DHANRAJ Vs. MANAGER BANK OF RAJASTHAN LTD

JUDGEMENT

(1.) As revealed from the letter dated 15.12.92 written by the Asstt. General Manager of the Bank to the Reserve Bank of India, it appears that Sumerpur branch of the Bank issued F. C. N. R. [foreign Currency Non-Resident] ac count for US$ 25000 on or about 20.1.86 for 60 months due on 20.1.91 at the interest rate of 12% p. a. The maturity value was US$ 44770. The amount was deposited by purchasing draft for US$ 25000 and the matter was reported to the Overseas branch for control ling the same in F. C. N. R. portfolio etc. On the date of maturity the deposit was again renewed from20.1.91 for US$ 44770 for one year payable on 20.1.92 and the maturity value was US$ 48656 whereas by mistake or oversight the Overseas Bombay branch recorded in their record for US$ 42702.50 for one year to mature on 16.4.92 for US$ 46187. Thus the original difference which was US$ 2067.50 increased to US $ 2469 on this renewal.

(2.) The Bank agent who represents before us states that the branch has committed a mistake in issuing the deposit @ 12% whereas the R. B. I, directive was 11%. However, so far the depositor is concerned, there is a firm contract between the Bank and the depositor whereas the bank has agreed to pay 12% interest. The matter must have been reported to the Overseas branch and the Overseas branch which is controlling this transaction has never applied its mind and made any order to the local branch to pay less interest. In these circumstances we are of the opinion that the Bank is bound to pay the interest at the rate agreed between the parties. The deposit when matured was renewed and, therefore, the question of payment on the date of renewal did not arise. The renewal is also for higher amount. At the time of payment the Bank has made a payment of US$ 2469 less than the agreed amount on the ground of R. B. I, directives not to pay interest exceeding 11%. The matter is pending before the R. B. I.

(3.) However, realizing the difficulty Mr. Paneser the learned Advocate appearing on behalf of the complainant on the instructions of his client who is present in the Court states that in order to avoid this controversy his client has no intention to put the Bank in difficulty. He is prepared to accept the amount in rupees provided the said amount is deposited in his N. R. E. account which is already opened in Ahmedabad branch since there is no prohibition from the R. B. I, for paying in rupees. The Bank shall have to bear that burden and deposit the amount in N. R. E. account of the depositor.