Jayarajan V/S SBI

A.IR:135/2008


IA-392/2008 (Waiver) –

 Ld. Counsel appearing on behalf of the petitioner stated that a written request for settlement has been made to the bank and that the bank is yet to pass orders on the same.

Ld. Counsel Shri Mohandas appearing on behalf of the respondent bank stated that there is no offer of settlement and stated that whatever representation was made to the bank the same has been duly considered by the bank and the same has also been rejected and prayed that this IA may be dismissed.

At this juncture the Ld. Counsel for the Petitioner stated that there has been no communication from the bank with respect to the rejection of the compromise proposal given by the petitioner to the bank.

Heard both sides.

It is seen that the bank has not accepted the proposal of the petitioner for settlement.  It is also seen that the petitioner has not complied with the conditional order dated 25.4.2012 and therefore this Tribunal is compelled to dismiss this IA. Accordingly this IA is dismissed.

This order was issed by the Honble Chair person of DRAT chennnai on 27th july 2012

OTS Drive of SBT

BL:27 July 2012

State Bank of Travancore (SBT) has launched a one-time settlement (OTS) campaign for repayment of non-performing accounts in the micro, small and medium enterprises (MSME) segment.

The scheme is applicable to all sub-standard assets (in default for more than 12 months) without collateral backing.

It is also applicable for doubtful or ‘loss assets’ (loss identified but not written off) as on March 31, 2012, as defined in the MSMED (MSME Development) Act 2006.

All MSME borrowers can avail this special opportunity and settle their outstanding with the bank, a bank spokesman said here.

There is also an additional incentive of 15 per cent and 10 per cent discount on the OTS amount arrived for borrowers who make full payment respectively within one month or three months from the date of approval of the OTS.

The last date of receipt of application by branches is August 31. More details can be had from the nearest branch or the MSME department at the SBT head office (phone no: 0471-2353658).

Insurer accountable to the insured for act of agent: Consumer forum

S Muralidharan;BL:26 JULY 2012

When an insurance company accepts without demur personal cheques of its agents, after the agent had collected premium from the insured favouring himself in the first instance, it cannot subsequently wriggle out of its commitment to the insured.

The National Consumer Disputes Redressal Commission in Bajaj Allianz Insurance Company Ltd v. Sali Thomas found the argument of the appellant—insurer, that it was not responsible for the actions of its agent in not paying the premium collected in his personal name and deposited in his personal bank account, untenable after having acquiesced in the act by accepting the first few instalments.

The wily agent did the vanishing trick after faithfully depositing with the insurer the first two instalments of Rs 1,50,000 each but swindled the last instalment for the same amount.

The insurer’s plea that the agent was no longer its employ when the third and the last instalment was collected by him once again in his personal capacity did not wash with the Commission. Had it put its foot down on the pernicious practice of the agent collecting premium in his personal name and then issuing his own cheque to the insurer, its stand would have been tenable. The commission pointed out that the insured obviously cannot be faulted because the insurer had fostered the notion that the agent had apparent authority to collect cheques in his personal name by condoning this act not once but twice.

(The author is a New Delhi-based chartered accountant.)

Indian Bank has made a provision of Rs 32 crore against its Rs 800-crore loan to Air India

BL ;Chennnai:26th july 2012

Indian Bank has made a provision of Rs 32 crore against its Rs 800-crore loan to Air India, the bank’s Chairman and Managing Director, Mr T. M. Bhasin, said at a press conference here today.

He said the bank was required to make Rs 8 crore of provision for each of the four quarters of the year, but it decided to take the entire provision in the first quarter itself.

Except for Air India, the bank has no other exposure to the aviation sector.

Indian Bank has restructured loans worth Rs 9,918 crore (loans for which payment terms have been reset to help the borrower.)

Two loan accounts are chunky, incidentally, both are public sector — Air India, and the one to the Rajasthan State Electricity Board (about Rs 1,200 crore).

Indeed, most banks have exposure to RSEB, but it is generally believed that the loans would be paid back as they are backed by a Government guarantee.

Mr.R.chidambaram and ors V/S IOB

M.A(S.A):81/2012

Proof of service not filed in this transfer petition.

