BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION:
HYDERABAD.
C.C.No.15 OF 2011
Between:
Syed Ahmed Mohiuddin
S/o.Late Syed Khaja Moinuddin
Aged about 45 years,
Occ:Business Consultant,
R/o.H.No.2-5-550, Choti Masjid,
Subedari, Hanmakonda,
Warangal-506 001. …Complainant
AND
State Bank of Hyderabad,
NRI Branch,
Khan Lateef Khan Estate,
Opp:Fatheh Maidan Stadium,
Hyderabad. …Opposite Party
Counsel for the Complainant Party-in-person
Counsel for the Respondent Sri Ch.Siva Reddy
QUORUM: HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT
SMT M.SHREESHA, HON’BLE MEMBER
AND
SRI R.LAKSHMI NARASIMHA RAO, HON’BLE MEMBER
FRIDAY, THE FOURTEENTH DAY OF OCTOBER,
TWO THOUSAND ELEVEN
Oral Order:(Per Sri R.Lakshmi Narasimha Rao, Hon’ble Member.)
1. The Complaint is filed seeking direction to State Bank of Hyderabad to pay US$ 58915.29 towards principal amount of 7 FCNR-B deposits, US$ 49783.42 towards compound interest @ 6.5% per annum for 13 years of the FCNR-B deposits, US$ 43,956 towards damages for mental tension and US$250 towards costs.
2. The averments of the complaint are that the complainant’s father late Syed Khaja Moinuddin invested NRE Assets worth US$ 35000 in Indian Development Bonds (IDB) floated by the State Bank of India on behalf of the Reserve Bank of India in the year 1991 and on maturity of the bonds, the complainant’s father reinvested the IDBI Bonds worth US$ 55668 in 7 FCNR-B deposits bearing receipts No.0305412 to 418 each worth Rs.US$7952/62 with the opposite party in the year 1997. The complainant and his father gave written instructions through letter dated 30.10.1997 to the opposite party bank to renew all the FCNR-B deposits for a period of three years on every maturity of the FCNR-B deposits. The opposite party bank by its endorsement created impression that the deposits would be renewed automatically for a period of three years in the absence of instructions thereof from the complainant and his father.
3. After the death of his father, the complainant approached the opposite party along with 7 FCNR-B deposits and the death certificate of his father, to claim maturity proceeds of the FCNR-B deposits. The opposite party bank informed the complainant that the records were not in its possession and later on he was informed that the records are in possession of the opposite party’s overseas branch at Mumbai. The opposite party bank to cover up its deficiency in service came up with the plea of linking of FCNR-B deposits of the complainant and his father with other NRI Indian rupee deposits held jointly and individually by the complainant’s father and the complainant. The origin of FCNR-B deposits is in IDBI bonds which are not interchangeable with the NRE deposits of the complainant’s father and the complainant.
4. The opposite party bank had renewed the FCNR-B deposits for a period of one year instead of for a period of three years and against the instructions of the complainant through letter dated 13.10.1997. The complainant and his father did not know about the renewal of the deposits for a period of one year and in view of the endorsement and undertaking of the bank they believed that the FCNR-B deposits would be automatically renewed for a period of three years. The complainant and his father had not given telephonic instructions or endorsement or acceptance for conversion of FCNR-B deposits into NRE deposits. No official of the opposite party bank had informed the complainant and his father about the high rate of interest on NRE account. The complainant approached the Banking Ombudsman who rejected his claim on 18.2.2009 citing his limitations and short-comings. The Banking Ombudsman had instructed the opposite party bank to provide the complainant a copy of statement of NRE account No.249. The opposite party bank failed to furnish the copy of statement of account.
5. The opposite party bank filed written version contending that the complainant had taken 7 FCNR-B deposits bearing receipts No.0305412 to 0305418 each deposit worth US$7952/62. Originally the deposits were in the name of the complainant’s father Syed Khaja Moinuddin. Subsequently, on the request of the original depositor, the complainant’s name was included. The complainant and his father addressed a letter dated 13.10.1997 to renew the deposits on maturity.
