Consumer Education & Research Centre

In a case (No.300 of 2001) filed by Consumer Education Research Society (CERS), Ahmedabad, and others, the National Consumer Disputes Redressal Commission, New Delhi, has decided a moot question about the interest payable to the complainant after the expiry of the period of fixed deposits.

Vijay Shamji Patel along with his wife, Amrutben Vijay Patel, both NRIs, having failed in their efforts, approached CERS through their Power of Attorney, H.K.Patel, about the payment of interest on the fixed deposits kept with Allahabad Bank, Kolkata.

The brief facts of the case are as follows:

(a) The Patels jointly deposited Rs. 40,40,404/- and Sterling Pounds 1,63,090/50 on 11 October 1993 with Allahabad Bank, Kolkata.

(b) The complainant approached the Bank after 11 months of the maturity date, asking for the maturity amount.

(c) The Bank offered to get it renewed to get interest, etc. But the complainant did not renew it and wanted the maturity amount with interest.

(d) By the time the maturity amount with interest could be given, all the books of accounts, including the ledger book relating to above fixed deposits, had been taken away by the CBI in connection with some investigation against the officers of Allahabad Bank who were dealing with foreign currency non-resident (FCNR) deposits.

(e) The books of accounts were returned in 1999 and immediately thereafter the entire amount was paid on two occasions i.e. on 7 October and 12 October 1999 with 5 per cent interest, while CERS submitted before the National Commission on behalf of the complainant that interest should be awarded at 9.5 percent per annum, i.e. the complainant be given interest on the unpaid amount of difference as interest from the date of demand till the date of realisation.

(f) After hearing both the parties, the Commission, deeming that the Bank had used that fund as if the fixed deposit had been renewed, passed the following order:

“Accordingly, it is ordered that the complainant shall be entitled to get the difference in the rate of interest between 5 per cent and the rate of interest on such deposits prevalent at the relevant time from the date of maturity till the date of payment after adjusting 5 percent interest already paid.

“The petition is disposed of accordingly.”

(g) The Allahabad Bank went in appeal before the Supreme Court, against the above order of the Commission but the appeal was dismissed on 8 September 2006.

(h) CERS issued notice for execution and, on its receipt by the bank, the complainant benefited by about Rs. 39 lakh in the form of difference of interest.

Date : 05/10/2006 Pritee Shah
Place: Ahmedabad Editor Insight-The Consumer Magazine