Consumer Protection Act: Bank Held Liable for Neglect of Fixed Deposit.
25 November 2024
Civil Revision >> Civil & Consumer Law | Consumer Protection Act >> Consumer Rights
A recent ruling by the National Consumer Disputes Redressal Commission (NCDRC) has upheld the orders of the State Consumer Disputes Redressal Commission, Rajasthan, and the District Consumer Disputes Redressal Forum, Sikar, in a case involving the Bank of Baroda's (OP Bank) handling of matured fixed deposit receipts (FDRs). The decision highlights the bank's responsibility to handle matured deposits diligently, even in the absence of explicit renewal requests from the customer.
Background:
The complainant had deposited funds in two FDRs with the OP Bank in 1985, with a maturity period of five years. The complainant argued that he was assured of automatic renewal of the FDRs upon maturity. When he approached the bank for withdrawal years later, he was met with claims of untraceable records and delays. The OP Bank, on the other hand, contended that the FDRs were not renewed due to the absence of a renewal request and that they were prepared to pay interest at the savings bank rate as directed by the Banking Ombudsman.
Lower Forum Rulings:
The District Forum ruled in favor of the complainant, directing the OP Bank to pay the principal and interest on the FDRs at the rates applicable from time to time, along with compensation for mental agony and litigation expenses. The State Commission upheld this decision, emphasizing the bank's obligation to inform the customer of policy changes and to remit the matured amount, even if the customer failed to claim it.
NCDRC Decision:
The OP Bank filed a Revision Petition before the NCDRC, arguing that they were not obligated to auto-renew the FDRs in the 1990s and that the complainant's delay in claiming the funds warranted only savings bank interest. However, the NCDRC dismissed the petition, affirming the concurrent findings of the lower fora.
The NCDRC emphasized the limited scope of its revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986. Citing Supreme Court precedents, the commission reiterated that it should only intervene in cases of jurisdictional error, illegality, or material irregularity. The NCDRC found no such errors in the orders of the State Commission and the District Forum.
Key Legal Principles:
The NCDRC's decision underscores the following legal principles:
Limited Revisional Jurisdiction: The NCDRC's power to intervene in lower forum decisions is restricted to cases of jurisdictional errors or material irregularities.
Bank's Duty of Care: Banks have a responsibility to handle matured deposits diligently, even in the absence of explicit renewal requests.
Customer Communication: Banks are obligated to inform customers of changes in banking policies.
Concurrent Findings: The NCDRC should not interfere with concurrent findings of fact by lower fora, based on evidence on record.
Negligence cannot be benefitted from: The OP bank cannot benefit from its own negligence.
Conclusion:
The NCDRC's ruling serves as a reminder to banks of their duty of care in handling customer deposits. It reinforces the importance of clear communication and diligent record-keeping. The dismissal of the Revision Petition highlights the limited scope of revisional jurisdiction and the deference given to concurrent findings of lower fora.
Section 21, Consumer Protection Act - 1986