DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ERNAKULAM

Dated this the 30^th day of December, 2023.

                                                                   Filed on: 03/10/2022

PRESENT

Shri.D.B.Binu                                                                          President

Shri.V.Ramachandran                                                              Member Smt.Sreevidhia.T.N                                                             Member

C.C. No. 475/2022

COMPLAINANT

Ritika Sen Pattassery, Sen Pattassery, Pattasseril House, Raja 22, Judges Avenue, Kaloor P.O., Pin 682017.

Vs

OPPOSITE PARTY

Axis Bank Ltd., NPC1, 5^th Floor, Gigaplex, Plot No. 1, T5, MIDC, Airoli Knowledge Park, Airoli, Mumbai 400708.

F I N A L   O R D E R

D.B. Binu, President.

1.       A brief statement of facts of this complaint is as stated below:

This complaint was filed under Section 35 of the Consumer Protection Act, 2019. In this case, the complainant, a young professional beginning her career in Bangalore. Axis Bank offered to upgrade her credit card, sending the new card to her permanent address in Kochi. She activated it when her parents brought it to Bangalore. On the day of activation, fraudulent transactions totalling Rs. 34,650 occurred, supposedly for transferring the credit limit from the old to the new card. The bank called for verification, and the complainant denied authorizing these transactions.

She immediately reported the issue to Axis Bank customer care and filed a complaint with the Bangalore cyber cell. The complainant contends that the fraud happened during the card activation process and questions the bank's security measures, pointing to an erroneous email from Axis Bank as proof of a security lapse.

Axis Bank withdrew Rs. 4,087 from her account as interest on the disputed transactions, which she disputes. Pressured, she settled the credit card transaction by paying Rs. 58,855.53 but maintained it was under protest. The total loss she claims is Rs. 62,942.53, with additional claims for mental agony and harassment due to threatening calls from the bank's agents.

The complainant alleges negligence, deficient service, and unfair trade practices by Axis Bank. She seeks a refund of Rs. 62,942.53, Rs. 2 Lakhs as compensation, and Rs. 1 Lakh for the cost of proceedings.

2) Notice

The commission sent notice to the opposite party, which was acknowledged by them, but they did not file their version. Therefore, they have been set as ex-parte

3). Evidence

          The complainant submitted an ex-parte proof affidavit along with 11 documents, which were marked as Exhibits A-1 to A-11.

• Exhibit A1: Detailed email complaint sent to Axis Bank's nodal officer within 3 hours of the incident, reporting the fraudulent transactions and blocking the card.
• Exhibit A2: Complaint registered with the cyber cell in Bangalore, with a true copy of the FIR (First Information Report) filed before the First Additional Chief Metropolitan Magistrate Court, Bangalore City.
• Exhibit A3: English translation of the FIR mentioned in Exhibit A2.
• Exhibit A4: Reply dated 30.04.2022 received from Axis Bank.
• Exhibit A5: Reminder email to Axis Bank dated 01.05.2022.
• Exhibit A6: Email from Axis Bank addressed to Mr. Agarwal but sent erroneously to the complainant, dated 20.05.2022.
• Exhibit A7: Bank statement evidencing the loss of Rs. 34,650 from the complainant’s savings account with Axis Bank.
• Exhibit A8: Account statement showing the unauthorized transfer of Rs. 4,087 from the complainant's account by Axis Bank.
• Exhibit A9: Copy of the forwarding letter dated 23.02.2023 related to the settlement of the credit card transaction.
• Exhibit A10: Cheque No. 486720 dated 23.02.2023, used for settling the credit card transaction under protest.
• Exhibit A11: Bank statement showing the encashment of the cheque mentioned in Exhibit A10 by Axis Bank.

4) The main points to be analysed in this case are as follows:

i)       Whether the complaint maintainable or not?

ii)      Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant?

iii)     If so, whether the complainant is entitled to get any relief from the side of the opposite party?

iv)     Costs of the proceedings if any?

5)      The issues mentioned above are considered together and are        answered as follows:

            In the present case in hand, as per Section 2(7) of the Consumer Protection Act, 2019, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment.  Hence, the complainants are consumers as defined under the Consumer Protection Act, 2019 (Point No. i) goes against the opposite party.

We have heard from Sri. George Cherian Karippaparambil, the learned counsel representing the complainant.

