Delivered on : 16.05.2024

JUDGMENT

1.         Heard Mr. Pallav Shishodia, Sr. Advocate, assisted by Mr. Saurabh Seth, Advocate, for the complainant and Mr. O.P. Gaggar, Advocate, for the OPs.

2.         Public Health Foundation of India has filed above complaint for directing Central Bank of India to (i) refund Rs.25 crores, with interest as payable on maturity of the FDRs (ii) grant interest @18% per annum, from the date of maturity  of the FDRs till the date of refund; (iii) pay Rs.5 crores, as compensation for loss to the projects, undertaken in public interest and could not be completed due to lack of fund and for harassment; (iv) pay Rs.50 lacs, as litigation costs incurred by the complainant to recover its amount; and (v) any other relief which is deemed fit and proper in  the facts of the case.

3.       The complainant stated that Public Health Foundation of India (for short the PHFI) was a society, registered on 08.02.2006 under the Societies Registration Act, 1860 and formed with object to establish new institutes of public health, assist existing institutes for enhancing their capacity and output, promote research in prioritized area of public health etc. It is an initiative that has collaboratively evolved through consultations with multiple constituencies including Indian and National Academia, State and Central Government, multi & bi-lateral agencies and civil societies groups. The PHFI was registered under Foreign Contribution (Regulation) Act, 1976 on 26.09.2008 and the contributions to the PHFI is exempted under Section 80G(5)(vi) of the Income Tax Act, 1961. The PHFI was granted recognition under the scheme of Scientific and Industrial Research Organization, 1988, on 23.04.2011. The PHFI was running its activities from the donations. At the initial stage of formation of the PHFI, Government of India, Ministry of Health and Family Welfare granted Rs.65 crores towards corpus fund. Later on Rs.69.22 crores was contributed by Bill and Malinda Gates Foundation, U.S.A. and Rs.19.86 crores was contributed by Nand and Jeet Khernka Foundation. The PHFI received Rs.325.19 crores, from multiple donors till 31.03.2013. On 31.03.2013, the PHFI received Rs.219 crores contribution towards its corpus fund. The PHFI used to receive donations for a^. particular project and held it as a trustee till the completion of that project. The funds received from the donors and the interest earned on it, are utilized for fulfilling the object of the society without any motive of profit. The PHFI opened Current Account NO.0340992008, in Citibank NA, Connaught Circus Branch, New Delhi, for receiving foreign donations and Saving Account No.05861110000013 in HDFC Bank Ltd. Green Park Extension, Delhi; for receiving domestic donations. Apart from it the PHFI opened bank accounts in other banks in order to carry out its work.

4.    Governing Body of the PHFI took a decision in the year 2013-2014 to deposit 80% of its fund in ‘fixed deposits’ with the public sector banks as keeping money in "fixed deposit" with the bank was safest mode for holding the money and utilizing it along with interest earned on it, in completing the project. In pursuance of the decision of the Governing body, the PHFI initially deposited its surplus fund in Housing & Urban Development Corporation Limited, Dewan Housing Finance Corporation Limited, Kerala Transport Department Finance Corporation Limited. Over a period of time, this exposure was gradually reduced from private sector banks to housing development finance corporations. Thereafter, the PHFI made following ‘fixed deposits’;-

(a)     (i) The PHFI forwarded account opening form and the required documents to Central Bank of India, Malad Branch, Malad (West), Mumbai on 04.11.2013, for ‘fixed deposit’ of Rs.5 crores, for a period of one year. The forms were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.) and remitted Rs.5 crores from its Account No.0340992008 with Citibank to the Non-customer Inter-Branch Funds Transfer Account No.3004384683 of Central Bank of India, Malad Branch through Real Time Gross Settlement System (RTGS) on 18.11.2013, with a letter of instruction to deposit above amount in FDR for a period of one year. The PHFI received Fixed Deposit Receipt No.593720 dated 21.11.2013 of Rs.5 crores.

(ii) The PHFI forwarded account opening form and the required documents to Central Bank of India, Malad Branch, Malad (West), Mumbai on 17.12.2013, for ‘fixed deposit’ of Rs.5 crores, for a period of one year. The forms were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.) and remitted Rs.5 crores from its Account No.0340992008 with Citibank to the Non-customer Inter-Branch Funds Transfer Account No.3004384683 of Central Bank of India, Malad Branch through National Electronic Fund Transfer System (NEFT) on 17.12.2013, with a letter of instruction to deposit above amount in FDR for a period of one year. The PHFI received Fixed Deposit Receipt No.593815 dated 19.12.2013 of Rs.5 crore.

(iii) The PHFI forwarded account opening form and the required documents to Central Bank of India, Malad Branch, Malad (West), Mumbai on 31.12.2013, for fixed deposit of Rs.5 crores, for a period of one year. The forms were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.) and remitted Rs.5 crores from its Account No.0340992008 with Citibank to the Non-customer Inter-Branch Funds Transfer Account No.3004384683 of Central Bank of India, Malad Branch through Real Time Gross Settlement System (RTGS) on 31.12.2013, with a letter of instruction to deposit above amount in FDR for a period of one year. The PHFI received Fixed Deposit Receipt No.593856 dated 01.01.2014 of Rs.5 crores.

