Kerala

StateCommission

A/12/86

Canara Bank - Complainant(s)

Versus

Syed Mohammed - Opp.Party(s)

P Balakrishnan

28 Sep 2015

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL

COMMISSION, VAZHUTHACAUD, THIRUVANANTHAPURAM

 

APPEAL NO.86/2012

JUDGMENT DATED 30/09/2015

 (Appeal filed against the order in C.C No.101/2009 on the file of CDRF, Kasargod dated, 24/11/2011)

 

PRESENT:

SMT. A. RADHA                            :         MEMBER

SHRI. K. CHANDRADAS NADAR :        JUDICIAL MEMBER

SMT. SANTHAMMA THOMAS    :        MEMBER

 

APPELLANTS:

 

The Chief Manager,

Canara Bank, Bank Road, Kasargod.

 

(By Adv:  P. Balakrishnan)                   

 

                   Vs

 

RESPONDENTS:

 

1. Dr.  Sayed Mohammed.
2. Mrs. Jubairi Sayed, Puthiyavalappil,

Sufash, Bendichal, P.O., Thekki, Kasargod.

 

(By Adv:  Selvi.M)                    

 JUDGMENT

 

SMT. A. RADHA  :  MEMBER

 

          This appeal is preferred by the opposite parties against the order in C.C No.101/2009 on the file of CDRF, Kasargod wherein the

 

Forum Below allowed the complaint and the opposite party is directed to pay an amount of Rs.6,33,312.27 with interest @ 4.5% along with cost of Rs.5,000/-.

          2.  The case of the complainants’ are that the complainants are FCNR account holders of opposite party having FCNR deposits for Rs.19063.07 US $ and 2125.84 US $ and a joint deposit of 67688.28 US $.  The complainant availed loan against these deposits for   Rs.29 Lakhs according to the maturity schedule from time to time.  The allegation of the complainant is that in October, 2008 the opposite party unilaterally closed all the Dollar deposits for adjusting the loan availed by the complainants.  It is asserted in the complaint that the 3^rd deposit of 67688.28 US $ alone would have been sufficient for closing the loan.  It is alleged in the complaint that the opposite parties closed the loan without any instruction or intimation to the complainants.  There had sufficient balance in the NRE Account for servicing the loan interest.  The exchange rate of US $ at that time was Rs.40/- for one Dollar whereas on maintaining the Dollar deposit till October, 2008 the complainants would have fetched Rs.51/- per Rupee.  After closing the account it is only after enquiry made with the opposite party the complainants were informed of the guidelines of the Reserve Bank of India during January, 2007 which restricts loan to NRI’s against FCNR to Rs.20 Lakhs.  This Act of the opposite party caused a loss of Rs.10 Lakhs being the difference in Rupees for the Dollars was around Rs.10/-.  The complainant had incurred financial loss as well as mental agony and it is to be compensated for the deficiency of service on the part of opposite parties.

          3.  The opposite party contended in the version that the complainant availed a loan of Rs.22 Lakhs as on 28/06/2006 against the NRI deposits worth Rs.29 Lakhs.  The allegation that the opposite party unilaterally closed the loan is not correct as it was under the Circular issued by the Head Office of the opposite party based on the guidelines of the Reserve Bank of India.  As per the guidelines the Bankers were prevented from renewing the existing loan in excess of Rs.20 Lakhs against NRE/FCNR deposits.  It is also contended that while availing loan the complainant had executed a letter authorizing and permitting the opposite party to liquidate the loan granted against FCNR deposit by adjusting deposit on maturity or before maturity.  Hence the loan granted to the complainant was not renewed.  This fact was intimated to the complainant orally.  Therefore, no deficiency in service can be attributed upon the opposite parties and no financial loss or mental agony caused to the complainant.  The 2^nd complainant has no locus standi to file the complaint and the complaint is only to be dismissed.

          4.  To substantiate the case the 2^nd complainant filed proof affidavit and marked documents as Exbts. A1 to A10 and on the part of opposite party Exbts. B1 to B3 series were marked.  DW1 was examined on the part of opposite party.