6. The depositors had given telephonic instructions to convert the 7 FCNR-B deposits into NRE Rupee deposits as the NRE Rupee deposits carry higher rate of interest. The complainant’s father had taken 7 FCNR-B deposits from the opposite party bank on 15.1.1997 for US$7952.62 each with the due date of 15.1.1998. On 13.10.1997 the depositor had requested through a letter to include the name of his son, the complainant Sri Syed Ahmed Moinuddin. Accordingly the name of the complainant was included in the deposits converting them as joint deposits. After maturity of the deposits, they were renewed on 16.1.1998 at the request of the depositors. The FCNR deposits carried interest @ 5.25% and therefore they were cancelled and issued NRE deposits converting them into rupees on 17.2.1998 as per the oral request of the depositors. The 7 NRE deposits were cancelled as per the letter dated 17.2.1999 and they were made six term deposit receipts (NRE) in three names each having two deposits. Syed Ahmed Moinuddin was issued two deposit receipts bearing Nos.260227 and 260226 of `4,27,587/- each. Syed Khaja Moinuddin was issued two deposit receipts bearing Nos.260229 and 260230 of `4,27,587/- each and Syed Zaheeruddin was issued two deposit receipts bearing Nos.260231 and 260232 of `4,27,587/- and `4,27,586/- and the deposit receipts were renewed in their names from time to time. The conversion of FCNR-B deposits in to NRE rupee deposits on telephonic instructions was acquiesced by the depositors including the complainant.
7. After conversion of the NRE rupee deposit in individual names, the depositor had requested to transfer the deposits to Warangal main branch and MGM Hospital Branch, Warangal during 2003-04. The term deposit receipt No.621707 and 621708 in the name of late Syed Khaja Moinuddin were transferred to Warangal Main Branch on 12.9.2003 and the TDR Nos.621701 and 621702 in the name of the complainant were transferred to the main branch Warangal on 1.11.2002. The TDR Nos.587842 and 587843 in the name of Syed Zaheeruddin were transferred to MGM Hospital Branch Warangal on 4.8.2004. The complainant, his father and brother opened their accounts on 1.11.2002, 14.10.2003 and 11.8.2004 respectively at the main branch and MGM Hospital Branch Warangal.
8. After the death of his father the complainant demanded the opposite party bank to pay the amount in respect of FCNR deposits of his father. The opposite party bank informed the chronological events to the complainant. The complainant approached the Banking Ombudsman Hyderabad who after verifying the records rejected the claim of the complainant holding that there was no evidence to establish that the NRE deposits were other than the FCNR amounts. The original FCNR B deposits were converted to NRE rupee of deposits. Hence, the FCNR-B deposits are no more in existence and as such the complainant is not entitled to claim any amount under the FCNR-B deposit receipts. Therefore, prayed for dismissal of the complaint.
9. In support of his claim the complainant has filed his affidavit and the documents marked as Exs.A1 to A16. On behalf of the opposite party bank, its Manager IV Gopala Krishna has filed his affidavit and got marked Exs.B1 to B16.
10. Ex A-1 are the copies of Seven Joint FCNR-B Deposits. Ex A2 is the copy of letter dated 13-10-1997is to the Bank requesting for renewal for further period of 3 years and to add complainant name into seven FCNR-B deposits on either survivor basis. Ex A3 is the copy of the death certificate of complainant father (2nd joint holder) issued by competent authority (Warangal Municipal Corporation Warangal). Ex A4 is the copy of letter requesting bank to deposit FCNR amount proceeds into complainant personal account No. 083003. dated : 23.10.2008. Ex A5 is the copy of complaint dated 23.10.2008.to Banking Ombudsman against SBH, NRI Branch. Ex A6 is the copy of Banking Ombudsman acknowledgement dated 29.10.2008 and allotment of complaint no. by banking ombudsman. Ex 7 is the copy of letter dated 22.1.2009.to SBH NRI Branch to provide 1067 NRE Statements of account. Ex A8 is the copy of letter to Banking Ombudsman to instruct SBH NRE Branch to provide complainant with the statements accounts of the following NRI accounts 1067, 674, 249 and 744 respectively. Ex A9 is the reminder to SBH NRI Branch to provide requested NRI account statement dated 29-01-2009. Ex A10 is the letter to Banking Ombudsman disputing SBH, NRI bank claim of account No.1067 as Joint account. Ex A11 are the order of A.P. Banking Ombudsman dated 18-02-2009. Ex A12 is the letter to SBH NRI branch as a final reminder to submit statement of account No. 249, 1067, 674 and 744 as instructed by Banking Ombudsman and reminder sent by the complainant. Ex A13 is the circulation Memo (sheet ) with particulars. Ex A14 is the copy of SBH Reply letter (F.No. 120./191) to A. P. Banking Ombudsman against complaint No. 200809001128 filed by complainant. Ex A15 is the statement of accounts bearing NRI Accounts No. 83003, 83004, 83005 issued by SBH NRI branch during period 01-02-2003 to 09-08-2004 to verify SBH NRI Branch claim of transfer of funds to Warangal SBH as per instruction of Hon’ble A.P. State Consumer Disputes Redressal Hyderabad. Ex A16 is the brochure containing details of FCNR (Dollar ) & NRE STDR (Indian Ruppes) Deposit schemes.