Ld. Counsel Shri Aravind Ghosh appearing on behalf of the respondent bank stated that this Tribunal by its discretion transfer this case to any other DRT of competent jurisdiction and also issue directions for the disposal of the SA itself within two months.

Ld. Counsel Shri Desingu appears on behalf of the transfer petitioners and stated that a Presiding Officer cannot step into the shoes of the Authorised officer and also cannot conduct auctions and such being the case the SA should be transferred.

Heard both sides.

In view of the submissions made by the Ld. Counsel for the respondent bank the following order is passed.

‘A Presiding Officer of the DRT cannot conduct a sale under the provisions of the SARFAESI Act. Therefore the Registry, DRT-II, Chennai who has already collected the tenders is hereby directed to return the same to the Authorized Officer of the respondent bank. ‘SA No.67/2012’ is hereby transferred from the file of DRT-II, Chennai to the file of DRT-I, Chennai. The Ld. Presiding Officer, DRT-I, Chennai is hereby directed to take up the SA and dispose of the same as enshrined in Sec.17(5) of the RDDBFI Act.  However it will be open to the respondent bank to urge the Ld. Presiding Officer to dispose of the SA at the earliest.’

This MA(SA) is disposed of accordingly.

IA 749/2012 (stay); Orders passed in MA(SA).  Hence this IA is closed.

This order was issued by THE HON'BLE CHAIRPERSON  of DRAT ,Chennai ON 23/07/2012

The Supreme Court has ruled that a high court has the power to appoint an arbitrator in a dispute between two parties

BS :M J Antony / New Delhi Jul 02, 2012, 00:51 IST

The Supreme Court has ruled that a high court has the power to appoint an arbitrator in a dispute between two parties if one of them refuses to name an arbitrator according to the contract. If a party is aggrieved by the refusal of the other party to nominate the arbitrator, he can move the court and then the other party cannot object to the court appointing an arbitrator under the Arbitration and Conciliation Act.

 In this case, Hindustan Petroleum Corporation vs Vijay HP Filling Centre, the oil company terminated its contract with the dealer. The latter invoked the arbitration clause and asked HP to name the arbitrator. It did not. So the dealer moved the Punjab and Haryana High Court. It appointed a district judge as arbitrator. HP appealed against that order to the Supreme Court. It upheld the view of the high court and named one of the retired judge of the Supreme Court as the arbitrator.

Interest on solatium
The land owner whose property has been acquired under the Land Acquisition Act is entitled to interest on the solatium granted, the Supreme Court has held in the judgment, Chhanga Singh vs Union of India. Compensation was awarded in 1986, after assessing the market value of the land. When the owner moved the executing court for higher compensation, it raised the value of the land and also awarded solatium. But interest on it was not awarded. The owner moved the court again, but his plea was rejected. The high court also dismissed his appeal. But on further appeal to the Supreme Court, it allowed interest on solatium, following earlier constitution bench judgments on this question.

Order to remove drug trade mark

The Delhi High Court has dismissed the appeal of United Biotech Ltd against the order of the Intellectual Property Appellate Board in its trade mark dispute with Orchid Chemicals and Pharmaceuticals Ltd. United Biotech had a medicine called Forzid while Orchid had one named Orzid.The latter company moved the board complaining that the names were similar and likely to confuse the public. The board allowed the rectification application and directed the Registrar of Trade Marks to remove the trade mark Forzid from the register. It held that Forzid was deceptively similar to the earlier trade mark Orzid in respect of some pharmaceutical products. Further, it ruled that a trade mark cannot be registered if it is of such nature as to deceive the public or cause confusion or it is similar to an earlier trade mark and goods covered by the trade mark. The division bench of the high court upheld this view.

DRT can regulate own procedure

The Bombay High Court has stated that the Debt Recovery Tribunal is not bound by the procedure laid down in the Code of Civil Procedure (CPC) and has the power to regulate its own procedure.

 The tribunal, under the scheme of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, has the power under the CPC and it can even travel beyond it, provided natural justice is observed, the high court stated in its judgment in the case, Manik Engineering Ltd vs State Bank of India.

