By Smt. C. S. Sulekha Beevi, President,

1. The complainant is an NRE account holder in opposite party Bank. On 21-8-2007 he deposited 2500 euro equivalent to Rs.1,36,125/- in his NRE account. The exchange rate was Rs.54.45. On checking his account he came to notice that on the same day the amount has been withdrawn and redeposited two times. It is stated that Bank has done so without any authorisation. It is seen from his account that complainant gained Rs.125/- in the last transaction shown by the Bank. Again on 09-4-2008 he deposited 2300 euro equivalent to Rs.1,43,520/-. The exchange rate was Rs.62.40. On the same day the said amount was withdrawn from his account without authorisation and without his issuing any cheque. The money is seen redeposited in the account on the next day and it is shown that complainant has gained Rs.125/- with the changed exchange rate. It is alleged that the Bank has withdrawn and redeposited the amounts without authorisation and has carried out transactions in his account without authorisation. That these are gross violation of Banking Rules and practice. The action has caused him great mental agony as the Bank has meddled with his money without his authorisation and knowledge. Hence this complaint alleging deficiency in service and to direct opposite parties to pay Rs.2,50,000/- as compensation for the damage caused to his bank account and in banking circles and for Rs.2,50,000/- as compensation for mental agony.

2. A combined version was filed by opposite parties. It is admitted that complainant is an NRE a/c holder of opposite party Bank. Opposite parties dispute the maintainability of the complaint contending that the complainant had already filed a complaint before the Banking Ombudsman and it was dismissed. Opposite party denies the allegations. Opposite parties submit that complainant is an NRI customer vide a/c No.047361060005734 sine 09-8-2006. On 21-8-2007 complainant deposited Euro 2500 into his account and the transaction details are stated in the version as under:

“21/08/07 EURO 2500 X 54.45 21/08/07 136,375.00 386,113.04

21/08/07 EURO 2500 X 54.45 21/08/07 136,375.00 249,738.04

21/08/07 EURO 2500 X 54.45 21/08/07 136,125.00 385,863.04

21/08/07 EURO 2500 X 54.45 21/08/07 136,125.00 249,738.04

21/08/07 EURO 2500 X 54.45 21/08/07 136,250.00 385,988.04”

 

3. It is submitted by opposite party that the above second entry was reversal of first entry which had been erroneously passed. The third entry was reversal of fourth entry for providing better rate to customer by considering the customer relationship. That these entries are teller's rectification entries only and not cash withdrawals as alleged by complainant. It is stated that complainant has benefited with higher conversion rate and accordingly there is no scope for financial loss situation. The details regarding deposit of EURO 2300 on 09-4-2008 is stated as under:

“09/04/08 FCY EURO 2300 @ 62.40 09/04/08 143,520.00 148,633.77

09/04/08 FCY EURO 2300 @ 62.40 09/04/08 143,520.00 5,113.77

09/04/08 FCY EURO 2300 @ 62.45 10/04/08 143,635.00 147,748.77”

 

4. It is submitted that first entry got reversed due to unexpected fund shortage in the exchange houses and the credit has been given to complainant on the very next day morning itself with better conversion rate. That in this case also, the previous day's conversion rate is protected and the complainant is benefited with 5 paise more. Opposite party submits that accounting rectification entries does not require customer instruction or letter and the same are not cash withdrawals by any officials from his account. That the complainant has not landed up with any financial loss, but has only benefited with better rate. The complaint has arisen only out of mistaken or misconstrued understanding of accounting and journal entries. That opposite party had clarified it to the complainant. That there is no deficiency in service and that complainant is not entitled to any reliefs.

 

5. Evidence consists of the oral evidence of the power of attorney holder of complainant who was examined as PW1. Exts.A1 to A4 marked for complainant. Opposite party was examined as DW1 and Exts.B1 to B3 marked for opposite party.

6. Points for consideration:-

   (i) Whether complaint is maintainable?