11. Ex B1 is the 7 FCNR Deposits opened deposits receipts along with receipts and vouchers in the name of Syed Khaja Moinuddin. Ex B-2 is the letter dated 13.10.1997 letter from Syed Khaja Moinuddin to include his son Syed Ahmed Moinuddin. Ex B3 is the renewed 7 FCNR deposits along with the vouchers dated 17.2.1998 Ex B-4 are the 7 FCNR deposits converted into NRE deposits with voucher dated 17.2.1998 Ex B-5 is the letter for issuing NRE deposits converted by FCNR dated 17.2.1999. Ex B-6 are the Vouchers for renewals of 6 NRE deposits dated 3.2.2011 Ex B-7 is the letter from Syed Khaja Moinuddin for transfer of deposits from OP. Ex B-8 are the vouchers for opening NRE deposits of Syed Khaja Moinuddin at Warangal branch and deposits receipts dated 14.10.1993. Ex B-9 is the letter from Syed Ahmed Moinuddin to transfer of deposits to Warangal branch dated 14.10.2002. Ex B-10 is the Voucher dated 6.11.2002 pertains to opening of NRE deposits of Syed Ahmed Moinuddin at Warangal branch Ex B11 is the letter dated 31.7.2004 from Syed Jaheeruddin to transfer deposits to MGM Hospital, Warangal. Ex B-12 is the letter dated 31.7.2004 fom Syed Jaheeruddin to transfer deposits to Warangal branch. Ex B-13 are the vouchers dated 11.8.2004 for opening deposit at Warangal branch and receipt. Ex B-14 is the complaint dated 23.10.2008 made by Syed Ahmed Moinuddin against the bank before Ombudsman. Ex B-15 is the reply dated 17.11.2008 filed by the Bank before the Ombudsman. Ex B-16 are orders dated 18.2.2009 of the Ombudsman.
12. The complainant has filed his written arguments.
13. The points for consideration are:
1) Whether the FCNR-B deposits and the NRE Rupee deposits are one and the same?
2) Whether the source of investment of FCNR-B deposits and NRE Rupee deposits is the same?
3) Whether there was any deficiency in service on the part of the opposite party bank in not making payment of the amount under FCNR-B deposits?
4) To what relief?
14. POINTS NO.1 to 3: As the discussion under these points is interrelated, they have been taken up for simultaneous discussion. The complainant’s father late Syed Khaja Moinuddin invested NRE Assets worth US$ 35000 in Indian Development Bonds (IDB) floated by the State Bank of India on behalf of the Reserve Bank of India in the year 1991 and on maturity of the bonds, the complainant’s father reinvested the IDBI Bonds worth US$ 55668 in 7 FCNR-B deposits bearing receipts No.0305412 to 418 each worth Rs.US$7952/62 with the opposite party in the year 1997. On 13.10.1997 the complainant’s father addressed letter to the opposite party bank to include the name of his son in the FCNR-B deposits. The opposite party bank accordingly had included the name of the complainant in the deposit receipts and thereby the deposits were converted from individual deposits to joint deposits.
