Strange Case of Missing|Indian Money Faces Trial

SAN FRANCISCO (CN) - The Bank of India must face claims over $100,000 that allegedly disappeared from a woman's account 24 years ago, a federal judge ruled.

Zarika Somaya claimed that her father placed $100,000 into a foreign currency nonresident account on her behalf with the Bank of India's San Francisco branch in 1985. The Indian government encouraged the accounts as a way for people of Indian origin living abroad to send back foreign currency - particularly U.S. dollars and British pounds - to the Royal Bank of India.

Under the scheme, the accounts lasted five years and did not pay interest after maturity. After that, account holders could either cash out or roll over the proceeds for another five-year term.

Somaya and her father forgot about the money until 2011, at which time they asked Bank of India for a payout. The bank discovered after an investigation, however, that the Somayas' account had already been paid out in full in 1990. It had no idea who requested the payout or where the money went.

Somaya sued in a California state court for breach of contract and other actions, and Bank of India successfully removed the case to federal court.

U.S. District Judge Charles Breyer last week rejected the bank's latest claim that India's statute of limitations controls even though Somaya and her father lived in California at the time they asked for the payout.

"The account was payable in California, where Somaya and her father lived when they sought payment, and Somaya, the payee, resided in California," Breyer wrote. "Therefore, her claim arose in California, and the state's civil procedure code does not require the court to borrow India's limitations law; rather the court applies California's limitations law."

Breyer also refused the bank's efforts to dismiss based on the possibility that Somaya's mother - who died in 2005 - had managed to claim the money, unbeknownst to both Somaya and her father. Both Somaya and her father have disputed that the mother could have even successfully accessed the account.

"The value of much of the evidence on both sides comes down to credibility," Breyer wrote. "This is especially true when neither party presents particularly strong evidence. Credibility is a determination that lies squarely within the providence of a jury."

Somaya had claimed the Bank of India owes her $2 million, calculating the account's value at maturity at more than $179,000, plus 12 percent annual interest from 1990 to the present.

Breyer said the contract her father signed to set up the account said otherwise.

"The bank does not have record of the father's actual application. But it did produce copies of two applications from 1982 and 1991, plus a sample application in a manual from 1985, which all contained the same interest disclaiming language," he wrote. "Somaya does not contest the accuracy of the bank's application exemplars. Thus, Bank of India has shown that there is no genuine dispute of fact that if the father filled out an application, it contained the above operative language."

Since the bank sometimes allowed accounts to automatically accrue interest for another five years if they weren't cashed out, however, Somaya could still be eligible for more than $179,000.

"Bank of India presented no evidence that the account would not automatically renew for another five year term at the then-prevailing market interest rate," Breyer wrote. "Nor did the bank present evidence that the account would sit interest-free until the account holder either actively renewed the account for another five years or withdrew the money. Somaya's claim is plausible, thus she has shown that there is a triable issue of fact as to that issue."

The bank may offer more evidence of its practices to limit Somaya's damages before the matter goes to trial, the judge concluded.

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