Unilateral reduction of interest rates on Fixed Deposit Receipts post-issuance violates contract law, as the terms agreed upon cannot be altered without mutual consent.

JUDGMENT :

Swarupama Chaturvedi, J.

1. Heard Sri Manish Kumar Jain, learned counsel for the petitioners, Sri Jainendra Kumar Mishra, learned counsel for respondent nos. 2 and 3 and learned Standing Counsel for the State respondent.

2. By means of both these writ petitions, filed under Article 226 of the Constitution, the petitioners have sought substantially similar reliefs. The principal prayer is for a writ of mandamus directing the respondents to compute and pay interest on the respective Fixed Deposit Receipts at the contracted rate till their dates of maturity and to restrain the respondents from reducing the agreed rates of interest and further to direct Respondent Nos. 2 and 3 to consider and decide the representations submitted by the petitioners. These prayers flow from the common grievance regarding the unilateral reduction of the agreed interest rate after issuance of the FDRs.

3. Since both petitions raise identical legal issue, they were heard together and are being decided by this common judgment. Although the factual particulars of each petition, such as the date of the Fixed Deposit Receipt (FDR), the amount deposited and the name of the depositor differ, the core question involved is the same that whether the respondent bank is justified in reducing the rate of interest after issuance of the FDR. For clarity, the individual facts of each case are discussed separately, but the determination of the common issue shall govern both petitions.

4. The background facts in the Writ-C No. 21627 of 2023 is that many Fixed Deposit Receipts (FDRs) were created by petitioner no. 1 with his mother, Smt. Yashoda Jain (petitioner no. 2), and his father, late P.K. Jain, who was a retired staff member of the Oriental Bank of Commerce, Bulandshahr Branch, and who passed away in the year 2016. The said FDRs were issued by the Oriental Bank of Commerce, Bulandshahr Branch, on 01.12.2011, 01.12.2011, 01.12.2011, 16.12.2011, 28.03.2012, 28.03.2012, 28.03.2012, and 16.12.2011, for amounts of Rs. 5,00,000/-, Rs. 3,00,000/-, Rs. 3,00,000/-, Rs. 2,00,000/-, Rs. 1,00,000/-, Rs. 50,000/- , Rs. 50,000/-, and Rs. 45,000/-, respectively. These FDRs were created on the interest rate of 10.75% per annum, with a maturity period of ten years, and the total maturity amount payable thereunder was Rs. 44,63,051/-. The petitioners had also created another FDR on 18.02.2014 for an amount of Rs. 1,00,000/-, carrying an interest rate of 10.25% per annum and maturing on 18.02.2024, with a maturity value of Rs. 2,75,134/-.

5. The brief facts in the Writ-C No. 21657 of 2023 is that FDRs were made by the petitioner no.1 and his joint account holder mother namely, Smt. Yashoda Jain (petitioner no. 2) and father namely, P.K. Jain, a retired staff member of Branch of Oriental Bank of Commerce, Bulandshahar and he died in the year 2016. The aforesaid FDRs were created before the Branch of Oriental Bank of Commerce, Bulandshahar on 01.12.2011, 01.12.2011, 16.12.2011, 16.12.2011 and 28.03.2012 amounting Rs. 5,00,000/-, Rs. 5,00,000/-, Rs. 1,00,000/-, Rs. 1,00,000/- and 2,00,000/- respectively interest @ 10.75 % which will be matured after 10 years and total maturity amount will have to be paid Rs. 40,44,189/-.

6. Learned counsel for the petitioners submits that the aforementioned FDRs were jointly made by petitioner no. 1, petitio