Do not ignore client’s right to information

In future, all those manufacturers and service providers who ignore the consumers’ right to information will have to pay for the consequences.`A0This is a clear message flowing from a recent order of the national consumer disputes redressal commission.

The central point in this case is the failure of a bank to give a customer proper information about a financial deal, thereby causing him financial loss. In May 1996, the bank customer, Gopal Krishan Singla, first deposited in his PPF account, Rs 60,000. Subsequently, he deposited Rs 90,000 in July the same year, and again in August, Rs 3,90,000.

When the bank refused to pay interest on the amount of Rs 4,80,000 for the period 1996 to 2000, when the money was in the account, Singla filed a complaint before the consumer court.

The bank’s contention was that as per the rules framed by the Central Government for deposits in individual PPF accounts, an individual could deposit only a maximum of Rs 60,000 in a financial year in his PPF account, and any amount deposited suo motu in excess of the said limit was not eligible for earning interest. Thus, the client was not entitled to any interest on the excess amount of Rs 4,80,000.

The bank also argued that it was only an agent for the government as far as the PPF account was concerned, and it deposited the amount in PPF accounts with the Reserve Bank of India/Government of India on a daily basis. So the bank did not even make use of the money for any commercial purpose and, therefore, was not liable to pay any interest on the amount.

The client, on the other hand,`A0pointed out that the bank was guilty of deficient service as it had`A0failed to advise or inform him that any deposits in excess of Rs 60,000 would not fetch any interest. Instead, it merrily accepted the excess deposit to the tune of Rs 4,80,000. No person of sound mind would lock up such a huge amount in his PPF account if he were told or informed that the amount would not fetch any interest. So the bank was at fault in not informing him of the rules governing the individual PPF accounts and should, therefore, pay interest for the amount for the duration that it was in the account.

In considering this case, the apex court referred to the decision of a three-member bench of the national consumer disputes redressal commission in the case of the Chief Post Master, Chennai, vs Chuda Milk Products Cooperative Organisation Ltd (RP NO 2651 of 2007 decided on 23-10-2009), wherein it had held that the complainants may be guilty of purchasing Kisan Vikas Patras in violation of the relevant rules, but the responsibility of informing them of it lay with the officials, who not only failed to do so, but even`A0issued the KV Patras in violation of the rules.

It had, therefore, directed the Chief Post Master to seek instructions from the Ministry of Finance to pay the complainants some interest. Eventually,`A0the ministry had agreed to pay the post office saving bank rate of interest on the face value of the Kisan Vikas patras to the complainants.

The national commission observed that`A0the present case was slightly different in that here the bank did not utilise the money deposited by the complainant in his PPF account. However, it said that "`85we are of the view that the interest of justice would be well served in this case, too, if some interest is allowed on the complainant’s excess deposit in his PPF account`85"

So it directed the bank to pay interest on the excess amount for the period that it was in the PPF account, at the rate of 6 per cent per annum. If the amount is not paid within four weeks from the date of the order, interest at the rate of 12 per cent would be payable, the commission said. It also awarded Rs 1000 as costs (State Bank of Patiala vs Gopal Krishan Singla, RP No 1063 of 2010, decided on August 16,2011).

In the case of M/S Chemisol Adhesive Pvt Ltd vs Dhanaji Shankar Dalvi (RP No 3050 of 2009, decided on 29-3-2010), the apex court had highlighted the importance of`A0the consumers’ right to information vis-`E0-vis products. It had held a manufacturer guilty of negligence for not giving usage instructions on the product.

Now the present order reinforces the consumer’s right to information in respect of services, too. In fact it sends out a warning signal to all manufacturers and service providers that they will be held accountable for their failure to respect the consumer’s right to information.

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