ANJANA KHANEJA Vs. STATE BANK OF PATIALA

JUDGEMENT

(1.) This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 ("CPC") is filed by the plaintiff in the suit impugning the Judgment of the Trial Court dated 28.1.2005 by which the trial court dismissed the suit for recovery of Rs. 8,62,336/-. Defendant in the suit is State Bank of Patiala.

(2.) The basic issue in the suit and the appeal was/is whether the respondent/defendant-bank was entitled to deduct one additional percent of the Fixed Deposit amount, in addition to giving a 2% lesser interest rate than as payable on completion of Fixed Deposit period, as charges on account of premature conversion by the appellant/plaintiff of a Fixed Deposit of Rs. 6,57,00,000/- i.e. on a normal premature encashment of a fixed deposit rate of interest was brought down from 14% to 12% when the fixed deposit was prematurely encashed, and which Fixed Deposit was in rupees, and thereafter since the new fixed deposit is made in foreign currency, therefore besides deducting 2% for premature encashment, a 1% of the amount additionally has to be deducted for creating a foreign currency account in terms of relevant RBI Circular.

(3.) The facts of the case are that appellant/plaintiff on 24.1997 created a fixed deposit for two years and three months of a sum of Rs. 6,57,00,000/-. The maturity amount was Rs. 8,95,42,356/-. Since however this fixed deposit was encashed prematurely by the appellant/plaintiff on 24.4.1998, a sum of Rs. 7,36,05,600/- was credited to the account of the appellant/plaintiff giving a lesser interest of 12% instead of 14% to be paid on completion of maturity period. The amount of Rs. 7,36,05,600/- was converted to US$ 18,55,285.68 and put in an FCNR(Foreign Currency Non-Resident deposit) fixed deposit with maturity value of US$ 19,53,966.47 at 5.25%. This Fixed Deposit called as Special Term Deposit was rolled over when it matured on 29.4.1999 for another period of twelve months with agreed interest at 4.75 % compounded with maturity value being US$ 20,47,881.92. When this term deposit was encashed after its period on 24.4.2000, the respondent/defendant-bank however deducted an amount of Rs. 7,39,623/-, and it transpired that this amount which was deducted by the respondent/defendant-bank was on account of the fact that actually at the time of first premature encashment on 24.4.1998 the appellant/plaintiff besides getting a lesser interest at 12% instead of 14%, the respondent/defendant-bank was entitled to charge a penalty of 1% on account of RBI circulars and for this 1% of Fixed Deposit amount of Rs. 7,39,623/- no deduction was made at the relevant point of time. Appellant/plaintiff protested to this, as it was contended by the appellant/plaintiff that this was done without any notice, and this could not have been done on 24.4.2000 when the claim was as on 24.4.1998.