STANDARD CHARTERED BANK LTD.versusDR. B.N. RAMAN

                                                                                     -.
A                     STANDARD CHARTERED BANK LTD.
                                         v.
                                 DR. B.N. RAMAN

                                   JULY 14, 2006

B                  [ARIJIT PASAYAT AND S.H. KAPADIA, JJ.]


         Consumer Protection Act, 1986-Section 2(1)(d), (g) and (o)-Business
  transaction between Bank and Customer, a non-resident lndian-Deposit by
  Customer in Foreign Currency Non-Resident Account-Reinvestment of the
c matured amount from time to time-On enquiry about status of the amount
  after 12 years of initial deposit, told by Bank that the amount prematurely
  withdrawn just after 3 months of initial deposit-Complaint for deficiency in
  service-Claim for decree of the final matured amount after conversion of
  foreign currency and interest@ 18% p.a. till realization-State Commission
D decreeing the claim-Decree upheld by National Commission-On appeal,
  held: Factual findings of the Courts below are upheld-However as the rate
   of interest@ 18% was on the higher side and since the courts below have
  not examined the question regarding selection of appropriate date for ftxing
  the rate of exchange, matter remitted to State Commission for reconsideration
  on these points.
E
          Banking-Customers of Bank-Whether consumers-Held: They are
    consumers with the meaning of Section 2(/)(d)(ii) of Consumer Protection
    Act-Statutory bodies are within the purview of the Act as their functions
    come under the term 'service '---Consumer Protection Act, 1986-sections
    2(/)(d)(ii) and 2(/)(o).
F
          Words and Phrases-'Banking'-Meaning of

           Respondent-Consumer, a non-resident Indian had admittedly deposited
    US Dollars in Foreign Currency Non-Resident (FCNR) Account in August
    1979 with appellant-Bank. The same was to mature in November 1984. In
G
    June 1984 the consumer got intimation that he should reinvest the entire        :,
    amount on maturity for a further period of 6 years at 13% p.a. interest. The
    said reinvestment was to mature in November 1990. In 1986, on visit to India,
    when the consumer visited the office of the Bank he was assured that
    everything was in order. In September 1990, he again requested the Bank to
H                                       558
           STANDARD CHARTERED BANK LTD. v. DR. 13.N. RAMAN                    559
reinvest the entire amount on maturity in the FCNR account for a further             A
period of3 years. Consumer when visited India in 1992 enquired about the
status of his deposits, which was not replied to. On complaint, he received a.
letter from Bank, stating that there was no outstanding amount in the account
as the same was prematurely withdrawn in November 1979.

      Consumer filed a complaint before State Commission stating therein             B
that he could not have withdrawn the amount, as he was not in India on the
relevant date and the original deposit memo was retained by the Bank in safe
custody. He claimed money decree with interest@ 18% p.a. till realization.
State Commission decreed the claim holding that the facts stated by the
consumer were proved and there was no evidence to show that the amount               C
deposited was prematurely withdrawn and also to show that the records were
destroyed on completion of eight years; that the deposit was reviewed from
time to time, and hence was within limitation. The appeal of the Bank to
National Commission was dismissed confirming the order of State
Commission. Hence the present appeal.
                                                                                     D
    Partly allowing the appeal and remitting the inatter to the State
Commission, the Court

      HELD: I.I. The Court is in agreement with the factual findings of the
impugned judgment. However, the claim of the respondent for money decree
with interest at the rate of 18% p.a. till realization appears to be on the higher   E
side and inflative. The rate of exchange, which is indicative of price and which
constantly varies from time to time, has not been examined. [564-D-F[

       1.2. In an action to recover an amount payable in a foreign currency,
five dates compete for selection by the court as the proper date for fixing the
rate of exchange at which the foreign currency amount has to be converted            F
into the currency of the country in which the action has been commenced and
decided. These dates are - the date on which the amount became due and payable;
the date of the commencement of the action; the date of the decree; the date
when the court orders execution to issue; and the date when the decretal
amount is paid or realized. The court has to select a date which puts the            G
plaintiff in the same position in which he would have been, had the defendant
discharged his obligation when he ought to have done, bearing in mind that
the rate of exchange is a fluctuating factor. To select the date when the amount
became due, the court has to act in a just, fair and equitable manner.
                                                                        [564-E-H[
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    560                     SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R.

A         Foraso/ v. Oil and Natural Gas Commission, AIR (1984) SC 241, relied
    on.

