If bank delays credit, the consumer should be compensated for mental agony

In 2014, the Reserve Bank of India (RBI) had floated Inflation Index National Saving Securities. The public could apply for these securities through any nationalised bank.

Bharat Kapur subscribed for these securities on March 15, 2014 by paying Rs 25,000 through Bank of India (BoI). RBI issued a payment receipt on March 29, 2014. But, Kapur did not receive the securities.

On making inquiries, BoI informed Kapur that the investment was linked to high or low rate of inflation, but the exact formula for calculation was not notified. Kapur made an application on March 29, 2014 for withdrawal of money from the securities and investing it in a fixed deposit. The withdrawal of the amount from the securities was delayed. On June 2, 2014 he received an SMS alert that Rs 26,164 had been credited to his account.

Feeling aggrieved, Kapur complained to the banking ombudsman, but no action was taken. When he had his passbook updated, he saw that BoI had credited Rs 18 to his account on June 15, 2015 towards ‘interest on delayed credit of RBI Bond’. Kapur did not want this measly interest, so he sent a cheque to BoI on August 28, 2015 to return the amount. He then approached Ludhiana District Forum to claim compensation for service deficiency.

BoI contested the case. It explained that on receipt of Kapur's application, his name was registered on RBI’s website. After validation, the certificate of holding was to be generated and securities were to be issued in the form of Bonds Ledger Accounts. BoI contended Kapur had no reason to complain as he had already withdrawn his investment of Rs 25,000 in the securities for which his account had been credited with Rs 26,164.50, and additionally, delay payment interest had also been paid. BoI alleged that Kapur had returned the delayed payment interest with the malafide intention of filing a complaint to extract money.

The forum held BoI liable for deficiency in service and ordered it to pay Rs 500 towards loss of interest income. The compliance of the order was to be done in 30 days, else this amount would carry 8 per cent interest from December 12, 2016. In addition, Rs 2,500 was awarded as compensation for mental harassment and Rs 2,000 as litigation expenses.

Kapur challenged the order as he wanted the compensation to be enhanced, but the Punjab State Commission dismissed his appeal. He approached the National Commission in revision. His argument was that neither the district forum nor the state commission had considered the expenses incurred and the mental agony caused to him. BoI opposed his argument, saying that the compensation was adequate.

The National Commission observed that Kapur's harassment started from the very day when he applied for the securities. The litigation at the district forum went on for over a year which needlessly caused harassment and mental agony, and put him to expense and loss of man hours for attending the hearing. Considering all these factors, the compensation of Rs 2,500 was held to be inadequate. Accordingly, by its order of January 23, 2018 delivered by Justice Ajit Bharihoke, the National Commission allowed Kapur's revision petition, and enhance the compensation to Rs 15,000.

(The author is a consumer activist)