Whether bank can refuse to encash FDR issued without consideration?

Be that as it may, we do not see nor is there any discussion in the orders before us giving the basis on which the second FDR was issued. Assuming the FDR dated 8th March, 1996 was issued to the Appellant fraudulently, it was all the more obligatory on the Respondent-Bank to have taken action against its employees. As far as the Appellant is concerned, the only document that he had in his possession and rightly so was the FDR issued to him by the Respondent-Bank. The Appellant cannot be expected to produce anything more than what is given to him by the Bank which is the FDR receipt itself.

9. Under the circumstances, we are of the view that the State Commission as well as the National Commission were in error in dismissing the complaint filed by the Appellant. Accordingly, we set aside the orders passed by the State Commission as well as the National Commission and restore the order passed by the District Consumer Forum.
IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6850 of 2005

Decided On: 18.01.2017

 Pishora Singh Vs.  Bank of Punjab and Ors.

Hon'ble Judges/Coram:
Madan B. Lokur and Prafulla C. Pant, JJ.

Citation: AIR 2017 SC 2696

1. We have heard learned Counsel for the parties. The Appellant had obtained two FDRs for Rs. 1,00,000/- (Rupees one lakh only) each on 24th February, 1996. Thereafter, he also obtained another FDR on 8th March, 1996 for an amount of Rs. 2,00,000/- (Rupees two lakhs only). The first set of FDRs obtained by the Appellant on 24th February, 1996 were renewed by the Respondent-Bank on 10th April, 1996 and on 7th June, 1996.

2. When the Appellant went to encash two FDRs that were originally issued on 24th February, 1996 as well as the FDR issued on 8th March, 1996, the Respondent-Bank refused to encash the second FDR for Rs. 2,00,000/- (Rupees two lakhs only) on the ground that it was issued to the Appellant without any consideration. There is no dispute with regard to the encashment of the first set of two FDRs issued originally to the Appellant on 24th February, 1996.

3. The complainant preferred a complaint before the District Consumer Forum with regard to the failure of the Respondent-Bank to encash the FDR for Rs. 2,00,000/- (Rupees two lakhs only) issued on 8th March, 1996. On a consideration of the material placed before the District Consumer Forum as well as the evidence on record, the District Consumer Forum concluded that the Appellant was entitled to encashment of the FDR and it passed appropriate orders in this regard. It was also held that the Appellant was entitled to payment of interest payable under the FDR.

4. Feeling aggrieved, the Respondent-Bank preferred an appeal before the State Commission which was allowed and it was held that the Appellant before us was not entitled to encashment of the FDR issued on 8th March, 1996.

5. Against the order passed by the State Commission, the Appellant preferred a revision petition which was dismissed by the National Commission by the impugned order dated 2nd June, 2004. It is under these circumstances that the Appellant is now before us.

6. It is submitted by learned Counsel for the Respondent-Bank that the FDR issued on 8th March, 1996 was issued by mistake and it is because of this mistake that the Respondent-Bank declined to encash the FDR. On our asking, we have been informed that no action has been taken against the defaulting officer for having allegedly issued FDR on 8th March, 1996 without any consideration.

7. It is further submitted by learned Counsel for the Respondent-Bank that the Appellant had only Rs. 2,00,000/- (Rupees two lakhs only) in his account and that amount was adjusted against the first set of FDRs issued on 24th February, 1996 and that the Appellant did not have any amount to the extent of Rs. 2,00,000/- (Rupees two lakhs only) which would enable the Bank to issue the second FDR on 8th March, 1996.

8. Be that as it may, we do not see nor is there any discussion in the orders before us giving the basis on which the second FDR was issued. Assuming the FDR dated 8th March, 1996 was issued to the Appellant fraudulently, it was all the more obligatory on the Respondent-Bank to have taken action against its employees. As far as the Appellant is concerned, the only document that he had in his possession and rightly so was the FDR issued to him by the Respondent-Bank. The Appellant cannot be expected to produce anything more than what is given to him by the Bank which is the FDR receipt itself.

9. Under the circumstances, we are of the view that the State Commission as well as the National Commission were in error in dismissing the complaint filed by the Appellant. Accordingly, we set aside the orders passed by the State Commission as well as the National Commission and restore the order passed by the District Consumer Forum.

10. The appeal is allowed. The order passed by the District Consumer Forum may be implemented within a period of six weeks from today.