Failure to release maturity amount of Fixed Deposit as per contract is unfair trade practice.

PNB Housing Finance Ltd. Ordered to Pay Maturity Amount with Interest in Deficiency of Service Case NCDRC Upholds State Commission's Decision, Directs Payment with Enhanced Interest for Delayed Settlement

In a significant ruling, the National Consumer Disputes Redressal Commission (NCDRC) has directed M/s. PNB Housing Finance Ltd. to settle a long-standing fixed deposit dispute by paying the complainant, Bhavna, the maturity amount of Rs. 50,499 along with a 12% per annum simple interest. The NCDRC upheld the decision of the State Consumer Disputes Redressal Commission, which had modified the original order of the District Consumer Disputes Redressal Commission, Lucknow.

The case, initiated by Bhavna, revolved around a fixed deposit made under the PNB Housing Scheme in 1998. Despite the maturity of the deposit in 2000, PNB Housing Finance Ltd. failed to release the maturity amount, citing a lien due to alleged fraud. This lien was marked without any legal basis, leading to a prolonged dispute.

The State Commission had earlier modified the District Commission's order, enhancing the interest rate to 12% per annum with half-yearly compounding and 12.5% per annum for delayed payment. However, PNB Housing Finance Ltd. challenged this enhancement, arguing that they had complied with the original order by paying within 41 days and that the State Commission's modification was beyond the scope of the initial pleadings.

The NCDRC, after careful consideration, ruled in favor of Bhavna, recognizing the deficiency in service and unfair trade practices by PNB Housing Finance Ltd. The Commission directed the company to pay the maturity amount with the enhanced interest rate and an additional Rs. 30,000 as litigation costs within 60 days. Failure to comply would result in further interest liabilities.

This judgment underscores the importance of honoring contractual obligations and serves as a reminder to financial institutions about the consequences of failing to provide timely services to consumers.

Bottom Line:

Failure to release maturity amount of Fixed Deposit Receipt (FDR) as per contractual terms constitutes deficiency in service and unfair trade practice.

Statutory provision(s): Consumer Protection Act, 2019 Section 58(1)(b)

M/s. PNB Housing Finance Ltd. v. Bhavna, (NCDRC)(New Delhi) : Law Finder Doc Id # 2805769