Full Judgment Text
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CASE NO.:
Appeal (civil) 2982 of 2006
PETITIONER:
Standard Chartered Bank Ltd.
RESPONDENT:
Dr. B.N. Raman
DATE OF JUDGMENT: 14/07/2006
BENCH:
ARIJIT PASAYAT & S.H. KAPADIA
JUDGMENT:
J U D G M E N T
[Arising out of S.L.P.(C) No.19723 of 2004]
Kapadia, J.
Leave granted.
This civil appeal, by grant of special leave, is filed by
Standard Chartered Bank Ltd. against order dated
14.7.2004 passed by National Consumer Disputes
Redressal Commission (for short ’National Commission’)
dismissing the bank’s appeal and confirming the decree
passed by the State Consumer Disputes Redressal
Commission, New Delhi (for short ’State Commission’)
under Consumer Protection Act, 1986 (for short ’the Act’).
Respondent herein was a non-resident Indian
employed as a professor of Medical Physiology in the
University of Libya from 1975 to 1980. Thereafter, he
stayed in Libya till 1992. On 17.8.79 when the
respondent was in Libya he had placed with the bank
US$5000 in FCNR (Foreign Currency Non-Resident)
Account for 63 months at 9% p.a. vide LF No.MR-24, DR
No.316/79/39. The deposit was made by the draft
drawn on New York Bank. The deposit was to mature on
17.11.84. The appellant confirmed the deposit. The
deposit receipt is annexed to the paper book. In 1984,
Reserve Bank of India (RBI) allowed the banks to keep
FCNR for six years. Interest on such deposits was
increased from 9% to 13% p.a. According to the
respondent, in June 1984, intimation was given to the
appellant to reinvest the entire amount in FCNR account
on maturity for a further period of six years at 13% p.a.
In 1986, the respondent visited India. He attended the
branch office of the bank. The respondent claims that he
was assured by the bank that everything was in order
and that US$ 7939.56 were lying in the FCNR account
which amount stood reinvested at 13% p.a. for six years
maturing on 17.11.90. Respondent alleged that in
September 1990 he had requested the bank to reinvest
the entire amount in his FCNR account for a further
period of three years. This was to be done on maturity of
his deposit on 17.11.90. In January 1992, as stated
above, the respondent returned to India. He enquired
about the status of his deposits. He did not get the
response. He made a complaint in writing on 5.1.92 and
on 14.1.92. On 7.9.92, he received a letter from the bank
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stating that no outstanding amount was there in his
name in the FCNR account. By letter dated 15.10.92, the
appellant stated that from their records it is seen that the
said deposit was prematurely withdrawn on 22.11.79.
Thereafter, correspondence ensued. Respondent herein
denied the fact of premature withdrawal of the deposit.
He complained to RBI. On 19.4.93 the bank stated that
the deposit was encashed prematurely not on 22.11.79
but on 23.11.79. A copy of the sale/purchase register
was also enclosed by the bank to show that the deposits
stood withdrawn on 23.11.79. Ultimately, on 28.9.94 the
respondent herein preferred a complaint under section
2(1)(g) and section 2(1)(o) of the Act before the State
Commission.
In the said complaint respondent alleged that he
could not have withdrawn the amount on 23.11.79 as he
was not in India. He relied upon his passport to show
that he was not in India. He further alleged that a copy
of the original FCNR was put in the safe deposit vault. In
this connection, he relied upon the said receipt which
states that the deposit receipt memo is retained by the
bank in Safe Custody. Respondent stated, on the basis
of the above facts, that the amount has been withdrawn
by somebody in connivance with the bank’s officers. In
the circumstances, respondent herein claimed that he
was entitled to the decree in following terms :
"S.No. Year Interest Total amount
payable on
maturity
1. From 17.8.79 to @ 9% to be US $7939.56
16.11.1984 (63 added half yearly
months) on $ 5000
2. From 17.11.84 @ 13% to be added US $ 16904/093
to 16.11.1990 half yearly on
(6 years) $ 7939.56
3. From 17.11.90 @ 10.5% to be US $ 22978/645
to 16.11.1993 added half yearly on
(3 years) $ 16904/093
A total of Rs.7,12,337.99 at present date is due from the
opposite party till 17.11.93. Thereafter, interest @ 18% per
annum on the aforesaid amount which comes to approx.
Rs.1,28,220.83 (Rupees one lakh twenty eight thousand two
hundred twenty and paise eighty-three only)."
By written statement, the appellant conceded that the
respondent had deposited on 17.8.79 a sum of US$ 5000 in
FCNR account for 63 months maturing on 17.11.84 at 9% p.a.
However, the appellant contended that prior to the date of
maturity the deposit was prematurely withdrawn on 23.11.79.
In this connection, reliance was placed on sale/purchase
register. Therefore, according to the bank, there was no
question of reinvesting of the aforestated amount from time to
time, as alleged by the respondent. The appellant also denied
that the deposit receipt was kept in Safe Custody. In this
connection, the appellant submitted that an inquiry into
premature withdrawal and the demand for recovery of money
after 12 years was beyond time. The bank, however, agreed
that in 1984 RBI allowed it to keep FCNR for six years at the
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rate of 13% p.a. However, the appellant contended that since
the amount was prematurely withdrawn, there was no
question of reinvesting it for six years at the rate of 13% p.a.
