Person Availing Bank's Service "Consumer"; Consumer Complaint Maintainable Over Dispute On Encashment Of FD : Supreme Court

The Supreme Court has observed that the consumer complaint in a dispute regarding premature encashment of Joint Fixed Deposit by bank in contravention of the terms and conditions is maintainable.

A person who avails of any service from a bank will fall under the purview of the definition of a 'consumer' within the meaning of the Consumer Protection Act.

"A person who avails of any service from a bank will fall under the purview of the definition of a 'consumer' and it would be open to such a consumer to seek recourse to the remedies provided under the Consumer Protection Act", the bench comprising Justices DY Chandrachud and AS Bopanna observed 

In this case, the complainant and his father had opened a joint FD in HDFC Bank. An amount of 75 Lakhs had been deposited jointly in the name of the complainant and his father for a period of 145 days. The FD amount was credited to the account of complainant's father on the request made by the father on 31 May 2016. In his complaint before the State Consumer Disputes Redressal Commission at Lucknow, the complainant contended that upon the maturity of the FD, both the complainant and his father had jointly issued a direction to the bank for renewing it for a period of ten days and despite this the amount was credited solely into the account of the father. The SCDRC held that the dispute was primarily between the complainant and his father on the issue of the FD amount deposited, and therefore only a civil court was competent to deal with such a dispute. The NCDRC dismissed the appeal as withdrawn. Later, the complainant filed a review application stating on affidavit that he had not furnished instructions to his counsel to apply for withdrawal of the appeal. But the same was not entertained.

In appeal, the Apex Court bench noted the the relevant terms and conditions relating to the joint FD which read as follows: "In the case of premature encashment, all signatories to the deposit must sign the encashment instruction.

"The respondent bank does not dispute that the appellant, along with his father, opened a joint FD with the bank. A person who avails of any service from a bank will fall under the purview of the definition of a 'consumer' under the 1986 Act. As a consequence, it would be open to such a consumer to seek recourse to the remedies provided under the 1986 Act.", the court observed.

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 the account of his father. 

"The SCDRC ought to have determined whether the complaint related to deficiency of service as defined under the 1986 Act. The SCDRC had no justification to relegate the appellant to pursue his claim before a civil court. The appellant did not, in the proceedings before the SCDRC, raise any claim against his father. Therefore, the SCDRC was wrong deducing that there was dispute between appellant and his father. Assuming that there was a dispute between the appellant and his father, that was not the subject matter of the consumer complaint. The complaint that there was a deficiency of service was against the bank.", it added.

The court therefore directed the NCDRC to dispose the appeal on merits.

Case details

Arun Bhatiya vs HDFC Bank | 2022 LiveLaw (SC) 696 | CA 5204-5205 of 2022 | 8 August 2022 | Justices DY Chandrachud and AS Bopanna

Counsel: Adv Kushagra Pandey for appellant, Sr. Adv Arvind Nayar for respondents

Headnotes

Consumer Protection Act, 1986 ; Section 2(1)(d)(ii) - Consumer complaint alleging premature encashment of Joint Fixed Deposit by bank in contravention of the terms and conditions is maintainable - A person who avails of any service from a bank will fall under the purview of the definition of a 'consumer' under the 1986 Act. As a consequence, it would be open to such a consumer to seek recourse to the remedies provided under the 1986 Act. (Para 19)

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