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Sharada Institute of Indian Management Research v/s Axis Bank & Others

Company & Directors' Information:- AXIS BANK LIMITED [Active] CIN = L65110GJ1993PLC020769

Company & Directors' Information:- I AXIS LIMITED [Active] CIN = U72200TG2003PLC040977

Company & Directors' Information:- AXIS CORPORATION PRIVATE LIMITED [Active] CIN = U35990MH2010PTC208288

Company & Directors' Information:- INDIAN RESEARCH INSTITUTE LTD [Under Liquidation] CIN = U74220WB1933PLC007716

Company & Directors' Information:- AXIS LTD [Amalgamated] CIN = U51109WB1981PLC034186

Company & Directors' Information:- H S MANAGEMENT INSTITUTE PRIVATE LIMITED [Active] CIN = U74140DL2005PTC141500

Company & Directors' Information:- A S INSTITUTE OF MANAGEMENT PRIVATE LIMITED [Strike Off] CIN = U80302DL2005PTC140941

    Complaint Case No. 187 of 2009

    Decided On, 08 March 2016

    At, Delhi State Consumer Disputes Redressal Commission New Delhi


    For the Appearing Parties: ------.

Judgment Text

O.P. Gupta, Member (Judicial)

1. The case set up by the complainant is that on 04.11.2008 it decided to open a bank account with respondent-1 which was to be operated by Chairman-cum-Managing Director of the complainant either singly or jointly by OP-4 who is competent constitutional authority and governing authority of the complainant (A/c No.473010100054171). On 24.11.2008 another account was opened wherein OP-4 was authorised either singly or jointly to operate the account. Thereafter, complainant requested OP-1 to open yet another account no.473010100050096 wherein OP-4 was authorised signatory singly in her official capacity as competent constitutional authority and governing authority of management, financial and administrative affairs of the complainant. On 24.11.2008, OP-1 through OP-2 & 3 made FD of Rs.8.50 lacs in the personal name of OP-4 from first mentioned account. This amounted to converting institute’s property to individual property of OP-4 and deficiency in service. On 26.11.2008 complainant got transferred amount from Union Bank of India, Moti Bagh Branch, New Delhi to second account opened with OP-1. On the same day, OP-1 through OP-2 & 3 made a FD of Rs. 3,00,000/- in the personal name of OP-4 from the said account. Hence, this complaint for seeking compensation towards negligence, mental harassment and torture caused due to negligent conduct in maintenance of account of complainant. Initially, the complainant prayed for sum of Rs.99 lacs as compensation/punitive damages and refund of Rs.11.50 lacs alongwith interest which has wrongfully put on hold by the OPs in FD without any instructions. It also prayed for cost / litigation. The complainant mentioned that amount so awarded may be directed to be utilised by constituting an endowment fund for charity towards 100% scholarship for the poor girl students having the ambition of business management education. OP-1 had been interacting with third parties and sharing information and forwarding details and documents about the account of the institute at addresses other than that of the institute. OP-1 is duty bound to maintain secrecy of the transactions of account of its customers and not to share with third party. Copy of one such letter at the address of third party is annexure-H to the complaint.

2. OP-1,2, & 3 filed reply submitting that there is no negligence or deficiency in service on their part. They took preliminary objections that no cause of action has arisen in favour of complainant, subject matter of complaint exceeds pecuniary jurisdiction of this Commission. The complaint is liable to be dismissed as there are criminal complaint / counter complaint / FIR and litigation pending before the Hon’ble High Court of Delhi concerning serious issues between complainant and OP-4. They submitted that they have received notice u/s 91 Cr.PC from PS – Vasant Vihar and they have submitted the documents vide seizure memo copy of which collectively are as annexure R-6. On merits they did not deny that on 26.11.2008 they got FDRs for Rs.11.50 lacs issued in the name of OP-4. According to them officers of complainant Sh. Atul Aggarwal got FDs prepared. They disputed their liability to pay Rs.99 lacs compensation and punitive damages. They denied that they had been interacting with third party about bank information of account of complainant or sharing information with regard to said account.

3. OP-4 filed written statement raising preliminary objections that she was working with the complainant in the capacity of POJS / MGPO till 15.12.2008. The second mentioned account in complaint was opened by her in which amount was deposited Rs.75,280/- which was her salary. CMD of complainant opened personal saving bank account mentioned at sl. no.1 in the complaint in her name wherein she was made signatory. She was not aware of existence of said account until a false FIR was filed against her by complainant. The CMD of the complainant deposited Rs.8.50 lacs in the said account on 25.11.2008 which was sale proceed of personal care of CMD and the money belong to CMD. On 26.11.2008 CMD of the complainant withdrew Rs.8.50 lacs from the said account and Rs.3,00,000/- from the personal account of OP-4 and got FD of Rs.11.50 lac made. She did not issue any cheque / request for making the FD. Transfer of Rs.3,00,000/- in the first mentioned account was done by Dr. Parthsarthy, CMD of complainant who was also chairman of RKVIF from Union Bank of India from account of Rama Krishna Vivekananda International Foundation. The FDR was got prepared, verified, collected and possessed by Atul Aggarwal of the complainant institute in connivance and conspiracy of CMD of complainant. The complainant had nothing to do with the account mentioned at sl.no.1 & 2. Complainant institute filed FIR No.46/09 u/s 403/406/408/409 IPC against OP-4, investigation revealed that complainant and Atul Aggarwal were culprits. Final report u/s 169 Cr.PC had been filed by police. On merits she stated that complainant had already sought recovery of amount in FD through damages suit in Hon’ble High Court of Delhi.

