2004 Supreme(SC) 1338

2004(8) Supreme 247
SUPREME COURT OF INDIA
(From National Consumers Disputes Redressal Commission, New Delhi)
Mrs. Ruma Pal & Arun Kumar, JJ.
Anumati -Appellant
versus
Punjab National Bank -Respondent
Civil Appeal No. 6945 of 2004
(Arising out of SLP (C) No. 15786 of 2002)
Decided on 25-10-2004
Counsel for the Parties :
For the Appellant : M.N. Krishnamani, Sr. Advocate, Anil Karnwal, Sushil Balwada and Debasis Misra, Advocates.
For the Respondent : M.T. George, Advocate.

IMPORTANT POINT
A fixed deposit jointly owned with an either or survivor clause cannot be pledged by one of the account holders with the Bank so that the amount becomes payable to such third party, without the consent of the joint account holder.

Headnote:Consumer Protection Act, 1986-Sections 2, 14 and 21-Banking-Deficiency in service-Non payment of a fixed deposit jointly owned with an either or survivor clause-Bank adjusting amount of fixed deposit against a pledge, without the authority, knowledge or concurrence of other account holder-Service rendered by the Bank challenged as deficient-Appellant and her husband made a fixed deposit of Rs. 20,000/- with respondent bank for a period of seven years-Fixed Deposit would have matured on 31.5.1995 and amount payable on maturity was Rs. 39,930/- -In a bank s suit for recovery filed against a firm, it was pleaded that the fixed deposit receipt had been mortgaged by appellant s husband towards the disputed loan-Trial Court held that the amount was rightly adjusted in the account of disputed loan-Revisional Court held that appellant and her husband could initiate legal proceedings against the Bank-Consumer complaint-District Forum held that respondent Bank should not have accepted any pledge of the account without informing the appellant and getting her consent-Appeal-Whether a fixed deposit jointly owned with an either or survivor clause can be pledged by one of the account holders with the Bank-(No)-Whether the Bank can adjust the amount of fixed deposit against such pledge, without the authority, knowledge or concurrence of the other account holder-(No).

       Held : A fixed deposit in the joint names of two persons is nothing but a joint account which, as the name itself suggests, is repayable on the expiration of the agreed period. The fixed deposit receipt is merely a written acknowledgement by the Bank that it holds a certain sum to the use of its customers. The Bank is thus a debtor to the account holders in respect of the amount deposited - a debt which is repayable by the bank to the account holders with interest on the expiry of an agreed period. An "either or survivor" clause in such an account means that the amount payable by the Bank on maturity of the fixed deposit may be paid to either of the account holders by the Bank in order to obtain a valid discharge. In other words under a tripartite agreement between the joint account holders inter se and the Bank, the Bank may, on maturity, make payment only to either of them. This tripartite agreement cannot be bilaterally modified by one of the joint account holders for example by pledging the account with any third party including the Bank itself in its capacity of creditor, so that the amount becomes payable to such third party, without the consent of the joint account holder. (Para 12)

       In the present case the contract in respect of the joint account was between the respondent bank and the husband and wife. The fixed deposit was not a debt due by the bank to Mam Chand alone which could be set off by the bank against any claim that the bank may have had against Mam Chand. Besides the right of Mam Chand was to receive the money deposited only after it matured, if he survived. Supposing Man Chand had died before the fixed deposit matured, the only person entitled to get the money would be the appellant. This right of the appellant could not have been taken away without her consent. (Para 16)

       We have our doubts regarding the validity of the order of the Trial Court allowing the Banks "information" application. But it is unnecessary to pronounce on it as it does not bind the appellant as was correctly held by the Revisional Court. Nor does anything turn on the supposedly shifting stances taken by the appellant in the two legal notices as there is no dispute that there was in fact a fixed deposit. (Para 18)

       The State and National Commission both erred in proceeding on the basis that the Civil Court s decision was that the FDR had in fact been pledged by Mam Chand to the bank. We have already quoted the observation of the Revisional Court earlier. In fact, the Revisional Court also held that the decision of the trial Court did not in any fashion bind the appellant. There is no independent finding by any of the fora that the pledge had indeed been created of the fixed deposit receipt by Mam Chand as claimed by the bank. In the circumstances, the Bank had no right to refuse payment of the amount deposited to the appellant. The refusal as disclosed to this Court, was contrary to banking norms. We are therefore of the view that the District Forum was correct in accepting, and the State Commission and the National Commission erred in rejecting, the appellant s complaint. (Paras 19 and 20)