BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ADDITIONAL BENCH,                                                                                                  MANGALORE      

Dated this the 25^th November 2016

PRESENT

SRI. VISHWESHWARA BHAT D         : HONBLE PRESIDENT

SRI. T.C. RAJASHEKAR                       : MEMBER

ORDER IN

C.C.No.308/2012

(Admitted on 27.09.2012)

1. Smt. Anusuya M Pai,

     W/o late Manjunatha Pai,

       Aged 74 years.

2. Sri. M Ganesh pai,

    S/o late Manjunatha Pai,

    Both are R/at Mahalasa Kripa,

    Netharavathi Road,

     Belthangady  574214.

3. Smt. Usha , Pooja,

    D/o Late Manjunatha Pai,

    W/o Sri. Satish Pai,

    Aged 45 years,

    (No 302, NAL Layout

     4 T Block,

     Bangalore.

4. Smt. Mamatha Prabhu,

    W/o Sri.Maruthi Prabhu,

     Aged 42 years,

     Sridhara Kripa,

     Near Bus Stand

    Honnavar,

    U.K. District.

5. Sri. M. Rajesh Pai,

    S/o Late Manjunatha Pai,

    Aged 36 years,

    Mahalasa Kripa,

    Nethravathi Road,

    Belthangady  574214.

                                      ….. COMPLAINANTS

(Advocate for the Complainant: Sri AV)

VERSUS

The Senior Manager,

Syndicate Bank,

Belthangady Mansion,

Surendra Mansion,

Main Road,

Belthangady.

                                            …......OPPOSITE PARTY

 (Advocate for the Opposite Party: Sri. GKM)

ORDER DELIVERED BY HON’BLE MEMBER

T.C. RAJASHEKAR:

I.       1. The above complaint filed under Section 12 of the Consumer Protection Act alleging deficiency in service against claiming to pay a sum of Rs.3,20,000/ legal representatives of late Manjunatha Pai with respect of schedule deposits of late Raghava Pai deposited to the extent of 1/5^th share with interest 14% per annum from 3.8.2011 up to the payment, to pay Rs.2 lakhs towards damages, to pay Rs.2 lakhs towards mental agony, cost of this complaint, cost of notice Rs. 5000/.

       The brief facts of the case are as under:

     On perusal of the complaint and the version averments we understood this dispute is related to payment of interest  for the amount in FDR kept by the deceased depositor Shri Raghava Pai a bachelor who expired before maturity of the deposits intestate. Complainants are the class II LR s having 1/5 share, alleges that one Shri Raghava Pai deposited certain amount in various deposits with the opposite party Syndicate bank. The said Raghava Pai expired on 07.02.1976 intestate as a bachelor and the complainants herein are the legal heirs 1/5 share of the deceased. On approaching the bank with succession certificate for the claim the Opposite party has given lesser amount as maturity value where they are entitles to more maturity amount and the interest to be calculated on the rate payable to FDR. The Opposite party contested that they have settled the interest as per the RBI circular. The unclaimed amount and the documents will be transferred to the H.O under the head non operative account as per usual practice of banking. As per RBI circular the interest payable is only at the rate of SB A/c 4% simple interest. The amount settled is accepted by the complainant no 2 on behalf of other complainants.

POINTS FOR ADJUDICATION

        The facts that Shri Raghava Pai deposited certain amount with the Opposite party and the sum deposited under FDR and he died intestate as bachelor on 07.02.1976 is not disputed.  The complainant herein are legal heirs by virtue of succession certificate for 1/5 share is not disputed. The claim made by them under succession certificate in respect of the FDR and the payment made by Opposite party  and received by them as 1/5 share in the estate of the deceased’s FDR  is not disputed. The dispute is in terms of the rate of interest. Interest amount and the maturity amount paid by the Opposite party are the core and crux of the dispute. The complainant claims the interest at the rate payable to FDR. The Opposite party contends that it shall be at rate applicable to SB A/C at 4% simple interest and the same had been paid as per RBI circular and there is no deficiency of service from their part.  The Opposite party also raised a question of limitation in filing the complaint. This being the case we considered the following points to be adjudicated in resolving this dispute:

1. Whether under Consumer Protection Act 1986 complainants are consumers?
2. Whether the Opposite party proves the amount paid with interest towards refund of FDR is justified?
3. Whether the complainants are entitled for the prayed relief?
4. What order?

