State Consumer Disputes Redressal Commission
Sonjoy Chatterjee vs Standard Chartered Bank on 19 January, 2011
IN THE STATE COMMISSION:DELHI IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 19.01.2011 Complaint Case No.05/2005 1. Sh. Sonjoy Chatterjee . Complainants through Mr. Rohit Sehgal, advocate. 2. Smt. Pushpa Chatterjee, Both Resident of: Room No.1905, Le Meridien Hotel, Windsor Place, New Delhi. Versus Standard Chartered Bank, . Opposite Party Sansad Marg, through Mr. Ajay Monga, New Delhi. advocate. CORAM Justice Barkat Ali Zaidi ... President Ms. Kanwal Inder Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice Barkat Ali Zaidi, President ORAL
1. The short facts of the case are that there was an oral agreement between the complainants and the OP Bank. According to which in case the complainants bring $ dollars and make NRE (Non Resident External) fixed deposits in the OP Bank, the Bank will furnish them information regarding conversion rate as well as interest rate applicable on NRE deposits, which means that what the conversion rate of the currencies will be, and what will be the interest rate on money deposits in NRE account at a particular time.
2. Pursuant to this assurance the complainants brought and deposited 15,14,824/- USD, converted in Rs.7 crorers in 07 NRE fixed deposits of one crore each, for a period of one year, their maturity date being 8th July 2004, repayable with interest @5.2% per annum. Initially the OP continued to send the complainants messages about conversion rates of currencies, by fax (more than 20 messages).
3. That on 08.04.2004 on enquiry OP informed the complainants on phone that prevalent conversion rate of 1 USD is Rs.43.69/- and the forward premium rate charges for booking the forward contract was nine paisa, chargeable from the complainants in case the complainants book the forward rate of that day, to be due(payable) on the date of maturity. The complainants decided to book on this rate so that the matured value of Rs.7 crore NRE fixed deposits, could be converted on 08.07.2004 in US Dollars @Rs.43.78/- (after adding the premium) and repatriated out of India in their foreign accounts. The complainants averment is that on 08.04.2004, when the complainants asked the Bank to fulfill the formalities for booking the forward rate, the officers of the OP advised them (orally) not to book the forward rate, as of now because; (i) rupees was likely to further strengthen it, the conversion rate may reduce (ii) even if the conversion rate does not improve favourably their NRE fixed deposits even on and after maturity if kept in India will continue to earn more interest (3.5%) rate in India, then what they earn (get) outside India.
4. The complainants relying on the words of the Bank officers did not book the forward rate, making it clear to the OP officers that for the future in case the complainants book the forward rate they should keep the papers ready well in advance, so that they may book the forward rate immediately. It is said that around 20.04.2004, RBI reduced the prevalent rate of 3.5% interest on NRE deposits to 1%. The conversion rate thus on 20.04.2004 was Rs.44.05P per USD and forward premium on that day was 19 paisa, effective rate of conversion thus being Rs.44.24p. per USD. The complainants say that the OP did not inform the complainants about this change which was to effect them adversely. Had the complainants been informed, the complainants would have booked the forward rate immediately for repatriation of amount on, and after the maturity in order to save them from economic loss in case the continue to deposit their money in India.
5. Their case is that on 02.06.2004 on query the OP Bank informed the complainants about the said change in the rate of interest, that it is Rs.45.17/- per US Dollar including also premium 6 paise per dollar. The grouse of the complainants is that had the OP informed around 20.04.2004 about the reduction in rate of interest, the complainants would have booked the forward rate of Rs.44.24 per US dollar which was existing around 20.04.2004 and at this conversion rate the complainants would have received 1582278 US dollars on the maturity of their fixed deposits on 08.07.2004, and thus the complainants could have earned profit of USD 67.45 including 5.2% interest, payable by the OP Bank to them. Their grouse is that thus the complainants lost the opportunity to book the more favourable conversion rate prevalent on 20.04.2004, when the RBI reduced the interest rate on NRE Deposits and on 20.04.2004 they would have booked the forward rate of Rs.44.5 paise per dollar by giving direction to the OP to repatriate their deposits which is also the natural consequence of booking the forward rate.