(iv) The PHFI forwarded account opening form and the required documents to Central Bank of India, Malad Branch, Malad (West), Mumbai on 31.01.2014, for fixed deposit of Rs.2 crores, for a period of one year. The forms were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.) and remitted Rs.5 crores from its Account No.0340992008 with Citibank to the Non-customer Inter-Branch Funds Transfer Account No.3004384683 of Central Bank of India, Malad Branch through Real Time Gross Settlement System (RTGS) on 31.01.2014, with a letter of instruction to deposit above amount in FDR for a period of one year. The PHFI received Fixed Deposit Receipt No.594040 dated 31.01.2014 of Rs.2 crores.

(v) The PHFI forwarded account opening form and the required documents to Central Bank of India, Malad Branch, Malad (West), Mumbai on 31.01.2014, for fixed deposit of Rs.5 crores, for a period of one year. The forms were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.) and remitted Rs.5/- crores from its Account No.3301599318 with HDFC Bank to Non-customer Inter-Branch Funds Transfer Account No.3004384683 of Central Bank of India, Malad Branch through Real Time Gross Settlement System (RTGS) on 31.01.2014, with a letter of instruction to deposit above amount in FDR for a period of one year. The PHFI received Fixed Deposit Receipt No.594041 dated 31.01.2014 of Rs.5/- crores.

          Central Bank of India, Malad Branch confirmed above ‘FDRs’ in its letter dated 13.02.2014. Thereafter Statutory Auditors of the PHFI sought for confirmation of above ‘FDRs’, which was confirmed by Central Bank of India, Malad Branch through its letter dated 14.04.2014. Central Bank of India, Malad Branch deducted TDS on above ‘FDRs’ on 26.03.2014 of Rs.160864, Rs.127598/-, Rs.110604/- and Rs.103231/-, which was duly credited in the PHFI’s PAN No.AABAP4445L against TAN No.MUMC10331G of Central Bank of India, Malad Branch.

(vi)     The PHFI forwarded account opening form and the required documents to Central Bank of India, Malad Branch, Malad (West), Mumbai on 07.05.2014, for fixed deposit of Rs.3 crores, for a period of one year. The forms were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.) and remitted Rs.3 crores from its Account No.3301599318 with HDFC Bank to the Account No.3004384683 of Central Bank of India, Malad Branch through National Electronic Fund Transfer System (NEFT) on 07.05.2014, with a letter of instruction to deposit above amount in FDR for a period of one year. The PHFI received Fixed Deposit Receipt No.594442 dated 08.05.2014 of Rs.3 crores.

(b)    Mr. P.C. Chaturvedi, then Manager of Punjab and Sindh Bank, Khar West Branch, Linking Road, Mumbai approached Mr. Nirmal Pathak, Finance Manager of the PHFI on telephone offering interest @9.25% p.a. for 181 days of the term deposit of the value exceeding Rs.1 crore in May, 2014. The PHFI forwarded relevant forms and the documents to Punjab and Sind Bank, Khar West Branch on 02.06.2014, as required, for fixed deposit of Rs.10 crores. The forms were filled up in the handwriting of Mr. Nirmal Pathak and were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.). The PHFI remitted Rs.5 crores from its Account No.0340992008 with Citibank and Rs.5 crores from its Account No.05861110000013 with HDFC Bank to the intermediary account No.03001100032877 of Punjab and Sind Bank, Khar West Branch on through RTGS on 05.06.2014. The PHFI received FDR Nos.884262 and 884264, each of Rs.5 crores for a period of one year, with maturity value of Rs.5,46,54,166/-, on 06.06.2014, issued by Punjab and Sind Bank, Khar West Branch. Punjab and Sind Bank, Khar West Branch issued confirmation letter dated 01.07.2014 of above fixed deposits. In spite of the fact that the PHFI had given undertaking that there would be no premature withdrawal of above fixed deposits, Punjab and Sind Bank, Khar West Branch remitted Rs.5,03,57,535/- to the account of the PHFI with HDFC Bank on 02.07.2014 and Rs.5,03,32,877/- to the account of PHFI with Citibank on 04.07.2014. Investigating Officer, CBI, vide letter dated 24.07.2014 to Citibank, New Delhi informed that Rs.6.5 crores was transferred on 01.07.2014 and Rs.5 crores was transferred on 03.07.2014 from the account of the PHFI with Dena Bank, Malabar Hill Branch to Punjab and Sindh Bank, Khar Branch, who remitted Rs.5,03,57,535/- to the account with HDFC Bank on 02.07.2014 and Rs.5,03,32,877/- to the account with Citibank on 04.07.2014 of the PHFI.  

