Chandigarh

StateCommission

CC/453/2018

Comrade Rattan Singh Marxwadi Chetna Kendra - Complainant(s)

Versus

State Bank of India - Opp.Party(s)

Gurbachan Singh, Sanjeev Kumar, Adv.

28 May 2019

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	453 of 2018
Date of Institution	:	04.12.2018
Date of Decision	:	28.05.2019

 

Comrade Rattan Singh Marxwadi Chetna Kendra Trust, Gulabgarh Road, Dera Bassi, District Mohali through its Chairman Dr. Sher Singh, H.No.96, Village Lakhnour, P.O. Sohana, District Mohali, Punjab.

 ……Complainant.

Versus

State Bank of India, SCO 27-28, Sector 7C, Madhya Marg, Chandigarh 160019 through its General Manager.

…..Opposite Party.

 

Complaint under Section 17 of the Consumer Protection Act, 1986

 

 

BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

               MRS. PADMA PANDEY, MEMBER

               MR. RAJESH  K.  ARYA, MEMBER  

 

Argued by:  

 

Sh. Joginder Singh Toor, Advocate and Sh. Gurbachan Singh, Advocate for the complainant.   

Sh. N. S. Sodhi, Advocate for the opposite party alongwith            Ms. Jasbeer Kaur, Deputy Branch Manager, State Bank of India Branch at SCO No.27-28, Sector 7-C, Chandigarh.

 

 

 

 

 

 

PER  RAJESH  K. ARYA, MEMBER

            Briefly stated the facts are that Sh. Rattan Singh created a Trust on 08.07.2015 in the name of ‘Comrade Rattan Singh Marxwadi Chetna Kendra’. Dr. Sher Singh is one of the          trustee and Chairman of the Trust. Sh. Rattan Singh was        having an Account No.10506656135 with the opposite party – Bank, in which, he nominated the aforesaid Trust as his      nominee. Sh. Rattan Singh deposited an amount of Rs.40 Lakhs to

be held in Fixed Deposit for a period of two years on 27.07.2015. Unfortunately, Sh. Rattan Singh died on 16.12.2015. After his death, the Chairman of the Trust approached the opposite party –Bank for disbursement of the amount due against the deposit in the saving Bank account/FDR No.35103245276. The claim was made by the Trust as nominee of Rattan Singh, depositor.

2.             The opposite party – Bank refused to disburse the amount vide its letter dated 10.09.2018 on the ground that as per advice sought from the Law Department and as per Master Circular No.RBI-15/72DBOD No.LEG-BC-21/09.07.006/2014-15 dated 01.07.2014, the nomination shall be made only in favour of individual and a nominee cannot be an association, trust, society or any other organization or any office bearer thereof in his official capacity. Chairman of the Trust served a legal notice upon the opposite party – Bank on 25.09.2018 but to no avail.

3.             It was further stated that the aforesaid acts of the opposite party – Bank, amounted to deficiency, in rendering service, as also, indulgence into unfair trade practice. When the grievance of the complainant - Trust, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed to get the dispute between the parties settled and the amount admissible against Saving Bank A/c No.10506656135 and FDR No.35103245276 be ordered to be paid without further delay alongwith interest till the date of payment besides award of compensation in the sum of Rs.10 Lakhs.

4.             On the other hand, the opposite party – Bank, in its reply, took up a specific preliminary objection that the matter involves disputed questions of law and facts and this Commission has got no jurisdiction to try and decide the complaint. It was further stated that the complainant – Trust be relegated to approach the Civil Court to get declaration about the person who is competent to withdraw the amount in FDR and to file the complaint in Commission.

