INDIAN OVERSEAS BANK Vs. KLEBERT PIERRE

JUDGEMENT

(1.) This revision petition arises out of the order of the State Commission, Pondichery (U.T.) which in turn affirmed the order of the District Forum.

(2.) The brief facts which lead to the filing of the complaint are that the complainant had deposited US $ 36,701.33 on 16.7.1990 with the petitioner/opposite party Bank for a period of 18 months at 9.5% interest. Later on the same was renewed on 20.1.1992 at 10.5% rate of interest, on 19.1.1993 at 5% on 17.1.1994 at 4.5% rate of interest and on 18.1.1995 the rate of interest was 6.5%. During audit inspection it was found that the rate of interest on FCNR Account in 1992 was 6.75% and not 10.5%. This clerical error was brought to the notice of the petitioner by the opposite party Bank. The petitioner was asked to forward the deposit receipt for necessary correction and re -transmission vide letter dated 7.8.1995, which the petitioner had refused. Thereafter, as many as seven letters were sent to the petitioner to forward the receipts for necessary corrections, to which the the petitioner paid no heed. The Bank had paid the respondent US $ 52,788.36 after deducting the excess amount of US $ 2,003.91. This deduction has led the complainant to approach the District Forum for a direction to the Bank to pay the US $ 2,003.91 along with a sum of Rs. 25,000/ - as exemplary damages for mental agony along with costs of Rs. 5,000/ -. The District Forum allowed the complaint and directed the petitioner to pay US $ 2003.91 with interest at the rate of 6.5% from 19.1.1996 till the date of payment and costs of Rs. 300/ -. On appeal before the State Commission, the order of the District Forum was affirmed. Hence, the opposite party is the petitioner before us.

(3.) We have heard the learned Counsel for the petitioner. We have also gone through the order of the District Forum as well as that of the State Commission. The learned Counsel for petitioner has relied on the Sections 23, 72 and 171 of the Indian Contract Act and also various provisions of Banking Regulation Act and the R.B.I. circulars to show that the rate of interest shown contrary to the RBI prescribed rate of interest for F.C.N.R. accounts would be unlawful and void. And, that, he had the right to recover. In support of his contention he has also brought decisions of this Commission as well as that of the Honble Supreme Court of India. In the case of Konkan Mercantile Coop. Bank Ltd. v. Abdul Sattar Ahmed Bendre, Revision Petition No. 385 of 1996 reported as 1998 (2) CCC 11, wherein we have held that the depositor could not be paid interest at the rate higher than the maximum prescribed by the RBI which in the present case is 10.5% plus 1%, i.e. 11.5% and the Bank could not be faulted for reducing the rate of interest to the extent of interest prescribed by the RBI and applicable at the time of acceptance of the FDRs. We see merit in this contention. In view of what has been discussed above we allow this revision petition and set aside both the orders of the State Commission as well as District Forum. In the facts and circumstances of the case, there will be no order as to costs. Revision Petition allowed.