6. The complainants sent a letter on 09.06.2004 of the aforementioned facts asking the OP, how it was going to make good the complainants loses, which the OP replied on 15.06.2004 saying that he OP was looking into their grievance. The complainants reiterated their grievances again by sending letter on 16.06.2004to which the OP replied on 21.06.2004, in which the OP did not dispute the facts, and urged that it was RBI who changed the rate of interest and not the OP. The complainants then had a meeting with officer of OP on 24.06.2004 and also sent a letter on that day to OP reiterating the same grievance which the Bank replied on 25.06.2004 saying that they are looking into the complaint and also sent a reply on 07.07.2004. The complainants then sent a legal notice on 02.08.2004 demanding the OP to pay the complainants USD 55908 with interest @16% per annum. The OP denied everything in its reply dated 13.08.2004.
7. The complainants then filed a complaint of the aforementioned facts with a prayer that the OP be directed to pay Rs.18,58,892/- towards loss of profit, Rs.33,000/- towards the legal costs and Rs.3 lacs towards, the harassment.
8. The OP filed the written statement and opposed the claim saying that there is no contract between the parties to inform the complainants about the conversion rate or interest rate on the NRE deposit Account. The contract was only for a fixed deposit which was to mature on 08.07.2004, That the complainants had no documents to show that there was any oral contract to furnish information about interest or conversion rates. To substantiate its case the complainants filed their joint affidavit and certain communications between them and the bank while the one Sh. R.K. Wahi, Attorney of the OP filed his affidavit with some annexures, which will be discussed if need be hereinafter in the judgment.
9. We have heard Sh. Abishek Mishra, counsel for the complainants and Sh. Ajay Monga, Counsel for the OP.
10. It will appear from the above narrative that the main question which arises for consideration is whether the OP Bank management told the complainants not to repatriate their money on 08.04.2004. There is no writing about any such suggestion having been given by the OP Bank officers. Even if we proceed on the assumption that the OP Bank told the complainants not to repatriate their money at this stage and the exchange rate of dollars was likely to recede further which will give them more profit, it was a mere advice and no legal liability can be fastened on the basis of any advice if the advice proves erroneous. It is only when there is an agreement and is a definite contract about a particular matter between the parties, which may give rise to resultant legal consequences. If the advice caused any financial loss to the complainants, he cannot hold his advisors liable for damages or compensation.
11. The other question which has to be considered is whether the deduction of interest from 3.5% to 1% was unjustified and unwarranted.
12. It will be noticed in this connection that there was no agreement that such interest will remain static. The Reserve Bank of India is free to reduce or enhance the rate of interest according to its own policy, which it keeps on doing. The complaint of the complainants in this regard is therefore without merit.
13. The other question which is to be considered now is whether the OP Bank should have informed the complainants about reduction in the rate of interest from 3.5% to 1% and since no such information was given the complainants suffered loss and are entitled to reimburse for the same?
14. The OP bank can be fastened with liability only if they were bounding agreement to keep the complainants informed about the fluctuation in the rate of interest. There is no written agreement between the parties. The contention of from the side of the complainants is that the OP Bank had given an assurance to keep the complainants informed about the conversion rate. The OP Bank has denied that there was any such agreement between the parties. Agreement about commercial transaction cannot be considered dependable unless these are in writing or there are some documents from which inference may be drawn about existence of such agreement. Even otherwise it seems unusual that the OP Bank could have agreed to keep the complainants informed about the variations in the conversion rate. The conversion rate may fluctuate day to day and that would have meant that the OP would have bound itself to the same. Normally in such matters if a party itself makes enquiries and keeps itself informed of the fluctuation in the conversion rate. There is no document from which any such agreement may be inferred. Reference was in this connection to some messages sent by the OP bank informing the complainants about the conversion rate, which are on file, but it will be noticed that these messages mention that the information is being conveyed on the query of the complainants.
15. It will therefore, appear that the complainants are not entitled to any relief claim by them and the complaint is therefore dismissed but without costs.
16. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record room.
Announced on 19th day of January 2011.
(Justice Barkat Ali Zaidi) President (Kanwal Inder) Member Tri