IMPORTANT POINTS
(1) “Deficiency” – Section 2(11) defines deficiency as any fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance which is required to be maintained by or under any law for the time being in force, in relation to any service. In this case, the failure to return the matured funds falls squarely under this provision.
(2) “Service” – Section 2(42) defines service to include facilities in connection with banking and financing. The acceptance and refund of fixed deposits by a credit society is a ‘service’ rendered to the consumer.
(3) Internal Crises do not Excuse Deficiency in Service – A financial institution’s internal problems – such as bad loans, defaulting members, or general financial crisis – do not justify withholding a depositor’s matured funds. Failing to refund the money upon maturity is a direct “deficiency in service” under the Consumer Protection Act, 2019, as the depositor is not liable for the society’s operational failures.
(4) Section 69 – Limitation Period – Specifies that a consumer commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen. The interpretation of a “continuing cause of action” (due to the auto-renewal of the FD) was crucial in validating this complaint.

ORDER

B. Sudheendra Kumar, President—The appellant is the complainant in C.C.No.41/2024 on the files of the District Consumer Disputes Redressal Commission, Palakkad (for short, ‘the District Commission’).

2. The complainant deposited Rs.2,90,946/- as fixed deposit with the 1st opposite party society on 01.04.2020 at an interest at the rate of 8.25% per annum. On 01.04.2021, when the fixed deposit attained the maturity period, the complainant demanded the amount. However, the amount was not released to the complainant. Instead of releasing the amount to the complainant, the fixed deposit was renewed from year to year by the opposite parties without the consent of the complainant. Accordingly, the fixed deposit was renewed up to 01.01.2024. Finally, the complainant approached the District Commission with the above complaint alleging deficiency in service on the part of the opposite parties.

3. The opposite parties filed a joint version admitting the deposit made by the complainant. The opposite parties further admitted that the opposite parties failed to refund the amount deposited by the complainant. The opposite parties contended that since many persons who had availed loan from the opposite parties failed to repay the amount, the Society was in stringent financial crisis and hence, the Society was not in a position to disburse the amount to the complainant. In view of the stringent financial crisis, the Joint Registrar (General), Palakkad passed an order constituting a Monitoring Committee for disbursement of the fixed deposit amount. The Committee also initiated ARC proceedings to realize the loan amount.

4. Before the District Commission, the complainant and the 2nd opposite party filed proof affidavit. Exhibit A1 was marked for the complainant and Exhibit B1 was marked for the opposite parties. After evaluating the evidence, the District Commission dismissed the complaint.

5. Service is complete. However, there is no representation for the respondents. Heard the learned counsel for the appellant. Perused the records.

6. The District Commission dismissed the complaint on two reasons. The first reason is that the complaint was barred by limitation and the second reason is that the complainant could not prove deficiency in service on the part of the opposite parties.

7. The complainant deposited the amount as fixed deposit on 01.04.2020. Admittedly, the amount was renewed from year to year till 01.01.2024, even though it was not with the consent of the complainant. The opposite parties had contended that the fixed deposit amount could not be given to the complainant due to the stringent financial condition of the Society. Since the fixed deposit amount was renewed from year to year till 01.01.2024 and the complaint was filed on 27.01.2024, it cannot be said that the complaint was barred by limitation. In the said circumstances, the finding by the District Commission that the complaint was barred by limitation cannot be sustained.

8. Admittedly, the complainant deposited an amount of Rs.2,90,946/- with the 1st opposite party society on 01.04.2020. It is also admitted that even though the complainant had demanded the release of the amount with interest, the opposite parties failed to release the amount to the complainant. Since the opposite parties did not release the amount to the complainant when demanded by the complainant, there was, definitely, a deficiency in service on the part of the opposite parties. The opposite parties contended that since many persons who had availed loan from the Society failed to repay the amount, the opposite parties were not in a position to release the amount deposited by the complainant. It was contended in the version that the 1st opposite party is a Rural Credit Society, which could validly accept deposits. It is true that a committee was constituted by the Joint Registrar (General) to refund the amount on priority basis as is seen from Exhibit B1. However, since the complainant had deposit