(c)    Dena Bank, Malabar Hills Branch, Mumbai offered to deposit in "Samruddhi Deposit Receipt" scheme, in which interest @9.6% per annum was given. The Director Finance of the PHFI wrote a letter dated 12.02.2014 to Dena Bank, for opening account for "fixed deposit" of Rs.8 crores and forwarded Account Opening Form, jointly signed by Amit Chaturvedi, Head Finance and Lt. Gen. Narayan Chatterjee, Advisor and other relevant documents. The Director Finance of the PHFI transferred Rs.8 crores on 13.02.2014, from its Saving Account No.05861110000013 in HDFC Bank Ltd. through RTGS to the Intermediary Account No.00760050050002 of Dena Bank, Malabar Hill Branch, Mumbai. The Director Finance of the PHFI again transferred Rs.6 crores on 13.03.2014, Rs.3 crores on 19.03.2014, Rs.6 crores on 22.04.2014 and Rs.3 crores on 06.05.2014 from its accounts in HDFC Bank Ltd. and Citybank through ^.RTGS to the Intermediary Account No.00760050050002 of Dena Bank, Malabar Hills Branch, Mumbai, for 'fixed deposit' for a period of one year. Dena Bank issued "Samruddhi Deposit Receipt" dated 13.03.2014, 19.03.2014, 25.04.2014 and 07.05.2014 of above amounts. The Auditors of the PHFI wrote a letter- dated 14.04.2014 to Dena Bank, Malabar Hill Branch, for confirming the deposits in a proforma of Audit Certificate till 31.03.2014, which was provided by Dena Bank on 21.06.2014.

5.    The PHFI received an email dated 28.06.2014, from Senior Inspector, Economic Offences Wing, CBI, Mumbai, informing about large scale of embezzlement of Rs.58 crores and that during investigation it was revealed that an amount of Rs.14.50 crores was transferred to the account of SIES Trust from the account of the PHFI. Senior Inspector sought for confirmation from the PHFI of that transaction. The PHFI, through email dated 02.07.2014, informed that no such amount was transferred by the PHFI to SIES Trust. Prabhakar Loke from CBI, vide email dated 02.07.2014 informed that Account No.03001100032865 was opened in the name of SIES Trust with Punjab National Bank, Khar Branch, Mumbai in which Rs.14.50 crores was transferred by the PHFI on 21.05.2014 and asked to check its accounts with the banks. The officials of the PHFI, firstly checked its fixed deposits with Punjab National Bank and Punjab & Sind Bank, where embezzlement had taken place_. Amit Chaturvedi, Head Finance of the PHFI went to Malabar Hill Branch of Dena Bank on 07.07.2014 and met with Mr. Pritam Nagarkar, Chief Manager, and. inquired about its deposits in "Samruddhi^, Deposit Receipt", who assured that the money of the PHFI would be refunded^, within 6-7 days along with interest. Mr. M.L. Bahera, Zonal Manager of Dena Bank, lodged a complaint with CBI on 10.07.2014, alleging that Pritam Nagarkar, Chief Manager in connivance of Vimal Barot, Showman Group and unknown persons of 7 organizations had embezzled approximately Rs.220/- crores of Dena Bank. Pritam Nagarkar absconded from the date of lodging the complaint. The PHFI wrote a letter dated 11.07.2014, to Dena Bank, Malabar Hill. Branch to close it’s above 5 "Samruddhi Deposit Receipt" and transfer its money to the accounts as mentioned in it. Dena Bank, through its letter dated 16.07.2014, informed that 5 "Samruddhi Deposit Receipt" as supplied along with letter dated 11.07.2014, were not matching with Dena Bank's record rather Current Account No.007611023867 was opened in the name of the PHFI and the amount transferred 13.03.2014, 19.03.2014, 25.04:2014 and 07.05.2014 were credited in Current Account No.007611023867. From where, the money was fraudulently transferred to various accounts and the matter had been referred to CBI for investigation. The PHFI, vide letter dated 22.07.2014, denied opening of above Current Account No.007611023867 and requested Dena Bank to return its money.

6.     The official of the PHFI visited the branch office of OP-1 on 07.07.2014 and inquired about the status of above 6 ‘fixed deposits’. The branch office of OP-1 intimated about the status of ‘fixed deposits’ as on 31.03.2014 and handed over TDS certificate up to 31.03.2014. The official of the PHFI noticed that the interest certificate mentioned an address in Mumbai along with the address of the PHFI in Delhi. Due to large scale fraud in banks as stated above, the management of the PHFI decided to close all the above ‘FDRs’. The PHFI wrote a letter dated 11.07.2014 to Central Bank of India, Branch Malad (West) to close its above ‘FDRs’ and remit the amount along with accrued interest on it. Central Bank of India, Branch Malad (West), vide email dated 17.07.2014, sought confirmation of the PHFI that on 07.07.2014, an official of OP-1 had handed over statement of Overdraft Account No.3301599318 along with TDS certificate to the PHFI.

