THIRUCHIRAPALLI MULTIPURPOSE SOCIAL SERVICE SOCIETY Vs. CANARA BANK

JUDGEMENT

(1.) HEARD the learned Counsels for the parties.

(2.) IT is the contention of the complainant that the complainant, the Thiruchirapally Multipurpose Social Service Society, registered under the Societies Registration Act at Thiruchirapally, deposited various funds as narrated in paragraph 3 in FDR with the opposite party, Canara Bank. It is submitted that in all complainant deposited a total sum of Rs. 62,08,745.05 for a term of five years. All the fixed deposits were due for maturity in the year 2000. It is contended that to their shock and surprise they received a letter dated 5.2.1996 that the bank was marking a general lien on fixed deposits to cover the DIR Loans sanctioned by them from 1986 to individuals on the recommendations of the complainant. It is contended that a bank acted arbitrarily, in illegally marking general lien on the said deposits because the DIR Scheme never provided for any guarantee by the complainant. It is, therefore, prayed that bank be directed to repay a sum of Rs. 48,80,160/- with interest @ 24% from 1.7.1996 and to pay a compensation of Rs. 5,00,000/- for mental agony and hardship caused to the complainant.

(3.) IT is also not disputed that there was a scheme framed by the Central Government known as "Differential Interest Rate" Scheme, which, inter alia, provided rate of interest @ 4% per annum and ceiling of the loan amount at Rs. 1,500/-, repayment period was not to exceed five years.