Damayanti Kantilal Doshi v Indian Bank

• Jurisdiction: Singapore
• Judge: Lai Kew Chai J
• Judgment Date: 03 August 1999
• Neutral Citation: [1999] SGCA 57
• Docket Number: Civil Appeal No 301 of 1998
• Date: 03 August 1999
• Year: 1999
• Published date: 19 September 2003
• Plaintiff Counsel: Samuel Chacko (Manjit, Samuel & Partners)
• Citation: [1999] SGCA 57
• Defendant Counsel: Deborah Barker and Wang Tiak Kweng (Khattar Wong & Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: Accounts,Charging fixed deposits to secure grant of facilities,Where demand for payment must be made at,Wife subsequently added as joint account holder to charged deposits,Wife appointed executor of estate and demands Singapore branch provides an account and procures payment of fixed deposits,Whether Singapore branch has to render an account of fixed deposits and procure payments from Indian branches,Whether creation of a charge over deposit requires consent of joint account holder,Plaintiff demanding payment prior to maturity,Banking,Deceased placing fixed deposits with various Indian branches of the bank through its Singapore branch,Lending and security,Whether bank have to make payment of fixed deposits prior to maturity,Fixed Deposits,Branch bank,Whether addition of joint account holder constitutes termination of original deposit contract and previous charge

(delivering the judgment of the court): This is an appeal from the decision of the High Court which, among other things, dismissed the appellant`s claim for an account and for losses suffered owing to the refusal of the respondents` branch in Singapore to pay her certain moneys which were placed on fixed deposits under the joint names of her late husband, Kantilal P Doshi, and herself.

The facts

The facts that led to the appeal are these. The appellant, Madam Damayanti Kantilal Doshi, is the widow of the late Kantilal P Doshi (`KPD`), who was killed on 1 July 1991. KPD was a Malaysian, who operated his businesses in Johore Bahru and was a long standing customer of the Singapore branch of the respondents, Indian Bank. We shall refer to the Singapore branch of Indian Bank as `IBS`.

Under the will of KPD, the appellant and her youngest son, Jogesh, were appointed the executors of KPD`s estate (`the estate`). The appellant has two other sons, the eldest being Jigarlal, and the second Tilaklal. After KPD`s death an unfortunate dispute arose in the family, with Jigarlal seeking to acquire control of KPD`s main business carried on through the company, Overseas Industries Sdn Bhd (`OISB`). Jigarlal obtained an injunction in the Johore Bahru High Court which prevented his mother and siblings from gaining access to KPD`s Johore office and documents kept there. These documents included fixed deposit receipts to the numerous fixed deposits (`FDs`) placed with various branches of the respondents in India, and some of these FDs were in the joint names of KPD and the appellant. These deposits were placed by KPD under a special scheme operating in India and are known as the Foreign Currency Non-Resident Deposits (`FCNRDs`). Under this scheme Indian nationals resident abroad or persons abroad of Indian origin were encouraged to place fixed deposits in certain specified foreign currencies with various authorised branches of the respondents in India at interest rates which were higher than the normal prevailing rates. The rate of interest payable on such deposits is determined by the Reserve Bank of India and is the same regardless of which bank or branch of a bank the deposits are placed. Such deposits and the interests accrued thereon may be freely repatriated out of India by the depositors. But a depositor cannot obtain payment of his deposit in cash over the counter at the bank or the branch of the bank where his deposit is placed. Payment of a deposit can only be effected by (i) an `overseas` branch, ie a branch in India specifically authorised to deal in foreign exchange, or (ii) a demand draft drawn on a foreign bank outside India or by way of telex transfer to a bank outside India.

In July 1991, soon after the death of their father, Jogesh and Tilaklal met up with officers of IBS to ask for an account of the various FDs placed by KPD with the respondents. Subsequently by a letter written to IBS dated 30 July 1991, the appellant asked for an `up to date and complete list of all assets, including fixed deposits and any other investments` held in the name of KPD singly or in the joint names of KPD and the appellant, both locally and overseas. IBS replied on 1 August 1991 informing the estate of the facilities granted to KPD and his associate firms, and some 15 FDs, which were charged to IBS to secure those facilities. Further, IBS requested the estate to advise them of the arrangements to settle their claims against KPD.

The 15 FDs referred to by IBS consisted of seven FDs in the name of OISB and eight in the joint names of KPD and the appellant. These eight FDs (the `eight charged FDs`) in the joint names of KPD and the appellant were as follows:

(1) FCNRD No 406019 dated 26 February 1991 (Richmond Circle Branch) principal sum of US$319,805.38 due on 26 August 1991 for US$331,798.08

(2) FCNRD No 003777 dated 6 December 1990 (Harbour Branch) principal sum of US$1,030,000 due on 6 December 1993 for US$1,370,468.86

(3) FCNRD No 433953 dated 6 December 1990 (Adyar Branch) principal sum of US$500,000 due on 6 December 1993 for US$646,250.00

(4) FCNRD No 585753 dated 20 December 1990 (Ballygunge Branch) principal sum of US$102,033.82 due on 20 December 1991 for US$111,216.86