7.      The PHFI remitted money (total Rs.25 crores) for ‘fixed deposit’ for a period of one year time to time and never intended to open Overdraft Account. Reference of Overdraft Account No.3301599318 in the name of PHFI alarmed it, in respect of fraud in this bank also. Chief Manager of OP-1 also clarified vide letter dated 25.07.2014 that it had no information about Overdraft Account No.3301599318 in the name of PHFI. The PHFI wrote a letter dated 21.07.2014 to Fraud Monitoring Cell of Reserve Bank of India to investigate in above incident. The PHFI also lodged a complaint with CBI on 28.07.2014, to investigate above fraud and recover its money, on which, Crime No.82/2014, 83/2014 and 84/2014 were registered against Bank of Maharashtra, Central Bank of India and Punjab National Bank. The PHFI, vide letter dated 14.11.2014, sought for issue of certified copies of account opening forms, specimen signature cards and other details, which were necessary for opening the account and cheques books and transactions etc. from Dena Bank. The PHFI, vide letter dated 19.11.2014, informed that entire amount of Rs.26 crores was transferred to Intermediary Account No.00760050050002 of Dena Bank, by HDFC Bank and Citibank. Dena Bank, vide letter dated 22.12.2014, informed that original records relating to opening current account were seized by CBI. The PHFI informed to Central Vigilance Commission, Department of Finance Services, Ministry of Finance and Reserve Bank of India of above incidents.

8.    Economic Offence Wing issued notice dated 18.11.2014 to the PHFI to verify the veracity of Account Nos.60146702654 with Bank of Maharashtra, Malawar West Branch, 007611023867 with Dena Bank, Malabar Hills Brach, 03001100032877 with Punjab and Sindh Bank, Khar Branch, 0564005900000014 with Punjab National Bank, Worli Naka and 3301599318 with Central Bank of India, Malad West. The PHFI, vide letter dated 01.12.2014, informed that none of above accounts were opened by PHFI. CBI, vide letter dated 22.12.2015, permitted for supply of the certified copies of all the documents relating to opening of current account in Dena Bank and the transactions made from that account. After receiving the documents, it was revealed that the amount of Rs.8 crores transferred on 13.02.2014 was invested in "Samruddhi Deposit Receipt" No.1807117 on 13.02.2014, which was closed on 14.02.2014, on the instructions issued by the Manager and the amount was transferred into an account opened in the name of the PHFI with Bank of Maharashtra, Malad (W). Current Account No.007611023867 was opened in the name of the PHFI in Dena Bank, Malabar Hill Branch on 11.03.2014. The amounts of Rs.6 crores transferred on 13.03.2014, Rs.3 crores transferred on 19.03.2014, Rs.6 crores transferred on 22.04.2014 and Rs.3 crores transferred on 06.05.2014 by the PHFI from its accounts in HDFC Bank Ltd. and Citibank through RTGS to Intermediary Account No.00760050050002 of Dena Bank, Malabar Hill Branch, Mumbai, were credited in Current Account No.007611023867 as per Manager's instruction. A cheque book, containing cheques No.788201 to 788225, relating to above account was issued and received by one Devendra Suresh ^.Bhogle on 14.03.2014. Another cheque book, containing .cheques No.790551 to 790575, relating to above account was issued and received by Devendra Suresh Bhogle on 05.06.2014. Entire amount was syphoned to other accounts using these cheques.

9.    Central Bank of India, Branch Malad West, vide letter dated 26.09.2014, informed that it had received an application supported by Resolution of the Governing Body of the PHFI to sanction an overdraft facility of Rs.4.5 crores on 21.11.2013, against FDR No.3301504868. On which, Overdraft Account No.3301599318 in the name of PHFI was opened. Limit of overdraft facility used to be increased time to time on the request of the PHFI on the basis of 4 FDRs, deposited on 17.12.2013, 31.12.2013 and 31.01.2014 and total limit of overdraft was Rs.22.5 crores. As against sanctioned limited, overdraft as on the date was Rs.224968083/-. Rs.3 crores was remitted to Overdraft Account No.3301599318 in the name of PHFI, on 07.05.2014, for creating ‘Time Deposit’ on 08.05.2014. The PHFI continued to pay interest on overdraft through RTGS from CD Account No.60146702654 with Malad Branch of Bank of Maharashtra. The PHFI, vide letter dated 09.10.2014, raised its objection to the opening of Overdraft Account No.3301599318. It has been pointed out that OP-1 had confirmed above ‘FDRs’ in its letter dated 13.02.2014 and again to Statutory Auditors through its letter dated 14.04.2014. Central Bank of India, Malad Branch deducted TDS on above ‘FDRs’ on 26.03.2014 of Rs.160864, Rs.127598/-, Rs.110604/- and Rs.1,03,231/-, which was duly credited in the PHFI’s PAN No.AABAP4445L against TAN No.MUMC10331G of Central Bank of India, Malad Branch. It has never informed about Overdraft Account No.3301599318 to the PHFI but the OPs did not respond. The PHFI, vide letters dated 15.11.2014 and 17.03.2015, demanded the papers on which, overdraft account was opened but the OPs did not supply the documents. The PHFI, vide letter dated 11.04.2016 and 03.05.2016 directed to refund balance amount of Rs.2.5 crores of above FDRs but the OPs, vide letter dated 04.07.2016, declined to refund even the balance about of Rs.2.5 crores.

