The Kerala High Court has ruled that a writ petition can be filed to recover unpaid fixed deposit (FD) interest if the dispute can be decided using the bank’s own records and admitted facts. The Court said that a customer should not be forced to file a civil suit simply because the dispute involves a banking transaction.
Dispute Over SBI Fixed Deposit
The case was filed by a partner of Asiatic Export Enterprises, who sought payment of interest on a fixed deposit maintained with the State Bank of India (SBI). The company had deposited ₹7.22 crore in a fixed deposit for a period of 12 months.
Due to disputes among the firm’s partners, the bank account could not be operated for some time. Earlier, the High Court had directed SBI to release the fixed deposit amount, and the bank later paid the maturity amount after deducting TDS.
Disagreement Over Interest Amount
The petitioner claimed that SBI had not paid interest for the full period between the maturity of the fixed deposit and the final payment. During the case, SBI admitted that it was liable to pay interest for part of the period and paid ₹41.99 lakh as directed by the Court through an interim order.
The remaining dispute was whether SBI should also pay interest for the earlier period after the fixed deposit had matured.
SBI and Petitioner Presented Different Views
The petitioner relied on SBI’s own circular, which states that if a customer does not give any instructions after a fixed deposit matures, the deposit should automatically be renewed for the same period at the interest rate applicable on the maturity date.
SBI argued that after the original fixed deposit matured, the amount had been transferred to the firm’s current account and therefore was not eligible to earn further interest. The bank also argued that the matter was based on a contract and should be decided through a civil court instead of a writ petition.
Court Says Writ Petition Is Maintainable
The High Court rejected SBI’s objection. It said that although writ courts usually do not decide complicated contractual disputes, there is no legal bar when the issue can be decided based on admitted documents and does not require detailed evidence.
The Court noted that the important facts, including the fixed deposit, its closure, SBI’s payment for part of the period, and the remaining interest claim, were all supported by the bank’s own records.
SBI’s Own Circular Supported the Customer
The Court found that SBI’s own circular clearly provided for automatic renewal of the fixed deposit if the customer had not given any instructions after maturity. SBI could not produce any rule or circular that said otherwise.
The Court also observed that SBI never claimed that the money was transferred to the current account at the request of the petitioner or the firm. Therefore, the bank could not avoid paying interest on that basis.
Bank Held Responsible
The Court further observed that even if the deposit had later been placed under another deposit scheme, the responsibility for doing so rested with the bank. The petitioner had not made any false claim or violated any rules.
The Court held that the mistake was made by SBI and that the customer could not be blamed for the way the bank handled the deposit.
High Court Directs SBI to Pay Interest
The High Court ruled in favour of the petitioner and directed SBI to pay interest at the rate of 8.5% on ₹8,00,19,849 for the period from July 18, 2012, to May 12, 2013.
The Court ordered SBI to calculate the amount and credit it to the firm’s current account within two months. It also said that since the case had been pending since 2018 and could be decided based on admitted records, there was no need to send the petitioner to a civil court.
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