(5) FCNRD No 585785 dated 9 January 1991 (Ballygunge Branch) principal sum of US$96,436.12 due on 9 January 1992 for US$105,115.37

(6) FCNRD No 190216 dated 31 March 1991 (Ernakulam Branch) principal sum of US$203,194.67 due on 31 March 1994 for US$258,057.23

(7) FCNRD No 72113 dated 3 May 1991 (Rajkot Branch) principal sum of US$19,017.47 due on 3 May 1994 for US$24,152.19

(8) FCNRD No 115262 dated 14 November 1990 (Panaji Branch) principal sum of US$1,751,770.41 due on 14 November 1992 for US$2,093,365.60

Three of the eight charged FDs, namely, the FDs maintained at the Harbour, Adyar and Panaji branches of the respondents were originally in the name of KPD alone but subsequently in early 1991 the appellant`s name was added as a joint holder thereof. These three FDs gave rise to a separate point of dispute in this appeal, which we shall discuss and consider in a moment.

On the following day, the appellant replied by her letter dated 2 August 1991, stating, among other things, the following:

We would like the fixed deposits to be transferred to a bank overseas of our choice upon maturity.

Please advise us of the procedure for doing so. Similarly we would like to transfer other fixed deposits as and when they mature.

IBS did not appear to have responded to this letter specifically.

In the meanwhile, in July 1991 IBS received the following: (i) a demand from Lloyds Bank plc under the guarantee given by IBS for the account of KPD, and (ii) a demand from Pacific Bank Bhd under the standby letter of credit established by IBS also for the account of KPD. In view of such demands, IBS in August 1991 obtained the proceeds of a FD placed with the Panaji branch prior to the maturity of the deposit amounting to a sum of US$1,770,997.89. In the same month, IBS also received a total sum of US$1,427,351.37, being the proceeds of four FDs of OISB from different branches of the respondents in India. The total amount received from the FD with the Panaji branch and the four FDs of OISB was US$3,198,349.26. After meeting the claims of Lloyd Bank plc and Pacific Bank Bhd, there was a net excess of US$255,581.43, which was used to reduce a loan of US$1.53m which had been extended by IBS to KPD.

Following on what they had done, IBS wrote to the appellant and Jogesh on 27 August 1991, stating that they had utilised the proceeds from these five FDs to settle the claims of Lloyds Bank plc and Pacific Bank Bhd.

In September 1991 the appellant consulted her solicitors and on 10 September 1991 her solicitors wrote to IBS asking for a breakdown of all joint accounts which had been opened with the respondents by KPD and the appellant. This was followed by a reminder dated 17 October 1991. In response, the solicitors for the respondents replied on 22 October 1991 stating that the respondents would only provide information relating to the estate to the executors thereof. In consequence, the appellant and Jogesh as the executors of the estate on 25 October 1991 wrote to IBS requesting for `information on the estate` to be provided without further delay. This was followed by a further letter dated 31 October 1991, referring to a conversation Jogesh and Tilaklal had with the assistant manager of IBS, Mr Nachiappan, in which the latter said that the information sought would be released by 1 November 1991.

Eventually on 8 November 1991, IBS replied to the appellant`s earlier letters. They informed her that they were not able to give an exhaustive update of all of KPD`s FDs and that they were only able to confirm the deposits which were placed through IBS. These included US Dollar FDs placed in the joint names of KPD and the appellant, which were maintained in various branches in India. They informed the appellant that all the FDs listed by them had already been charged to them as security. The letter further said:

Please note that in our letter dated 27.8.91 we had also informed that we had utilised certain deposits favouring M/S Overseas Industries Sdn Bhd (OISB) towards adjustment of Mr KP Doshi`s liabilities. On scrutiny of Mr Doshi`s account we have noted that we are still holding additional pledged deposits in Mr KP Doshi`s name which should first have been exhausted prior to utilisation of the deposits pledged by the Company (OISB). In view of this we have rectified the same and reinstated the liabilities that were reversed with OISB deposits.

Thus, IBS had reversed the offsetting of OISB`s deposits against the liabilities of KPD which was effected earlier in August 1991 and reinstated the liabilities of KPD.

The executors of the estate replied by a letter dated 13 November 1991. Besides raising further queries in relation to some of the answers given by the respondents in their letter dated 8 November 1991, the executors objected to the reversal of the offsetting, as well as all the adjustments made by the respondents. The appellant then made a complaint to the Monetary Authority of Singapore (`MAS`) in a letter dated 14 November 1991. The complaint to MAS was forwarded to IBS, who wrote to the appellant and Jogesh on 16 December 1991 explaining various matters brought up in the complaint. This was followed by a letter dated 21 February 1992, where IBS gave a detailed reply to the queries raised by the estate in their letter dated 13 November 1991.

On 29 June 1992 the appellant commenced an action against the respondents, seeking, in the main, an order for account and the payment of all deposits placed with the respondents to which she was entitled.

In early 1992 or thereabouts, the appellant engaged the services of American Express Bank (`Amex`) to assist her to obtain information and payment of the deposits from the respondents....