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2018 Supreme(Ori) 141
IN THE HIGH COURT OF ORISSA : CUTTACK
D.P. CHOUDHURY, J.
State Bank of India – Appellant
Versus
Banking Ombudsman, represented by its Secretary and another - Opposite Parties
W.P. (C) No.3528 of 2004
Decided on : 22-02-2018
Advocate Appeared:
For the Petitioner: Mr.P.V.Ramdas and Mr.P.V.Balakrishna
For the Opp. Parties : Mr.Ramesh Sahu-3
The court emphasized the binding nature of the award by the Banking Ombudsman and the limitations on the court's intervention in the decision-making process of the Ombudsman.
Headnote:
Banking Ombudsman Scheme - Public Provident Fund Act - 1968 - Clause-20 of the Scheme, 1995 - The court discussed the provisions of the Public Provident Fund Act, 1968 and the Banking Ombudsman Scheme, 1995. The court highlighted the binding nature of the award by the Banking Ombudsman and the process for conciliation and adjudication under the Scheme, 1995. The court also emphasized the limitations on the court's intervention in the decision-making process of the Ombudsman.
Fact of the Case:
The State Bank of India (SBI) returned excess deposits made by the opposite party no.2 under the Public Provident Fund Scheme without paying any interest. The opposite party filed a complaint with the Banking Ombudsman, who directed the SBI to pay interest on the excess deposits. The SBI challenged the award in a writ petition.
Finding of the Court:
The court found that the SBI was not justified in returning the excess amount without any interest, as the deposits had already accrued interest. The court affirmed the award of the Banking Ombudsman and directed its implementation within three months.
Issues: The main issue was whether the SBI was justified in returning the excess amount without paying any interest.
Ratio Decidendi: The court held that the SBI's action of returning the excess amount without paying interest was unjustified, as the deposits had accrued interest. The court also emphasized the binding nature of the award by the Banking Ombudsman and the limited scope for court intervention in the decision-making process of the Ombudsman.
Final Decision: The writ petition was disposed of, affirming the award of the Banking Ombudsman and directing its implementation within three months.
JUDGMENT :
Dr. D.P.Choudhury, J.
Challenge has been made to the award dated 30.07.2002 passed by the Banking Ombudsman, opposite party no.1, vide Annexure-4 in directing the State Bank of India-petitioner to pay simple interest prevailing on FD rate to both the deposits made by the opposite party no.2, i.e, Rs.8,11,845.23 and Rs.20,000.00 except the balance of Rs.60,000.00 earning interest in the PPF Scheme.
2. The adumbrated facts leading to the case of writ petition are that the petitioner, being State Bank of India, IDCO Tower Branch, Bhubaneswar (hereinafter called as “the SBI”) was working as facilitator for promoting Public Provident Fund Scheme (in short “the PPF Scheme”) floated under Public Provident Fund Act, 1968 (hereinafter called as “the Act, 1968”)
3. The opposite party no.2, after receiving the final withdrawal of the provident fund money from his ex-employer and, being interested to deposit the same under the PPF Scheme, deposited Rs.8,71,845.23 and Rs.20,000.00 on 1.6.1998 and 6.11.1998 respectively in his PPF Account No.703 after having consultation with the Chief General Manager of SBI. On 28.08.2001, an amount of Rs.8,31,845.23 was returned by the SBI to the opposite party no.2 in shape of banker’s cheque on the ground that the amount deposited by the opposite party no.2 in his PPF account is excess over the limit of Rs.60,000/ during the year. It is also mentioned by the SBI that the opposite party no.2 is not entitled to the interest paid on this excess amount and the excess interest paid into his account would be adjusted.
4. The opposite party no.2 filed a complaint before the learned Banking Ombudsman, opposite party no.1. Learned Ombudsman after hearing both parties, passed the impugned award on 30.07.2002 to the effect that the SBI shall pay interest at the then prevailing FD rate (on simple basis) applicable to both the excess deposits, i.e., Rs.8,11,845.23 deposited on 01.06.1998 and Rs.20,000/-deposited on 06.11.1998. Against such award, the instant writ petition has been filed by the SBI on various grounds.
5. SUBMISSIONS
Mr.P.V. Balakrishna, learned counsel for the SBI submitted that the Government of India has promulgated Public Provident Fund Act, 1968 (hereinafter called “the Act, 1968”) wherein it has been provided that any individual can open an account under PPF scheme by depositing an amount not less than Rs.100/-and not more than Rs.60,000/-in a year. The SBI has been nominated to work as an agent for promoting such Scheme.
6. Mr.Balakrishna, learned counsel for the SBI submitted that the opposite party no.2 has got PPF Account No.703 and deposited a sum of Rs.8,71,845.23 on 01.06.1998 and Rs.20,000/-on 06.11.1998. The said amount was transferred by the SBI to Nagpur for process but in the year 2001, it is found that excess amount has been deposited by the opposite party no.2. So, the SBI returned the excess amount to the opposite party no.2 without any interest thereon as under the PPF Scheme, any excess amount deposited would not carry any interest. But, this aspect has not been properly dealt with by the learned Ombudsman.
7. Mr.Balakrishna, learned counsel for the SBI further submitted that the learned Ombudsman is erred in law by not fixing the responsibility on the opposite party no.2 for depositing the excess amount although he is a regular account holder under the PPF Scheme and it is well settled in law that ignorance of the law is not an excuse to anyone.
8. Mr.Balakrishna, leaned counsel for the SBI contended that according to Section-10 of the Act, 1968, no suit or legal proceeding can lie against the bank as the opposite party no.2 has accepted the entire deposits in his PPF account on good faith. Since the learned Ombudsman, opposite party no.1 has passed an illegal and improper award, the same should be quashed.
9. Per contra, Mr.Ramesh Sahu-3, learned counsel for the opposite party no.2, supporting the counter affidavit, submitted that the writ petition is not maintainable because
