Kollam District Co-Operative Bank
ORDER SRI.K. VIJAYAKUMARAN, PRESIDENT.
This complaint getting to recover Rs.34.125/- being the interest payable on Rs.25,00/- deposited compensation and costs.
The averments in the complaint can be briefly summarized as follows:
The complainant had deposited a sum of Rs.25,000/- with the opp.party on 20.4.1990 as fixed deposit for a period of three years vide FDR No.4280 dt. 20.4.1990. The opp.party had received the deposit agreeing to pay interest at the rate of 10.5% p.a. The complainant the rafter requested the opp.party to renew the deposit periodically. But in January, 2006 the complainant got information that the opp.party did not renew the deposit in terms of his request The complainant issued a registered notice with acknowledgment due requesting to renew the deposits w.e.f. the date of maturity and pay interest at the rate of 10.5% p.a. for the first three years and thereafter at the rate applicable from time to time. Though the opp.party had received the notice they did lnot incline to renew the deposit or sent any reply. So the complainant requested the opp.party to close the account and pay the proceeds by his letter dt. 19.4.2006. Accordingly, the opp.party had closed the account and paid Rs.31,563/- to the complainant being the sum of Rs.25,000/- deposited on 20.4.1990 with interest at the rate of 10.5% payable upto 20.4.1993. The opp.party did lnot pay interest for a period of 13 years commencing from 21.4.1993 to 20.4.2006. The complainant is legally entitled to recover a sum of Rs.34,125/- from the opp.party on that account. Hence the complaint.
The opp.party filed a version contending, interalia, that the complaint is not maintainable either in law or on facts, and therefore the same is to be dismissed in limina. The averments in para 2 is not fully correct. It is clearly stated in the FD receipt that interest will ceased at the expiration of 30 months when this receipt must be sent in payment or renewal endorsement by the depositor. No notice will be issued by the bank. The complainant is willfully evading having seen this. The complainant has not request to renew the FD receipt during the period from20.10.1992 till 18.11.2005. The averments contrary to that is false and hence denied. The FD receipt will be renewal only if the depositor demand renewal. The opp.party have no right to renew suo motu the fixed deposited receipt on attaining maturity. The complainant was abroad in connection with business matters and from the letter dated 18.11.2005 itself it can be seen that he was not in station. The opp.parties have given reply to the complainatís letter. Subsequently as per the requests of the complainant the FD was closed and the amount with 10..5% amounting to31,563/- was given to the complainant in full and final settlement. After the maturity the opp.parties informed the complainant several times either to receive the amount or to renew the same but the complainant did not turn up. On receipt of the notice the opp.parties gave reply and after accepting amount due to the complainant, this complaint is filed as an experimental measure. The opp.parties are not bound to pay interest to the complainant during the period from 21.4.1993 to 20.4.2006. The amount with interest was to be refunded to the complainant at any time on demand and therefore the opp.parties have kept this amount in the bank without any profit. Due to the act of the opp.party no deficiency in service has been occurred. Since the complainant failed to file written requests for the renewal of the FD the opp.parties are not liabilities to pay interest. The complainant has no cause of action. Hence the opp.party prays to dismiss the complaint with their costs.
Points for consideration:
1.Whether the complainant is entitled to get interest?
2.Whether there is deficiency in service on the part of the opp.parties?
3.Reliefs and costs.
For the complainant PW.1 is examined. Ext.P1 to P5 are marked.
For the opp.party DW.1 is examined. Ext.D1 to D7 are marked.
It is an admitted fact that the complaint made a fixed deposit of Rs.25000/- in the opp.party bank and that on maturity of the fixed deposit the same was not renewed. The contention of the opp.party is that there is lno provision for automatic renewal of the Fixed Deposit but the Deposit or must apply within 14 days of maturity for renewal relying an Ext. D7 RBI guidelines. According to DW.1 the amount with interest as per the Fixed Deposit was kept in the locker of the Bank till the same was paid to the complainant
DW.1 has stated that when the fixed deposit matured they send letter to the complainant but no material worth believable was produced to establish that aspect. DW.1 has admitted in cross examination that Ext. D2 is produced to prove this aspect. But no credibility can be given to Ext.2 as no dispatch register is produced.
According to DW.1 when the FD matured they transferred the account to the Register of fixed deposit matured and the amount with interest will be kept in the locker and that sum will not be reinvested or in circulation. Though he would say that it is the prevailing practice no material was produced before the Forum to establish that this account was kept in the locker till it was repaid. Ext.D1 RBI guidelines does not show any such procedure Money is intended for circulation and keeping that sum in the locker is against the provisions.
It is to be noted that the Bank are collecting fixed deposits not for doing any favour to the Depositors but for the purpose of making profit by giving loan etc. on higher rates of interest. Merely because an application for renewal is not received the banks are not justified in keeping that sum in the locker thereby deprive circulation of that money. DW.1 admitted in cross examination that overdue account referred to in Ext. D7 are matured accounts and that in the case of overdue accounts the bank are bound to pay interest. If that be so, one is at a loss to under stand why the opp.party bank has not considered it as an over due account rather than keeping the sum in the locker. Ext.D7 des not authorize opp.party to keep the amount in locker thereby depriving circulation of that amount. DW.1 himself has admitted that he is not aware of the provision which authorize them to keep matured Fixed Deposits amounts in the locker. It is also worth pointing out in this context that in Ext.D5 send by the General Manager to the complainant it is stated in last para that they may be advised whether they shall renew the deposit at the prevailing rate of interest from 20.10.1992. It is not known as to how the opp.party will renew the F.D with retrospective effect if there is no provision for the same but to keep in locker. So it is obvious that the opp.parties have discretion which they refuse to exercise in favour of the complainant for reasons best known to them.
On a perusal of Ext.D7 also it can be seen that the bank has discretion to renew an FD and can exercise such discretion in favour of or against the depositor. But in the absence of any provision being produced before the Forum we are of the view that so long as the amount continues to be in the possession of the opp.party they are bound to pay interest at the rate applicable at least to SB Account. According to DW.1 the matured fixed deposit are kept in locker so as to pay that amount as and when the depositor demands the same. In the case of an SB account also the bank is bound to pay the amount as and when demanded at least by keeping minimum balance. So the contention that the amount was kept in the locker with a view to pay the same on demand cannot be accepted. When the amount is kept by the opp.party under whatever name the opp.party is bound to pay interest at least at the rate applicable to SB account. Point found accordingly.
In the result the complaint is allowed directing the opp.party to pay interest to the complainant for Rs.31,563/- at the rate applicable to SB account from 20.10.1992 till payment. The order is to be complied with within one month from the date of receipt of this order.
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