Cuttack District Commission Holds Post Office Liable For Wrongfully Deducting Promised Interest, Orders Refunds And Compensation

The District Consumer Disputes Redressal Commission, Cuttack (Odisha) bench comprising Sri Debashish Nayak (President) and Sri Sibananda Mohanty (Member) held the Post Office, Madhupatna S.O., liable for deficiency in service. The Post Office's Bank wrongfully deducted a certain percentage of promised interest from a senior citizen's account based on the absence of her PAN number during the opening of the account. The District Commission held that it failed to provide any documentary evidence to prove its contentions.

Brief Facts:

Mrs. Sanjukta Sahu (“Complainant”), a senior citizen, opened an account under the "Senior Citizen Savings Scheme" (SCSS) with the Post Office, Madhupatna (“Bank”). During the account opening, she submitted proper identification, PAN number, and a deposit of Rs. 2,00,000/-. The bank issued her a Passbook for the SCSS scheme with the intention that there be a quarterly interest payment of Rs. 3,700/- on her deposit. However, in the first year, the bank paid an interest of Rs. 2,960/-, deducting Rs. 740/- in each quarter without any apparent reason. The Complainant discovered this discrepancy on October 1, 2022, during a visit to the bank's office and requested to request a refund of the deducted amount. The bank responded, justifying the deduction by stating that she had not submitted her PAN number as per their database. The Complainant stated that she provided her PAN number during the account opening. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Cuttack, Odisha (“District Commission”).

In response, the bank contended that the Complainant's SCSS interest component suffered a 20% deduction for TDS due to her failure to submit a PAN card. Quarterly interest was credited to the Complainant's account, and according to the bank, the Complainant submitted her PAN card later, following the advice of the post-master. It argued that TDS deductions ceased after the Complainant submitted the PAN card. The bank asserted that the Complainant noticed the quarterly interest deduction, during a visit to the Madhupatna SO but did not inquire about it. The bank claimed that the Complainant, being aware of the deduction, should have filed her Income Tax return promptly to claim a refund of the TDS amount. Additionally, the bank suggested that the Complainant should have proactively obtained Form-16 from the post office.

Observations by the Commission:

In the course of the proceedings, the District Commission noted that the application form submitted by the Complainant had the PAN number of the Complainant. Further, the District Commission clarified that, as per the Income Tax Act, the Complainant was entitled to a tax exemption of up to Rs. 50,000/- on the interest component. Notably, the District Commission held that the bank failed to produce evidence that it informed the Complainant about the scheme's conditions or requested Form 15G/15H from her. The District Commission concluded that the bank's deduction of Rs. 740/-, constituting 20% of the quarterly interest, was a clear deficiency of service on its part. 

Consequently, the District Commission directed the bank to refund the total sum of Rs. 2,960/- to the Complainant with interest, paying Rs. 20,000/- as compensation for mental agony and harassment, and Rs. 5,000/- towards the cost of litigation.

Case Title: Sanjukta Sahu vs Post-Master General and Others

Case No.: C.C.No.01/2023

Advocate for the Complainant: B.C. Sahoo

Advocate for the Respondent: S. Jena

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