The Supreme Court observed that the complaint of the consumer in a dispute concerning the premature encashment of the joint fixed deposit by the bank in violation of the terms and conditions is admissible.
A person who avails himself of a bank service will fall under the definition of “consumer” within the meaning of the Consumer Protection Act.
“A person who avails himself of a bank service will fall under the definition of a “consumer” and it would be open to such a consumer to resort to the remedies provided by the Consumer Protection Act”, the bench comprising Judges DY Chandrachud and AS Bopanna observed
In this case, the plaintiff and his father had opened a joint FD at HDFC Bank. An amount of 75 Lakhs had been deposited jointly on behalf of the plaintiff and his father for a period of 145 days. The FD amount was credited to the complainant’s father’s account at the request of the father on 31 May 2016. In his complaint to the National Consumer Dispute Resolution Commission in Lucknow, the complainant argued that upon due of the FD, both the plaintiff and his father had jointly issued an instruction to the bank to renew it for a period of ten days and despite this, the amount was credited only to the father’s account. The SCDRC found that the dispute was mainly between the plaintiff and his father on the issue of the amount deposited in FD and that, therefore, only a civil court had jurisdiction to hear such a dispute. The NCDRC dismissed the appeal as withdrawn. The Complainant later filed a Request for Review stating on affidavit that he had not provided instructions to his attorney to request the withdrawal of the appeal. But the same was not amused.
On appeal, the Apex Court seat noted the relevant terms and conditions relating to the joint DF which read as follows: “In the event of early encashment, all signatories to the deposit must sign the encashment instruction .
“The respondent bank does not dispute that the appellant, as well as his father, opened a joint FD with the bank. A person who avails himself of a service of a bank will fall under the definition of “consumer”. under the law of 1986. Consequently, it would be open to such a consumer to have recourse to the remedies provided for by the law of 1986.“, observed the court.
The court noted that the essence of the complaint is that there was a deficiency on the part of the respondent bank in proceeding to credit the proceeds of a joint FD exclusively to his father’s account.
“The SCDRC should have determined whether the complaint related to a breach of service as defined by the 1986 Act. The SCDRC had no justification for relegating the appellant to pursue his claim in civil court. not, in the proceedings before the SCDRC, raise a claim against his father. Therefore, the SCDRC erred in inferring that there was a dispute between the appellant and his father. Assuming there was a dispute between the appellant and his father, this was not the subject of the consumer’s complaint. The complaint that there was a lack of service was against the bank.”, he added.
The court therefore ordered the NCDRC to decide the appeal on the merits.
Arun Bhatiya against HDFC Bank | 2022 LiveLaw (SC) 696 | AC 5204-5205 from 2022 | August 8, 2022 | Judges DY Chandrachud and AS Bopanna
Counsel: Adv Kushagra Pandey for the Appellant, Sr. Adv Arvind Nayar for the Respondents
Consumer Protection Act, 1986; Section 2(1)(d)(ii) – Consumer Complaint Alleging Premature Encashment of Joint Fixed Deposit by Bank in Violation of Terms and Conditions Stands – A Person Relying on a Service of a bank will fall within the scope of the definition of “consumer” under the 1986 Act. Accordingly, such a consumer would be entitled to seek the remedies provided by the 1986 Act. (Paragraph 19)
Click here to read/download the judgment