Kerala

Idukki

CC/164/2021

John Varkey - Complainant(s)

Versus

Urban co-operative bank - Opp.Party(s)

Adv.V.V Sunny

02 Jun 2023

ORDER

DATE OF FILING :18/11/2021

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 2^nd  day of June 2023

Present :

              SRI.C.SURESHKUMAR                                               PRESIDENT

              SMT.ASAMOL P.                                                          MEMBER

              SRI.AMPADY K.S.                                                        MEMBER

CC NO.164/2021

Between

Complainant                           :  John, S/o Varkey,

                                                   Vennayapallil House, Thovarayar P.O.,

                                                    Kakkattukada Kara, Idukki District.

                                                    (By Adv.V.V.Sunny)

                                                           And

Opposite Party                    : The Kattappana Urban Co-Operative Bank Ltd.,            

                                               Kattappana, Represented by its Secretary,

                                               Kattappana – 685 508, Idukki District 

                                                          (By Adv.Babichen V.George)

                                                             

O R D E R

SMT.ASAMOL P., MEMBER

 

Complaint filed U/s 35 of Consumer Protection Act, 2019.  Facts of complaint are briefly discussed hereunder:-

 

1 . Complainant has membership in opposite party institution.  Opposite party made believe to members that about the benefits of golden deposit scheme which introduced by them in favour of education of children of members and if the amount of Rs.6,380/- deposit in the name of their children for 20 years and after 20 years, Rs.1 Lakh would be received as maturity amount.

2 . Complainant believed the bank and on 06/11/2001, he had deposited Rs.6,380/- in the name of his daughter Anjumol John.  At that time, opposite party issued golden deposit receipt as Account No.214.

(Cont....2)

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3 . This deposit had matured on 06/11/2021.  After the maturity date, complainant has approached the Secretary of opposite party’s institution for receiving the above said maturity amount.  But, he was not ready to disburse Rs.1 Lakh as maturity amount.  This acts amounts to deficiency in service on their part and illegal banking trade practice.  Complainant has deposited this amount for his daughter’s educational purpose since the amount not received, complainant couldn’t send his daughter for higher studies.  This was caused the mental agony for complainant.  Moreover, opposite party has threatened the complainant to go to court when he demanded Rs.1 Lakh as the maturity amount.  Hence this complaint filed.  Complainant prays the following reliefs.

(  a) Opposite party may be directed to pay Rs.1 Lakh as the maturity amount along with 12% interest from  06/11/2021, which was the maturity date, to complainant.

( b)  Opposite party may be directed to pay Rs.50,000/- as compensation for his mental agony to complainant.

Upon notice from this Commission, opposite party has entered appearance through counsel.  Opposite party has filed detailed written version.  His contentions are briefly discussed hereunder.

1 . Opposite party has not committed any wrong or there any deficiency in service on its part.

2 . It is true that complainant started a Term Deposit namely Golden Deposit Scheme in the name of his daughter, Anjumol John by depositing Rs.6,380/- on 06/11/2001 which is maturing on 06/11/2021 which bears a maturity value of Rs.1 Lakh.  But it is absolutely misleading that opposite party made the complainant believe as alleged.

(Cont....3)

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3 . It is not true that complainant approached the opposite party several times for receiving the maturity value after 06/11/2021 and opposite party is not ready to disburse the Rs.1 Lakh.  It is admitted at the time of deposit the interest rate was 14% and now the interest rate is below 7% which is prevailing in the market.  Opposite party bank is operating under the instructions and directions of Reserve Bank of India.  Opposite party cannot receive deposit and issue loans sidelining the directions issued by RBI from time to time.  Naturally the interest rates prescribed by RBI will be affecting the customers of opposite party.  This was well explained to the complainant at the time of making deposit with the opposite party.  Accordingly when RBI issued directions to this opposite party to decrease the interest of deposits, the same was send /communicated to complainant on 15/09/2004.  The said notice was sent to all customers including the complainant.  The notice to the complainant was returned with the endorsement “addressee not known at Thovarayar”.  In the above notice it was well informed that the bank will give interest at the rate of 14% till 30/09/2004 and from 01/10/2004 the maximum interest rate prevailing in the market will be given to the complainant.  Complainant continued the deposit with the opposite party.  Again on 26/11/2021 this was intimated to complainant vide a registered letter.  Urban Banks Department of RBI vide its letter No.BSD.I.28/12.05.01/2001-2002 dated 31/01/2002 specifically directs the opposite party to reduce the cost of funds by raising the percentage of low cost of deposits in this deposit mix and by aligning the interest rate in tune with the market rates.  It is also advised that “Urban Co-Operative Banks are therefore advised to review their interest rate structure on term deposits of different maturities and take appropriate action to make them comparable with the rates offered by commercial banks”.  Similarly in letter No.UBD(T) No.130/12.40478/2004 dated 10/07/2004 along with the inspection report.  