   (ii) Whether opposite parties are deficient in service

   (iii) If so, reliefs and costs.

7. Point (i):-

   It is contended by opposite parties that complainant had preferred a complaint before the Banking Ombudsman. That the complaint before Ombudsman was dismissed and therefore the complainant has exhausted any further remedy upon the dispute. Along with the version, opposite party has produced the document relating to the finality of the complaint before the Banking Ombudsman. We do not see that any considered decision was passed by the Ombudsman. It is not an order but a letter issued from the office of Banking Ombudsman stating that after deliberations during hearing and in view of explanations and documents furnished by complainant, the complaint is treated as closed. Further in Kamleshwari Prasad Singh Vs National Insurance Co. Ltd 2005 CTJ 747 (CP) NCDRC it has been held that the decision of the Ombudsman is not binding on the complainant and that a complaint can be filed before Consumer Forum. In view of the above we hold that this complaint is maintainable. Point found in favour of complainant.

8. Point (ii):-

The complainant is aggrieved that the Bank has meddled with his money and has done transactions in his account without his authorisation. During the relevant period second opposite party was the Manager. The defense raised by the Bank in regard to the deposit of 2500 Euro on 21-8-2007 is that the first debit entry was a rectification of first wrong entry and the second debit entry on the same day was done to give the complainant better exchange rate on the basis of good customer relationship. In regard to the deposit of 2300 euro on 09-4-2008 it is contended by the Bank that debit entry resulted due to fund shortage in the exchange house and that the amount was credited to the account of the complainant the very next day itself with a better exchange rate. A further defense raised by the Bank is that the complainant has only benefited by such transactions and has not sustained any financial loss.

9. The Bank does not have a case that the debit of the deposited amount two times on 21-8-2007 and debit of the deposited amount on 09-4-2008 was done with the consent, knowledge or authorisation of the complainant. It is submitted on behalf of the Bank that these withdrawals shown in the account are not actual withdrawal of amount but only debit entries which were done for rectification of mistake. That the Banker has a right to rectify a wrong entry.

 

10. On 21-8-2007 complainant deposited 2500 euro (Rs.136,375/-). This is seen reversed on the same day. As per the account statement it is seen withdrawn in euro itself and is not withdrawn in Indian currency. It is contended by the Bank that thee was teller error and the deposit was reversed to rectify the deposit erroneously passed. The oral evidence of DW1 in this regard is as under:

“21-8-2007-ന്ന് പരാതിക്കാരന്‍ 2500 euro deposit ചെയ്തിരുന്നു എന്നു പറഞ്ഞാല്‍ ശരിയാണ്. 9-4-2008-ന്ന് 2300 euro deposit ചെയ്തിരുന്നു എന്നു പറഞ്ഞാല്‍ ശരിയാണ്. Bank-ല്‍ പരാതിക്കാരന്‍ foreign currency deposit ചെയ്തപ്പോള്‍ അന്നേ ദിവസം നിലവിലുളള exchange rate സമ്മതിച്ചിട്ടാണ് deposit ചെയ്തത് എന്നു പറഞ്ഞാല്‍ ശരിയാണ്. “

 

“പരാതിക്കാരന് deposit ചെയ്തപ്പോള്‍ (21-8-2007) ആദ്യം യഥാര്‍ത്ഥ exchange rate പ്രകാരം 1,36,375/-ക. ആദ്യം credit കൊടുത്തു. അന്നേ ദിവസം തന്നെ അതേ amount-ന്ന് ഒരു debit entry കൊടുത്തിട്ടുണ്ട് എന്നു പറഞ്ഞാല്‍ ശരിയാണ്. ആ debit entry കൊടുക്കുവാന്‍ എന്താണ് കാരണം(Q) Teller-ല്‍ narration കൊടുക്കാത്തതു കാരണം ആ തെറ്റ് തിരുത്തുന്നതിന്നും narration കൊടുക്കുവാന്‍ വേണ്ടിയും ആണ് debit entry കൊടുത്തത്.“

11. Though it is contended by the Bank that this first debit entry on 21-8-2007 was a teller rectification entry there is no document produced by the bank to support this. If an error has happened in teller narration or the like, so as to reverse the credit entry in the account of the customer, then definitely there will be some document kept in the bank which reflects the mistake. The Bank has to maintain vouchers/slips and teller general ledger/chart of accounts for foreign currency transactions. Without any such evidence it cannot be concluded that there was an error which necessitated rectification.