The arguments of the complainant in the consumer complaint can be summarized as follows:

1. Fraudulent Transactions: The complainant is a victim of fraudulent credit card transactions totaling Rs. 34,650, carried out through a card issued in their name. These transactions occurred on 29.04.2022 at GYFTR VIA SMARTBUYGURGAONIN GIFT SHOPS in four successive amounts.
2. Card Activation and Fraud: Axis Bank offered to upgrade the complainant's credit card without a request from them. The new card was sent to Kochi, but the complainant was in Bangalore. The card was activated on 29.04.2022, and during this activation process, the fraudulent transactions occurred.
3. Immediate Reporting of Fraud: The complainant received an automated call from the bank during the transactions, denied authorizing them, and immediately reported the issue to Axis Bank customer care and blocked the card. They also sent a detailed email to the bank's nodal officer within 3 hours of the incident (Exhibit A1) and filed a complaint with the cyber cell in Bangalore (Exhibit A2, A3).
4. Dispute Resolution and Bank’s Responsibility: The complainant emphasizes that credit card disputes, if reported within 24 hours, can block the payment to merchants and withhold money release until the dispute is resolved. They reported the fraudulent transaction immediately.
5. Lack of Response from Opposite Party: Despite receiving a notice from the Commission, the opposite party did not appear or file their version, leading to an ex-parte decision.
6. Proof of Affidavit and Uncontroverted Statements: The complainant filed a proof affidavit as PW1, marking Exhibits A1 to A11, and these statements stand uncontroverted.
7. Issues for Consideration: The main issues raised are the deficiency in service, negligence, and unfair trade practice on the part of the opposite party, and the relief and cost associated with these issues.
8. Legal Backing and RBI Circular: The complainant references the RBI's circular on consumer protection and judgment of the Hon’ble Kerala High Court that supports the claim for a refund from the bank for the lost amount due to unauthorized transactions.
9. Conclusion: Based on the facts, documents, and legal propositions, the complainant argues that there is clear evidence of deficiency in service, negligence, and unfair trade practice by the opposite party. The opposite party seeks the complaint to be allowed as prayed for, including a refund and compensation for the losses and inconvenience caused.

The evidence presented included an ex-parte proof affidavit filed by the complainant, and it was unchallenged by the opposite party. Therefore, the complainant's claims were considered credible and supported by the evidence. Therefore, the complainant requests the commission to grant the relief sought, including compensation for mental agony and unfair trade practices.

The opposite party's conscious failure to file their written versions despite having received the Commission’s notice to that effect amounts to an admission of the allegations levelled against them.  Here, the case of the complainant stands unchallenged by the opposite party.  We have no reason to disbelieve the words of the complainant against the opposite party. The Hon’ble National Commission held a similar stance in its order dated 2017 (4) CPR page 590 (NC).

In the matter before this Consumer Protection Commission, we have considered the complaint filed by the complainant under Section 35 of the Consumer Protection Act, 2019, against Axis Bank, alleging deficiencies in service, negligence, and unfair trade practices, and seeking a refund, compensation, and costs of the cost of proceedings.

After careful analysis and examination of the evidence provided by the complainant, the following legal reasoning, observations, and findings have been made:

1. Maintainability of Complaint: The complainant is indeed a consumer as defined under Section 2(7) of the Consumer Protection Act, 2019, as they have availed of banking services and experienced deficiencies in those services. Therefore, the complaint is maintainable (Point No. i).
2. Fraudulent Transactions and Card Activation: The complainant has established that they were a victim of fraudulent credit card transactions totaling Rs. 34,650, which occurred during the activation of the new credit card issued by Axis Bank. This indicates a serious security lapse on the part of Axis Bank, especially considering that the complainant had not requested an upgrade of their card. The evidence shows that these transactions were unauthorized, and the complainant promptly reported them, both to Axis Bank and to the cyber cell in Bangalore. These actions reflect due diligence on the part of the complainant (Point No. ii).
3. The Reserve Bank of India, through its master circular No. RBI/2017-18/15 - DBR No. Leg.BC.78/09.07.005/2017-18 dated 06.07.2017, has addressed consumer protection concerns by setting out guidelines for limiting the liability of customers in unauthorized electronic banking transactions. According to this circular, customers are afforded Zero liability if they promptly notify the bank within 3 working days of any unauthorized transaction.
4. The Hon'ble High Court of Kerala, in the case of WP (C) No. 28824/2017, has placed reliance on the aforementioned circular dated 06.07.2017 issued by the Reserve Bank of India. The court held that customers who have suffered financial losses are entitled to a refund of the amount lost from the bank. Consequently, it is evident from these facts, documented evidence, and legal principles that there exists a deficiency in service, negligence, and unfair trade practice on the part of the opposite party.
5. Immediate Reporting and Lack of Response: The complainant's immediate reporting of the fraudulent transactions and their diligent efforts to resolve the issue are commendable. Axis Bank, as a financial institution, has a responsibility to address such concerns promptly, especially when reported within 24 hours, and they failed to do so. The lack of response from the opposite party (Axis Bank), despite receiving a notice from the Commission, further strengthens the complainant's case
6. Uncontroverted Evidence: The evidence presented by the complainant, including email correspondence, bank statements, and other documents (Exhibits A1 to A11), stands unchallenged as the opposite party did not file their written version. Therefore, the complainant's claims are well-supported by credible evidence (Point No. vi).
7. Legal Backing and RBI Circular: The complainant has cited a Kerala High Court judgment and the RBI's circular on consumer protection to support their claim for a refund from Axis Bank due to unauthorized transactions. These legal references are in line with consumer protection laws and regulations and lend further credibility to the complainant's case .
8. Deficiency in Service, Negligence, and Unfair Trade Practice: Based on the facts, documents, and legal propositions presented, it is evident that Axis Bank failed to provide adequate security measures during the card activation process, resulting in unauthorized transactions. This constitutes a deficiency in service, negligence, and unfair trade practice on the part of Axis Bank. The complainant has suffered financial loss, mental agony, and harassment due to the bank's actions (Point No. iii).
9. Relief Sought: Considering the aforementioned deficiencies in service and the complainant's entitlement to relief, we find merit in the complainant's claims.
10. Cost of Proceedings: As the complainant has successfully proven their case, they are entitled to the cost of proceedings.

