Monday, September 24, 2012

Cases Affecting Bankers


Important Recent Judgments of Various Courts - Lower Courts, High Courts, Supreme Courts, RTI, Central Information Commissioner etc. on Wage Revisions, HR Issues for Bankers



(A)  PENSION  AND  WAGE REVISION  CASES :



16. Case Filed At High Court of Karnataka by UFOPFO - Principal Bench at Bangalore - Full text of Writ now available for every banker (Uploaded on 17/11/2010)





7. Court case at Jaipur (uploaded on 11/09/2010)
2What happened on 10th August, 2010 at Madras High Court -  WRIT APPEAL - STAY VACATED. (uploaded on 10/08/2010) [Also updated on 11/08/2010]


(B)  ISSUING  RELATING TO  SUPPLY OF INFORMATION  BY RBI / Other Financial Institutions etc :

   Mr. Subhash Chandra Agrawal, vs RBI - Information commission has allowed the appellant to get certain information which RBI was reluctant to share under RTI

  Mr Kishanlal Mittal vs NABARD - Information commission has allowed the appellant to get certain information which NABARD  was reluctant to share under RTI

(C)  Issuing Relating to Payment to Bankers Who Were Compulsorily Retired :



Thursday, September 13, 2012

Bank Employee Dismissed , Court Rejected Petition


HC rejects Bank employee's petition challenging dismissal

Published in the newspaper Financial Express


Mumbai: The Bombay High Court has dismissed a petition filed by a former bank clerk challenging dismissal from service, observing that the petition suffers from gross delay and latches as the aggrieved person had not challenged the management's decision within a reasonable time frame.


The petitioner, Laxman Chougale, has not explained why it took him 14 years after his dismissal from Union Bank of India in 1991, to make a representation to it's Chairman and Managing Director regarding the bank's decision to terminate his service, Justice Rajesh Ketkar and S A Bobade said recently.

"In our opinion, the petitioner has not made out any cause, much less sufficient cause for entertaining this petition. It suffers from gross delay and latches," the judges opined.

"We decline to exercise extra ordinary powers under Article 226 of the Constitution of India in respect of a stale claim. In view thereof, the writ petition fails and the same is dismissed. Rule is discharged," the judges noted.

The petitioner had challenged the order of dismissal dated July 24, 1991 passed by Enquiry officer-cum-Disciplinary authority, Union Bank of India. He had also challenged the order of the Appellate Authority of November 18, 1991, upholding his dismissal from service.

After 14 years, he had made a representation to CMD of the Bank who also rejected his plea in 2005. Being aggrieved, he filed a petition in the High Court recently.

The Court noted that firstly it took the petitioner 14 years to file a representation to CMD of the Bank and when it got rejected he filed a petition in the High Court after a gap of seven years. As the petitioner could not convince the Court about the delay, the petition was rejected.

Sunday, September 9, 2012

Faulty documents Affects Banks


Bank pulled up for ‘deficient documentation’

VINSON KURIAN 

( collected from newspaper Hindu Business Line)

The Ombudsman held that the bank’s action of revising the rate without prior notice to the borrower was arbitrary and contractually not binding.
‘Deficient documentation’ is all too familiar a context cited by banks to delay or even refuse loans to customers.
But the shoe was on the other foot, as the Office of the Banking Ombudsman (OBO) for Kerala, Lakshadweep and Mahe ruled in a recent case referred to it.

FESTIVAL OFFER

A customer had availed himself of a home loan of Rs 22 lakh under a festival offer with concessional fixed interest rate of 7.50 per cent.
The loan agreement was executed on August 30, 2005. In November 2011, the bank issued a demand notice asking the borrower to pay additional interest.
This was on the ground that, according to the bank’s internal guidelines, the interest rate on home loans sanctioned was to be reset every three years.
Accordingly, the bank levied interest at the rate of 12.75 per cent from August 20, 2008 and 12.50 per cent from August 20, 2011.
The borrower contested the levies and filed a complaint with the OBO.

NO CLAUSE


Verification of the loan arrangement showed that the original interest contracted was 7.50 per cent fixed. There were no enabling clauses to reset the interest periodically.
The bank explained that an internal circular was issued on August 16, 2005, which the branch did not incorporate in the loan documents by oversight. Its internal audit team had pointed out the short levy in November 2011, after which the demand notice was issued.
The OBO held that the bank’s action of revising the rate without prior notice to the borrower was arbitrary and contractually not binding.

NOT BINDING

Neither did the loan documents carry any provision for resetting the interest rate every three years.
Accordingly, the bank was directed to roll back all interest revisions and refund the excess levies. The bank refunded Rs 46,170 to the complainant.
(Disclaimer: The Reserve Bank of India does not vouch for the correctness, propriety or legality of orders passed by Banking Ombudsman. The object of placing this in the public domain is merely to disseminate information on the working of the Banking Ombudsman Scheme.)

Thursday, September 6, 2012

Banks Should Adopt 'Give and Take' Policy to Resolve the Issues AND Avoid Litigation


Bank takes widow’s Rs15,000 claim all the way to SC

Published: Thursday, Sep 6, 2012, 8:46 IST 
By Rakesh Bhatnagar 
A village cooperative bank that’s supposed to help poor and landless farmers with subsidies and easy small loan for purchasing cattle is found to have opened its coffers in litigating with a poor widow all the way to the Supreme Court resisting the petty claim for the death of her mulching buffalo in 2001.
Hearing the case, the top court warned that the government and its instrumentalities must shun trivial litigation and resolve them by adopting ‘give and take’ attitude instead of litigation otherwise both the institutions and court “will sink”.
The warning came in a case initiated by a Gurgaon-based Gramin Bank that used public money in the litigation cost besides the various allowances its officials received in pursuing a fight against a poor widow who had a decree for compensation of Rs 3000 for the accidental death of her buffalo in 2001.
“It is the poor luck of the bank that its appeal has come before us,” an anguished bench of Justices KS Radhakrishnan and Dipak Misra observed as it rejected the bank’s appeal against the directives passed by all the subordinate consumer grievances resolution tribunals regarding payment of compensation of Rs 15,000 to Khazani.
Khazani had paid the insurance premium of Rs 759 to the New India Insurance Company.When her insured cattle died she approached the bank and the insurance company but it didn’t yield any result.
A subordinate consumer tribunal ordered that she should be compensated for the loss off her animal and also should be paid Rs 3,000 cost with 6 per cent interest. But the bank took it as its defeat and pursued litigation.
“Let God save the gramins (villagers),” the court observed as it imposed a cost of Rs10,000 on the bank and asked it pay this money within a month to Khazani.The judges noted that the bank now has to spend altogether Rs 25,950for a claim of Rs. 5,000 apart from the travelling expenses ofthe bank officials.
“The number of litigations in our country is on therise. For small and trivial matters, people and sometimes central and state governments  and their instrumentalities banks, nationalized or private, come to courts may be due to ego clash or to save the officers’ skin,” the court noted with concern.
The court warned that if the institutions don’t take “ earnest efforts”to resolve the disputes at their end by adopting “some give and take”attitude, “both” will sink.
Unless serious questions of law of general importance arise for consideration or a question which affects  large number of persons or the stakes are very high,courts jurisdiction cannot be invoked for resolution of small and trivial matters, the court ruled.