2013 (5) TMI 67 - AT - Law of Competition

Tribunal Rejects 14-Year-Old Bank Complaint as Time-Barred; Finds Bank's Actions Lawful and Fair.

Rangi International Versus Bank of India

The tribunal dismissed the complaint and Compensation Application under Section 12-B, determining them to be non-maintainable due to being filed 14 years ... Complaint was filed by appellant under Sections 36-A, 36B, 36D and 37 of the MRTP Act. – compensation application - Appellant availed the services of respondent bank - said service was of sub-standard quality and that the respondents have adopted unfair and deceptive practices while rendering the same and had also coercively recovered Export Outstanding Charges ('XOS charges' in short) and it had neglected and failed to return original title deeds of the properties entrusted to the respondent bank as a collateral security in spite of having been fully paid all the debts given to the complainant. It is to be seen that the complainant used to export garments through the Apparel Export Promotion Council and several export bills were sent to the foreign buyers through the bank for 'collection only'. In respect of these 'collections only' export bills, the bank used to levy xos charge per outstanding bill per quarter. These charges were levied since these were required to be reported by the bank to RBI every quarter by way of 'XOS statements' get incentives/benefits on the export proceeds. In fact, it was only in August 1992 that the complainant had shifted its banking operation to Vysya Bank. However, packing credit limit was paid on 05.08.1993, but the outstanding in the account of the complainant on that date was ₹ 1,40,77,644/-. According to the complainant though the loan credit of the respondent bank was liquefied in 1993 and though the bank guarantee also expired on 30.10.1994, but the collaterals were not returned. Held that - We have deliberately stated the facts above along with the dates of the correspondence which went on between the parties stretching maximum in favour of the complainant. We do not find any justification as to how the non-return of collaterals could be complained of only in 2007 when admittedly the collateral securities were refused for the first time in somewhere in the year 1993 and when the bank ultimately returned the collaterals in March 2001. As regards the non-refund of XOS charges, we have already found that the complainant has not shown any rule under which he was entitled to the refund, thus there is a complete justification on the part of the respondent bank not to return collaterals. There is no question of limitation as any action in that behalf could not be possible. In the result, we come to the conclusion that the complaint as well as Compensation Application under Section 12-B are not maintainable. They are dismissed. Issues Involved:1. Maintainability of the complaint and Compensation Application.2. Refusal to raise the credit limit.3. Refusal to return the collaterals.4. Recovery of XOS charges.Issue-wise Detailed Analysis:1. Maintainability of the Complaint and Compensation Application:The respondents raised a preliminary objection regarding the maintainability of the complaint filed by M/s. Rangi International under Sections 36-A, 36B, 36D, and 37 of the MRTP Act. They argued that the complaint was not maintainable based on Section 66(3) of the Competition Act read with Section 3(g) and Section 2(da)(iv) of the MRTP Act. The respondents contended that the bank is a financial institution covered under Clause (iv) of Section 2(da) of the MRTP Act, and thus excluded under Section 3(b) and (g) of the MRTP Act. Furthermore, they argued that the complaint did not constitute monopolistic, restrictive, or unfair trade practices within the meaning of the MRTP Act, and was barred by limitation and latches as it was filed 14 years after the alleged grievances.2. Refusal to Raise the Credit Limit:The complainant alleged that their applications for enhancement of various credit limits were kept pending for two years, causing them to transfer their banking operations to Vysya Bank. The tribunal refused to delve into this issue, stating that raising the credit limit was at the discretion of the bank and could not be claimed as a right by the complainant.3. Refusal to Return the Collaterals:The complainant argued that despite settling the entire funded loan by 1993, the respondent bank did not return the collateral securities. The bank justified retaining the collaterals on the grounds that the original bank guarantees were not returned and there were outstanding XOS charges. The tribunal noted that the collaterals were eventually returned in March 2001 and emphasized that any complaint regarding the delay should have been made within a reasonable period. The tribunal cited the Supreme Court's decision in Corporation Bank v. Navin J. Shah, which held that a complaint must be brought within a reasonable time, typically three years, and found that the complainant had not justified the delay in filing the complaint.4. Recovery of XOS Charges:The complainant contended that the respondent bank coercively recovered XOS charges, which were not permissible by law or in accordance with RBI/FEDAI Guidelines. The tribunal found that the XOS charges were levied as per banking practice and RBI rules, and the complainant had requested the bank to return the margin money after adjusting the XOS charges. The tribunal concluded that there was no unfair trade practice in the recovery of XOS charges and that the complainant's request for a refund was unjustified.Conclusion:The tribunal dismissed the complaint and Compensation Application under Section 12-B, concluding that they were not maintainable. The complaint was barred by limitation as it was filed 14 years after the alleged grievances, and there was no justification for the delay. The tribunal also found no fault with the bank's actions regarding the refusal to raise the credit limit, retention of collaterals, and recovery of XOS charges.