Arun Bhatiya v. HDFC Bank.2022

Facts

• The appellant, Arun Bhatiya, and his father jointly held a Fixed Deposit (FD) of INR 77 lakhs with HDFC Bank.
• On 1 June 2016, the appellant’s father requested the encashment of the FD to his individual savings account in Agra.
• On 3 June 2016, the appellant instructed the bank not to transfer the FD amount to any individual account.
• Despite this, the bank credited the FD proceeds to the appellant’s father’s account.
• On 4 June 2016, the bank informed the appellant that the amount had been credited to his account, which was incorrect.
• The appellant filed a consumer complaint against the bank, alleging deficiency of service.

Issue

The appellant challenged two orders by the National Consumer Disputes Redressal Commission (NCDRC):

1. First Order (7 May 2019) – NCDRC dismissed the appeal as withdrawn, allowing the appellant to approach another forum.
2. Second Order (25 July 2019) – NCDRC rejected the review application.

The core dispute was whether the bank acted improperly by encashing a joint FD based on a unilateral request from the appellant’s father.

Legal Arguments

Petitioner’s Argument

• The FD was jointly held, and the bank should not have entertained a unilateral request from his father.
• The bank’s action was in contravention of his instructions and amounted to deficiency of service under the Consumer Protection Act, 1986.

Respondent’s Argument

• The bank claimed that the FD was redeemed based on representations made by the appellant regarding his father’s health and age.
• The bank argued that there was no deficiency of service and that the complaint was a private dispute between the appellant and his father.

Court Hearing & Judgment

Key Legal Provisions Considered

1. Consumer Definition (Section 2(1)(d)(ii)) – The appellant was a consumer, as he availed of banking services.
2. Deficiency Definition (Section 2(1)(g)) – The bank’s action was examined to determine if there was a failure in service.
3. Service Definition (Section 2(1)(o)) – Banking services fall under the Consumer Protection Act, 1986.

Lower Court Rulings

• State Consumer Disputes Redressal Commission (SCDRC) dismissed the complaint, ruling that the case was a family dispute, not a consumer complaint.
• National Consumer Disputes Redressal Commission (NCDRC) dismissed the appeal on 7 May 2019 and the review application on 25 July 2019.

Supreme Court’s Observations

• Error by SCDRC – The SCDRC wrongly dismissed the case as a family dispute instead of examining the bank’s deficiency in service.
• Review Application at NCDRC – The NCDRC failed to review the matter properly, even after the appellant claimed he never instructed his counsel to withdraw the appeal.

Supreme Court’s Key Directions

1. Restoration of Appeal – The case (First Appeal No. 2262 of 2018) was restored before the NCDRC.
2. Resolution on Merits – The NCDRC was directed to resolve the case on merits.
3. Additional Defence – The appellant was allowed to file an additional affidavit within four weeks.
4. Timeline for Disposal – The NCDRC must dispose of the appeal within four months of receiving the judgment.
5. Maintainability of Complaint – The Supreme Court ruled that the complaint is maintainable, but did not make any observations on the merits of the case.

Conclusion

The Supreme Court allowed the appeal and directed the NCDRC to hear the case on its merits. The judgment clarifies that banking disputes involving service deficiencies fall within the Consumer Protection Act, 1986, and cannot be dismissed as personal disputes.