10.   The complaint has been filed on 15.07.2016 alleging deficiency in service on the part of the OPs in not following the KYC norms, Anti-money Laundering Standard/ Combating of Financing of Terrorism/ Obligations of Banks under Prevention of Money Laundering Act, 2002 and Real Time Gross Settlement Guidelines, 2013 issued by RBI, while opening Overdraft Account No.3301599318 in the name of PHFI. The branch manager of the OP bank in collusion with the fraudsters opened overdraft account on fabricated papers. Within a short span of time, entire money of Rs.25/- crores was embezzled and overdraft account was closed. Due to fraud committed by the branch manager of the OP bank, the PHFI is being harassed in criminal investigation and its accounts were seized on 06.08.2014, which was re-opened on condition of giving security of Rs.27/- crores and for maintaining minimum balance of the amounts as received from the OPs bank, due to which, its project works undertaken by the PHFI have been stopped.

11.    Central Bank of India and another (the OPs) filed its written reply on 05.04.2017. Ms. Amrita CA, Mobile No.9167832287, an agent of the PHFI approached the OP bank for fixed deposit of Rs.5/- crores for one year handed over all the necessary papers. No officer of the OP bank ever visited the office of PHFI or approached it for fixed deposit. Later on Rs.5 crores was remitted from Account No.0340992008 with Citibank of the PHFI through RTGS on 18.11.2013. Then FDR No.3301504868 dated 19.11.2013 of Rs.5 crores was issued. The said representative later on approached the OP bank for grant of Overdraft Facility on security of FDR No.3301504868 and submitted all the required papers on which Overdraft Account No.3301599318 in the name of PHFI was opened with limit of Rs.4.5 crores on 21.11.2013. Again the PHFI remitted Rs.5 crores on 17.12.2013 through NEFT, on which FDR No.3308438820 dated 19.12.2013 of Rs.5/- crores was issued. On the request of the said representative and on producing all relevant documents, limit of overdraft was further enhanced to Rs.4.5 crores on 19.12.2013. Again the PHFI remitted Rs.5/- crores on 31.12.2013 through NEFT, on which FDR No.3311932779 dated 01.01.2014 of Rs.5/- crores was issued. On the request of the said representative and on producing all relevant documents, limit of overdraft was further enhanced to Rs.4.5 crores on 01.01.2014. Again the PHFI remitted Rs.2/- crores and Rs.5/- crores on 31.01.2014 through RTGS, on which FDR No.3319632687 of Rs.7/- crores was issued on 31.01.2014. On the request of the said representative and on producing all relevant documents, limit of overdraft was further enhanced to Rs.6.3 crores on 03.02.2014. The OPs followed KYC norms at the time of opening account and obtained all the papers. As the heavy amounts were being transferred to the bank therefore the OPs had no reason to doubt the genuineness of the papers or signatures on it as produced by the said representative and lending credence of the said representative. The papers as mentioned in paragraph-17 of the complaint at point Nos., f, g, and h were not supplied to the bank by the said representative. The emails were issued to the PHFI as required by the said representative. The bank utilized the fund of the PHFI as per instructions of the representative as received time to time. The alleged FDRs produced by the complainant were not issued by the OPs and are fake documents.  Original FDRs were taken possession Economic Offences Wing, Unit-3, Crime Branch, CBI, Mumbai on 24.07.2014. There were total five FDRs of Rs.25 crores. The PHFI was sanctioned overdraft facility Rs.22.5 crores. As against sanctioned limited, overdraft of Rs.22,49,68,083/- was made. Rs.3 crores was remitted to Overdraft Account No.3301599318 in the name of PHFI, on 07.05.2014. On the request of the representative of the PHFI, FDR No.3340023847 dated 08.05.2014 was issued. Overdrafts were utilised for transferring the fund to the CD Account No.60146702654 of the PHFI with Malad Branch of Bank of Maharashtra. The PHFI continued to pay interest on overdraft through RTGS from CD Account No.60146702654 with Malad Branch of Bank of Maharashtra. Overdraft facility of FDR is a common practice of the banks. Interest Certificate was issued in routine form of the system of the bank to Mr. Arun, representative of the PHFI. TDS used to be routinely deposited by the bank as and when it becomes due. There is no such person of the name of Mr. R. Govil working the branch of the bank. Mr. Nirmal Pathak visited the branch of the OP bank on 07.07.2014 and he was supplied Statement of Account of Overdraft Account No.3301599318 and TDS certificates. The address of Mumbai, which was provided by the representative of the PHFI was mentioned alongside of the Delhi address of the PHFI. The other narration about the suspicion is a cooked up story. The officer of the PHFI had full knowledge of the affairs of their account since beginning till end. The complainant has lodged false criminal complaint against the OP bank before CBI on 28.07.2014. The letter dated 29.09.2014 was sent to set at rest all the misgivings of the complainant and as reply to their rhetoric in the matter. The officers of the complainant availed services of an agent, who was in connivance with them. The complainant has lodged criminal complaint with CBI, who is investigating the matter. There is no deficiency in service within the meaning of Section 2(1)(g) of the Consumer Protection Act, 1986. The OPs raised preliminary issue relating to maintainability of the complaint as it raises complicated issues relating to fraud and misappropriation of money, which requires examination of voluminous documentary evidence and examination/cross-examination of witnesses. These issues cannot be decided in summary jurisdiction of this Commission. The complaint is barred by limited as provided under Section 24-A of the Consumer Protection Act, 1986.