15. On 16.1.1998 the deposits were renewed. The complainant contends that they had not issued any instructions for renewal of the deposits whereas the opposite party bank submits that as per the telephonic instructions of the complainant’s father it had renewed the deposits. A perusal of the brochure goes to show that the FCNR deposits are of the auto-renewal nature and so is the special term deposits (SPDR). The complainant on one hand contends that the opposite party bank had renewed the FCNR deposits without there being any instructions from him or his father and on the other hand he contends that he and his father addressed letter dated 17.2.1998 requesting the bank to renew the deposits.
16. The complainant’s brother had requested through letter dated 31.7.2004 the opposite party bank to transfer the deposits to the M.G.M. Hospital Branch Warangal. The M.G.M. Hospital Branch, Warangal addressed letter dated 31.7.2004 requesting the opposite party bank to transfer the term deposit receipt in terms of the letter enclosed thereto submitted by the complainant’s brother. The letter from MGM Hospital Branch made a specific reference to “SPL TDR NO.FD/20587842 DT.11TH FEBRUARY ’03 FOR RS.653542. MATURING ON 1ST FEBRUARY ’08 – MATURITY VALUE RS.902162/- ISSUED IN FAVOUR OF SYED ZAHEERUDDIN”. In the teeth of the specific mentioning of the TDR, it cannot be believed to hear the complainant that he or his father or brother had no knowledge of conversion of the 7 FCNR-B deposits to NRE TDRs.
17. The complainant cannot blow hot and cold simultaneously by contending that by virtue of the auto-renewal clause of the deposits mentioned in the brochure, the opposite party bank had the obligation to renew the deposits automatically as also contending that the opposite party bank despite their specific instructions for renewal of the deposits for a period of three years, had renewed them for a period of one year. The opposite party bank had converted the 7 FCNR deposits on 17.2.1998 to NRE TDRs w.e.f., 1.2.1998 in the joint names of the complainant and his father for a period of 36 months with interest @ 12% per annum. The opposite party contends that FCNR-B deposits were converted to NRE TDRs at the request and on telephonic instructions of the complainant and his father whereas the complainant submits that either he or his father had not issued any instructions orally or written to the opposite party bank to convert the 7 FCNR-B deposits to NRE TDRs.
18. The endorsement on the letter dated 13.10.1997 goes to support the contention of the opposite party bank that the FCNR-B deposits be converted into NRE TDRs w.e.f., 1.2.1998. The FCNR deposits were converted to NRE TDRs as long before as on 1.2.1998. Thereafter 7 NRE TDRs of Rs.3,25,633/- each were paid and reinvested in term deposits and the aggregate maturity value of 7 TDRs was `25,65,521/-. The TDRs were transferred to the branches of the opposite party bank at Warangal during the year 2003-04. The complainant, his brother or father had not raised any objection as to conversion of the FCNR deposits to NRE TDRs.
19. The interest prevailing during the year 1998 on FNR B deposits 5.25% and the rate of interest on NRE TDRs during the relevant period was 12% per annum. No depositor would loose the interest accrued at higher rate as the difference between the rate of interest on FCNR-B deposits and NRE TDRs during the relevant period was 6.75%. No cogent explanation is forthcoming from the complainant for his father not opting for conversion of 7 FCNR-B deposits to NRE TDRs. The endorsement on the letter dated 13.10.1997 would clearly establish the telephonic instructions by the complainant’s father to the opposite party bank to convert 7 FCNR-B deposits to NRE TDRs on the premise that there was high variance in the rate of interest between the NRE TDRs and that of FCNR-B deposits. At the cost of repletion we may say that the deposits were transferred to the branches of the opposite party bank at Warangal at the request of the complainants’ brother, father and the complainant. During the time of transfer of the deposit from the opposite party bank to the main branch and MGM Hospital at Warangal not even after transfer of the deposits from the opposite party bank to its branches at Warangal, the complainant or his father or his brother had not pointed out any discrepancy in the amount in regard to the accrual of interest on the deposits so transferred from the opposite party bank.
