New Delhi, Oct. 28: If one of the parties to an ?either or survivor? fixed deposit account pledges the money to the bank, can the bank say ?no payment? to the other party when the FD matures?

?No,? says the Supreme Court.

In a judgment delivered on October 25, the apex court ordered Punjab National Bank to pay half the matured amount to one of the parties who had approached it after being refused by the bank.

The division bench of Justices Ruma Pal and Arun Kumar said PNB?s refusal to pay on the ground that one of the parties had pledged the money in the account was ?contrary to banking norms?.

Anumati and her husband Mam Chand had opened an FD account with PNB in 1988 for a period of 84 months (seven years). The Rs 20,000 they deposited would have matured in 1995 to Rs 39,930. But Mam Chand, without the knowledge of his wife, pledged the amount to the bank when he took a loan for a business deal with some other person.

When the FD matured, the bank refused to pay Anumati and adjusted the money against the loan. The trial court held that the bank had rightly adjusted the money. On appeal, the revision court did not interfere with the trial court?s order.

On further appeal, the district consumer forum reached the conclusion that Anumati was entitled to her share and the bank could adjust only half the matured amount against the loan as it was her husband and not she who had pledged the money.

But the state consumer forum held that the money was rightly adjusted and the national forum, too, concurred with it.

Anumati then approached the Supreme Court, which said an ?either or survivor? account was like a ?tripartite? agreement that could not be bilaterally modified by one of the joint holders without the consent of the other.

The court said ?any variation or revocation of instructions in a joint account? can be effected only under the joint signatures of all persons entitled to operate the joint account?.

One of the account holders thus cannot ?unilaterally? instruct the bank not to ?honour? cheques signed by the other, or ask it to issue a duplicate deposit receipt, make premature repayment or give a loan against the fixed deposit, the court said.

In this case, the court said the husband and wife jointly held the FD account and that Mam Chand was to receive the money deposited only after it matured, if he survived. If he had died before the deposit matured, the only person entitled to the money would have been the appellant (Anumati). This right of the appellant could not be taken away without her consent, Justice Pal, writing the judgment for the bench, said.

The court upheld the decision of the district consumer forum that Anumati was entitled to half the matured amount, which the bank should pay.