Fixed deposit maturity rights protected: depositors awarded contractual interest from maturity and litigation costs after company default.

Fixed deposit holders were found entitled to receive matured deposit amounts with contractual interest at 12.5% per annum from the respective dates of maturity until realization, because the company's default could not justify reducing the agreed rate or denying interest for the post-maturity period. The appellate tribunal noted that the deposits had matured in 2016 and remained unpaid despite notice, and held that the protective framework for depositors could not be used to benefit a defaulter. The tribunal therefore set aside the NCLT orders and awarded litigation costs to the depositors.

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Issues: Whether the appellants were entitled to payment of the matured fixed deposit amount with interest at 12.5% per annum from the date of maturity, instead of the reduced rate awarded by the Tribunal, together with litigation costs.

Analysis: The appeals arose from defaults in repayment of matured fixed deposits accepted by the respondent company. The fixed deposits had matured in 2016, yet the respondent had not made payment despite notice and proceedings. The impugned orders had reduced the agreed interest rate and had also denied interest for the period between maturity and filing of the petition. The Tribunal found no justification for reducing the contractual rate or for withholding interest from the date of maturity. It held that depositors should not be disadvantaged by the default of the company and that the protective framework for deposit holders could not be used to reward a defaulter.

Conclusion: The appellants succeeded. The orders of the National Company Law Tribunal were set aside, and the appellants were held entitled to the matured FDR amounts with interest at 12.5% per annum from the respective dates of maturity until realization, along with litigation costs.

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