Mumbai: Redressal panel dismisses JNPT's complaint against Oriental Bank of Commerce

Mumbai: Redressal panel dismisses JNPT's complaint against Oriental Bank of Commerce

The commission was hearing a complaint filed by the Jawaharlal Nehru Port Trust (JNPT) against Oriental Bank of Commerce (OBC) seeking refund and interest on certain amounts it gave for term deposits, which was fraudulently siphoned off.

Ashutosh M ShuklaUpdated: Sunday, March 26, 2023, 12:52 AM IST
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Mumbai: Redressal panel dismisses JNPT's complaint against Oriental Bank of Commerce | Representative Image

Mumbai: Dismissing a complaint, the National Consumer Disputes Redressal Commission (NCDRC) has said that transaction for higher interest rate is a business activity for profit and hence falls into the exclusion clause of ‘consumer’ definition.

The commission was hearing a complaint filed by the Jawaharlal Nehru Port Trust (JNPT) against Oriental Bank of Commerce (OBC) seeking refund and interest on certain amounts it gave for term deposits, which was fraudulently siphoned off.

The order dated March 22 was passed by Justice Ram Surat Ram Maurya, presiding officer, and Dr Inderjit Singh, member of NCDRC.

How the 2014 case started

In 2014, JNPT looked to deposit between Rs100-Rs120 crore as term deposit for one to two years. For this, it asked for quotations for best interest rates from banks. OBC was willing to offer an interest rate of 9.67% per annum, the highest.

The competent authority at JNPT approved the quotation and Rs110 crore was transferred via RTGS. However, no term deposit receipt (TDR) was issued and JNPT wrote to the bank about the same. It was informed that a higher interest rate was being negotiated. In a few days, JNPT sought quotations for another term deposit of Rs70 crore for a year or two. This time again of all the banks, OBC gave the highest quotation at 9.75 % per annum. It acknowledged both the receipts.

When JNPT did not receive the TDR as promised, it made a complaint with the general manager of the bank. When the bank asked around, it got to know that the complainant had asked the amount to be transferred to the current account of one M/s Padmavati International. When JNPT came to know of the finding of the bank, it filed a complaint with the chief vigilance officer and an FIR was filed, which investigated by the CBI. 

Why JNPT approached Consumer court

When JNPT sought the amount with interest, the bank asked it to approach the appropriate court as the CBI had recovered Rs115 crore from various bank accounts. When the money was not refunded by the bank, JNPT filed a consumer complaint.

The bank contended that the CBI inquiry proved connivance of an employee of JNPT. And that Rs70 crore being transferred without insisting TDR for the earlier one showed contributory negligence and that the complaint needed to be dismissed.

During the hearing, the commission delved into the definition of “consumer” as defined in the Consumer Protection Act, 1986. It stated that one had to look into the dominant reason for which transactions were done and if it were for business and earning profit. The commission cited earlier case laws that dealt with commercial activity and doing business to earn profit. It stated that for the term deposit, inviting quotations both times showed that the transactions were business to business to earn profit and fell in the exclusion clause of consumer.

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