In light of the above legal reasoning and analysis, and considering the uncontroverted evidence and the failure of the opposite party to respond, we find in favor of the complainant. The opposite party's negligence and deficient service have been established, and the complainant is entitled to the relief sought.

We find that issues (i) to (iv) also favour the complainant, as they are a result of the serious deficiency in service on the part of the Opposite Party. Naturally, the complainant has experienced a significant amount of inconvenience, mental distress, hardships, financial losses, etc., due to the deficiency of service and unfair trade practices by the Opposite Party.

In view of the above facts and circumstances of the case, we are of the opinion that the Opposite Party is liable to compensate the complainant.

Hence the prayer is partly allowed as follows:

1. The Opposite Party shall refund a total amount of ₹ 62,942.53 (Rupees Sixty-Two Thousand Nine Hundred Forty-Two and Fifty-Three Paise Only) to the complainant for the deficiency in service and unfair trade practices caused by the Opposite Party.
2. The Opposite Party shall pay a sum of ₹1 Lakh (Rupees One Lakh Only) as compensation for the financial losses and mental agony suffered by the complainant due to their deficiency in service and unfair trade practices.
3. The Opposite Party shall also pay the complainant the sum of ₹10,000/- (Ten Thousand Only) towards the cost of the proceedings.

The opposite party is liable for the above-mentioned directions. They must comply within 30 days from the date of receiving a copy of this order. If they fail to do so, the amounts ordered in points (i) and (ii) above will attract interest at a rate of 9% per annum from the date of the complaint (13.10.2022) until the date of realization.        

Pronounced in the Open Commission on this the 30^th day of December, 2023.

Sd/-                  

D.B.Binu, President

                                                                          Sd/-                  

                                                                    V.Ramachandran, Member

                                         Sd/-                  

                                                                      Sreevidhia.T.N, Member

Forwarded/By Order

Assistant Registrar 

Appendix

Complainant’s Evidence

Exhibit A1: Detailed email complaint sent to Axis Bank's nodal officer within 3 hours of the incident, reporting the fraudulent transactions and blocking the card.

Exhibit A2: Complaint registered with the cyber cell in Bangalore, with a true copy of the FIR (First Information Report) filed before the First Additional Chief Metropolitan Magistrate Court, Bangalore City.

Exhibit A3: English translation of the FIR mentioned in Exhibit A2.

Exhibit A4: Reply dated 30.04.2022 received from Axis Bank.

Exhibit A5: Reminder email to Axis Bank dated 01.05.2022.

Exhibit A6: Email from Axis Bank addressed to Mr. Agarwal but sent erroneously to the complainant, dated 20.05.2022.

Exhibit A7: Bank statement evidencing the loss of Rs. 34,650 from the complainant’s savings account with Axis Bank.

Exhibit A8: Account statement showing the unauthorized transfer of Rs. 4,087 from the complainant's account by Axis Bank.

Exhibit A9: Copy of the forwarding letter dated 23.02.2023 related to the settlement of the credit card transaction.

Exhibit A10: Cheque No. 486720 dated 23.02.2023, used for settling the credit card transaction under protest.

Exhibit A11: Bank statement showing the encashment of the cheque mentioned in Exhibit A10 by Axis Bank.

Opposite party’s evidence

Nil

Despatch date:

By hand:     By post                                                  

kp/

CC No. 475/2022

Order Date: 30/12/2023