12.    The complainant filed Rejoinder Reply, Affidavit of Evidence of Jayanto Narayan Choudhury, Vice President and documentary evidence. The OPs filed Affidavits of Evidence of Om Prakash Sharma and Anuj Mulchand Patel and documentary evidence. Both the parties have cross-examined the witness of each other. Both the parties have filed their written synopsis.

13.   We have considered the arguments of the counsel for the parties and examined the record. Relying upon the judgment of Supreme Court in Civil Appeal No.7289 of 2009, The Chairman & Managing Director, City Union Bank Limited Vs. R. Chandramohan (decided on 27.03.2023), the counsel for the OPs raised preliminary objection, relating to the maintainability of the complaints.

           The Consumer Protection Act, 1986 was enacted with an object to provide for better protection of the interests of the consumers. For that purpose, consumer council and other authorities have been^. established. Consumer markets for goods and services have undergone drastic transformation since the enactment of the Consumer Protection Act, 1986. The modern market place contains a plethora of products and services. The emergence of global supply chains rise in international trade and the rapid development of e-commerce have led to new delivery systems for goods and services and have provided new options and opportunities for the consumers. Equally, this has rendered the consumer vulnerable to new forms of unfair trade and unethical business practices. Misleading advertisements, tele-marketing, multi-level marketing, direct selling and e-commerce pose new challenges to consumer protection and^. will require appropriate and swift executive interventions to prevent consumer detriment. The Consumer Protection Act, 2019, has been enacted, repealing the earlier Act to meet out new challenges, in which, false and misleading advertisement and manufacture and sale of spurious and 'adulterant have been declared as an offence.

        Section-3 of the old Act and Section 100 of the new Act provide that the provisions of the Act are in addition to and not in derogation to the provisions of any other law. A consumer can avail remedy before civil court, Arbitrator (if contract so provides) or any other tribunal/court constituted under the law. In the absence of any provision barring the jurisdiction of consumer foras, the question as to whether remedy available under 'consumer law’ is barred specifically or impliedly does not arise. A person is ^\a 'consumer' who buys any goods or avails service paying consideration, for his own uses and not for commercial purpose. The nature of the dispute which can be raised before consumer foras are defects in goods, deficiency in service and unfair trade practice. Banking facilities are not free of charge as the banks earn on it.

        Section-13(2)(b) of the old Act and Section-38 (6) of new Act requires to decide the complaint on the basis of affidavit and documentary evidence, which means that the Commission has to decide the complaint in summary manner: But at the same^, time, Section 13 (4) of the old Act and Section-38 (9) of the new Act, confers same powers upon the Commission, for trial of a consumer dispute, which are vested in Civil Court under Code of Civil Procedure, 1908, while trying a suit in respect of (i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath, (ii) requiring the discovery and production of any document or other material object, producible as evidence, (iii) the reception of evidence on affidavits, (iv) the requisitioning of-the report of the concerned analysis or test the appropriate laboratory or from other relevant source, (v) issuing of commission for the examination of any witness or document and (vi) any other matter which may be prescribed by Central Government. From these provisions it is clear that although under the Act, the jurisdiction of the authorities is limited to consumer dispute, but while deciding such dispute no limit, has been fixed on adjudicatory power. The authorities are conferred jurisdiction to decide the issue of '"unfair trade practice" which has been defined under Section 2 (r) of the old‘ Act and Section 2 (47.) of new Act. This definition is similar to the definition of “fraud" as given under Section 17 of Indian Contract Act, 1872. From these provisions^-it is clear ^.that this Commission can hold a full trail, like a civil court or adopt summary procedure for decision of any. complaint:

     A three Judges Bench of Supreme Court in Dr. J.J. Merchant Vs. Shrinath Chaturvedi, (2002) 6 SCC 635, (paragraph_:7) held that the object and purpose of the Act is to render simple, inexpensive and speedy_; remedy to the consumer with complaint against defective goods and deficient services, it being a benevolent piece of legislation_; intended to protect a large body-of consumer from exploitation. Consumer Forum is an alternate Forum, established under the Act, to discharge the function of Civil Court. The, argument that the complicated^, question of fact cannot be decided by the Forum, has been specifically rejected (in paragraph-12). Similar view has been taken in Amar Jwala Paper Mills. Vs. State Bank of India, (1988) 8 SCC 387, CCI Chambers Coop. Hsg. Society Ltd. Development Credit Bank Ltd. (2003)7 SCC 233. This view has been reaffirmed by three Judges Bench of Supreme Court, in Nizam Institute of Medical Sciences Vs. Prasanth S. Dhananka, (2009) 6 SCC 1 and IFFCO TOKIYO General Insurance Company Ltd. Vs. Pearl Beverages Ltd., (2021) 7 SCC 704.