 

(Cont....4)

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It was specifically pointed out in paragraphs 3.2 as  follows.  “The deposit rates offered by the bank were revised on two occasions during the period under review.  The rates of interest on various deposits in vogue, as on the date of inspection, ranged from a minimum of 6% for deposits of 15 days to 29 days and maximum of 10% for deposits of above 3 years which was considered as very high compared to the prevailing market rates.  Bank should take immediate steps to reduce the interest rates offered for term deposits so that they are comparable with the rates offered by commercial banks.  The bank was paying interest at 4% on saving bank deposits as against 3.5% as per RBI’s directives”.  The charge in the interest rates were made as per the strict direction of RBI.  Opposite party is duty bound to obey the above directions of RBI and was forced to decrease the interest rates.  So this cannot be called as “illegal banking trade practice”.

4 . The statements in the 5^th and 6^th paragraph are baseless and hence denied.  Opposite party has acted only as per law.  Opposite party cannot be held liable for obeying the law of the land and has not caused any mental agony to the complainant.  The allegation of defamation do not have relevancy in this case.  It is also false that when the complainant demanded for maturity value, opposite party threatened the complainant to approach the court which is added only for the sake of the case.

5 . The complainant is not entitled for any interest after the maturity date as stated in 7^th paragraph as the eligibility ceases on the date of maturity.

6 . Complainant does not have any cause of action against this opposite party.  No deficiency can be alleged against this opposite party in this regard at any point of time and the reliefs sort are not real and liable to be dismissed complainant is not entitled for any reliefs as prayed.  

 

(Cont....5)

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 7 .  According to opposite party, this case is not maintainable either in law or on facts.  Hence this complaint may be dismissed with cost of this opposite party.

After filing written version, this case was posted for complainant’s evidence.  Complainant has filed proof affidavit.  He was examined as PW1.  Ext.P1 to P3 series 2 in numbers were marked.  Opposite party has also tendered evidence.  Proof affidavit was filed and RW1 was examined.  Exts R1 to R7 series 2 in numbers were marked.  Evidence closed and heard the counsels for both parties and thereafter it was taken for orders.  Now, the points which arise for consideration are:-

(  a ) Whether there is any deficiency in service on the part of opposite party?

(  b  ) If so, what reliefs the complainant is entitled to?

Points are considered together

We have perused the proof affidavit and documents which were marked.  Ext.P2 is the original of golden deposit receipt dated 06/11/2001 which was issued from opposite party.  As per this document, Rs.6,380/- was deposited for 20 years and it is clearly mentioned that the maturity value   Rs.1 Lakh and maturity date 06/11/2021.  In this receipt, nothing was mentioned about either the rate of interest or it would be changed as per direction from RBI.  Complainant has invested this amount as per this golden deposit scheme launched from opposite party.  This is a contract between complainant and opposite party.  Therefore, opposite party cannot take a decision unilaterally to make any changes in it.   Opposite party relies on the circular  of  RBI  dated  31/01/2002  and  thereafter  the  inspection  report

 

(Cont....6)

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 prepared by RBI which was specifically directed to bank that the deposit rate offered by them should be revised.  A letter dated 10/07/2004 and copy of inspection report were marked as Ext.R2 series 2 in numbers.  As per this Ext.R2(a) document, it is seen that RBI has directed the opposite party bank to take immediate steps to reduce the interest rate offered by  bank for term deposits.  Also, it was directed that month wise profile of its liability towards term deposits should be maintained and made use of as a tool for planning its lending, funds management etc, but it was not maintained by the bank.  From the above said direction of RBI, it can be understood that the opposite party bank had received deposit from customers without assessing their financial liability and assets.  This is not a justifiable act.  If the bank has received deposits which offered high interest rate without checking their financial position, customers don’t need to put up with it.  Since it is a contract between the bank and complainant, it should be agreed and signed by both parties to make any changes in this deposit scheme. Otherwise, contractual terms should be followed.  In this case, as per the direction of RBI, eventhough opposite party has sent communication letter to complainant, it was returned with the endorsement “addressee not known”.  Therefore, complainant was not informed about the aforesaid directions from RBI.  So, the alleged deposit scheme was continued with opposite party bank.  It is not evident that complainant has agreed to make any changes either regarding the interest rate or any other conditions in his deposit as per this deposit scheme.  In a mutually executed contract, opposite party bank cannot take a decision unilaterally to make any changes in it.  Moreover, RBI has not compulsorily directed the opposite party bank  to reduce the interest rate, it was only directed that immediate steps should be taken for reducing the rate of interest offered for term deposits.  This does not mean that rate of interest should be reduced without consent from depositors.   Circular and directions of RBI can