          1.3. In such cases, the Agencies under the Consumer Protection Act,
    1986 should also keep in mind the economic situation of the country. In the
    present case, none of these factors have been considered by the State
B   Commission. In cases of this type, the burden is on the complainant to show
    the rate of exchange prevalent on the aforestated dates in order to assist the
    count to arrive at the indicative prices. This has not been done in the present
    case. Neither the State Commission nor the National Commission has
    examined this question regarding selection of the appropriate date, the
C   appropriate rate of exchange on that particular date as also the rate of interest
    which the appellant was required to pay. f565-A-C(

          2. Activities relating to non-sovereign powers of statutory bodies are
    within the purview of the Consumer Protection Act, 1986. The functions of
    such statutory bodies come under the term 'service' under section 2(1)(o) of
D   the Act. Banking is a commercial function. 'Banking' means acceptance, for
    the purpose of lending or investment of deposit of money from the public,
    repayable on demand or otherwise. The intention of the 1986 Act is to protect
    consumer of such services rendered by the banks. Banks provide or render
    service/facility to its consumers or even non-customers. Banking is business
    transaction between bank and customers. Such customers are consumers
E   within the meaning of section 2(1)(d)(ii) of the Act and the services rendered
    by the banks come under Section 2(1 )(o) of the said 1986 Act. f564-A-D)

          Vimal Chandra Grover v. Bank of India, AIR (2000) SC 2181, relied
    on.

F         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2982 of2006.

         From the Judgment and Order dated 14.7.2004 of the National Consumer
    Disputes Redressal Commission, New Delhi, in First Appeal No. 299/1997.

         Mukul Rohtagi, Sanjay Gupta, Varsha Kirpalani, N. Gupta and Rajeev
G   Sharma for the Appellant.

          Rajeev Dhawan and Balraj Dewan for the Respondent.

          The Judgment of the Court was delivered by

H         KAPADIA, J. Leave granted.
 STANDARD CHARTERED BANK LTD." DR. B.N. RAMAN IKAl'ADI/\ . .l.] 56 l

      This civil appeal, by grant of special leave, is filed by Standard Chartered A
Bank Ltd. against order dated 14.7.2004 passed by National Consumer Disputes
Redressal Commission (for short 'National Commission') dismissing the bank's
appeal and confirming the decree passed by the State Consumer Disputes
Redressal Commission. New Delhi (for short 'State Commission') under
Consumer Protection Act, 1986 (for sho1t 'the Act').
                                                                                  B
       Respondent herein was a non-resident Indian employed as a professor
 of Medical Physiology in the University of Libya from 1975 to 1980. Thereafter,
 he stayed in Libya till 1992. On 17.8. 79 when the respondent was in Libya he
 had placed with the bank US $5000 in FCNR (Foreign Currency Non-Resident)
 Account for 63 months at 9% p.a. vide LF No. MR-24, DR No.316/79/39. The C
 deposit was made by the draft drawn on New York Bank. The deposit was
 to mature on 17.11.84. The appellant ~onfirmed the deposit.· The deposit
 receipt is annexed to the paper book. In 1984, Reserve Bank of India (RBI)
 allowed the banks to keep FCNR for six years. Interest on such deposits was
 increased from 9% to 13% p.a. According to the respondent, in June 1984,
 intimation was given to the appellant to reinvest the entire amount in FCNR D
 account on maturity for a further period of six years at 13% p.a. In 1986, the
 respondent visited India. He attended the branch office of the bank. The
 respondent claims that he was assured by the bank that everything was in
 order and that US$ 7939.56 were lying in the FCNR account which amount
 stood reinvested at 13% p.a. for six years maturing on 17.11.90. Respondent E
alleged that in September 1990 he had requested the bank to reinvest the
entire amount in his FCNR account for a further period of three years. This
was to be done on maturity of his deposit on 17.1 I .90. In January 1992, as
stated above, the respondent returned to India. He enquired about the status
of his deposits. He did not get the response. He made a complaint in writing
on 5.1.92 and on 14.1.92. On 7.9.92, he received a letter from the bank stating F
that no outstanding amount was there in his name in the FCNR account. By
letter dated 15.10.92, the appellant stated that from their records it is seen that
the said deposit was prematurely withdrawn on 22.11. 79. Thereafter,
correspondence ensued. Respondent herein denied the fact of premature
withdrawal of the deposit. He complained to RBI. On 19.4.93 the bank stated G
that the deposit was encashed prematurely not on 22.11.79 but on 23.11.79.
A copy of the sale/purchase register was also enclosed by the bank to show
that the deposits stood withdrawn on 23.11.79. Ultimately, on 28.9.94 the
respondent herein preferred a complaint under section 2( I )(g) and section
2(l)(o) of the Act before the State Commission.
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    562                     SUPREME COURT REPORTS 120061 SUPP. 3 S.C.R.

