalloorpady
Branch, Thaikkad.P.O.
(By Advs.P.A.Surendranath & M.S.Nisanth, Thrissur)
O R D E R
By Smt. Rajani.P.S., Member
The case of complainant is that the 2nd respondent approached him to make a deposit under NRRD cash certificate scheme and the complainant obliged to make a deposit of Rs.90,510/- vide receipt No.266934 on 29/3/2000. The period of deposit was 78 months The respondents had agreed to pay 12% interest for the said deposit. Hence the complainant was entitled to get Rs.1,95,193/- as its maturity value on 29/9/06. On completion of the maturity period the complainant approached the 2nd respondent to withdraw the deposit and get its value of Rs.1,95,193/-. But the 2nd respondent informed him that he will be getting only Rs.1,57,745/-. It was also told by him that maximum period of NRRD deposit has been limited to 36 months. It was further stated by him that the proceeds have been reinvested after completion of 36 months and maturity period has been changed to 29/3/03 and interest rate will be 6.75%. The complainant demanded the respondent to pay the amount of Rs.1,95,193/- on 21/10/06 by sending a letter. He received the reply on 25/10/06 and the respondent stated in it that the matter was informed to the complainant vide their letter dated 30/3/05. But he has not received any such letter from the respondent. It was alleged that the said letter was addressed to his overseas address. From this it is clearly admitted the fact by the respondents that they have sent such an information to the complainant after two years of their arbitrary actions. The maturity period of the deposit was changed on 29/3/03 without the consent from the complainant. The above said actions of the respondents are quite illegal, unsustainable and not binding on the complainant. The respondents have committed deficiency in service and dereliction of duties. Because of these actions he has suffered severe financial loss, mental agony and sufferings. Hence the complaint.
2. After filing the complaint the complainant received through IA1225/08 an amount of Rs.1,57,745/- from the respondents.
3. The counter filed by the respondents : It is admitted that the complainant had deposited Rs.90,510/- under NRRD scheme on 29/3/00. Period shown in the deposit receipt was 78 months instead of 36 months under NRRD scheme. As per the directives of RBI, maximum duration of NRRD deposit can only be for 3 years. Further, from 1/4/02 onwards RBI had stopped NRRD deposit scheme itself. Since the directive of RBI is to receive deposits under NRRD scheme only for a maximum period of 3 years, the respondents can not allow the complainant to avail benefits under NRRD deposit scheme for a period exceeding 3 years. If at all it is permitted for a period more than 3 years, it would be illegal and against the specific directives of RBI. What actually happened was that the 2nd respondent had mistakenly shown maturity period as 29/9/06 under NRRD scheme. But as and when 2nd respondent came to know the said mistake 2nd respondent immediately sent a letter to the complainant in his address abroad making the correction. Since there was no reply for the said letter, respondents thought that the complainant has agreed and accepted the statement of the 2nd respondent. 1st respondent is a scheduled bank and it is under the control of RBI. So it can not act against the specific directions of RBI. So the allegation of the complainant is unacceptable to the respondent. After the permitted period of NRRD deposit scheme, the 2nd respondent had deposited the amount of the complainant in the NRE cash credit scheme, which was the most beneficial scheme for the complainant at that time. So the complainant has not sustained financial loss and mental agony with respect to the above deposit in any way. The complainant cannot be permitted to encash an innocent mistake committed by the 2nd respondent Reserve Bank of India has the general supervisory control over the banks and the said power has been provided under section 56 of Banking Regulation Act, 1949. The Reserve Bank is competent to issue circulars inter alia, in public interest and in the interest of banking policy apart from other exigencies and the banks cannot pay more interest than what is prescribed by Reserve Bank of India as per its circular. Moreover banks are free to fix the maturity period of NRRD deposit between 6 months and 3 years. In this case the NRRD deposit was opened inadvertently for a period of 78 months, which is infact a violation of the directions of RBI. When this was detected steps were taken to correct the same during the year 2005, as no NRNR deposits were allowed to be renewed on or after 1/4/02, because as per the directions of RBI dated 1/3/02, the very scheme was ceased to exist from 1/4/02. Hence there is no deficiency in service on the part of the respondents, dismiss the complaint with costs.
