GARDEN SILK MILLS LTD vs AMERICAN EXPRESS BANK LTD

THE complaint relates to alleged deficiency in service on the part of the Opposite Party - Bank in respect of Forward Foreign Exchange Contracts entered into between the Complainant and the Opposite Party. Eight such contracts were entered into during July/August, 1988. The value of the contracts is given below: SI. No. Contract No. Amount 1. FWS 1899 Yen 644,000,000 2. FWS 1900 Yen 463,743,667 3. FWS 1950 Yen 58,180,000 4. FWS 1951 Yen 57,045,350 5. FWS 1984 Yen 16,578,000 6. FWS 1988 SFR 228,844 7. FWS 1986 and ECU 949,012 8. EWS 1989

ACCORDING to the complainant, these Forward Foreign Exchange Contracts were of a continuing nature and the complainant was required to roll over the contract in the event they did not take or want delivery of the Foreign Exchange. These Forward Exchange Contracts can be booked for a maximum period of six months in India. Consequently, in order to keep original contracts alive at the end of every roll over period, the same contract is to be renewed and/or rolled over subject to the payment of a price for rolling over the contract. This price payable for rolling over a contract is dependent upon the premium prevailing at the time of the roll over and is known as the Swap cost or the roll over cost. In addition to Swap cost or roll over cost, the Opposite Party Bank could also charge brokerage. After perusing the record and hearing the Counsel, the Commission is of view that the transactions of Forward Exchange Contracts are quite complex in nature. Keeping in view that there were eight such contracts, and elaborate taking of accounts relating to the periodical rolling over of the contracts every six months on the payment of Swap costs or roll over costs besides brokerage payable to the Opposite Party Bank will have to be undertaken, we do not think this is not a fit case to be dealt with in the time bound proceedings before this Commission under the Consumer Protection Act. It will obviously involve detailed examination of the several transactions between the party for determining whether there was any deficiency in service, on the part of the Opposite Party Bank in each of the contracts at periodical intervals. A satisfactory adjudication of these matters will not be possible before the Consumer Forum.

FOR the reason stated above, we decline to adjudicate upon the merits of this complaint and relegate the complainant to pursue the remedy by way of Civil Suit for which liberty is hereby reserved to the complainant.

THE complainant petition is accordingly dismissed. No Costs. Complaint petition dismissed.