Bank Sued Over Missing Rs 113,800,000

By Faraz Shauketaly - Sunday Leader

A Sri Lankan expatriate – complete with a rags to riches story – has become the victim of fraud involving a significant portion of his fortune. Manohar Alexander a businessman with interests in Dubai and Canada is suing the Bank of Ceylon for Rs 113,800,000 for monies he says simply ‘disappeared’ from his account. The Bank of Ceylon in turn maintains that the money was transferred out from his account in accordance with the customers’ wishes. “Not true’ says Manohar who robustly maintains that he did not issue any instructions for transferring the money and that he has no knowledge at all of the missing money and how it went missing. “That is the duty of the bank, I trusted the bank and they are responsible. There can be no other way” says Manohar.

Manohar Alexander told The Sunday Leader that ‘it is amazing that the Bank of Ceylon did not follow even the most rudimentary checks and balances in transferring money out of my account even though the sums of money involved was far more than any average personal customer transaction.”

Manohar Alexander through his Power of Attorney holder Mrs. Kurukulasuriya Bernadette instituted an action in the District Court of Colombo against Bank of Ceylon, claiming a sum of USD 750,000/- and USD 125,468/75 which is equivalent to Sri Lankan Rs 113,800,000/= together with legal interest.

It has been stated in the Plaint that the Plaintiff is a businessman and while residing in Dubai, on or about the February 2012, he opened the following Special Foreign Investment Deposit Accounts [“SFIDA”] at the Bank of Ceylon;

i.     Sri Lankan Rupee [“LKR”] SFIDA Savings Account;

ii.   United States Dollar [“USD”] SFIDA Savings Account;

iii.  LKR SFIDA Fixed Deposit account.

It is further stated in the Plaint that the Plaintiff opened the aforesaid accounts at the Defendant Bank with a view to safely and securely invest his monies and savings, and lawfully earn and obtain the rate of return offered by the Defendant for such investments.

It is also stated in the Plaint that consequent to opening the aforesaid accounts at the Defendant Bank, the Defendant Bank provided the Plaintiff with online banking facilities that enabled the Plaintiff to access, check and keep updated with his said accounts at the Defendant Bank.

In the Plaint the Plaintiff pleaded that he is a customer of the Defendant Bank, and the Defendant Bank is duty bound to the Plaintiff to act diligently and with due care and by opening the aforesaid accounts at the Defendant Bank, the Defendant Bank became contractually bound to the Plaintiff.

The Bank of Ceylon maintains that the money was transferred out from his account in accordance with the customers’ wishes.

Consequent to the opening of the USD SFIDA fixed deposit, the Plaintiff caused his other bank [Merrill Lynch] to wire transfer a sum of USD 750,000/- to his Bank of Ceylon USD SFIDA Savings Account, so that the same could be deposited in Manohar’s USD SFIDA Fixed Deposit for a period of three years maturing on 14thSeptember 2015 and at an agreed interest rate of 5.5% per annum. The said sum of USD 750,000/- was duly deposited by the Defendant Bank to the Plaintiff’s said USD SFIDA Fixed Deposit for an agreed period of three years, maturing on 14thSeptember 2015 with an agreed interest rate of 5.5% per annum.

It is further stated in the Plaint that in the latter period of the month of October 2013, the Plaintiff was unable to access his online banking facilities with the Defendant Bank and when the Plaintiff attempted to access his said online banking facilities, the Plaintiff was prevented from doing so with the notification “USER ID ALREADY LOCKED”.

The Plaint further stated that immediately the Plaintiff e-mailed a representative of the Defendant Bank and sought assistance to access his online banking facilities with the Defendant Bank. A representative of the Defendant Bank responded to the Plaintiff and invited the Plaintiff to fill an application for a fresh password. It was indicated to the Plaintiff that the fresh password that would be provided to the Plaintiff would enable the Plaintiff to access the Defendant’s online banking facilities and the Plaintiff completed the said application and sent the same to the Defendant Bank.

“The Plaintiff further stated that the Defendant Bank has not even followed the basic, elementary and regular verification protocols that would have been followed by any bank prior to effecting a transfer of this magnitude.”

In the month of January 2014, the Plaintiff e-mailed the Defendant Bank on three occasions requesting for his new/fresh password. The same was only provided by the Defendant Bank on or about 30th January 2014 via e-mail and on 31st January 2014, the Plaintiff used his fresh password and accessed his online banking facilities with the Defendant Bank and noted that the same only displayed his said two savings accounts with incorrect balances. The Plaintiff noted that his said Fixed Deposits maintained with the Defendant Bank were not displayed online.

On 31st January 2014 itself, the Plaintiff e-mailed a representative of the Defendant Bank and sought clarifications as to why the said two Fixed Deposits did not appear online. The representative of the Defendant e-mailed and responded to the Plaintiff and inter alia stated the following;

“On 01/01/2014 we have already transferred $750, 000 to your account in America according to your request.

You have requested to transfer the Rs, 34,467,825/- to your account in South Africa

That mean both of your account has already closed and now you are having both SFIDA S/A Only. That is why that 2 accounts not indicate in E-banking system.”

It is further stated that the Plaintiff was shocked and devastated at the said e-mail of the Defendant Bank and immediately contacted the representative of the Defendant Bank by multiple telephone calls and subsequently, immediately by e-mail. By his said e-mail the Plaintiff inter alia expressly stated the following;

 “I have NEVER EVER instructed for a wire transfer at all and the transaction was done without my authorization and verification.”

It is stated that the Plaintiff did not authorise and/or instruct the Defendant Bank to transfer any monies from his said LKR SFIDA Fixed Deposits.

In the Plaint it has been stated that the Defendant Bank has wrongfully and/or unlawfully and/or in breach of its duties to the Plaintiff and/or contractual commitments to the Plaintiff and/or in breach of its duty to act diligently and professionally, and without any authorisation and/or instruction from the Plaintiff whatsoever, transferred the monies of the Plaintiff which were in the Plaintiff’s said USD SFIDA Fixed Deposits. The Plaintiff further stated that the Defendant Bank has not even followed the basic, elementary and regular verification protocols that would have been followed by any bank prior to affecting a transfer of this magnitude.

In the Plaint it is also stated that the Defendant has acted negligently and/or carelessly and/or without due diligence in transferring the Plaintiff’s USD 750,000/- from his said USD SFIDA Fixed Deposits and further stated that the Defendant Bank is in breach of its express and/or implied contractual commitments and obligations to the Plaintiff in transferring the said USD 750,000/- from the Plaintiff’s said USD SFIDA Fixed Deposit. It is further stated that the Defendant Bank has wrongfully and/or unlawfully and/or in breach of its commitments, duties and obligations to the Plaintiff failed and/or neglected to restore the Plaintiff’s said USD 750,000/- (together with the entire interest).

The case is due to be called on 02nd April 2015 for Defendant Bank’s answer in the District Court of Colombo. S.A. Parathalingam President’s Counsel with Nishkan Parathalingam, Attorney-at-Law settled the Plaint for the Plaintiff Mr. Manohar Alexander and the Plaint was filed by G.G. Arulpragasam, Attorney-at-Law.