     

12. Again, on 09-4-2008 the complainant deposited 2300 euro (Rs.148,633.77). After crediting this amount, the Bank has reversed the entry or which means withdrawn the amount. It is seen withdrawn in foreign currency itself. It is contended by the Bank that there was fund shortage in the exchange house and this necessitated the reversal of the credit. The amount is then seen deposited as euro in the complainant's account only on the next day. Then in which account was the euro kept by the Bank on 09-4-2008? It is submitted in the version that Bank has converted the foreign currency through UAE Exchange and Financial services Ltd. If there was fund shortage in exchange house making it not possible to give credit to the customer on 09-4-2008 and also making it necessary to reverse the entry, then such a situation should reflect in the account or some document kept in the Bank kept on that day. Such amounts are ordinarily kept either in the suspense account of the Bank or some other mode int hat respective day. Without this the Bank will not be able balance and close the transaction of the day. Bank has not explained how it has maintained it's account on 09-4-2008 after accepting 2300 euro and not crediting to the complainant's account. If there was presentment of the amount to the exchange house on 09-4-2008 itself, and there was inability to credit it due to shortage of funds, then the account statement of the Bank maintained with exchange house of the particular day should reflect this. Opposite party has produced the account statement maintained with UAE Exchange house of 09-4-2008 and 10-4-2008. It is seen that the 2300 euro was presented only on 10-4-2008. Thus as per the evidence placed the euro was received into the complainant's account and then withdrawn and presented to UAE exchange house only on 10-4-2008.

     

13. Undisputedly a Bank can correct a genuine mistake. But a Bank cannot unendingly make debit and credit entries in the entries in the account of a customer and then take refuge under the defense of rectification of wrong entry. Even if we accept that the first entry on 21-8-2007 was an error and it was reversed, then the Bank would have no occasion to reverse the third rectified entry. If the Bank had presented the euro and exchanged it by the third entry the Bank cannot withdraw the amount again as euro itself and make the later entries. It can be safely concluded that the Manager was holding the euro till the last entry. The contention that these repeated entries were only fictitious entries and that there were no actual withdrawal of money or redeposit of money throws light that the Manager was holding the amount as euro with him. If such practices are to be allowed, then how can a customer rely upon his account statement? It will be disastrous as it will give employees in the Bank ample chance to meddle with customer's money by transferring it into other accounts for a day or two and then pocketing the profit. In the case of foreign currency, as the exchange rate keeps on fluctuating it is more grievous. If there is an occasion of error and it needs rectification the Bank is bound to establish ti with cogent evidence. In this case, the Bank has miserably failed.

     

14. Another defense raised by the Bank is that the credit entry was reversed for the second time to give better conversion rate to the complainant. It is testified by DW1 that complainant had deposited the foreign currency after confirming with the Bank the exchange rate. If that be so, the Bank has no right to interfere in his account reverse the entry and fetch him a 'better rate'. The second debit entry on 21-8-2007 is an actual withdrawal of the euro from the account of the complainant and not a fictitious entry as contended by Bank. If the Manager had given credit of 2500 euro by the third entry on 21-8-2007 and had exchanged it (teller error already rectified) into Indian currency then how could the Manager withdraw it as euro again and exchange it for a better rate? It can be inferred that the Manager has played some accounting tricks holding back the foreign currency. Along with the version opposite party has produced the copy of the complaint preferred by the complainant to Banking Ombudsman in March, 2009. It is averred in the complaint as under:

    “Here I strongly feel Mr. Sujithan, has taken advantage of the fluctuations in currency exchange rate on 21-8-2007 and on 09-4-2008. And to cover up his fraud he deposited an extra Rs.125/- to my account and the balance in profit in the exchange rate fluctuation he pocketed himself.”