20. Till the death of his father, the complainant as also his brother had kept quite in regard to their objection relating the conversion of FCNR-B deposits to NRE TDRs. The complainant’s father is the original depositor and at his instance the amount deposited individually was converted into a joint deposit whereby the complaint was included as the joint deposit holder and thereafter the joint deposit was broken into three individual deposits in the names of the complainant’s father, Syed Khaja Moinuddin, his brother Syed Zaheeruddin and the complainant, Syed Ahmed Moinuddin. All the deposits were of the same nature and status as also the amount invested thereunder. At no point of time either the complainant or his brother or father had pointed out any discrepancy in the amount either the original deposit or the interest accrued thereon. In the circumstances, we are of the opinion that the complainant had failed to establish that the FCNR-B deposit’s were converted without their consent to NRE TDRs.
21. The interesting feature of the complainant’s contention is that the source of investment for FCNR-B deposit and NRE TDRs is not the same and different. The complainant claims that 7 FCNR-B deposits had the origin of their investment in IDBI bonds and the 7 NRE Indian Rupees deposits had origin and source of inward accumulated remittances sent by him and his father in their individual and joint accounts. Insofar as the source of investment for FCNR-B deposit is the maturity proceeds of IDBI Bonds. The complainant has not filed any document to show the inward accumulated remittances stated to have been made by him and his father while they were abroad. The complainant had failed to show the source for the investment of NRE TDRs. It is not disputed that at the request of the complainant, his brother and father NRE TDRs were transferred to the branches of the opposite party bank at Warangal. The complainant has miserably failed to show that the source of investment for the FCNR-B deposits and NRE TDRs is different and not the same.
22. The complainant oblivious of the clause in the brochure relating to the opening of FCNR account and operation of the FCNR accounts under term deposits has been harping on difference in the nature and operation of FCNR and TDR accounts. The brochure contains clause that establishes the relation between the FCNR Account and the TDR Account. The clause reads “FCNR accounts can be opened only by an NRI and kept in term deposits for fixed periods”. The complainant contends that 7 FCNR-B deposits in view of his possessing the receipts are still valid and the opposite party bank has to renew them. We do not agree with the contention of the complainant since the FCNR deposits had already been converted into NRE TDRs and mere possession of the receipts would not mean that the FCNR deposits have been still in existence. The complainant and his father through their letter dated 17.2.1999 had cancelled 7 NRE deposits which are the product of conversion of FCNR deposits and as per their request 6 TDRs (NRE) in the names of the complainant’s father, the complainant’s brother and the complainant each of whom had been issued two deposits and the deposit receipts were renewed in their respective names from time to time. Yet the complainant without any basis contends that the FCNRs and TDRs deposits are not interchangeable.
23. After conversion of the FCNR deposits to NRE TDRs in the names of the complainant’s father and his brother and the complainant interest payable on the deposits were 12% per annum and on request of the complainant and his father and brother on 17.2.1999 the deposits were reinvested in term deposits. The maturity value of each of the TDRs was `3,66,503/-. The amount was again invested at the request of the complainant’s father, brother and the complainant for a period of 36 months. The opposite party bank had given the details of TDR No., A/c No., period of investment, rate of interest and the names of the depositors i.e., the complainant’s father, complainant’s brother and the complainant. Even before the deposits became matured, the depositors opted for transfer of the deposits to the MGM Hospital branch and the main branch of the opposite party at Warangal.
24. The deposits aggregating to a sum of `44,77,706/- had been transferred to the branches of the opposite party at Warangal on 1.2.2003, 12.9.2003 and 9.8.2004. In the circumstances, we hold that the opposite party bank had converted the FCNR-B deposits, the receipts of which have been in possession of the complainant to NRE TDRs at the request of the complainant, his father and brother and 7 NRE TDRs were converted to 6 NRE TDRs deposits each in the name of the complainant’s father, his brother and the complainant. Having considered the matter in the light of correspondence exchanged between the opposite party and the complainant, we are of the opinion that the opposite party bank has not rendered any deficient service. As such there is no merit in the complaint and liable to be dismissed.
In the result the complaint is dismissed. There shall be no order as to costs.