The bank denied all factual allegations made by the
respondent with regard to reinvestment. By the objections,
apart from the question of limitation, the appellant stated that
the respondent was not a consumer as defined under section
2(1)(d) of the said 1986 Act. The appellant also contended that
under RBI rules, the bank was not bound to retain the records
after eight years and, therefore, the matter cannot be decided
on presumptions; that the burden was on the respondent to
prove the alleged facts regarding reinvestment. By the written
statement, the appellant denied its liability to pay a sum of
Rs.7,12,337.99 including interest till 17.11.93 and further
interest at 18% p.a. on the said amount amounting to
Rs.1,28,220.83.
By order dated 28.4.97, the State Commission came to
the conclusion that the respondent had deposited US$ 5000
on 17.8.79 carrying 9% interest and maturing on 17.11.84;
that the receipt was retained in safe custody; that there was
no record to show that the said amount was prematurely
withdrawn; that there was no evidence regarding destruction
of the records on completion of eight years and since the initial
deposit of US$ 5000 on 17.8.79 stood established the decree,
as prayed for, was granted by the State Commission. The
Commission further found that there was no evidence on
record to show that the respondent had given written
instructions to the bank for premature withdrawal; that there
was no endorsement on the receipt showing payment in lieu of
discharge and, therefore, the bank was not entitled to place
reliance only on entry in the sale/purchase register dated
23.11.79. The State Commission further found that on
23.11.79 respondent was not in India. In this connection,
reliance was placed on the endorsement in his passport.
Accordingly, the State Commission came to the conclusion
that the deposit was reviewed from time to time and, therefore,
the complaint was within limitation. Accordingly, the decree
in the aforestated terms was passed by the State Commission.
Aggrieved by the aforestated decision of the State
Commission, appellant herein went in appeal to the National
Commission under the said 1986 Act. By the impugned order
dated 14.7.2004, the findings of fact recorded by the State
Commission were confirmed. The appeal was accordingly
dismissed. Hence, this civil appeal comes before this court at
the instance of the bank.
The Consumer Protection Act, 1986 provides for
formation of National Commission; State Commission and
District Forum. These are remedial agencies. Their functions
are quasi judicial. The purpose of these agencies is to decide
consumer disputes. Activities relating to non-sovereign
powers of statutory bodies are within the purview of the Act.
The functions of such statutory bodies come under the term
’service’ under section 2(1)(o) of the Act. Banking is a
commercial function. ’Banking’ means acceptance, for the
purposes of lending or investment of deposit of money from
the public, repayable on demand or otherwise [See: section
5(b) of Banking Regulation Act, 1949]. The intention of the
1986 Act is to protect consumers of such services rendered by
the banks. Banks provide or render service/facility to its
customers or even non-customers. They render
facilities/services such as remittances, accepting deposits,
providing for lockers, facility for discounting of cheques,
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collection of cheques, issue of bank drafts etc. In Vimal
Chandra Grover v. Bank of India [AIR 2000 SC 2181] this
court has held that banking is business transaction between
bank and customers. Such customers are consumers within
the meaning of section 2(1)(d)(ii) of the Act.
Only two points appear to have been argued by the bank
before the National Commission, viz., question of premature
withdrawal and limitation. However, the claim of the
respondent for money decree with interest at the rate of 18%
p.a. till realization appears to be on the higher side and
inflative. The rate of exchange, which is indicative of price and
which constantly varies from time to time, has not been
examined. This is apart from awarding of the rate of interest
at 18% p.a. which itself is on the higher side. In the case of
Forasol v. Oil and Natural Gas Commission [AIR 1984 SC
241] this court observed that in an action to recover an
amount payable in a foreign currency, five dates compete for
selection by the court as the proper date for fixing the rate of
exchange at which the foreign currency amount has to be
converted into the currency of the country in which the action
has been commenced and decided. These dates are - the date
on which the amount became due and payable; the date of the
commencement of the action; the date of the decree; the date
when the court orders execution to issue; and the date when
the decretal amount is paid or realized. The court has to
select a date which puts the plaintiff in the same position in
which he would have been, had the defendant discharged his
obligation when he ought to have done, bearing in mind that
the rate of exchange is a fluctuating factor. To select the date
when the amount became due, the court has to act in a just,
fair and equitable manner because in a case where the rate of
exchange has gone up, the opponent escapes by paying a
lesser sum than what he was bound to and thus he gains by
default while in the converse case where the rate of exchange
has gone against the opponent, the opponent would be
subjected to a greater burden than what it should be. Apart
from the judgment of the Supreme Court in Forasol (supra),
we may observe that in such cases, the Agencies under the
Consumer Protection Act, 1986 should also keep in mind the
economic situation of the country. Encashment of dollar
denominated deposits have certain economic implications. In
the present case, none of these factors have been considered
by the State Commission. In cases of this type, the burden is
on the complainant to show the rate of exchange prevalent on
the aforestated dates in order to assist the court to arrive at
the indicative prices. This has not been done in the present
case. Neither the State Commission nor the National
Commission has examined this question regarding selection of
the appropriate date, the appropriate rate of exchange on that
particular date as also the rate of interest which the appellant
was required to pay.
For this limited purpose alone, we partly allow the appeal
and remit the matter to the State Commission to pass the
decree in favour of the respondent herein in accordance with
law indicated above. On all other factual findings, we are in
agreement with the impugned decision. This appeal is partly
allowed with no order as to costs.