By Sri. M.S. Sasidharan, Member:
The case in brief is that the complainant is a non-resident Indian and he has been maintaining a foreign currency account with the respondent bank since 1985. The complainant had deposited huge amounts in foreign currency for specified periods. He had also availed loan facility from the respondent loan on deposit account and over draft. The loan on deposit account and the over draft facility were availed on specific agreement with the respondents that the rate of interest for the loan/overdraft shall be 2% above the FCNR deposit. The rate of interest for FCNR deposit was 5.8% during the relevant period and therefore the rate of interest for the loan/overdraft was only 7.8%. On 19.4.2002 the statement of accounts of the over draft account given to the complainant had shown a credit balance of Rs.4,48,326/-. So the complainant had taken a D.D. for Rs.3,69,360/- in favour of KINFRA and also issued one or two cheques against the balance available in account as above. However when the complainant received the statement of accounts from the respondent on next month it was found that in respect of the credit balance in the accounts, the amount of DD’s drawn were recorded as over drawn in the account and in respect of such amount the complainant was charged interest at the rate of 18%. The complainant requested pre-closure of the foreign currency deposit which he had deposited for 12 months. The respondent had sent a reply to his pre-closure request on 8.6.2002 by stating that they have recovered an amount of Rs.12,86,984/- due to the respondent bank as short charged interest. The respondent had indicated that the interest rate for the over draft account and the loan on deposit account were at 13.5%, 14%, 12.5% and 12% over a period of time from 1.6.1990 onwards and therefore the complainant had become liable to pay Rs.12,86,984/- to the respondent. The respondent had also recovered the said amount by exercising their lien on the FCNR (B) deposit account and the balance amount under the FCNR deposit was refunded to the complainant. But the charging of interest rate much higher than the agreed rate and that too after closure of the account is illegal as against the contract and it amounts to deficiency in service and unfair trade practice. The rate of interest agreed between the complainant and the respondent for the loan on deposit account and overdraft was only 7.8%. It was contrary to the above specific contract and agreement that the respondent demanded an amount of Rs.12,86,984/- and had wrongly exercised the right of lien. The complainant sent a letter dt. 17.6.2002 demanding explanation. The respondent sent a reply stating that they were sorry for the complainant that the rate of interest was only 2% above the deposit rate, and that the complainant was under obligation to pay interest at the rate demanded by them. It is against the agreement. Hence the complaint filed.
2. The respondent filed a counter denying all the allegations. They have admitted that the complainant is a non resident Indian and had good deposits and loan on deposit account and over draft against the deposits. The complainant was informed that the loan on deposit/overdraft is 2% above the deposit rate plus interest tax. Demand promissory note signed also indicates the same rate. However by oversight respondent applied wrong interest rate instead of charging prime lending rate plus interest tax whenever applicable. When this error/omission was noticed the respondent requested the complainant to make payment of the difference amount and when insisted the complainant closed the deposits and therefore the respondent had to recover the leakage income of Rs.12,86,984/-. With reference to the averment in the complaint that the overdraft account as on 19.4.2002 showed a credit balance of Rs.4,48,326/- this happened due to a computer error. When the respondents noticed this mistake the same was rectified and intimated to the complainant and therefore the respondent had to charge 18% interest for the excess amount from the complainant. The short charged interest of Rs.12,86,984/- is due to the respondent from the complainant was recovered by exercising general right of lien. Therefore there was no violation of contract by the respondent. Hence dismiss the complaint.
3. The points for consideration are:
(1) Is there any deficiency in service committed by the respondent?
(2) Is the complainant entitled to get the amount claimed?
(3) Other reliefs and costs.
4. The evidence adduced is Exts. P1 to P11 and Exts. R1 to R10 only. No oral evidence has been adduced by the complainant and the respondent.
