- (1.) THE complainant is a retired officer of a Public Sector Undertaking. His retirement benefits amounting to Rs. 8,38,931/ - were credited to the State Bank of India viz., the 1st opposite party on 4.10.1995 out of which a sum of Rs. 8,00,000/ - was later transferred to the Public Provident Fund (PPF) Account in the same branch. The PPF Account was subsequently transferred to the 2nd opposite party at Chennai. Another sum of Rs. 50,000/ - was added to the PPF Account on 3.2.1996. There was thus a sum of Rs. 8,50,000/ - with the opposite parties during the financial year 1995 -96. The 2nd opposite party informed the complainant that interest on the PPF will be remitted to the account for a total amount of Rs. 60,000/ - only. It is true that to avail tax benefit one can invest only upto Rs. 60,000/ -, but it does not mean that the person cannot invest more than Rs. 60,000/ -. The 2nd opposite party returned Rs. 7,90,000/ - without any interest. Thus there was failure on the part of the opposite parties to pay interest even at 15% p.a. for the sum of Rs. 7,90,000/ -. Hence the complaint as there was deficiency in service on the part of the opposite parties.
(2.) THE opposite parties contended that the amounts that were deposited in PPF Account are credited to the Government account and do not form part of the opposite parties deposits. As per rules, under the PPF account, the maximum limit of deposit is Rs. 60,000/ -. The excess deposit of the complainant over and above Rs. 60,000/ - is against the rules and, therefore, it was returned to the complainant without interest. The acceptance of the deposit over and above will not amount to deficiency in service. There was no inducement from the opposite parties to the complainant to make the deposit. The complainant is bound by the rules applicable to the PPF account. Hence, the opposite parties are not liable.
(3.) THE District Consumer Disputes Redressal Forum, Chennai (South) accepted the complaint and directed the opposite parties to pay to the complainant a sum of Rs. 55,932/ - and costs of Rs. 1,000/ - within one month. Aggrieved by the same, the present appeal is filed. It is not in doubt that a sum of Rs. 8,50,000/ - being the retirement benefits of the complainant was deposited with the opposite parties unde PPF account. No doubt, the rules of the PPF Account provide that the investments will qualify for 20% rebate upto Rs. 60,000/ - and this interest on Rs. 60,000/ - is tax -free. But the opposite parties accepted the deposits in spite of being aware of the fact that there was such a rule and instructions under PPF Account. Having received the deposit of Rs. 8,50,000/ -, they have offered to pay interest on Rs. 60,000/ - and return the balance of Rs. 7,90,000/ - without interest. Assuming that the deposit was made in ignorance of the rules, the opposite parties ought to have been aware of the rules and the necessary circulars issued by the authorities concerned in that regard. They ought to have then and there instructed the complainant about the position and if they had done, so then they would be free of any legal obligations, and would not have failed to discharge their duties and would not be giving room for the complaint of deficiency. The National Commission has observed in a case reported in Department of Posts and Telegraphs v. Dr. R.C. Saxena, 1997 1 CPR 74, where, contrary to Rule 4 of the Scheme of NSC, an account was opened. The National Commission held that the said Rules were only meant for administrative convenience of the Department and that there was no bar for payment of interest on an account opened by a depositor in ignorance of this Rule. Therefore, it would follow that the banks are liable to pay interest. Here, the deposit has been received by the Bank with open eyes knowing fully well the regulations of investment. They have received Rs. 7,90,000/ - on 4.10.1995 and the other sum of Rs. 50,000/ - on 3.2.1996. They had this amount with them till the date of payment. Therefore, equity and good concience requires that when the bankers receive money from public and retain them with them, they are bound to repay the same with interest, otherwise it would amount to malvestation. In a batch of appeals in A.P. Nos. 1458 to 1470/1995, this Commission took the view that since the deposits were in the nature of voluntary payment having been made without inducement by the parties concerned, there is no obligation on the Bank to pay interest and failure to pay interest on the amount will not constitute deficiency in service on the part of the Bank. This view was, of course, confirmed by the National Commission in R.P. Nos. 625 to 637 of 1995. Though the view has been confirmed by the National Commission, we are constrained to take a different view for the following reasons. That in the brochure issued by the Directorate of Small Savings which has invited public to invest in 15 -Year PPF Scheme, it is clearly stated that deposits upto Rs. 50,000/ - will qualify for deduction of income tax under Section 88 of the Income Tax Act and the balance will be held in PPF account absolutely free from tax. It is also provided under the head "Tax Benefit as below: "........A subscriber is permitted to invest a maximum of Rs. 60,000/ - in a Public Provident Fund account of which Rs. 50,000/ - will qualify for deduction from Income Tax under Section 88 of Income Tax Act. Even if a subscriber deposits more amount than required for income tax purposes, his deposit will earn him a tax free interest at fabulous rate of 12% p.a. which is highest TAX FREE rate of interest." Therfore, the brochur issued by the Department clearly says that even if the deposit is made in excess, the person will be entitled to interest at the rate of 12% p.a. The opposite parties have not produced the circular or regulation or rule, as the case may be, issued in that regard by either the Government of India, Finance Department or the Income Tax Department or the Reserve Bank of India. Only if all these documents are produced, we can find out whether a deposit only upto a certain amount can be made and whether the excess has to be returned by the Bank and in case of excess amount deposited, if there is any liablity on the Bank to pay interest thereon. But here in this case, the Bank had the amount in PPF scheme of the complainant in a sum of Rs. 7,90,000/ - from October, 1995 onwards. Another sum of Rs. 50,000/ - was received in February, 1996. Leaving alone the later amount received, at least when a sum of Rs. 7,90,000/ - was received and if it was in the opinion of the Bank authorities contrary to any circular, regulations or rule, they ought to have immediately returned the same intimating the depositor of the same. Further, as pointed out already, there is no rule or guidelines produced to show that there is any upper limit for investment. Only for the purpose of tax benefits, a minimum is provided for without specifying any ceiling limit. Only if the subscriber wants to claim or qualify for reduction of Income Tax, then the question of maximum investment prescribed would come into play. But where the subscriber is making deposit not for the propose of income tax benefits but as a sort of sound investment, as it is, the rules do not provide for or prescribe any upper limit of ceiling, and on the other hand the brochure shows that even if the subscriber deposits more amount than required for income tax purposes, the deposit would get him tax -free interest. Therefore, in such circumstances, we are of the view that the view taken by the District Forum is perfectly sound. The opposite parties have retained such a huge sum of Rs. 7,90,000/ - with them for nearly a year and returned it without interest to the party, which is definitely an unjustified act. The Banks entrusted with the monies of the public are in the position of a bailee and they have to function with care and caution that is expected of a bailee in taking care of the funds given to them. They simply cannot say that the deposit was received contrary to any rule or regulation and deny to pay the interest upon the same. Even if the complainant had been ignorant, the Bank aurthorities ought to have been more vigilant when such a huge deposit was received by them. In such circumstances, we have no hesitation in holding that the order of the District Forum is in keeping with the norms of natural justice, equity and good conscience. The Banking authorities have gone against the professional ethics in denying the interest which the complainant is legitimately entitled to.;