A          In the said complaint respondent alleged that he could not have
    withdrawn the amount on 23 .11. 79 as he was not in India. He relied upon his
    passport to show that he was not in India. He further alleged that a copy of
    the original FCNR was put in the safe deposit vault. In this connection, he
    relied upon the said receipt which states that the deposit receipt memo is
B   retained by the bank in Safe Custody. Respondent stated, on the basis of the
    above facts, that the amount has been withdrawn by somebody in connivance
    with the bank's officers. In the circumstances. respondent herein claimed that
    he was entitled to the decree in following terms :
    "S. No. Year                   Interest                     Total amount
                                                                payable on
c                                                               maturity

    I.    From 17.8.79 to          @ 9% to be                   us$ 7939.56
          16.11.1984 (63           added half yearly .
          months)                  on$ 5000
D
    2.    From 17.11.84            @ 13% to be added            us $ 16904/093
          to 16.11.1990            half yearly on
          (6 years)                $ 7939.56

    3.    From 17.11.90            @ 10.5% to be                us $ 22978/645
E         to 16.11.1993            added half yearly on
          (3 years)                $ 16904/093

               A total ofRs.7,12,337.99 at present date is due from the opposite
           party till 17 .11.93. Thereafter, interest @ 18% per annum on the aforesaid
           amount which comes to approx. Rs.1,28,220.83 (Rupees one lakh twenty
F          eight thousand two hundred twenty and paise eighty-three only)."

           By written statement, the appellant conceded that the respondent had
    deposited on 17.8.79 a sum of US $ 5000 in FCNR account for 63 months
    maturing on 17 .11.84 at 9% p.a. However, the appellant contended that prior
G   to the date of maturity the deposit was prematurely withdrawn on 23.11.79.
    In this connection, reliance was placed on sale/purchase register. Therefore,
    according to the bank, there was no question of reinvesting of the aforestated
    amount from t:me to time, as alleged by the respondent. The appellant also
    denied that the deposit receipt was kept in Safe Custody. In this connection,
    the appellant submitted that an inquiry into premature withdrawal and the
H   demand for recovery of money after 12 years was beyond time. The bank,
 STANDARD CHARTERED BANK LTD. v. DR. B.N. RAMAN [KAPADIA. J.J 563

however, agreed that in 1984 RBI allowed it to keep FCNR for six years at the A
rate of 13% p.a. However, the appellant contended that since the amount was
prematurely withdrawn, there was no question of reinvesting it for six yearsat
the rate of 13% p.a. The bank denied all factual allegations made by the
respondent with regard to reinvestment. By the objections, apart from the
question of limitation, the appellant stated that the respondent was not a B
consumer as defined under section 2( 1)( d) of the said 1986 Act. The appellant
also contended that under RBI rules, the bank was not bound to retain the
records after eight years and, therefore, tile matter cannot be decided on
presumptions; that the burden was on the respondent to prove the alleged
facts regarding reinvestment. By the written stateme1:t, the appellant denied
its liability to pay a sum of Rs.7, 12,337.99 including interest till 17.11.93 and C
further interest at 18% p.a. on the said amount amounting to Rs.1,28,220.83.

       By order dated 28.4.97, the State Commission came to the conclusion
that the respondent had deposited US$ 5000 on 17.8.79 carrying 9% interest
and maturing on 17 .11.84; that the receipt was retained in safe custody; that
there was no record to show that the said amount was prematurely withdrawn;        D
that there was no evidence regarding destruction of the records on completion
of eight years and since the initial deposit of US$ 5000 on 17.8.79 stood
established the decree, as prayed for, was granted by the State Commission.
The Commission further found that there was no evidence on record to show
that the respondent had given written instructions to the bank for premature       E
withdrawal; that there was no endorsement on the receipt showing payment
in lieu of discharge and, therefore, the bank was not entitled to place reliance
only on entry in the sale/pJrchase register dated 23.11. 79. The State
Commission further found that on 23.11.79 respondent was not in India. In
this connection, reliance was placed on the endorsement in his passport.
Accordingly, the State Commission came to the conclusion that the deposit          F
was reviewed from time to time and, therefore, the complaint was within
limitation. Accordingly, the decree in the aforestated terms was passed by the
State Commission.

