JITENDRA KUMAR GUPTA Vs. ALLAHABAD BANK

JUDGEMENT

(1.) PETITIONER has filed this petition and claimed certain directions in the matter of renewal of a fixed deposit receipts of the petitioner and payment of interest thereof.

(2.) PETITIONER alongwith one Ambika deposited a sum of Rs. 5,000/- in fixed deposit with respondent Bank on 27.7.1989 for a period of 60 months. The aforesaid deposit was to mature on 27.7.1994 and as per the rate of interest applicable at the time of deposit, petitioner was to receive 10% interest on the deposit. However, even though the fixed deposit matured on 27.7.1994 petitioner did not present it for renewal. It was presented by the petitioner for renewal only on 2.11.2002 and, therefore, respondent Bank granted interest to the petitioner as per the circular Annexure P-3 dated 7.6.2001 clarified vide Annexure P-4 dated 18.9.2001. It is the case of the petitioner that once the amount was deposited and the interest payable on the deposit was 10% per annum, petitioner is entitled to renewal of the deposit for a further period of 5 years as per the interest rate prevailing at the time of deposit and the circular dated 7.6.2001 cannot be retrospectively applied to the deposit made in 1989. Inter alia contending that the circulars Anexure P-3 and P-4 will not apply in the case of the petitioner, petitioner wants a direction to be issued to the respondent that interest on the renewed deposit be granted at the rate that was prevailing prior to 7.6.2001.

(3.) HAVING heard learned counsel for the parties and on perusal of records it is clear that deposit made by the petitioner on 27.7.1989 matured on 27.7.1994. After maturity petitioner did not place the F.D.R. for renewal immediately but presented it for renewal only after 7 years on 2.11.2001. On 2.11.2001 when the F.D.R. was presented for renewal the terms and conditions for renewal of over due deposits and the rate of interest to be paid as contained in Annexure P-3 dated 7.6.2001 and clarified vide Annexure P-4 on 18.9.2001 had come into force. That being so, renewal of the petitioners over due deposit has been made by the Bank strictly in accordance with these circulars. From the perusal of the circular it is clear that the basis for renewal is not the date of maturity of the F.D.R. but it is the date on which the F.D.R. is presented for renewal. The Bank is required to pay interest in accordance with the (old rates applicable only if the F.D.R. is presented for renewal within the stipulated period, but in this case it was presented on 2.11.2001 when the circulars Annexure P-3 and P-4 had come into force and that being so respondents have rightly taken action for granting interest to the petitioner based on the date of presentation of the F.D.R. for renewal.