      We have considered all the documents produced and the evidence adduced and noted, filed by the rival parties and answered the above points as under:

1. In the affirmative.
2. In the negative.
3. In the affirmative.
4. As per order delivered.

REASON

     POINT NO 1: The complainants have not produced any FDR for our perusal. But it is admitted by the Opposite party that Shri Raghava Pai had deposited in FDR with them before he died and the succession certificate produced shows that the complainants are the legal heirs of Shri Raghava Pai. This establishes the complainants are consumers and the Opposite party is the service provider and hence we answered the point no 1 in the affirmative.

     POINT NO 2: The contention of the Opposite party is that the FDR kept by Shri Raghava Pai  has not been renewed or claimed by any body and hence as per banking practice the amount unclaimed has been transferred to H.O. Account under the unclaimed  Account. The unclaimed account will carry a simple interest at 4% per annum as per transparent rules framed by the bank as per RBI direction. It is noted from the complainant  file that the Opposite party have not produced any details of the amount transferred  and the date in support of their contention.  We consider the following documents will be of help in resolving these issues.

1. Ex C3 is the IA in P & S.C. No 2/99 in which the complainants seek courts direction for renewal of the fixed Deposits under reinvestment scheme from the date of maturity until further order on the ground that if not renewed the interest will not accrue and if renewed the all parties to these proceedings will gain.
2. Ex C4: is the order passed on above IA in which the application was allowed the order says IA allowed. The office to intimate concerned bank to renew FDRs as prayed for...  
3. EX R1: is the RBI’S INSTRUCTIONS FOR BANKS AND BANKING OPERATIONS SIXTH EDITION 2005. The Opposite party relied on the Para 9.I.16: interest payable on the deposit account of deceased depositor (a) in the case of term deposit standing in the name of a deceased individual depositor the criterion for payment of interest on matured deposits in the event of death of the depositors in the above case has been left to the discretion of the individual banks subject to their board laying down a transparent policy in this regard.
4. EX R 2 is another RBI Master Circular No 001.2010 claim settlement dated 12.05.2010. the Opposite party relied on K (2)(b)iii: In the case of deposit being claimed after the date of maturity: interest at the contacted rates till the date of maturity and from the date of maturity to the date of payment simple interest at the applicable rate operative on the date of maturity shall be paid in the event of death of the depositor before the date of maturity of the deposit. In the case of death of the depositor after the date of maturity of deposit interest at savings deposit rate operative on the date of maturity shall be  paid from the date of maturity till the payment
5. EX R3: is the payment voucher for Rs 41512/ dated 18.06.2012 for the payment being made to the complainants. The Opposite party relies on this document to contend the complainants have received the payment in full satisfaction and there is no cause of action for the complainants.

       Borne by records it is evident Shri Raghava Pai kept deposits and died before the FDR matures so application for rate of interest is that either, a) the discretion of the individual banks subject to their board laying down a transparent policy in this regard as left to the banks by the RBI circular above said EX R1 or interest at the contacted rates till the date of maturity and from the date of maturity to the date of payment simple interest at the applicable rate operative on the date of maturity EX R2 referred above. As for as first option is concern the Opposite party has not come up with any board laid policy in this regard and not adaptable. The second option is applicable i.e interest at the rate as per FDR contract till the maturity and thereafter simple interest at the rate prevailing at the time of maturity on such kind of FDR. So the rate of interest is not as Opposite party interpreted as simple 4% or savings bank Account interest rate. The circular is crystal clear and no ambiguity. As such the interest given by opposite party is less than what RBI guided.

      In between there is unchallenged court interim order in P & S C 2/99 dated 05.12.2007 which orders the renewal of deposit as prayed for in the IA.  The order says the FDR s to be renewed on “reinvestment scheme” which gives the meaning that from the date of maturity the FDRs to be renewed as per the rate prevailing from time to time for the same period as original FDR issued. Which means in our view it is not simple interest but on reinvesting amount after every renewal.

