CANARA BANK Vs. BANKING OMBUDSMAN AND ORS.

JUDGEMENT

(1.) Canara Bank (Srivilliputhur Branch), represented by its Senior Manager, preferred this Writ Petition seeking issuance of a writ of certiorarified mandamus to call for the records of R1/Banking Ombudsman, Chennai, with reference to his Award, dated 31.08.2000, vide Award No. Ac-003/99-2000 in Complaint No. RS-439/98- 99 and to quash the same.

(2.) Learned counsel for the petitioner briefly outlined the core factual aspects by submitting thus:

(3.) Per contra, learned Senior Counsel appearing for the complainant/R3, by arguing at the first instance that the writ petition should fall to ground simply on the ground of laches and that the Bank has an alternative remedy of filing appeal before RBA as per the Ombudsman Scheme, would submit on merits that, due to the unilateral action on the part of the Bank in resorting to renewal of deposits even after maturity so as to derive undue benefits, the complainant suffered huge financial loss. He referred to various rules and directions issued by the RBI in his endeavour to demonstrate to what extent the Bank violated the Rules and Circulars as well as the principles of natural justice to derive undue gains. He would add that the act of indefinite renewal beyond the agreed date and the loan-swelling over and above the deposit amount came to be detected by the inspection team during internal inspections which clearly exhibited that the Bank miserably failed in its duty; thereby, total lack of service and diligence is rampant on its part. After passing of the Award, when the Bank insisted upon the 3rd respondent to furnish the proof relating to his NRI Status for arriving at a basis to fix the interest rate so as to calculate the dues, R3 readily complied with the said demand, however, the Bank now endeavours only to divert the judicial attention from its inefficient service to non-compliance of NRI regulations. The claim by the Bank against R-3 about misuse of NRI status by him or suppression of material particulars in that regard at any point of time is totally baseless and fallacious. He also pointed out that, when this writ petition was taken up for hearing in 2014, owing to the reason that no sum was fixed in the Award, this Court had suggested for a Mediation, in which course, both sides agreed over the excess rate of interest collected as Rs. 4,42,551/-, however, the Bank, without applying proper interest rate applicable thereon, either F.D. Rate or the one based on Negotiate Instruments Act, themselves came out with the proposal to pay Rs. 10 lacs in full-quit without any basis for such calculation, which attitude prompted R-3 disagreeing with the proposal and resultantly, the mediation became unsuccessful. According to him, excess interest debited from R-3 with cumulative interest at 18% p.a (as provided under the N.I. Act) works out to Rs. 90 lacs and for which, a calculation sheet is also submitted. He states that the Bank successfully kept the Award without implementation for over 15 years by making R-3 to run from pillar to post, resulting in mental agony and hardship, for which, a compensation of Rs. 50 lacs may have to be awarded. At any rate, according to him, this being an exemplary case where the bank has acted in utter violation of the banking ethics & procedure to derive undue gains and caused loss to the bona fide customer/R3 by its unfair approach, it should be directed to pay the excess sum collected viz., Rs. 4,42,551/- together with cumulative interest @ 18% p.a. from the date of appropriation till realisation with costs and compensation.