5. Points: The complaint is filed alleged deficiency in service in exercising the general lien on recovering huge amount from the complainant’s account and also charging high rate of interest against the agreement made between the complainant and the respondent. The complainant being an NRI had deposited huge amounts in foreign currency. He had also availed loan facility by way of loan on deposit account and also overdraft facility. The complainant has stated that there was specific agreement with the respondent regarding the rate of interest for the loan/overdraft. As per the agreement the rate of interest shall be 2% above the FCNR deposit rate. The rate of interest for FCNR deposit was 5.8% during the period. Therefore the rate of interest for loan/overdraft was only 7.8%. The respondent denied this. They have stated that by oversight the respondent applied wrong interest rate instead of charging prime lending rate plus interest tax whenever applicable. Overdraft/loan on deposit against FCNR deposit in designated foreign currency alone can be charged as about at prime lending rate as per exchange control regulations. It has been stated in the Ext. P1 letter that the interest rate applied for OD is deposit rate + 2% + interest tax. But the respondent has stated that they have applied wrong interest rate and they said that it is due to oversight. The respondent admits that the complainant is an NRI and had good deposits and the transaction comes to crores of rupees. So an oversight regarding the rate of interest charged against this loan/overdraft cannot be justifiable in any way. It is nothing but deficiency in service.
6. The complainant has stated that from the statement of accounts of the overdraft account given by the respondent on 19.4.2002 showed a credit balance of Rs.4,48,326/-. As there was sufficient amount in his account the complainant has taken a DD for Rs.3,69,360/- in favour KINFRA and issued one or two cheques. But when the complainant received the statement of accounts in the next month it was found that the amount of DD’s were drawn as over drawn and the interest charged was at the rate of 18%. The contention raised by the respondent in this issue is that the showing of credit balance of Rs.4,48,326/- is due to a computer error and when they noticed this mistake the same was rectified and intimated the correct statements. The complainant took DD and issued cheques showing the balance in his account. The respondent has stated that the balance is due to a mistake of the computer and it was the initial stage of computerization. If it was the initial stage of computerization the respondent must be more vigilant in verifying the accounts before sending it to the complainant. It is not justifiable for blaming the computer and throwing the burden upon the complainant.
7. Another issue raised in this case is the recovery of Rs.12,86,954/- from the complainant’s account by exercising general lien. The respondent had indicated the interest rate for the overdraft account and the loan on deposit account was at 13.5%, 14%, 12.5% and 12% and hence the complainant had become liable to pay Rs.12,86,984/- as short charged interests. The complainant alleged the action of the respondent in charging the interest rate much higher than the agreed rate is illegal and it is against the contract. The complainant has stated that the rate of interest agreed between the complainant and the respondent for the loan on deposit account and overdraft facility was only 7.8%. The complainant deposited huge amounts on the basis of this agreement. The respondent has stated that by oversight the respondent applied wrong interest rate. But it is stated in Ext. R5 that in respect of loans dominated in foreign currency against FCNR (B) deposits the rate of interest is deposit rate + 2% + interest tax. Ext. R9 and R10 reveal that the complainant was granted OD of Rs.85,45,000/- at 7.14% interest. So the charging of higher rate of interest is against the rate agreed to in Ext. R9 and R10. In this connection it should also be noted that the respondent recovered such a huge amount from the complainant’s account unilaterally exercising the general lien that too, after closing the deposit account.
8. The respondent bank failed to keep a good customer relation with the complainant who deposited huge amount in the bank. Once they said they have charged wrong interest rate due to oversight. The respondent forwarded an account statement shown a credit balance of Rs.4,48,326/- and later confessed that it is an error in the computer and finally recovered Rs.12,86,984/- from the complainant’s account exercising the general lien. Since the recovery was against the agreement on interest made between them the respondent is liable to pay back the amount to the complainant. The respondent is also liable to pay compensation for the deficiency in service committed. Since 18% interest is awarding no separate compensation is necessary.
9. In the result the complaint is allowed and the respondent is directed to pay Rs.12,86,984/- (Rupees twelve lakhs eighty six thousand nine hundred and eighty four only) with interest at the rate of 18% per annum from 13.6.2002 till realization with cost Rs.1000/- (Rupees thousand only) within two months from the date of receipt of copy of this order.
Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum this the 13th day of March 2013.