 The bank started recovery proceedings in 1986 in the high court. Later the tribunal was set up and the suit was transferred to it. The debtors argued that they were not aware of it as they were not served notice by the tribunal and the newspaper publication by the bank was not known to them. 

Therefore, it was argued that the tribunal did not follow the CPC provisions. Rejecting this argument, the high court emphasized that the Act was meant to speed up recovery of debts and therefore the tribunal was conferred special powers. If the tribunal is not able to conclude proceedings expeditiously, the purpose of the law itself will be defeated, the court emphasized while dismissing the petition.

Patent on water filter revoked

The Intellectual Property Appellate Board has revoked the patent granted by the Controller of Patents and Designs to Hindustan Unilever Ltd for a filter device for cleaning water, claiming to improve the performance of “filter cartridges in achieving controlled constant flow rate with effective filtration even after extended application.” The board passed the order on an application by Tata Chemicals Ltd. The latter company intervened claiming that the product of Unilever was not novel. Tata Chemicals stated that it has an Innovation Centre in Pune which is working on water purification methods. The company has recently released in the market a unique and cheap water purifier which requires no energy or running water to operate. The board ruled that “the invention is not new, nor is there any inventive step.”

Should credit cardholders pay before filing a complaint?

BS :Neha Pandey Deoras / Mumbai Jul 05, 2012, 00:51 IST

Many may have got a wrong bill for their credit card. 

What do you do in such case?

 Pay the bill? 

Or, take it up with the company?

The Banking Ombudsman suggests you first pay the bill, even if disputed, before filing a complaint with the card provider. 

Reason: This will protect you from the risk of paying more on the back of late payment, in case the decision is in favour of the card provider. In case, the case falls in your favour the excess money can be refunded to you.

You would certainly ask why?

 Reasons a senior official at the Indian Banks' Association (IBA), “This is not an exceptional suggestion. In case of an income tax notice, you have to pay the dues before filing an appeal. In case of an order from the Debt Recovery Tribunal, you are required to pay two-thirds of the debt before knocking on the Appellate Tribunal's door.”

While the card provider may not refuse to entertain your complaint if you've not paid the dues before that, some feel it is unfair to ask a consumer to pay up when he hasn't spent the money.


Says V N Kulkarni, counsellor at Bank of India's Abhay Debt Counseling, “It appears the Banking Ombudsman has presumed the case may go against a consumer. If a credit card holder is absolutely confident that it is a wrong bill, there is no question of paying the amount first and then filing a complaint. It may take quite some time to get back the money and in all probability, without any interest.” Refund, if any, is only adjusted with the next billing cycle.
Some bankers agree with Kulkarni that at times, cardholders are not at fault and are still asked to pay hefty amounts. Even if the case is not in favour of the consumer and is just a confusion, bankers say, cardholders should first check with the card provider before paying.


The Ombudsman suggests likewise for those who rotate their card payments, as well. If you do not agree with the bill sent to you, ask the card company for details such as details of the transaction, charge slip and so on, they suggest.


Consumer activist Jehangir Gai feels if such norms are brought in, it would make sense to directly approach the consumer courts.


Agreed there are built-in checks for credit card transactions such as card holder's photograph on the card, mobile alert for each transaction, online transactions being permitted with CVV number and another password and many more. However, there are mishaps as there are some cases where in mobile alerts are not received. Heads of card companies heads point out that in case of a disputed transaction, point out immediately.


Says Kadambi Narahari, chief executive officer of SBI Cards, “Each transaction is sent back to the card holder in the form of a text message or e-mail alert. Ideally, point out there and then in case of a disputed transaction. Don't wait till the bill is generated. If there was nothing wrong in the alerts sent, there can't be a sudden change in the bill generated.”


Agrees the IBA official that a record is sent by a merchant, if the card is used. If not, then it must have been lost. Then, the card holder should be able to show a loss of card report he/she had filed. Or, your card may have been cloned. In that case, you have to prove that you were not there at the merchant establishment when the card was used for the matter to be settled. But if you've adhered to none of the above, then you should pay the bill first, as filing a dispute complaint is always an option.


Instead of asking card holders to pay first, experts say, the grievance redressal machinery needs to be streamlined and the entire process should be completed in 30 days in which case there will not be huge liability as is made out.