Bengaluru District Commission Holds IndusInd Bank Accountable for Breach of Duty as Prudent Bankers
The Bengaluru-IV Additional District Consumer Disputes Redressal Commission, led by Ramachandra, M.S. (President), Nandini
Bengaluru District Commission Holds IndusInd Bank Accountable for Breach of Duty as Prudent Bankers
The Bengaluru-IV Additional District Consumer Disputes Redressal Commission, led by Ramachandra, M.S. (President), Nandini H Kumbhari (Member), and Shrinidhi (Member), found IndusInd Bank liable for unfair trade practices, negligence, and breach of fiduciary duty for refusing to refund the complainant's investments of ₹16.16 lakh, which were made under the implicit understanding that the bank would offer a higher interest rate and allow withdrawals at any time.
Shanthappa Raju (complainant) invested ₹16,16,780 in various schemes and accounts at IndusInd Bank (bank). He alleged that the bank refused to refund his investment despite repeated requests. Raju issued a legal notice to the bank, but its response was unsatisfactory. He then filed a consumer complaint with the Bengaluru-IV Additional District Consumer Disputes Redressal Commission (district commission).
The complainant contended that he had invested a substantial sum of money in multiple accounts and schemes at the bank, with the assurance of a higher interest rate and the flexibility to withdraw his principal investment and accrued interest at any time. However, when he attempted to withdraw his funds, he faced difficulties. The bank officials provided unsatisfactory responses, dodged the matter, and gave lame excuses for not refunding his investment. The complainant argued that the bank's actions constituted unfair trade practices, negligence, and a breach of their duty as prudent bankers.
The bank denied all of the complainant's allegations, including the existence of any transaction between the complainant and the bank. The bank argued that the burden of proof was on the complainant to prove the existence of a transaction and any deficiency in service. The bank requested that the complaint be dismissed.
The District Commission observed that, despite the promise made in the investment agreement of higher interest rates and the flexibility to withdraw the principal investment with accrued interest, the bank officials failed to adequately respond to the complainant's withdrawal requests. Instead, they provided vague excuses and appeared to avoid addressing the issue.
The District Commission ruled that the bank's actions constituted unfair trade practices, negligence, and a clear dereliction of its duties as a prudent banker. The bank's refusal or delay in refunding the complainant's investment was deemed a clear case of deficient service. The Commission also affirmed the complainant's right to a refund of their investment and compensation for the inconvenience and suffering caused by the bank's actions.
The District Commission ordered the bank to refund the complainant the invested amount of ₹16,16,780, plus interest at a rate of 10 per cent per annum from the date of the last payment. The bank was also instructed to pay the complainant ₹1,00,000 in compensation for the deficient service and ₹10,000 in litigation costs.