The National Consumer Commission has come to the rescue of the Mumbai Metropolitan Region Development Authority (MMRDA) and the Maharashtra Tourism Development Corporation (MTDC), and ordered Dena Bank to clear within six weeks their fixed deposits totaling to Rs 477.32 crores, which were held up allegedly because of fraudulent acts of the bank officers.
In March 2014, the MTDC had invested an idle sum of Rs 125.82 crore with the Dena Bank. In the same month, the MMRDA had also invested Rs 351.5 crore with the bank for a year with assured returns at 9.9% per annum.
Four months later, the statutory bodies received letters from the Economic Offences Wing of the Mumbai police informing them that frauds had been committed with respect to their fixed deposits. The police added that the officials of the MMRDA and the MTDC that the fixed deposit receipts received by them were not original, but forged, and certain amounts have been siphoned off after obtaining overdraft facilities on the security of their original fixed deposit receipts.
After inquiry, it was revealed that an overdraft facility to the extent of Rs 45 crore was obtained in the name of MMRDA and the entire amount had been siphoned off, whereas from the overdraft facility obtained in same manner in the name of MTDC, a sum of Rs 69.03 crore had been siphoned off.
After the date of maturity of the fixed deposits, the bank refused to pay the amounts payable to the MMRDA and the MTDC on the ground that the fixed deposit receipts held by the authorities had been forged. The bank agreed to make the payments, but only after adjusting the amounts outstanding on respective overdraft accounts of both, the MMRDA and the MTDC, which compelled the authorities to approach the National Consumer Commission.
Before the National Commission, the bank took several technical objections. It took a stand that all the transactions were entered into by the persons duly authorised by the statutory bodies, and therefore the bank cannot be held liable for the fraudulent acts that resulted in loss to them. It contended that the fixed deposit receipts were collected, the overdraft and loan accounts were opened and the cheques, whereby money was transferred to third parties, were issued on behalf of the complainants, by the person whom they had authorised to negotiate the fixed deposits and collect the fixed deposit receipts.
The national commission, however, held the bank liable after noticing that the Central Bureau of Investigation had undertaken investigations into the fraud on the complaints lodged by the higher officials of the Dena Bank and the central agency had found alleged complicity of the Dena Bank branch manager in the entire episode. It noted that the bank manager had deliberately not communicated the terms of overdrafts, allegedly because he did not want them to know about the loans extended in their names.
MMRDA and MTDC at fault too
While granting major relief to the MMRDA and the MTDC, the National Consumer Commission has also taken stern note of the lethargic approach on part of the officials of these statutory bodies
Noting that they did not bother to verify either the identity of the persons who visited them as Dena Bank officials or the genuineness of the fixed deposit receipts received by them, it has recommended department action against the officers concerned
It has therefore marked a copy of the June 3 order to the chief secretary, Maharashtra, “for inquiring into the aforesaid acts of negligence and taking appropriate action.”