2020 (9) TMI 548 - HC - Indian Laws

Trust's interest claim on Fixed Deposits dismissed due to renewal failure & estoppel, Circular No. 415/2012-INF applied

The court dismissed the petitioner Trust's claim for interest on closed Fixed Deposits, citing failure to renew the deposits, trustee disputes, and lack ... Direction to the respondents to make the payment of interest for the closed Fixed Deposits account - HELD THAT:- Admittedly, when orders were passed by this Court seeking a writ of Mandamus directing the second respondent Bank to transfer the funds to the loan account with the third respondent Bank, the petitioner had not sought for payment of interest for the overdue deposit. It is also pertinent to mention that the same set of counsels appeared for both, the petitioner and the Bank in the earlier round of litigation. In fact, the earlier order was silent about even the payment of 4% interest from the date of maturity till the date of payment. The said interest is paid by the second respondent Bank only as per the Circular of the RBI binding on them. The maturity value of the deposit as on 29-1-2013 was ₹ 1,06,65,755/-. According to the petitioner, the interest payable for 773 days from 29-1-2013 to 13-3-2015 was ₹ 18,29,630/-, but what was given was only ₹ 8,13,168 and thus after deducting TDS, they suffered loss of interest to the tune of ₹ 10,16,462/-. This Court is of the view that the petitioner is not entitled to the said amount claimed from the second respondent Bank for various reasons : (i) as per the Circular No. 415, dated 18-9-2012 referred to above, for the overdue deposits, the depositor is entitled only for interest at the rate applicable for a Savings Bank Account. In this case, admittedly, the petitioner had not made any request for renewal of FDs, though it had requested the Bank to transfer the amount to the loan account with the third respondent Bank ; (ii) the second respondent Bank had to withhold the account, as there were disputes among the trustees, after the death of the founder Trustee, who made the deposit; and (iii) Even in the earlier writ petition, the petitioner ought to have asked for payment of interest, which should have been decided there itself, but did not do so. The petitioner is not entitled to any relief in this writ petition and the writ petition fails and the same is dismissed. Issues:1. Claim for interest on closed Fixed Deposits account2. Interpretation of Circular No. 415/2012-INF by the second respondent Bank3. Dispute regarding operation of accounts by trustees4. Entitlement to interest on overdue deposits5. Estoppel from filing a second writ petition on the same cause of actionAnalysis:1. The petitioner Trust sought a Writ of Mandamus for payment of interest on closed Fixed Deposits (FDs) as per court orders. The FDs were made by the founder Chairman for educational purposes. The second respondent Bank transferred the funds with varying interest rates, leading to the current claim for interest at 9% p.a. The petitioner alleged non-transfer of funds post-maturity, leading to the initial writ petition and subsequent interest dispute.2. The second respondent Bank defended its actions citing Circular No. 415/2012-INF, treating the FDs as Overdue Deposits due to non-renewal. The Bank applied a 4% interest rate based on the circular's guidelines for such deposits. The Bank highlighted the unresolved trustee disputes as a reason for withholding the funds until court directions were received.3. Trustee disputes post-founder Chairman's demise led to operational challenges, with conflicting communications regarding account access. The Bank maintained that it acted in accordance with the court's directions and the circular's provisions in handling the FDs and interest payments.4. The court ruled against the petitioner's claim for additional interest, citing failure to request FD renewal, trustee disputes, and lack of interest claim in the initial petition. The court emphasized the circular's applicability for interest calculation and deemed the petitioner estopped from claiming further interest due to inaction.5. The court concluded that the petitioner was not entitled to relief or additional interest, considering the circumstances, lack of timely claim, and adherence to circular guidelines by the second respondent Bank. The writ petition was dismissed, with no costs awarded to either party.