Mr. Sanjay,
If the instructions are E/S then bank has commited unpardonable blunder. You may issue them a legal notice, and haul them over coals in a consumer forum, for deficiency in service.
You may use this decision titled Anumati Vs PNB AIR 2005 SC 29; (2004) 8 SCC 498
12. A fixed deposit in the joint names of two persons is nothing but a joint account which, as the name itself suggests, is repayable on the expiration of the agreed period. The fixed deposit receipt is merely a written acknowledgement by the Bank that it holds a certain sum to the use of its customers. The Bank is thus a debtor to the account holders in respect of the amount deposited - a debt which is repayable by the bank to the account holders with interest on the expiry of an agreed period. An "either or survivor" clause in such an account means that the amount payable by the Bank on maturity of the fixed deposit may be paid to either of the account holders by the Bank in order to obtain a valid discharge. In other words under a tripartite agreement between the joint account holders inter se and the Bank, the Bank may, on maturity, make payment only to either of them. This tripartite agreement cannot be bilaterally modified by one of the joint account holders for example by pledging the account with any third party including the Bank itself in its capacity of creditor, so that the amount becomes payable to such third party, without the consent of the joint account holder. Thus in Tannan's Banking Law and Practice in India (20th Edn.) 2001 volume 1, Chapter VIII page 259) the legal position has been summarized thus: "On the view that the terms of operation of a joint account constitute a term of the contract of deposit, any variation or revocation of instructions in a joint account, whether the operation is by 'either or survivor' or 'former or survivor' can be effected only under the joint signatures of all persons entitled to operate the joint account. One of the joint account holders thus cannot unilaterally instruct the Bank not to honour cheques signed by the others, issue duplicate deposit receipt, premature repayment or loan against Fixed Deposit".