PRESIDENT
MEMBER
MEMBER
Dt.14.10.2011
KMK*
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
EXHIBITS MARKED
For the complainant
Ex A-1 Copies of Seven Joint FCNR-B Deposits
Ex A-2 Copy of letter to the Bank to renew for further period of 3 years and to add complainant name into seven FCNR-B deposits on
either Survivor basis. dated : 13-10-1997
Ex A-3 Copy of the death certificate of complainant father (2nd joint
holder) issued by competent authority (Warangal Municipal
Corporation Warangal)
Ex A-4 Copy of letter requesting bank to deposit FCNR amount
proceeds into complainant personal account No. 083003
dated : 23.10.2008
Ex A-5 copy of complaint to Banking Ombudsman against SBH,
NRI Branch dated : 23.10.2008.
Ex A-6 Copy of Banking Ombudsman acknowledgement and
allotment of complaint no. by banking ombudsman dated :
29.10.2008.
Ex A-7 Copy of letter to SBH NRI Branch to provide 1067 NRE
Statements of account dated : 22.1.2009.
Ex A-8 Copy of letter to Banking Ombudsman to instruct SBH NRE
Branch to provide complainant with the statements accounts of
the following NRI accounts 1067, 674, 249 and 744 respectively.
Ex A-9 Reminder to SBH NRI Branch to provide requested NRI accounts statement dated 29-01-2009.
Ex A-10 Letter to Banking Ombudsman disputing contradicting SBH, NRI bank claim of account No.1067 as Joint account
Ex A-11 A.P. Banking Ombudsman orders dated : 18-02-2009.
Ex A-12 Letter to SBH NRI branch as a final reminder to submit
statement of account No. 249, 1067, 674 and 744 as instructed
by Banking Ombudsman and several request and reminder sent
by complainant.
Ex A-13 Circulation Memo (sheet ) with particulars
Ex A-14 SBH Reply letter (F.No. 120./191) to A. P. Banking Ombudsman
against complaint No.200809001128 filed by complainant.
Ex A-15 Statement of accounts bearing NRI Accounts No. 83003, 83004,
83005 issued by SBH NRI branch during period 01-02-2003 to
09-08-2004 to verify SBH NRI Branch claim of transfer of
funds to Warangal SBH as per instruction of Hon’ble A.P. State
Consumer Disputes Redressal Hyderabad.
Ex A-16 SBH Broacher containing FCNR (Dollar ) & NRE STDR (Indian
Ruppes) Deposits
For the opposite party
Ex B-1 7 FCNR Deposits opened deposits receipts along with receipts
and vouchers in the name of Syed Khaja Moinuddin dt :
15.1.1997
Ex B-2 Letter from Syed Khaja Moinuddin to include his son Syed
Ahmed Moinuddin dt 13.10.1997
Ex B-3 Renewed 7 fCNR deposits along with the vouchers dt :
17.2.1998
Ex B-4 7 FCNR deposits converted into NRE deposits with voucher dt :
17.2.1998
Ex B-5 Letter for issuing NRE deposits converted by FCNR dt :
17.2.1999
Ex B-6 Vouchers for renewals of 6 NRE deposits dt : 3.2.2011
Ex B-7 Letter from Syed Khaja Moinuddin for transfer of deposits from
OP
Ex B-8 Vouchers for opending NRE deposits of Syed Khaja Moinuddin at Warangal branch and deposits receipts dt : 14.10.1993
Ex B-9 Letter from Syed Ahmed Moinuddin to transfer of deposits to
Warangal branch dt : 14.10.2002
Ex B-10 Voucher pertains to opening of NRE deposits of Syed Ahmed
Moinuddin at Warangal branch dt : 6.11.2002
Ex B-11 Letter from Syed Jaheeruddin to transfer deposits to MGM
Hospital, Warangal dt : 31.7.2004
Ex B-12 Letter from Syed Jaheeruddin to transfer deposits to Warangal
branch dt 31.7.2004
Ex B-13 Vouchers for opening deposit at Warangal branch and receipt dt : 11.8.2004.
Ex B-14 Complaint made by Syed Ahmed Moinuddin against the bank
before Ombudsman dt : 23.10.2008
Ex B-15 Reply filed by the Bank before the Ombudsman dt : 17.11.2008
Ex B-16 Orders of the Ombudsman. Dt : 18.2.2009.
Sd/-
PRESIDENT
Sd/-
MEMBER
Sd/-
MEMBER
Dt.14.10.2011