        From above all document it is established that the rate of  interest payable is not the simple 4 % as Opposite party contended but it is either the simple interest prevailing at the time of maturity or on reinvested amount from period to period. We are of the considered opinion that the Opposite party not followed the principle of interest payment and hence we hold the Opposite party not proved the payment of interest justified and answered the point no 2 in the negative.

       The other contentions of the Opposite party as the complainant barred by time, the complainant has not informed the death and there is other legal heirs who were not consulted etc. will not stand as the Opposite party admitted the claim and paid an amount of Rs.41512/ through Ex R3 dated 18.06.2012 and cause of action starts from that date. The Opposite party contention that the amount was received by the complainants with full satisfaction is not proved. There is no any separate satisfaction voucher produced. And the contents of the voucher do not depict the full satisfaction  legally. There is no any calculation list enclosed for the verification of the claimants. we would like to extract the line from the RBI directions EX R1 furnished by the Opposite party under the head  9.I.13 Renewal of overdue deposits: All aspects concerning renewal of overdue deposits may be decided by the individual bank subject to their Board laying down a transparent policy  in this regard... the policy should be non discretionary and non discriminatory . The Opposite party should have been more transparent in settling the claim made by the claimants especially LRs as they will be new to the contracts. The complainants should have provided with detailed calculation of amount payable. It is also pertinent to note here that as per EX R15 the Opposite party clearly admitted the interest rate as simple and running at the time of maturity and hence all other contentions of the Opposite party will not stand.

       POINT NO 3:  As we hold the Opposite party not proved their case on the rate of interest we hold the complainants are entitled to get an interest rate above 4 % per annum. But to decide about the rate of interest the complainants are entitled, the constraint is we do not have important documents of FDR receipt which neither the complainants nor the Opposite party have produced. The complainant admitted that he do not have the original FDR and requested the bank to provide duplicate. The Opposite party instead of providing duplicate individual FDR, issued a summary of total amount of FDR without mentioning rate of interest or period for which it is kept. Accurate calculation is not achievable. The FDR is being quite old one and information gathering is difficult task. To ease the situation we are of the opinion to reduce the complication in resolving the dispute and removing complexity in the calculations, an amicable order to be passed with regard to rate of interest to be paid.  As such depending upon the different principle to be adopted there is four stages of applicable on rate of interest the complainants are entitled.

1. Till the maturity date of FDR
2. After the date of maturity till the P & S C order date 05.12.2007.
3. After the P & S C order passed till the complaint filed.
4. After the complainant filed till the disposal of the complainant.

 In our considered opinion we deem fit in the

                                                                                  THE RATE OF INTEREST would be

     First stage: it will be as per contracted rate of interest or if the documents are not available to determine the rate, an interest at the rate of 10% per annum till the date of maturity.

      Second stage: Simple interest at prevailing rate at the time of maturity or if the documents are not available to determine the rate, simple interest at the rate of 10% per annum till the P & S C order passed.

     Third stage: At the rate prevailing on the date of P & S C order or if the documents are not available to determine, the rate at 9 % interest per annum till the date of complainant filed. In this period as per P & S C order and it will be on reinvestment basis and we consider the period of 3 years interval in any of the rate of interest options said before (prevailing or 9%). The reinvestment scheme will be on the amount calculated at the end of the Second stage as above.

      Forth stage: As per order in this complaint.

     The rate of interest suggested in alternatively above is based on the approximate average rate of interest from the year 1975-76 till 2010-11 as per RBI list Table 74 : Structure of interest rates dated 15^th sept 2010.

       In our opinion the complainants are entitled to get a 1/5 share of the amount determined on the base of calculation stated above in Para THE RATE OF INTEREST with an interest of 9% per annum from the date of complainant till the date of payment. In our opinion there is negligence on the part of the Opposite party in reading the RBI circular properly and in obeying the order passed in the P & S C petition.  Also as per EX-R15 Opposite party has admitted that the interest rate payable is the simple interest at the rate as ruling on the maturity date of deposit as per their higher authorities direction. But not adhered to the directions given by their higher authorities and bent upon 4% SB rate which is not excusable. We also noted there was a clear order in the P & S C petition for renewal of deposits on reinvestment basis. The Opposite party has not renewed and issued fresh FDRs to the complainants and even when the complainant asked for the duplicate FDR the Opposite party not provided. There is grave negligence on the part of the Opposite party and the complainants are also  entitled for an amount of Rs50000/ as compensation and an  amount of Rs. 10000/ towards legal expenses. However Opposite party can deduct the amount already paid to the complainants.