14.       The OPs submitted that last transaction was done in May 2014, while the complaint was filed on 15.07.2016. Section 24-A of the Act provides two years limitation for filing the complaint. As the complainant did not file any application for condonation of delay as such the complaint is liable to be dismissed as time barred. The complainant has stated that fraud by the OP bank came in the knowledge of the complainant in October, 2014, then criminal complaint with Superintendent of Police, Economic Offence Wing, Crime Branch, Mumbai was filed on 14.10.2014. The complaint is filed within two years from the date of knowledge of fraud.

       Section 17 of Limitation Act, 1963, provides that in case fraud and mistake, limitation starts running from the date on which fraud or mistake came in the knowledge of the plaintiff. Supreme Court in V.N. Shrikhande (Dr) Vs. Anita Sena Fernandes, (2011) 1 SCC 53, held that where effect of medical negligence was manifest, cause of action arises on the date, when negligence was committed. However, where effect is latent, cause of arises when harm or injury is discovered. In Hyundai Motors India Limited Vs. Shailendra Bhatnagar, 2022 SCC OnLine SC 483, held that limitation would start running from the date, the defect was surfaced. In Jay Laxmi Salt Works (P) Ltd. Vs. State of Gujarat, (1994) 4 SCC 1, held that in cases of malfeasance, misfeasance and non-feasance, limitation can be computed from the date of occurrence the damage or the date when the claim is rejected.

15.       The plea that complicated issues of fact are involved, which requires trial by Civil Court is always raised by the opposite party for harassing a consumer. In the present case, both the parties have cross-examined of the witness of each other. So far as the argument that the complainant has produced fake documents along with the complaint, is concerned, whatever documents were supplied by the bank or obtained from CBI or other government agency, were filed. If same documents are not available in the record of the bank then its branch manager is responsible for it and not the PHFI. The branch manager handed over the papers to the PHFI, which are available in its office, same was filed in the complaint. Preliminary objections raised by the OPs have no merit.

16.    The counsel for the opposite parties argued that the employees of the complainant and the officers other banks committed embezzlement under a larger conspiracy, for which, the complainant itself has lodged criminal complaint with Economic Offences Wing of CBI. During pendency of criminal investigation, this complaint is not maintainable. This argument is not liable to be accepted. Supreme Court in Avitel Post Studioz Limited Vs.HSBC PI Holding (Mauri Lius) Limited (2021) 4 SCC 713, held that criminal and civil proceeding can go on simultaneously on same allegations. In Sunita Vs. Rajasthan .SRTC; (2020) 13 SCC 486, held that in civil proceedings the court is required to record findings on the basis of evidence on record and rule of adducing best evidence is not applicable.                                                

17.        Initially Dena Bank filed criminal complaint before CBI stating that Dena Bank takes bulk deposits from Government Institutions to augment its business. Internal inquiries revealed that Pritam Vidyadhar Nagarkar, Branch Manager Malabar Hill^. Branch was posted at the branch since 25.08.2011. Malabar Hill Branch was not. having any, bulk deposit.  Pritam Vidyadhar Nagarkar, therefore, tried to canvass bulk business. In this connection, he came into contact with Vimal Barot who introduced himself as custodian of government departments/corporations funds and was contacted with Showman group and posted there as Senior Vice President. In order to facilitate Malabar Hill branch in mobilizing bulk deposits Vimal Barot used to give information to Pritam Vidyadhar Nagarkar about the deposits available in a particular government organization/corporate. On the basis of that information Pritam Vidyadhar Nagarkar used to obtain interest rates from the Bank's Treasury Department, Head Office and conveyed this to Vimal Barot. Vimal Barot reportedly negotiated with the organization/corporate which offered the deposits and canvassed deposits for Dena Bank. Later on Pritam_. Vidyadhar Nagarkar used to convey the interest rate, tenor of deposit, amount of deposit ^,and IFSC code of the branch etc., to the concerned organization/corporate by way of email. The organization/corporate which offered the deposit used to remit the amount through RTGS, if the banks terms are acceptable. 'Term deposit accounts' were opened at the branch. The procedure to open 'term deposit accounts' are (i) KYC of the deposit account to be obtained by the branch by obtaining necessary documents like address proof, identity proof _.of the concerned organization duly verified with the original and signature of the authorized persons taken in bank officials presence (ii) The original deposit receipts are to be delivered to the authorized .person of the organization under acknowledgement in the presence of bank officials. It is observed that Pritam Vidyadhar Nagarkar had not followed above procedure, rather the KYC documents were invariably received through Vimal Barot and other persons in all the suspected fraud accounts. Bank TDR receipts were delivered based on the organization's suspected fabricated authority letter brought by Vimal Barot or his associates. Pritam Vidyadhar Nagarkar used to receive the loan application including original TDR Receipt duly, discharged by the signatories who has signed in the documents given at the time of submission of KYC and also resolution of the organization/corporate on its letter head through Vimal Barot and associates instead of personally verifying the genuineness with the concerned organization/corporation.