4. Points for consideration :
1) Was there any deficiency in service on the part of the respondents?
2) If so reliefs and costs ?
5. The evidence consists of Exhibits P1 to P3 and Exhibits R1 to R4 and the oral testimonies of PW1 and RW1.
6. The complainant’s case is that the respondent approached him to make a deposit under NRRD scheme and he deposited Rs.90,510/- on 29/3/2000 for 78 months with 12% interest. Upon maturity he is entitled to get Rs.195,193/-. But upon maturity the respondent informed him that he will be getting only Rs.157,745/- as the maximum period of said deposit has been limited to 36months with 6.75% interest. The respondent in their reply to his letter had stated that the matter was informed to the complainant vide letter dated 30/3/05. But he has not received such a letter from the respondent.
7. Exhibit P1 shows that the NRRD deposit was made on 29/3/2000 and maturity on 29/9/06. It is the version of the respondents that the maturity period was mistakenly written as 78 months which is infact a violation of directives of RBI. Exhibit R1 is the copy of the directives of RBI dated 11/6/92 reproduced which shows that banks are free to fix to the maturity period of NRRD deposit between six months and three years and are free to fix the rate of interest payable on such deposits and the scheme will cease to exist from 1/4/2002. So from the year 1992 onwards the period of NRRD deposit is limited to 3 years and the banks are free to fix the rate of interest. RW1 deposed that
If there was any specific direction of RBI the auditors will surely raise objection. Further RW1 deposed that the mistake of period as 78 months was an inadvertent mistake and the said mistake was understood only in March 2005 and no actions were taken against the manager at that time while the said deposit was renewed by the respondent in the year 2003. As per Exhibit R1 no NRNR deposit and NRSR deposit shall be enewed on or after 1/4/2002 as the scheme will cease to exist from 1/4/02. But the complainant’s deposit is under NRRD scheme. So Exhibit R1 is not relevant to the complainant’s deposit. So it seems contradictory that a mistake which was understood in March 2005 and renewed the account as per the RBI directives in the year 2003. Further Exhibit R4 shows that they had sent the information to the complainant in the Abudhabi address and stated that as far as they have not received any reply from the complainant they supposed that it was admitted by the complainant. The above statement of the respondents can be considered as utter foolishness. PW1 stated that he has not received such a letter. The respondents did not produce the acknowledgement for the same. So the statement of the respondents regarding the letter issued by them can be considered as a false story. Further the respondents reduced the interest rate also. A bank has no authority to reduce the interest rate of a deposit without the knowledge of a depositor. Hence the deficiency in service on the part of the respondent is proved and the complainant is liable to get the maturity amount as per Exhibit P1. The complainant had accepted an amount of Rs. 1,57,745/- from the respondent as per IA.No.1225/08. So the complainant is entitled to get the balance amount of Rs.37,448/- only towards the maturity value.
8. The complainant deposed that being ex-gulf employee he was in financial crisis and was in need of the Exhibit P1 maturity amount. But the payment was not effected only due to the deficiency in service committed by the respondents. So the complainant is entitled to get a compensation for the same.
9. In the result the complaint is allowed and the respondents are directed to pay Rs.37,448/- (Rupees Thirty seven thousand four hundred and forty eight only) with 12% interest from 29/9/06 to the complainant along with a compensation of Rs.10,000/- and Rs.500/- as costs within one month from the date of receipt of copy of order.
Dictated to the Confdl. Asst., transcribed by her, corrected by me and pronounced in the open Forum this the 29th day of September 2011.
Sd/-
Rajani.P.S., Member
Sd/-
Padmini Sudheesh, President
Sd/-
M.S.Sasidharan, Member
Appendix
Complainant’s Exhibits
Ext. P1 Copy of NRRD cash certificate
Ext. P2 Copy of lr. dtd. 21/10/06
Ext. P3 Reply dtd. 25/10/06
Complainant’s witness
PW1 –K.K.Chandran
Respondents Exhibits
Ext. R1 Copy of circular
Ext. R2 Copy of account opening form
Ext. R3 Copy of Lr. dtd. 30/3/05
Ext. R4 Copy of dispatch register
Respondents witness
RW1 – Asokan.C.N
Id/-
Member
