@#@#@#@#@#@#@ HONOURABLE DR JUSTICE G.YETHIRAJULU WRIT PETITION NO:13531 of 1999 DATED: 23-01-2008 Between: K.Sailaja Reddy ..... PETITIONER AND The Vysya Bank Ltd., Banjara Hills Branch, Hyderabad, rep.by its Manager and another. .....RESPONDENTS @#@#@#@#@#@#@ ORDER: This is a writ petition filed by the petitioner seeking to declare the action of the respondents in premature foreclosure of the fixed deposit of NR NRD ADR Account No.22/96 with the maturity date of 02-08-1999 and maturity value of Rs.82,12,348/- and converting the due amount into NRE FDR which carries 10% interest p.a. and maturity value will be Rs.2,25,229/- as arbitrary and illegal, and further to direct the respondents to treat the amount which has been deposited by the petitioner as NR NRD ADR till the date of maturity i.e., 02-08-1999 giving interest at the rate of 19% p.a. and other benefits in the said fixed deposit amount. The petitioner contended that she is working as an engineer in USA. She used to remit the amounts through FCNR account in Grindlays Bank Limited at Hyderabad. In course of time, she found that the respondents’ bank started stock investment and she transferred her part of funds from Grindlays Bank Limited to Vysya Bank to Account Nos.130 and 370 of the respondents bank. After carrying on the transactions with the respondents bank till August 1996 the bank has discontinued stock investment scheme. She wanted to invest in NRNRD deposit account with the respondents bank which is governed by the rules framed by the Reserve Bank of India i.e., the non-resident non-repatriable rupee deposit scheme framed by Reserve Bank of India. Under the scheme the respondents bank transferred a sum of Rs.47,05,646/- on 02-08-1996 and issued a certificate mentioning the due date as 02-08-1999 which carries interest at the rate of 19% p.a., mentioning that the maturity amount will come to Rs.82,22,343/- as on 02-08-1999. The petitioner wanted to get the interest amount of Rs.35,16,702/- by keeping her initial amount of Rs.47,05,646/- with the respondents bank. While the matter stood thus, the respondents foreclosed the account on 08-03-1999 i.e., about four months 26 days in advance and adjusted an amount of Rs.72,13,431/- towards the loan amount and arrived at a balance of Rs.2,25,229/- due to the petitioner and issued fresh FDR on 08-03-1999 mentioning the due date as 02-09-1999 with interest at 10% p.a. The petitioner contends that the respondents bank has no authority to foreclose the NRNRD deposit which is due to mature on 02-08-1999. The amount adjusted towards loan was only Rs.72,13,931/-. The respondents ought to have kept the deposit till the maturity date which would have fetched an amount of Rs.82,12,348/-. On account of premature encashment of the fixed deposit the petitioner suffered loss of about Rs.8 lakhs and odd, therefore, the respondents are liable to pay the amount and the action of the respondents is illegal. It is an undisputed fact that the petitioner made some deposit into the respondents bank and the amount was kept in fixed deposit on 02-08-1996. During the course of the deposit the petitioner has borrowed some amounts as a lower draft loan agreeing to pay interest at 19% p.a. She took a loan of Rs.40,34,200/- on 13-08- 1996. The amount deposited in the fixed deposit was Rs.47,05,646/-. The respondents issued a notice on 18-08-1998 to the GPA holder of the petitioner informing that the outstanding loan amount as on that date was Rs.63,87,200/- and the amount outstanding in the deposit account was Rs.67,04,118/-. A margin of 10% has to be maintained, but exceeded by Rs.3,53,495. Therefore, the petitioner was requested to pay the said amount at the earliest, failing which they will be constrained to close the deposit prematurely and adjust the amount to the loan. On 13-10- 1998 the bank again addressed the petitioner through the GPA holder mentioning that they requested the petitioner to remit a sum of Rs.3,53,495/- as there is a fall of margin. The petitioner orally promised to deposit the amount within a months time but till date she did not do so. Therefore, they are constrained to close the deposit which is almost equivalent to the loan amount, as they do not hear from her by 20-10-1998, without any further notice. She requested for some more time for payment of the deficit. On 09-12-1998 the respondents addressed the petitioner informing that though they requested the GPA holder to make good the deposit amount he did not do so, therefore, they are constrained to foreclose the deposit amount by premature encashment. Again on 08-03-1999 they informed the petitioner that they foreclosed the deposit and adjusted the proceeds to the loan amount and the balance amount of Rs.22,05,229/- was kept in NRA deposit for six months in her name by enclosing the statement of accounts pertaining to the loan and the deposit to the GPA holder. The GPA holder gave a letter to the bank to the following effect: “Please keep an amount of Rs.2,25,229/- which is payable by you in Account No.547356 NRE for a period of six months.” Having consented for the same, the petitioner came forward with a contention that the respondents caused loss to the petitioner to a tune of Rs.10 lakhs. But after going through the record, it is seen that the respondents have taken all possible steps to keep the deposit till the maturity date if the deficit of the loan amount is reimbursed by way of depositing the cash. But the petitioner failed to do so, therefore, they have no option except to encash the deposit prematurely as the difference amount exceeded 90%. After going through the entire record, I am convinced that no illegality has been committed by the respondents and the petitioner is not entitled for any relief as prayed for. The writ petition is dismissed. However, the petitioner is at liberty to verify the account and if there is any difference in the amount she is at liberty to claim from the respondents. No order as to costs. _________________ 23rd January, 2008 SKM