4. Both the parties filed their evidence by way of affidavit. The same were followed by written arguments.

5. Thereafter complainant moved an application for maintaining of complaint so as to reduce its claim of compensation from Rs.99 lacs to Rs.87 lacs so as to bring the case within pecuniary jurisdiction of this Commission. The application was allowed. In reply, the OP tried to change her defence but could not do so as the amendment was formal and she could not take any additional plea beyond the amended portion of the complaint.

6. We have gone through the material on record including written arguments and heard oral arguments also. The counsel for complainant drew our attention to one of the letter placed on record by OP-1 at page-51 of the documents. The said letter dated 19.01.2009 was written by OP-4 to OP-1. In that letter OP-4 stated that she never deposited the said amount with OP-1, she never possessed such amount with her, she requested OP-1 to cancel the FD and deposit the amount in the account of complainant from where the amount was originated. This leaves no defence.

7. Counsel for complainant submitted that subsequent shift in the defence of OPs is on account of decision of Civil Suit by Hon’ble High Court. That suit was not decided on merits. Rather the same was dismissed under Order 17 Rule 3 CPC due to failure of the plaintiff to lead evidence. Moreover, according to him the said suit included amount in other heads also and not confined to FD in question.

8. In order to ascertain veracity of submissions made by the counsel for complainant we directed to file copy of such plaint and copy of decision of Hon’ble High Court. He has done so. Perusal of the suit reveals in para no.7, complainant had claimed Rs.47,68,208.13pc on different heads other than the FD.

9. The counsel for complainant also filed copy of final report filed by police in FIR No. 46/09, PS – Vasant Kunj, the same shows that no sufficient evidence was found to substantiate allegations, hence report u/s 169 Cr.PC closing the case was filed.

10. Counsel for OPs submitted that once suit of complainant is dismissed by Hon’ble High Court, this complaint cannot be allowed.

11. We have considered rival submissions and did not find any merit in submissions of counsel for OP.

12. In view of the submissions of OP-4 that she did not have the necessary amount, the amount did not belong to her and that amount may be transferred in the account of complainant, there remains no scope for defending the complaint. OPs has not placed on record the copy of judgement of Hon’ble High Court to show that any evidence was lead by the parties or that evidence was disbelieved by the Hon’ble High Court or that finding was returned by the Hon’ble High Court that amount belonged to OP-4. Dismissal of suit under Order 17 Rule 3 bars the right of plaintiff to recover the said amount by way of civil suit. Moreover, the civil suit pertained to different items also. Still further OP1-3 were not parties in suit before Hon’ble High Court.

13. Now the question remains regading the quantum of compensation, rate of interest and cost of litigation. For that it may be observed that complainant has not given any detailed calculation as to how it arrived at figure of Rs.77 lacs for mental harassment.

14. It may be observed that amount involved was heavy being Rs.11.50 lac. Deprivation of amount for years together is bound to cause lot of tension and harassment. Howsoever, moderate the same can be, it must come to Rs.50,000/- per year at least. Calculated that way the amount for six years from July, 2009 to July, 2015 comes to Rs.3,00,000/- which includes cost of litigation etc.

15. Now, turning to the rate of interest, it may be mentioned that FD carried interest @11% per annum. In fact, OP-1 had no right to put a hold on the said amount, at least after the letter dated 19.01.2009 written by OP-4 to OP-1 giving her no objection to the transfer of amount to the account of complainant. It is not a case of non renewal by the complainant of FD in which case bank can say that this is liable to pay interest on savings accounts only. Anyhow, we feel that in order to balance rights of both parties, way out can be found in between. Viewed from that angle,

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the rate of FD was 11% whereas rate of savings had been 5%. Allowing simple interest @9% per annum would meet the ends of justice. 16. In view of the above discussions, we hold that OP-1 was deficient and negligent. It is liable to refund the amount alongwith interest and compensation as discussed above. Accordingly, OP-1 is directed to refund Rs.11.50 lacs/the amount of FDs alonglwith simple interest @9% per annum from the date FD matured till date of refund. It will also pay Rs.3,00,000/- as compensation to the complainant. The order shall be complied within 45 days, failing which the complainant would be at liberty to seek coercive process u/s 25/27 Consumer Protection Act. 17. However, we leave question of liability of OP-2 to OP-4 open. OP-1 may take decision of its own level to recover the amount of interest or compensation from OP-2 & 3. OP-2 & 3 were employees of OP-1 and the same is not required to be adjudicated in the present proceedings. 18. A copy of this order be sent to both the parties free of cost.