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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Ram Surat Ram Maurya, Presiding Member and Bharatkumar Pandya, Member
Public Health Foundation of India
(Through Mr. J. N. Chawdhary) – Complainant
versus
Central Bank of India and Anr. – Opp. Parties
Consumer Case No.1185 of 2016
Decided on 16.5.2024
Consumer Protection Act, 1986 – Sections 2(r), 3, 13(2)(b) and 13(4) – Consumer Protection Act, 2019 – Sections 2(47), 100, 38(6), 38(9) – Contract Act, 1872 – Section 17 – Limitation Act, 1963 – Section 17 – Economic offence – Embezzlement under Bank Officers – KYC norms not followed – Complainant lodged criminal complaint with Economic Offences Wing of CBI – Complaint is maintainable during pendency of criminal investigation – It is proved that branch office of OP Bank received total Rs.25 crores from PHFI time to time for fixed deposit of one year on which ‘FDRs’ were issued but Branch Office of OP Bank, in collusion with fraudster opened overdraft account without following KYC norms, through which Rs. 22.5 crores have been embezzled – There could be no reason for not following KYC norms while sanctioning overdraft facility of such a heavy amount except the collusion of officers of OP bank with fraudster – Central Bank of India is directed to pay Rs. 25 crores with interest @ 9% per annum from respective date of transfer of money to it till the date of payment to complainant, within two months from date of this judgment.(Paras 10, 13, 16, 19 and 20)
Result: Complaint partly allowed.
JUDGMENT
Heard Mr. Pallav Shishodia, Sr. Advocate, assisted by Mr. Saurabh Seth, Advocate, for the complainant and Mr. O.P. Gaggar, Advocate, for the OPs.
2. Public Health Foundation of India has filed above complaint for directing Central Bank of India to (i) refund Rs.25 crores, with interest as payable on maturity of the FDRs (ii) grant interest @18% per annum, from the date of maturity of the FDRs till the date of refund; (iii) pay Rs.5 crores, as compensation for loss to the projects, undertaken in public interest and could not be completed due to lack of fund and for harassment; (iv) pay Rs.50 lacs, as litigation costs incurred by the complainant to recover its amount; and (v) any other relief which is deemed fit and proper in the facts of the case.
3. The complainant stated that Public Health Foundation of India (for short the PHFI) was a society, registered on 08.02.2006 under the Societies Registration Act, 1860 and formed with object to establish new institutes of public health, assist existing institutes for enhancing their capacity and output, promote research in prioritized area of public health etc. It is an initiative that has collaboratively evolved through consultations with multiple constituencies including Indian and National Academia, State and Central Government, multi & bi-lateral agencies and civil societies groups. The PHFI was registered under Foreign Contribution (Regulation) Act, 1976 on 26.09.2008 and the contributions to the PHFI is exempted under Section 80G(5)(vi) of the Income Tax Act, 1961. The PHFI was granted recognition under the scheme of Scientific and Industrial Research Organization, 1988, on 23.04.2011. The PHFI was running its activities from the donations. At the initial stage of formation of the PHFI, Government of India, Ministry of Health and Family Welfare granted Rs.65 crores towards corpus fund. Later on Rs.69.22 crores was contributed by Bill and Malinda Gates Foundation, U.S.A. and Rs.19.86 crores was contributed by Nand and Jeet Khernka Foundation. The PHFI received Rs.325.19 crores, from multiple donors till 31.03.2013. On 31.03.2013, the PHFI received Rs.219 crores contribution towards its corpus fund. The PHFI used to receive donations for a. particular project and held it as a trustee till the completion of that project. The funds received from the donors and the interest earned on it, are utilized for fulfilling the object of the society without any motive of profit. The PHFI opened Current Account NO.0340992008, in Citibank NA, Connaught Circus Branch, New Delhi, for receiving foreign donations and Saving Account No.05861110000013 in HDFC Bank Ltd. Green Park Extension, Delhi; for receiving domestic donations. Apart from it the PHFI opened bank accounts in other banks in order to carry out its work.
4. Governing Body of the PHFI took a decision in the year 2013-2014 to deposit 80% of its fund in ‘fixed deposits’ with the public sector banks as keeping money in “fixed deposit” with the bank was safest mode for holding the money and utilizing it along with interest earned on it, in completing the project. In pursuance of the decision of the Governing body, the PHFI initially deposited its surplus fund in Housing & Urban Development Corporation Limited, Dewan Housing Finance Corporation Limited, Kerala Transport Department Finance Corporation Limited. Over a period of time, this exposure was gradually reduced from private sector banks to housing development finance corporations. Thereafter, the PHFI made following ‘fixed deposits’;—
(a)(i) The PHFI forwarded account opening form and the required documents to Central Bank of India, Malad Branch, Malad (West), Mumbai on 04.11.2013, for ‘fixed deposit’ of Rs.5 crores, for a period of one year. The forms were duly signed and authenticated by authorised signatories of the PHFI, namely Mr. Amit Chaturvedi and Lt. Gen. Narayan Chatterjee (Retd.) and remitted Rs.5 crores from its Account No.0340992008 with Citibank to the Non-custome
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