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Case Review: Banking
Summary of some of the decisions made by the Mediators on some of the complaints received by FMB.
This summary is for information only and should not be used for other purpose. [Previous]………[Next]
FIXED DEPOSIT (Case reference no : 6-103)
Madam M maintained a Fixed Deposit account at Bank L. Under the account, four fixed deposit certificates were issued amounting to RM40,000/-. The fixed deposit was operated in the joint names of Madam M and her son, Mr. O. The withdrawal of the certificates was to be effected by either ONE of the signatories.
Madam M wished to withdraw all four deposits. The bank only released 50% of the proceeds of the deposit. It became apparent that there has been a Bankruptcy action taken against the co-accountee, Mr. O. The Bank had written to Mr. O stating that there was a publication in the newspaper that that Bankruptcy proceedings has been instituted against him. By virtue of section 47(1) of the Bankruptcy Act 1967, the bank was freezing his account i.e. the fixed deposit account.
Section 47(1) of the Bankruptcy Act 1967 deals with the doctrine of "relating back" to acts by a Bankrupt and to the "date and commencement of the act of bankruptcy". This does not in any way empower the bank to freeze any account of any person including the proposed bankrupt. Section 47(1) only empowers the "Official Assignee" to trace back acts of the bankrupt from the commencement of the act of bankruptcy. This power crystallizes only upon the Receiving and Adjudicating Orders being made by the Bankruptcy Court. In the case of Mr. O, there was no evidence produced to show that he has in fact committed an act of Bankruptcy upon which a petition for bankruptcy can be founded.
Madam M's claim to be paid all monies deposited in the fixed deposit together with interest was allowed.
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