          5.  It is submitted by the counsel for the appellant that the complainants are not consumers and the complainants are not consumers under Consumer Protection Act.  The respondents have not availed any service of the appellant and there is no cause of auction for instituting the complaint.  It is also argued that no jurisdiction conferred on the Consumer Forum to adjudicate and its claim made out in the complaint.  So also the 2^nd complainant has no locus standi to file this complaint as no deposits were made in her name with the opposite party.  It is admitted that the appellant and the respondent entered into a contract for availing loan to the tune of Rs.22 Lakhs against 2 deposit receipts and the complainant under Clause-V of the contract has agreed that the loan granted under the currency of FCNR deposit shall be liquidated either by fresh inward remittance or adjustment of the deposit on maturity or before maturity.  The appellants liquidated the loan amount by local remittance out of NRO resources.  As per Clause-9 reveals that notice is waived only with respect to variation of interest including enhancement and clause-11 entitles the appellant every right to recall the entire loan at the absolute discretion at any time without further notice to the respondent.  The counsel also pointed out that the respondent had executed demand promissory note for the loan amount that he had already received and the deposit receipt retained as a security for the loan.  Since the complainant failed to liquidate the loan committing default the appellants appropriated the loan amount out of the deposits as per the contract and the balance amount of Rs.6,60,064.31 was credited to the SB Account of the complainant as on 20/10/2008.  The deposit receipt of Rs.2,125.84 US $ against which no loan was availed was renewed on the date of maturity ie. on 24/8/2008 and on 23/10/2008 the said amount was closed as per the request of the 1^st respondent and the amount of Rs.1,06,666/- was credited and at that time the paying rate was Rs.47.95.  It is asserted that time the appellant can only renew the deposit which has no liability over it if there is no direction from the depositor.  It is argued that the observation of the District Forum that appropriation of security without coming notice is a deficiency in service is not correct and does not come under service between the appellant and respondent.  The FCNR deposit against which the loan was availed were closed on the maturity date itself and the proceeds were kept in suspense account for want of suitable instruction from the complainant.  As the complainant is not entitled for the compensation based on the dollar/rupee exchange rate the appellant has not invariably appropriated the security towards the outstanding loan amount.  He also point out that there is no merit in comparing the rates on the date of closure and date of crediting balance to the SB Account.  The respondent had not incurred any loss in this regard.  The appellant was waiting for the instruction from the respondent after closing the loan in order to appropriate the balance amount as per the instructions of the respondent.  After waiting for a reasonable period of time the appellant has transferred the amount to the SB account of the 1^st respondent.  The complaint itself is not maintainable as the conversion rate of US $ has not been produced by the complainant.  The complainant is entitled to get the exchange rate as on 17/08/2008, 27/8 and 10/10 and not as on 20/10/2008, 23/10.  The maturity of the deposit expired on 17/8 and 27/8 and in both these deposits, the surplus amount credited after adjusting the loan of Rs.6,06,064/-.  Hence no financial loss has sustained to the respondent and the order of the Forum is only to set-aside.

          6.  It is argued by the counsel for the respondents that the respondents are FCNR joint account holders with the appellants and 2 of the deposits are in the name of the 1^st respondent and the        3^rd deposit was joint account.  It is an undisputed fact that the respondent availed loan on the basis of FCNR deposit.  The dispute arose while the appellants closed the loan accounts during July before maturity when the US $ was having Rs.40/- as exchange value.  The untimely closure of the account and amount credited only in October 2008 resulted in the financial loss.  The 1^st argument taken by the appellant was that the closing of the loan was based on the RBI circular issued during January 2007 restricting the FCNR loan to Rs.20 Lakhs.  This was not informed to the respondents.  The main argument is that the appellants could have adjusted only one deposit and allowed the complainants Rs.20 Lakhs loan nor abide by the RBI circular without conforming to Rs.20 Lakhs.  The appellants closed the loan account from the deposit and waited for the instruction for deposit of the balance amount for more than 3 months which caused huge monetary loss in terms of exchange value of Dollar to Indian Rupee.  The other argument advanced by the appellant is that the balance amount kept in suspense account was without proper intimation to the respondent.  It is also admitted by the appellants that they informed orally to the complainant and nothing is on evidence to show that this matter was intimated to the respondents.  The appellants also harped on the ground that as per the Cluase-V the bankers are at liberty to appropriate the amount without any further intimation under the terms and conditions of the agreement.  It is also argued that there had no default of remittance of the loan amount on the part of the respondents.  The non-intimation of appropriation of deposit amount towards the closing of the loan amount and keeping balance in the suspense account without further notice to the respondents resulted in financial loss in equating the US $ to Indian Rupee to the respondents.  Hence the financial loss caused by the appellants is to be compensated.

          7.  We have heard both the counsels in detail and had gone through the documents.  Admittedly, the complainants availed loan from FCNR deposit amount.  Based on the circular from the Reserve Bank of India, the appellants appropriated the loan amount restricting to Rs.20 Lakhs and kept the balance amount in the suspense account of the appellants.  Obviously though the terms and conditions stipulates the banker’s lien to appropriate the amount without intimation.  It is also obligatory on the part of the appellant to intimate about the balance amount without waiting for more than 2 months in suspense account.  We would like to point out that the complainants were having another FCNR deposit which would be sufficient for appropriating towards the loan amount and it was not carried out by the appellants causing financial loss to the respondents.  The banking service of course is between the customer and bankers.  In the instant case the appellants informed the regulations of RBI whereas kept mum regarding the balance amount waiting for the instruction of the respondent of course amounts to deficiency in service.  So also the rate of exchange of Dollar to Indian Rupee also resulted in the financial loss which could have avoided on timely intimation to the respondents.  Hence we are of the considered view that the appellant has to compensate the respondents.

In the result, appeal is dismissed and we uphold the order passed by the Forum Below.  The order is to comply within 30 days on receipt of copy of this order failing which the appellant is liable to pay interest @ 12% interest from the date of this order.

The office is directed to send a copy of this order to the Forum Below along with LCR.

 

 

A. RADHA           :        MEMBER

 

 K. CHANDRADAS NADAR :  JUDICIAL MEMBER

 

 

 

SANTHAMMA THOMAS     :        MEMBER

 

 

Sa.

 

 

 

 

 

 

 

 

KERALA STATE CONSUMER

                                                                  DISPUTES REDRESSAL

                                                           COMMISSION

THIRUVANANTHAPURAM

 

 

 

 

 

 

 

 

APPEAL NO.86/2012

JUDGMENT DATED 30/09/2015

 

 

 

 

          Sa.