NCDRC Holds Bank Of Baroda Liable For Deficiency In Service Due To Failure To Inform Joint Account Holder Before Releasing FDR

Brief Facts of the Case

The complainant invested in fixed deposit schemes with Bank of Baroda, and the maturity amounts totaled Rs. 13,93,859, Rs. 8,71,649, and Rs. 4,10,066. He claimed the funds were from his own sources and belonged solely to him, though the investments were made in joint names with his wife because he lived in Spain. After their relationship soured and she lodged a criminal complaint, the complainant feared she might withdraw the funds. He requested the bank to change the operation instructions to require joint signatures. Despite his letters, the bank released the fixed deposits to his wife. The complainant alleged this was a deficiency in service and filed a complaint with the State Commission of Rajasthan, seeking compensation of Rs. 33,30,574 with 24% interest. The State Commission partially allowed the complaint and directed the bank to pay a sum of Rs. 1 lakh to the complainant towards compensation for mental agony and harassment. Dissatisfied, the complainant appealed before the National Commission.

Contentions of the Bank

The bank argued that it had informed the complainant that any changes to the account's operational instructions required signatures from both account holders. It explained that the operational and payment instructions couldn't be altered without a written request signed by all account signatories. The bank stated that payments were made through banker's cheques based on the account holder's written instructions, as shown on the Fixed Deposit Receipts (FDR). It maintained that it followed legal provisions and banking norms, making payments in good faith and without negligence under the “Either or Survivor” instructions, and there was no deficiency in its service.

Observations by the National Commission

The National Commission observed that the FDRs were jointly opened with 'either or survivor' instructions, and it was undisputed that the complainant had informed the bank through letters that the FDRs should not be released to his wife and that the operational instructions should be changed to require joint signatories. This request was reiterated by a legal notice, and the bank had responded, confirming that the instructions had been modified and the FDRs would not be released without signatures from both account holders. The commission held that once the bank was aware of one joint holder's request to restrict unilateral withdrawal, it was the bank's responsibility to inform the other joint holder if the other party sought to discharge the FDRs. Despite the original 'either or survivor' instructions, the bank was obligated to notify both joint holders after receiving the complainant's request. By failing to do so, the bank committed a clear deficiency in service. The commission further noted that once the bank had confirmed to the complainant that the request was accepted, it was required to obtain consent from both joint holders before releasing the FDRs. Regarding the complainant's claim that the money in the FDRs was earned by him and deposited in the joint account with his wife, the commission agreed with the State Commission's ruling that such matters of ownership were beyond the jurisdiction of the consumer forum. The commission found no error in the State Commission's decision and upheld it, dismissing the appeal.

Case Title: Kamal Kumar Sajnani Vs. Branch Manager, Bank Of Baroda

Case Number: F.A.No. 234/2017

Click Here To Read/Download Order