5.             However, on merits, it was stated that Sh. Rattan Singh insisted to nominate the Trust despite advice given by the then Bank Official and he executed a Will dated 09.03.2011 in favour of communist party. He then again executed Trust Deed impliedly overriding Will and entrusted all his movable & immovable property in the hands of the said Trust. It was further stated that Sh. Rattan Singh submitted an application in writing and requested to nominate the Trust as his nominee and also filled nomination Form DA-1 opting to appoint the trust as his nominee. It was further stated that as only Single individual can be appointed as nominee of depositor and not the trust in view of Section 45 ZA of Banking Regulation Act, 1949 and RBI Master Circular No.RB/2014-15/72, DBOD No.Leg.BC.21/09.07.006/2014-15 dated 01.07.2014, the claim submitted by the Trust being nominee of Sh. Rattan Singh was not tenable and was rightly refused to be disbursed to the Trust. It was further stated that though Sh. Rattan Singh was made aware about the consequence which the successor would have to face later on, even then he insisted the Bank to nominate Trust as his nominee. It was further stated that the opposite party – Bank is not guilty of imperfection and shortcoming in performance of service at any point of time. It was further stated that the opposite party – Bank is ready and is bound to disburse the amount at all the time but to the legally competent person. It was further stated that the amount cannot be disbursed to the complainant – Trust without the order of any competent Court of law.

6.             It was further stated that the opposite party – Bank was neither deficient, in rendering service nor did it indulge into unfair trade practice. The remaining averments, made in the complaint, were denied.

7.             The parties led evidence in support of their case.

8.             We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully. 

9.             The factum qua nominating the Trust, in question, as his nominee by Sh. Rattan Singh while opening the account with the opposite party - Bank; depositing an amount of Rs.40 Lakhs therein by way of Fixed Deposit Receipt and Sh. Rattan Singh expired on 16.12.2015 has not been denied. The grouse of the complainant – Trust is that the opposite party – Bank, when approached by the Chairman of the Trust, for release of the aforesaid amount in favour of the said Trust, refused to disburse the amount on the ground that in view of Section 45 ZA of Banking Regulation Act, 1949 and RBI Master Circular No.RB/2014-15/72, DBOD No.Leg.BC.21/ 09.07.006/2014-15 dated 01.07.2014, the Trust could not be made a nominee and only a Single individual can be appointed as nominee of depositor.

10.           It is admitted case of the opposite party – Bank in its reply that Sh. Rattan Singh insisted to nominate the complainant - Trust as his nominee against the advice given by the then Bank Official. It may be stated here that once it came to the notice of the bank official or the opposite party that the Trust could not be made the nominee, as was allowed to be done in the case of Sh. Rattan Singh, it should not have done so. The opposite party – Bank could have refused Sh. Rattan Singh to open the account, in question or could have asked him to nominate some individual and not the Trust. The stand now taken by the opposite party that though Sh. Rattan Singh was made aware about the consequence which the successor would have to face later on, even then he insisted the Bank to nominate Trust as his nominee, seemed to be afterthought to cover up the mistake committed by the Bank or its official. The opposite party – Bank could not do this. It arbitrarily allowed Sh. Rattan Singh to nominate the complainant - Trust as his nominee, which was clearly against the provisions of Section 45ZA(1) of Banking Regulation Act, 1949 according to which, nomination has to be made in favour of only one individual. Not only above, the act of the opposite party – Bank is also in defiance of RBI Master Circular No.RB/2014-15/72, DBOD No.Leg.BC.21/09.07.006/ 2014-15 dated 01.07.2014, as per which, a nominee cannot be an Association, Trust, Society or any other organization or any office bearer thereof in his official capacity. Section Section 45ZA (1) of Banking Regulation Act, 1949 reads thus:-

“45ZA. Nomination for payment of depositors’ money.—

 

(1) Where a deposit is held by a banking company to the credit of one or more persons, the depositor or, as the case may be, all the depositors together, may nominate, in the prescribed manner, one person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposit may be returned by the banking company.”

