JUSTICE DEEPA SHARMA, PRESIDING MEMBER

          The present Appeal has been filed against the order of the State Commission dated 27.05.2014 in Consumer Complaint No. 30 of 2004. 

2.       The respondent (herein referred to as complainant) had filed a complaint claiming following reliefs:

“a.      The Opposite Party be directed to pay a sum of Rs.46,04,657 along with an interest of Rs.45,69,534/- on 46,04,657/-.

b.       The opposite party be directed to pay interest @ 18% per annum on the above amount.

c.       The opposite party be directed to pay a sum of Rs.5,00,000/- for mental pain and agony.

d.       The opposite party be directed to pay Rs.50,000/- towards cost of the consumer complaint.

e.       Any other relief that this Commission thinks fit to be granted under the facts and circumstances of the case.”

3.       The brief admitted facts of the case are that complainant had opened an account with the Appellant and had been depositing the funds in the term deposits since 1989.  It is contended that the Appellant had paid quarterly compounded interest on some FDRs of the complainant which  had matured during the period 1995 to 1998.  It was alleged that in 1999, while making an inquiry about the renewal proceeds of the term deposit no. 408691 dated 29.01.1995, which was sent to the bank for renewal on 23.03.1999, the complainant found out that only the simple interest was paid on the said FDR for the entire period of investment.  He was informed on inquiry that since it was SDR, the compounded interest could not be paid on such deposits.  He has contended that he suffered a loss of Rs.46,04,657/- and Rs.14,94,579/- which has accrued to him towards interest on 31.07.2021.  He lodged a complaint with the Ombudsman on 16.04.2011 which was decided on 04.06.2013 but the opposite party did not comply with the order of the Ombudsman.  He made a representation to the Bank which was not considered by the Appellant.   Thereafter, he filed  his complaint before the State Commission on 04.11.2014. 

4.       The complaint had been contested by the opposite party. The stand of the opposite party had been that they had paid interest on the deposits as per the bank norms, rules and regulations.  It was also contended that complainant had been paid more than what he deserved in connivance with the employees of the bank or due to non awareness of the bank employees regarding rules and regulation.  It was also contended that complaint was barred by limitation. 

5.       The parties led their evidences before the State Commission.  The written submissions were also filed and oral arguments were also addressed. The State Commission after hearing arguments of the parties, issued following directions:

“13.    Thus, for the reasons aforesaid, the consumer complaint is partly allowed.  The opposite party is directed to re-calculated the interest on all the FDs as per directions given above and will pay the interest accordingly within 30 days from the date of this order.  Since, there is omission on the part of the complainant also, therefore, the complainant is not entitled to other reliefs like compensation for mental agony, litigation expenses etc.”

6        Aggrieved by these directions, the present Appeal has been filed by the Bank.  It is alleged that findings of the State Commission to the fact that complaint was not barred by limitation is illegal.  It is submitted that complaint is highly belated and was liable to be dismissed.  It is further argued that directions are in violation of the rules and regulation of the RBI.  It is also submitted that directions of Ombudsman were not followed because those were in violation of the RBI rules and regulation.  On these contentions, it is submitted that present Appeal is liable to be dismissed.

7.       Written submissions have been filed by the parties. 

8.       I have perused the written submissions and also heard the oral arguments of the learned counsel for the parties.

9.       The State Commission has dealt with the contentions of the Bank regarding complaint being barred by limitation and has contended that since the complainant had raised the dispute before the Ombudsman and matter was pending before the Ombudsman, there was no occasion for the complainant to file the complaint before the State Commission.  It has held as under:

“8.      We went through all the details submitted by the complainant. So far as the issue of limitation is concerned, the dispute was under consideration of the Banking Ombudsman, who passed its order on 04.06.2003. Therefore, the complainant had no reason to file a consumer complaint simultaneously before this Commission. The learned counsel for the opposite party, while challenging the maintainability of the consumer complaint, has relied upon Delhi State Consumer Disputes Redressal Commission’s decision and Punjab State Consumer Disputes Redressal Commission’s decision in the case of ZamshedAlam Khan vs Regency Industries Ltd., &Ors., - III (2011) CPJ 389 and KamleshKumari and Anr. vs Union of India and Ors., - II (20010 CPJ 427, but the facts of these cases are quite different from the facts of the instant case. In these cases, the matter was not pending before the Banking Ombudsman. In the light of a judgment of the Hon’ble Supreme Court in the case of Laxmi Engineering Works vs PSG Industrial Institute – (1995) 3 SCC 583, the period spent in Banking Ombudsman’s proceedings shall be excluded for the purpose of counting the limitation period. Therefore, the consumer complaint is not liable to be dismissed on the ground of limitation.”