         Later on the complainant also filed criminal complaint i.e. Case No.RCBSM2014E000/CBI/BS&FC/Mumbai under Section 120-B, 419, 420, 467, 468 & 471 IPC R/w Section 13(2), 13(1)(d) of the Prevention of Corruption Act, 1988 was registered with Superintendent of Police, CBI, Bank Security and Fraud Cell, Mumbai, in respect of the transactions effected in the accounts of the PHFI opened with Dena Bank, Punjab National Bank and Bank of Maharashtra.

       During investigation, CBI did not find complicity of the employees/authorised signatory of the complainant in fraudulent transactions nor has charge sheet been submitted against any employee of the complainant.

18.    The allegations of the PHFI that it forwarded relevant forms and the documents to Central Bank of India, Malad Branch, Malad (West), Mumbai for ‘fixed deposit’, for a period of one year time to time, on which FDRs were issued by Central Bank of India i.e. FDR No.593720 dated 21.11.2013 of Rs.5 crores, FDRNo.593815 dated 19.12.2013 of Rs.5 crore, FDR No.593856 dated 01.01.2014 of Rs.5/- crores, FDR No.594040 dated 31.01.2014 of Rs.2 crores, FDR No.594041 dated 31.01.2014 of Rs.5 crores and FDR No.594442 dated 08.05.2014 of Rs.3 crores. Central Bank of India, Malad Branch confirmed above 5 ‘FDRs’ in its letter dated 13.02.2014. Thereafter Statutory Auditors of the PHFI sought for confirmation of above ‘FDRs’, which was confirmed by Central Bank of India, Malad Branch through its letter dated 14.04.2014. Central Bank of India, Malad Branch deducted TDS on above ‘FDRs’ on 26.03.2014 of Rs.160864, Rs.127598/-, Rs.110604/- and Rs.103231/-, which was duly credited in the PHFI’s PAN No.AABAP4445L against TAN No.MUMC10331G of Central Bank of India, Malad Branch. But Central Bank of India, without following the norms of KYC, opened Overdraft Account No.3301599318 on the fabricated papers, through which, an amount of Rs.224968083/- was embezzled. The complainant through letter dated 11.04.2016 and 03.05.2016, requested to refund the balance amount with accrued interest but the OPs denied.

19.   Central Bank of India admits above ‘fixed deposits’ but stated that the FDRs filed by the complainant are fake document. Ms. Amrita, CA, Mobile No.9167832287, an agent of the PHFI approached the OP bank for fixed deposit of Rs.5 crores for one year handed over all the necessary papers. Later on Rs.5 crores was remitted from Account No.0340992008 with Citibank of the PHFI through RTGS on 18.11.2013. Then FDR No.3301504868 dated 19.11.2013 of Rs.5 crores was issued. The said representative later on approached the OP bank for grant of Overdraft Facility on security of FDR No.3301504868 and submitted all the required papers on which Overdraft Account No.3301599318 in the name of PHFI was opened with limit of Rs.4.5 crores on 21.11.2013. As and when further FDRs were made, overdraft limit was enhanced on the request of the said representative. Overdrafts were utilised for transferring the fund to the CD Account No.60146702654 of the PHFI with Malad Branch of Bank of Maharashtra. The PHFI paid interest on overdraft through RTGS from Account No.60146702654 with Malad Branch of Bank of Maharashtra.

         So far as allegations of not following KYC norms, is concerned, the OPs stated that as the heavy amounts were transferred to the bank therefore the OPs had no reason to doubt the genuineness of the papers or signatures on it as produced by the said representative and lending credence of the said representative. Omprakash Sharma (OPW-1) in his cross-examination admitted that he had not examined any credential of Ms. Amrita.

 20.    Therefor it is proved that the branch office of the OP bank received total Rs.25 crores from the PHFI time to time for ‘fixed deposit’ of one year on which, ‘FDRs’ were issued but the branch office of the OP bank, in collusion with the fraudster opened Overdraft Account No.3301599318 without following KYC norms, through which Rs.22.5 crores have been embezzled. There could be no reason for not following KYC norms, while sanctioning overdraft facility of such a heavy amount except the collusion of the officers of the OP bank with fraudster. Supreme Court in Canara Bank Vs. Canara Sales Corporation, (1987) 2 SCC 666, held mere negligence of the customer will not prevent it in successfully suing the bank for recovery of the amount. Supreme Court in Canara Bank Vs. Canara Sales Corporation, (1987) 2 SCC 666 and Pradeep Kumar Vs. Post Master General, (2022) 6 SCC 351, held that the master is vicariously liable for the act of the servant.

ORDER

In view of above discussions, the complaint is partly allowed. Central Bank of India is directed to pay Rs.25 crores with interest @9% per annum from the respective date of transfer of the money to it till the date of payment to the complainant, within two months from the date of this judgment.