Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Dr. S.M. Kantikar, Presiding Member and Dinesh Singh, Member
Standard Chartered Bank – Petitioner
versus
Lakhwinder Singh – Respondent
Revision Petition No.3080 of 2017
(Against the Order dated 31/08/2017 in Appeal No.565/2017 of the State Commission Punjab)
Decided on 13.4.2021

Advocates:
Counsel for the Parties:
For the Petitioner:Mr. Devmani Bansal, Advocate
For the Respondent: In person with Gurcharan Singh, POA holder

IMPORTANT POINT
“Any customer who deposits amount under Reinvestment Plan is under assumption that the FDR will be renewed either till he approaches or gives any other specific instruction to the Bank.”

Headnote:
Consumer Protection Act, 1986 – Sections 21(b) and 2(1)(g) : [Consumer Protection Act, 2019 – Sections 58 and 2(11)] – FDR – Encashment on maturity – Refusal – Legality of – Complainant and his wife were joint holders of an FDR issued on 6.5.1997 for Rs. 50,000/- by petitioner-Bank – It was issued on basis of a Reinvestment Deposit Plan – Initial date of maturity was 6.5.1999, however, complainant approached the Bank for encashment of amount in year 2016, which the Bank refund – District Forum allowed the complaint, however, State Commission dismissed the same in limine – Any consumer of bank who deposits the amount under a Reinvestment Deposit, is under assumption that the FDR will be renewed either till he approaches or give any other specific instruction to the Bank – Complainant had deposited the amount with assumption that his FDR will be reinvested after maturity date i.e., 6.5.1999 for a similar term – Impugned order of For a below found will reasoned – Interference with declined – Direction issued.
Held: In the instant case, the Complainant had deposited Rs. 50,000/- on 06.05.1997 with the OP – Bank under the (bonafide) assumption that his FDR will be reinvested after maturity date i.e. 06.05.1999 for a similar term. The OP-Bank, but, mentioned in its archival report dated 14.10.1998 that the balance was “Nil” in the FD account. Meaning thereby that within a span of approximately 17 months the OP – Bank had withdrawn the amount from the FDR, (ostensibly) to make good the shortfall of minimum balance in the savings account. Pertinently, however, the OP - Bank did not produce any cogent evidence like statements of the savings account or the FD account. The OP – Bank has attempted to condone its deficiency by relying on its archival report, which is a report without any relevant or material details regarding deductions made from the FD account etc. The publication of closure of their branches was made in the ‘Financial Express’ in the month of March 1999, but this does not absolve the OP - Bank from its deficient act. The OP - Bank was duty bound to intimate/inform about the same to every consumer who held FDRs in its said branches. This is neither evident from the submissions nor from the evidence adduced by the OP - Bank. It is very significant that the OP-Bank has not produced any withdrawal details whatsoever of the FDR account, in which the account balance was reduced from Rs. 50,000/- to zero. (Nor has it produced
the corresponding details of the savings account.)
Considering the entirety of the facts, we do not find any merit in the Revision Petition. We concur with the State Commission. The Revision Petition is dismissed. The reasons have been given hereinabove. (Paras 10 to 12)
Result: Petition Disposed of.

ORDER

Dr. S.M. Kantikar, Presiding Member.—The Revision Petition has been filed under Section 21(b) of The Consumer Protection Act, 1986 against the Order dated 31.08.2017 of the State Commission, whereby the appeal filed by the Opposite Party – Standard Chartered Bank was dismissed in limine and the Order dated 07.06.2017 of the District Forum, allowing the Complaint, was affirmed.

2. The Petitioner was the Opposite Party (OP) and the Respondent was the Complainant in the Complaint and they are being accordingly referred to hereinafter.

3. Brief facts, shorn of unnecessary detail, are that the Complainant and his wife were the joint holders of an FDR issued on 06.05.1997 for Rs. 50,000/- by the OP – Bank. It was issued on the basis of a Reinvestment Deposit Plan. The initial date of maturity was 06.05.1999. The Complainant approached the OP – Bank for encashment of the amount in the year 2016; the OP - Bank refused.

The Complainant’s case was that under the Reinvestment Deposit Plan of the OP – Bank the FDR was to get reinvested automatically till instructions were given by the account holder either to get the same encashed prematurely or to get the status of the same changed. The Complainant alleged deficiency in service on the part of OP – Bank and filed a Consumer Complaint before the District Forum on 15.09.2016 for payment of the maturity amount along with compensation of Rs. 1,00,000/- for mental agony and Rs. 22,000/- as costs.

The OP – Bank’s contention was that the scheme of 2 in 1 reinvestment deposit is such that the savings account and the deposit account are linked. In the event of any shortfall in the savings account to meet any withdrawal the required sum is uplifted from the linked deposit account and credited to the savings account to make good the shortfall. According to the minimum balance clause and for the maintenance of savings account a minimum balance of Rs. 10,000/- is necessary to be maintained to avoid any deduction from the FDR account. The OP – bank has followed the said procedure and continued uplifting the required amount from the linked fixed deposit to make good the shortfall in minimum deposit in the savings account. The Complainant never approached the OP – Bank on the initial date of maturity i.e. 06.05.1999 and came in 2016. As per the Bank’s archival report dated 14.10.1998 the FDR in question revealed account balance as ‘Nil’ and subsequently the account was marked for deletion. There was a delay of approximately 18 years in filing of the Complaint. According to the provisions of the Banking Companies (Period of Preservation of Records) Rules, 1985 a bank is required to preserve the records relating to a period not less than 8 years immediately preceding the current calendar year. The OP – Bank has never acted in a deficient manner.

4. The District Forum heard both sides, appraised the evidence, and, vide its Order dated 07.06.2017, allowed the Complaint:

8. It is not the denial of the case that the complainant is holder of the FDR bearing No. 016/Q2/07918/01 (copy of FDR accounts for Ex. C2) alongwith his wife Smt. Jasbir Kaur, issued from the Gandhi Bazar, Amritsar branch of Opposite Party which has now been merged in the present Opposite Party for Rs.50,000/- and said FDR was issued on the basis of 2 in 1 Reinvestment deposit plan, hence the complainant is consumer as provided under the Act. The only plea taken by the Opposite Party is that concept of 2 in 1 re-investment deposit is that it is liked to a saving bank account. As per the nature of a 2-in-1 account wherein a savings account and a deposit account is linked, should there be a shortfall in the savings account to meet any withdrawal, the required sum is uplifted from the linked deposit and credit to the savings account to make good the shortfall. In accordance to the above nature, the amount against the FDR had been uplifted from the FDR account in question to meet the requirements of the saving account held in the name of

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IMPORTANT POINT“Any customer who deposits amount under Reinvestment Plan is under assumption that the FDR will be renewed either till he approaches or gives any other specific instruction to the Bank.”

IMPORTANT POINT
“Any customer who deposits amount under Reinvestment Plan is under assumption that the FDR will be renewed either till he approaches or gives any other specific instruction to the Bank.”