Consumer Complaint Maintainable over Dispute on Encashment of Bank FD: Supreme Court
Moneylife Digital Team 23 August 2022
A person availing any service from a bank will fall under the purview of the definition of a 'consumer' within the meaning of the Consumer Protection Act, the Supreme Court says.
 
While setting aside two orders passed by the national consumer disputes redressal commission (NCDRC), the apex court asked NCDRC to resolve the dispute on merit within four months. 
 
In an order, the bench of justice DY Chandrachud and justice AS Bopanna says, "Since the consumer complaint was instituted before the State Consumer Disputes Redressal Commission (SCDRC) (at Lucknow) in 2016, the entirety of the dispute shall be resolved on merits by the NCDRC. Save and except for holding that the consumer complaint is maintainable, no observation has been made by this Court on the merits of the rival contentions."
 
The bench also observed that NCDRC failed to hear a review application filed by the appellant. "The appellant instituted an application for review before the NCDRC categorically stating on affidavit that he had not furnished instructions to his counsel to apply for withdrawal of the appeal. In this view of the matter, the NCDRC ought to have entertained the review and should have set down the appeal for hearing," it says.
 
The SC also noted that there was a 'manifest error' on the part of the SCDRC in declining to entertain the consumer complaint on merits. It says, "The essence of the complaint of the appellant is that there was a deficiency on the part of the respondent bank in proceeding to credit the proceeds of a joint fixed deposit (FD) exclusively to the account of his father. The SCDRC ought to have determined whether the complaint related to deficiency of service as defined under the 1986 Act. The SCDRC had no justification to relegate the appellant to pursue his claim before a civil court." 
 
"The appellant did not, in the proceedings before the SCDRC, raise any claim against his father. Therefore, the SCDRC was wrong in deducing that there was a dispute between the appellant and his father. Assuming that there was a dispute between the appellant and his father, that was not the subject matter of the consumer complaint. The complaint that there was a deficiency of service was against the bank," the apex court says. 
 
The case related to a joint FD opened on 7 January 2016 by Arun Bhatiya with his father in HDFC Bank. The joint FD was for Rs75 lakh for 145 days with an interest of 7.5% per annum (pa). On 31 May 2016, Arun Bhatiya says he and his father jointly gave written instruction to HDFC Bank to renew the joint FD for 10 more days while retaining the joint mode of operation.
 
On 2 June 2016, the senior Mr Bhatiya went to Adajan, Surat branch of HDFC Bank to submit a request for encashment of the entire FD amount of Rs77 lakh to his individual saving account at Agra. When Arun Bhatiya came to know about this, he wrote to HDFC Bank, asking them not to transfer the FD amount to an individual bank account. 
 
However, contrary to his instructions, the proceeds of the FD were credited to the father's account. On 4 June 2016, Arun Bhatiya received an email from HDFC Bank stating that they had credited Rs77 lakh to his account. However, he alleged that no such amount was credited to his bank account.
 
Citing deficiency on the part of HDFC Bank, he filed a consumer complaint before the Uttar Pradesh SCDRC at Lucknow. However, on 24 October 2018, the state forum declined to entertain his complaint, stating that "the dispute essentially was between the appellant and his father and did not fulfil the description of a consumer dispute."
 
SCDRC was of the view that the dispute was primarily between Mr Bhatiya and his father on the issue of the FD amount deposited and, therefore, only a civil court was competent to deal with such a dispute.  
 
However, the bench of justice Chandrachud and justice Bopanna pointed out that SCDRC ought to have determined whether the complaint is related to deficiency of service as defined under the Act. 
 
"The SCDRC had no justification to relegate the appellant to pursue his claim before a civil court. The appellant did not, in the proceedings before the SCDRC, raise any claim against his father. Therefore, the SCDRC was wrong deducing that there was a dispute between the appellant and his father," it says. 
 
When SCDRC declined to entertain his complaint, Mr Bhatiya filed an appeal before NCDRC. However, while disposing of the appeal on 7 May 2019, the national commission stated, "After some arguments, counsel for the appellant, upon instructions, seeks to withdraw the present appeal, with liberty to approach the appropriate Forum. Accordingly, this appeal is dismissed as withdrawn with liberty to the appellant to approach the appropriate Forum."
 
Mr Bhatiya then filed a review application before NCDRC, along with an affidavit stating that he was present before the national commission and had not given any instructions to his counsel to withdraw the appeal. He also alleged that the previous counsel had only provided a truncated copy of the FD document without the reverse, which contained the terms and conditions of the FD. However, his application for review was rejected by NCDRC on 25 July 2019. 
 
He then approached the Supreme Court which directed NCDRC to resolve the dispute on merits within four months.
Comments
smehra
3 months ago
whats the fate of fdr depositors in unitech ltd since 212 since company defaulted in 2012, please inform latest deveopment i positive if any
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