 

11.           The opposite party – Bank could advise Sh. Rattan Singh at the relevant time to make necessary correction in the nomination Form and instead, give name of some individual in place of the complainant - Trust, to be nominated as his nominee. Clearly, by allowing Sh. Rattan Singh to nominate a Trust as his nominee, the opposite party – Bank is deficient in providing service. Sh. Rattan Singh might not be conversant with the rules, regulations or circulars etc. at that point of time but the opposite party – Bank being the service provider and a financial institution was expected to abide by the prescribed rules, regulations or circulars etc., in which it failed. The opposite party – Bank cannot shift blame on to Sh. Rattan Singh for its own wrong. In our considered opinion, qua above mistake on its part, the opposite party – Bank is deficient in rendering service, for which, the complainant – Trust is certainly entitled to some amount of compensation.

12.           Not only above, by not properly guiding Sh. Rattan Singh at the relevant time of opening the account and by putting nomination in the name of a Trust, which could not be done when looking at the terms and conditions governing the same and then not disbursing the amount at a later stage by quoting the aforesaid reason, the opposite party unnecessary forced the complainant – Trust to come to the Court and file this litigation. The present litigation could have been avoided had the opposite party taken due care and caution at the time of opening the account by keeping in view the guidelines and terms & conditions qua appointing a nominee in the case of Sh. Rattan Singh. Thus, the complainant – Trust was dragged in to this unnecessary litigation, which put it to immense harassment. Besides above, for unnecessarily utilizing the time of the Court, by dragging the complainant – Trust into this litigation, which was not warranted at all, in case the opposite party had shown some vigilance at the time of opening account of Sh. Rattan Singh, we are of the considered opinion, that the opposite party must be burdened with exemplary cost. We impose an amount of Rs.1,00,000/- upon the opposite party as exemplary cost, out of which, it shall deposit an amount of Rs.50,000/- in Consumer Legal Aid Account No.32892854721 and the remaining Rs.50,000/- will be paid to PGIMER, Chandigarh to be deposited in the Poor Patient Welfare Fund (PPWF).

13.           Now coming to the other aspect of the case, whether the Trust through its Chairman is entitled to refund of the aforesaid amount deposited by Sh. Rattan Singh (since deceased) once it is established on record that Trust could not be made as a nominee of Sh. Rattan Singh, we leave this issue open to be decided by a Civil Court of competent jurisdiction. It may also be stated here that Legal Heirs of Late Sh. Rattan Singh, may also raise some         claim on the aforesaid amount. Therefore, qua entitlement to claim the said amount, we relegate the complainant – Trust to approach the Civil Court of competent jurisdiction to get its title defined. Thus, in our considered opinion, this issue cannot be decided in a summary proceeding in this Commission. The same can be decided before a Civil Court of competent jurisdiction by leading detailed evidence, examination and/or cross-examination etc.

14.           No other point was urged by the Counsel for the parties.

15.           For the reasons recorded above, the complaint is partly accepted, with costs and the opposite party – Bank is held liable for deficiency in service and directed as under:-

(i)	To pay an amount of Rs.50,000/- as compensation for deficiency in rendering service to the complainant - Trust, within a period of 45 days from the date of receipt of a certified copy of the order, failing which, the said amount shall carry interest @9% p.a. (simple), from the date of filing the complaint till realization.
(ii)	Pay an amount of Rs.50,000/- to PGIMER, Chandigarh towards discharge of its corporate social responsibility, which shall further be deposited in the Poor Patient Welfare Fund (PPWF) maintained by PGIMER, Chandigarh within 45 days from the date of receipt of certified copy of this order, failing which the same will carry interest @9% p.a. from the date of default i.e. after expiry of period of 45 days till its deposit.
(iii)	To deposit Rs.50,000/- in the “Consumer Legal Aid Account” No.32892854721, maintained with the State Bank of India, Sector 7-C, Madhya Marg, Chandigarh in the name of Secretary, Hon’ble State Commission UT Chandigarh within 45 days from the date of receipt of its certified copy, failing which the same will carry interest @9% p.a. from the date of default i.e. after expiry of period of 45 days till its deposit.

16.        Certified Copies of this order be sent to the parties, free of charge.

17.        The file be consigned to Record Room, after completion.

Pronounced.

28.05.2019.

 

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

(PADMA PANDEY)

MEMBER

 

 

 

(RAJESH K. ARYA)

MEMBER

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