      Aggrieved by the aforestated decision of the State Commission, appellant
herein went in appeal to the National Commission under the said 1986 Act.          G
By the impugned order dated 14.7.2004, the findings of fact recorded by the
State Commission were confirmed. The appeal was accordingly dismissed.
Hence, this civil appeal comes before this court at the instance of the bank.

     The Consumer Protection Act, 1986 provides for formation of National
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    564                    SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R.

A Commission; State Commission and District Forum. These are remedial agencies.
    Their functions are quasi judicial. The purpose of these agencies is to decide
    consumer disputes. Activities relating to non-sovereign powers of statutory
    bodies are within the purview of the Act. The functions of such statutory
    bodies come under the term 'service' under section 2( I )(o) of the Act. Banking
B   is a commercial function. 'Banking' means acceptance, for the purposes of
    lending or investment of deposit of money from the public, repayable on
    demand or otherwise [See: section 5(b) of Banking Regulation Act, 1949].
    The intention of the 1986 Act is to protect consumers of such services
    rendered by the banks. Banks provide or render service/facility to its customers
    or even non-customers. They render facilities/services such as remittances,
C   accepting deposits, providing for lockers, facility for discounting of cheques,
    collection of cheques, issue of bank drafts etc. In Vimal Chandra Grover v.
    Bank of India, AIR (2000) SC 2181 this court has held that banking is
    business transaction between bank and customers. Such customers are
    consumers within the meaning of section 2(1)(d)(ii) of the Act.

D        Only two points appear to have been argued by the bank before the
  National Commission, vi::.., question of premature withdrawal and limitation.
  However, the claim of the respondent for money decree with interest at the
  rate of 18% p.a. till realization appears to be on the higher side and inflative.
  The rate of exchange, which is indicative of price and which constantly varies
E from time to time, has not been examined. This is apart from awarding of the
  rate of interest at 18% p.a. which itself is on the higher side. In the case of
  Forasol v. Oil and Natural Gas Commission, AIR (1984) SC 241 this court
  observed that in an action to recover an amount payable in a foreign currency,
  five dates compete for selection by the court as the proper date for fixing the
  rate of exchange at which the foreign currency amount has to be converted
F into the currency of the country in which the action has been commenced and
  decided. These dates are - the date on which the amount became due and
  payable; the date of the commencement of the action; the date of the decree;
  the date when the court orders execution to issue: and the date when the
  decretal amount is paid or realized. The court has to select a date which puts
G the plaintiff in the same position in which he would have been, had the
  defendant discharged his obligation when he ought to have done, bearing in
  mind that the rate of exchange is a fluctuating factor. To select the date when
  the amount became due, the court has to act in a just. fair and equitable
  manner because in a case where the rate of exchange has gone up, the
  opponent escapes by paying a lesser sum than what he was bound to and
H thus he gains by default while in the converse case where the rate of exchange
STANDARD CHARTERED BANK LTD. v. DR. B.N. RAMAN [KAPADIA, .I.] 565

has gone against the opponent, the opponent wou Id be subjected to a greater A
burden than what it should be. Apart from the judgment of the Supreme Court
in Forasol (supra), we may observe that in such cases, the Agencies under
the Consumer Protection Act, 1986 should also keep in mind the economic
situation of the country. Encashment of dollar denominated deposits have
certain economic implications. In the present case, none of these factors have B
been considered by the State Commission. In cases of this type, the burden
is on the complainant to show the rate of exchange prevalent on the aforestated
dates in order to assist the court to arrive at the indicative prices. This has
not been done in the present case. Neither the State Commission nor the
National Commission has examined this question regarding selection of the
appropriate date, the appropriate rate of exchange on that particular date as C
also the rate of interest which the appellant was required to pay.

      For this limited purpose alone, we partly allow the appeal and remit the
matter to the State Commission to pass the decree in favour of the respondent
herein in accordance with law indicated above. On all other factual findings,
we are in agreement with the impugned decision. This appeal is partly allowed
with no order as to costs.

K.K.T.                                                Appeal partly allowed.