 

(Cont....7)

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only have prospective effect.  To make these applicable, to existing deposits,  Bank should have express consent from depositors.  It does not matter whether registered notice was served or not served.  Depositors are not bound by these circulars or directions which were not there at the time when deposits were made.  We also notice that bank has not sought for clarification from RBI with regard to deposits received for higher rates of interest. In this case, nothing about the rate of interest  also was mentioned in Ext.P2 deposit receipt.  Maturity value and date were only mentioned in it.  Hence, we are of considered view that this is not applicable for complainant’s case.  Here, the opposite party bank has not tendered evidence to show that whether it is applicable for the depositors which were joined before the date of inspection.  Moreover, in the circular, it is not mentioned that there would be retrospective effect.  In this case, complainant has deposited the amount for 20 years by the promise of opposite party bank.  Hence, opposite party has liability to give the maturity amount which was offered in the golden deposit receipt to complainant.  This amount remaining unpaid on and after the maturity date points at deficiency in service on the part of opposite party bank.  Points are answered accordingly.

Complaint is allowed in part as hereunder.

1 . Opposite party is directed to pay Rs.1 Lakh as the maturity value along with 12% interest from 06/11/2021 which was the maturity date till the date of realization to complainant.

2 . Opposite party is also directed to pay Rs.15,000/- as compensation and Rs.5000/- as cost of litigation to complainant within 45 days from the

 

(Cont....8)

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date of receipt of this order, failing which the compensation amount shall carry 12% per annum from the date of order till realisation.

In the result, complaint is allowed in part as mentioned above.

Parties shall take back extra copies without delay.

Pronounced by this Commission on this the 2^nd day of June 2023.

                                                                                                                                                                                                                            

                                                                                             Sd/-                                                                

                                                                        SMT.ASAMOL P., MEMBER

                                                                                             Sd/-

                                                                   SRI.C.SURESHKUMAR, PRESIDENT

                                                                                             Sd/-

                                                                           SRI.AMPADY K.S., MEMBER

 

 

 

APPENDIX

Depositions :

On the side of the Complainant :

PW1 - Johnson

On the side of the Opposite Party :

RW1- Muraleedharan T.

Exhibits :

On the side of the Complainant :

Ext.P1  -  General Power of Attorney

Ext.P2  -  The Kattappana Urban Co-Operative  Bank Ltd.,

                 Golden Deposit Receipt dated 06/11/2001.

Ext.P3  -  Copy of letter and receipt from complaint to opposite party

                 dated 20/11/2021

 

 

 

 

 

 

(Cont....9)

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On the side of the Opposite Party :

Ext.R1               - Interest Rates on Deposits offered by Urban Co-Operative  

                            Bank  (UCBs) dated 31/01/2002.

Ext.R2(series)  -  Inspection under section 35 of the Banking Regulation

                            Act, 1949 (AACS) – Position as on 31^st March 2004.

Ext.R3              -  Copy of notice Kattappana Urban Co-Operative Bank,

                             Kattappana dated 15/09/2004

Ext.R4(series)  - Copy of letter and receipt from opposite party to

                           complainant dated 26/11/2021.

Ext.R5             - Jeevan Suraksha Deposit  Receipt from Kattappana Urban

                          Co-Operative Bank, Kattappana dated 03/04/2020

Ext.R6             - Copy of Minutes of the Board Meeting

Ext.R7             - Letter and receipt from  opposite party to complainant

                           dated 26/11/2021.

 

 

                                                                                                    Forwarded by Order  

 

 

                                                                                        ASSISTANT REGISTRAR