Nem Kumar Jain And Another Vs Union of India (Allahabad High Court)
Allahabad High Court held that bank not permitted to unilaterally reduce interest rates on Fixed Deposit Receipt [FDR] after issuance of the FDRs. Accordingly, these petitions are allowed and bank is directed to compute interest on FDRs at originally contracted rates.
Facts- By means of both these writ petitions, filed under Article 226 of the Constitution, the petitioners have sought substantially similar reliefs. The principal prayer is for a writ of mandamus directing the respondents to compute and pay interest on the respective Fixed Deposit Receipts at the contracted rate till their dates of maturity and to restrain the respondents from reducing the agreed rates of interest and further to direct Respondent Nos. 2 and 3 to consider and decide the representations submitted by the petitioners. These prayers flow from the common grievance regarding the unilateral reduction of the agreed interest rate after issuance of the FDRs.
Conclusion- Held that the bank has not alleged any fraud, misrepresentation, or irregularity on the part of the petitioners while opening the FDRs. The higher rate of interest was offered at the time of issuance, and the subsequent reduction was the result of a unilateral decision by the bank officials. As held in the earlier common order dated 24.02.2023 passed in the case of Sarojni Jain and Smt. Shalini Agarwal, the petitioners cannot be made to suffer for any error or oversight by the bank in offering a higher rate of interest. The same principle is squarely applicable to the present petitions. In the realm of contract, principle of promissory estoppel is absolutely attracted. Once it is found that beneficiary has not made any misrepresentation and cannot be held liable for suggestio falsi or for suppressio vari, having promised a particular rate of interest upon which investor agreed to invest money by creating FDRs, the bank cannot later on upon maturity, deny the agreed/promised rate of interest.