     

15. On 09-4-2008 euro 2300 had already reached the complainant's account in opposite party Bank. If there was fund shortage and Bank could not exchange it on the same day the euro should be credited to the complainant's account or at least kept in suspense account of the Bank. But it is seen credited to the complainant's account only on the next day. It can be again inferred that the euro was at the disposal of some person in the Bank. We have no hesitation to hold that such debit and credit of amount from the complainant's account is illegal amounting to deficiency in service. Any transaction done by the Bank in the customer's account without authorisation of the customer is illegal even if it ultimately turns out to be beneficial tot he customer. In the instant case, the benefit received by complainant is negligible when compared to the anxiety that might have created on coming to know hat some outsider is meddling with the money in his account.

     

16. Banks must function honestly to serve it's customers. They are trustees of public money. Second opposite party who was examined as DW1 was the Manager of the Bank during the relevant time. The Bank is vicariously responsible for the acts done by second opposite party. In our view the act of opposite parties in dealing with the complainant's account unauthorisedly constitutes deficiency. We hold both opposite parties deficient.

     

17. Even though, complainant may not have suffered financial loss in the literal sense; if someone else makes benefit unauthorisedly using his money, it is definitely injury and loss to the complainant. The deficiency that is brought to light by this case is highly alarming and should not be allowed to recur. In our view it is a fit case to award punitive damages so as to make employees of Banks and financial institutions to be careful and cautious in dealing with money belonging to the public. We hold that payment of Rs.20,000/- as damages to the complainant together with cost of Rs.1,000/- would meet the ends of justice. Both opposite parties are jointly and severally liable to compensate he complainant.

18. In the result we partly allow the complaint and order opposite parties to jointly and severally pay to the complainant a sum of Rs.20,000/- (Rupees Twenty thousand only) together with cost of Rs.1,000/- (Rupees One thousand only) within one month from the date of receipt of copy of this order.

Dated this 20th day of January, 2010.

Sd/-

C.S. SULEKHA BEEVI, PRESIDENT

Sd/-

MOHAMMED MUSTAFA KOOTHRADAN, Sd/-

MEMBER E. AYISHAKUTTY, MEMBER

APPENDIX

Witness examined on the side of the complainant : PW1

PW1 : Mohammed Basheer, S/o Marakkar, Kondath House, Tirurkad P.O.

Documents marked on the side of the complainant : Ext.A1 to A4

Ext.A1 : Special Power of Attorney dated, 31-3-2009 given by complainant to Mohammed Basheer, S/o Marakkar, Kondath House, Tirurkad Post, Perintalmanna.

Ext.A2 : Photo copy of the statement of accounts in respect of complainant

Ext.A3 : Notary attested copy of relevant pages of passport of complainant.

Ext.A4 : Photo copy of the e-Ticket Receipt & Itinerary

Witness examined on the side of the opposite parties : DW1

DW1 : Sujithan.K.S., Second opposite party.

Documents marked on the side of the opposite parties : Ext.B1 to B3

Ext.B1 : Photo copy of the letter dated, 28-5-2009 from Banking Ombudsman.

Ext.B2 : Photo copy of the letter dated, 24-3-2009 from second opposite party to Banking Ombudsman.

Ext.B3 : Photo copy of e.mail dated, 23-2-2009 from opposite party to complainant.

Sd/-

C.S. SULEKHA BEEVI, PRESIDENT

Sd/-

MOHAMMED MUSTAFA KOOTHRADAN, Sd/-

MEMBER E. AYISHAKUTTY, MEMBER