10.     It is not disputed that complainant had been pursuing the complaint before the Ombudsman and Ombudsman had decided the complaint in favour of the complainant.  The complaint was filed only when the Bank had refused to follow the directions of Ombudsman.  In light of these facts, it is apparent that under the Banking Rules and Regulations, the remedy available to the complainant for redressal of his grievance against the Bank was availed by him by filing a complaint before the Ombudsman.  The cause of action to file the complaint arose only when the bank refused to follow the directions of the Ombudsman.

          I found no illegality or infirmity in the findings of the State Commission to the effect that complaint was not barred by limitation.

11.     The next argument of the learned counsel for the Appellant is that directions of the State Commission is contrary to the RBI Rules and Regulation and the State Commission has failed to consider that complainant had been over paid and some money is due towards him which he needs to refund.  From the perusal of the State Commission’s record, it is apparent that the State Commission has adopted the findings and the reasoning of the Ombudsman and has held as under:

“11.    Keeping in view the method of computation  normally followed by the bank in such cases, the Banking Ombudsman suggested the following methods to sort out the issued:

Category No. (1)             The interest rate applicable on the date of deposit for the period upto date of payment with quarterly compounding.

Category No. (II)             The indicated rate of interest to be paid for the period to which this rate corresponds. For the remaining period, interest @ prevalent on the date of maturity of such period be paid upto the date of payment of the FD.

Category No.(III)             In respect of FD of Rs.1.75 crore No.408691, 9% interest which was originally mentioned on the FDR be paid from the date of initial deposit of 1 year and thereafter at the rate prevailing on the date of maturity (28.01.96) upto the date of payment.

Category No.(IV)             The difference between simple & compound interest will be paid upto 30^th September 1999. For the remaining period interest will be paid at the rate on the date of issue of the FD ( Rate will not be reduced)

12.     The opposite party did not comply with the said directions issued by the Banking Ombudsman on the ground that it was beyond its jurisdiction but the opposite party has not averred anywhere that the parties had not mutually agreed on the issues, as indicated by the Banking Ombudsman.  Therefore, we are of the view that the suggested methods are the only solution to settle the dispute.”

 12.    From the above  perusal and from the report of the Ombudsman, it is clear that Ombudsman had categorised the FDRs of the complainant in four categories :

13.     Learned counsel for the Appellant has not disputed that categorisation of the FDR in any away is incorrect .  It is also not disputed that interest is payable quarterly on the FDRS.  The Ombudsman had issued directions to the Bank to do the needful category wise and the same methodology has been adopted by the State Commission while disposing of the complaint. Counsel for the Appellant has failed to point out that there is anything wrong in the direction issued by the State Commission whereby it  had directed the interest to be paid from the date of deposit for the period upto date of payment with quarterly compounding in respect of FDs of category (i), in FDs where  neither the interest rate nor period of deposit is mentioned,   the directions to pay the interest at the rate prevalent on the date of deposit, it is not shown if such direction is in any way is violative of RBI guidelines.    In the case of FDs falling in category (ii) where  interest rate is mentioned on the FDs but maturity period is not mentioned on the FDs and the directions   in respect of FDs given in category (iii) which are of 1.75 crore to pay 9% interest which was originally mentioned on the FDR from the date of initial deposit for one year and thereafter to pay interest @ prevalent on the date of maturity upto the date of payment, learned Counsel has failed to point out that it in any way such directions violates the RBI rules and regulations.  In regard to FD receipts ( IPRQs), where it was found that these IRPQs were initially issued for 5 years but w,e.f. 01.10.1999, the bank had changed the interest rate after change in mode of payment of interest, the direction of State Commission to pay the difference between simple and compound interest upto 30.09.19999, the learned counsel has failed to show is in violation of RBI rules and regulations specially when it is not disputed that as per rules, interest on FDs has to be calculated quarterly.

14.     In view of the above, there exists no illegality and infirmity in the impugned order. The present Appeal  has not merits and same is dismissed.