       POINT NO 4: As per above discussion In the light of adjudication of points we pass the following:

ORDER

     The complaint is partly allowed. The Opposite party shall pay the complainants jointly the 1/5 share in the determined amount as per calculation specified in Para THE RATE OF INTEREST as above on the original amount deposited in FDR of deceased Shri Raghava Pai with an interest at 9% per annum from the date of complaint till the date of payment and an amount of Rs 50000/ towards compensation and Rs10000/ towards litigation expenses. The order shall be complied within 30 days from the date the copy of this order received and on failure of which the Opposite party is liable to pay a penal interest of 2% extra per annum on the total sum payable.

Copy of this order as per statutory requirements, be forward to the parties free of costs and file shall be consigned to record room.

(Page No.1 to 16 Dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 25^th November 2016)

           MEMBER                                                 PRESIDENT

    (SRI T.C. RAJASHEKR)                  (SRI.VISHWESHWARA BHAT D)

  D.K. District Consumer Forum                D.K. District Consumer Forum

Additional Bench, Mangalore                   Additional Bench, Mangalore

ANNEXURE

Witnesses examined on behalf of the Complainants:

CW1 Mr. M Ganesh Pai

Documents marked on behalf of the Complainant:

Ex C1:                    Original Memo of Calculation

Ex C2: 16.12.2009   Certified Order copy in P&SC No.2/1999 

Ex C3: 24.09.2002    Petition/application copy of P&SC  No.2/1999

Ex.C4: 25.11.2009    Certified Order Copy in P&SC 2/1999

Ex.C5: 15.10.2011    Photostat of Succession certificate in  P&SC No.2/1999

Ex.C6: 2.7.2010        letter written by Syndicate Bank to Prl. Civil Judge (Sr.Dv) and Add.CJM Puttur

Ex.C7: 23.02.2012    Original letter written by M. Ganesh Pai to  Syndicate Bank’s Branch Manager

Ex.C8: 11.01.2012     Original letter written by M.Ganesh Pai to Syndicate Bank s Branch Manager

Ex.C9: 30.08.1990     Photostat of Account Particulars sent by  Syndicate Bank Manager to m. Ganesh Pai

Ex.C10: 02.01.2012     Lawyers notice to Senior Manager of  Syndicate Bank

Witnesses examined on behalf of the Opposite Party:

RW1:  Mr. Dinesh Bhat, Manger, Syndicate Bank, Belthangady

Documents marked on behalf of the Opposite Party:

Ex.R1: D1 2005         :  Xerox of page 228 of RBI Circular Book                         

Ex.R2: D2 2010         : Xerox of relevant pages of Circular                                                         

Ex.R3: D3 18.06.2012        : Full settlement voucher given by  Complainants

Ex.R4: D4 07.12.2007        : Letter of court regarding renewal of  Deposits

Ex.R5: D5 23.06.2010        : Letter of 2^nd complainant seeking  Latest balance

Ex.R6: D6 24.06.2010        : Letter of bank to 2^nd complainant Giving particulars

Ex.R7: D7 01.07.2010        : Letter of court asking for maturity Value of deposits

Ex.R8: D8 06.07.2010        : Letter of bank to court giving Particulars of deposits

Ex.R9: D9 24.09.2007        : Cc of IA filed for getting direction for renewal with affidavit

Ex.R10:D10 27.7.2010       : Letter of 2^nd complainant enclosing Court order etc

Ex.R11:D11 13.07.2011     : Letter of 2^nd complainant claiming Balance with interest

Ex.R12:D12 13.07.2011     : Certificate issued by OP showing Balance payable (65921/-)

Ex.R13:D13 12.01.2012     : Death claim form signed by  Complaints

Ex.R14:D14                      : Consent form signed by complaints

Ex.R15:D15 06.6.2012       : Letter of Bank to 2^nd complainant for paying simple interest

Ex.R16:D16 11.09.1996      : Xerox of death certificate of Raghava Pai

Dated:  25.11.2016                             MEMBER