DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi-110016

Case No.311/2014

Sh. Kush Bhardwaj

S/o Sh. Har Saroop Sharma

R/o 673, Chiragh Delhi,

New Delhi-110017                                                         ….Complainant

Versus

Canara Bank

Trivent Phase-II,

Sheikh Sarai-II,

New Delhi-110017                                                     ….Opposite Party

                                                  Date of Institution      :     11.08.14       Date of Order    :     30.11.2018

Coram:

Sh. R.S. Bagri, President

Ms. Naina Bakshi, Member

Ms. Kiran Kaushal, Member

Naina Bakshi, Member

ORDER

Briefly stated, the case of the complainant is that the complainant has a saving bank account with the OP bearing account No.1768101103786 which is a joint account in the name of Smt. Kunti and Sh. Kush Bhardwaj. The OP is carrying their banking operation from Sheikh Sarai-II branch. On 30.10.11 there was a credit balance in their account of Rs.80058.91.  The complainant visited the OP’s bank at Sheikh Sairai and came to know that credit balance on 09.04.12 was only Rs.283.94p. On enquiry from the OP by way of getting the complainant’s passbook updated it was revealed that someone has misappropriated the entire amount except the balance of Rs.283.94p by way of making the purchases through a bogus and forged card etc. during the period from 16.11.11 to 03.12.11.  Although the complainant   had never gone to Chandigarh or any such places and never used the ATM cum Debit Card during the above said period.  The complainant took up the matter with the OP but no serious action was taken by the OP. Thereafter, the complainant filed the complaint before the Banking Ombudsman and a meeting was held on 03.10.12. the office of the Banking Ombudsman passed an order dated 02.11.12 wherein it has been held that “ keeping in view of the above, it is felt that a decision on the disputed transaction requires consideration of elaborate documentary and oral evidence and the proceedings before the Banking ombudsman are not appropriate for adjudication of such a complaint.   However, it may be added that the Banking Ombudsman is only an alternative forum for grievance redressal and the complainant  is free to approach any other Forum it he so desires for redressal for his complaint.”

It is submitted that the complainant aggrieved by the order dated 02.12.11 passed by the banking ombudsman filed an appeal before the Dy. Governor RBI and the appeal has been filed on 19.07.13 which was accepted and email dated 12.11.13 was sent to the complainant stating “ in this connection it is advised, that your complaint is under reconsideration of this office.” It is submitted that the Banking Ombudsman’s order dated 28.03.14 wherein it was mentioned that “nevertheless, after sending consideration to the submissions made by the bank, BO observed that sending SMS alert for all the transactions had become mandatory in terms of RBI circular DPSS.CO.PD.22224/02.14.003/2010-11 dated 29.03.11, therefore, even though the complainant  had not opted for SMS alter in his account opening form, the same should have been sent to the complainant for his information. As the transactions were done during the period 16.11.11 to 03.12.11 therefore there was deficiency in service on the part of the bank.” It is submitted that the complainant made lot of efforts to resolve the case by filing complaint before the Police Station, Malviya Nagar but no action has been taken by the police. Thereafter the complainant sent a letter to the Joint Commissioner of police, Economic Offence Wing Police Station, Complex Mandir Marg, New Delhi letter No.4657/12/ R/ACP/Cyber Cell/EOW Crime Branch New Delhi had forwarded the complaint dated 21.08.12 to the Dy. Commissioner of Police South District for investigation but no investigation has been carried out by the police. The OP had not filed any complaint to the police regarding the fraud. Hence, pleading deficiency in service on the part of the OPs, the complainant has prayed that OP be directed to refund of Rs.80,000/- with interest to the complainant and also the compensation for harassment which he has to bear or any other order deem fit to be passed. 

OP in the written statement has inter-alia stated that the present complaint has been filed beyond the prescribed period of limitation. The cause of action in the present complaint arose in the year November- December, 2011, whereas the complaint filed on 11.08.14 or thereafter. This means the same has been filed after more than two years from the date the cause of action arose in relation to the  prayer for refund of Rs.80,000/- hence the complaint is liable to be dismissed in limine. This forum does not have the territorial jurisdiction to entertain the complaint. Since as per the terms and conditions of the ATM/Debit Card issuance, the parties had conferred the jurisdiction the court/Fora of Bangalore as such the present complaint cannot be tried by this Forum.  It is submitted that the complainant was extremely negligent in maintaining his/her account that the complainant submitted his complaint for the first time for the about four months from the commission of the alleged fraud.  As per the master card/visa rule the same can be obtained only upto a maximum period of 120 days. Such a grave delay was beyond any sort of reasonableness. Moreover, when cases of such frauds are rampant these days the complainant had not clearly acted reasonable prudence.  The complainant had not filed the documents to shows that OP had been remotely involved in the alleged fraud. The documents merely show that there had been certain transactions (at point of sale) during the month of Nov.- Dec., 2011. Whether or not same had been undertaken at the issuance of the complainant or there had been a fraud yet to be ascertained. The complainant had not steps to lodge an FIR with the concerned police station the documents filed with the complaints do not show any apprehension or arrest by the police which goes to shows that the transactions were done at the behest of the complainant if at all there had been any fraud, the complainant ought to have sought registration of FIR atleats. However, no such step has been taken by the complainant because of this negligence of complainant. If at all there had been any fraud the actual offender had not been booked and the bank officials are being harassed by way of complaint like this.  It is submitted that the guidance’s RBI dated 29.03.11 only pertains to credit card present transaction (CNP transactions). The said circular was issued in continuance, in reference to the previous circular dated 18.02.09. A fair reading of these circulars revealed that the RBI initially vide circular dated 18.02.09, advised the Bank to send online alerts to all CNP transactions of value of Rs.5,000/- and above. But subsequently vide circular dated 29.03.11, the RBI while referring to the circular dated 18.02.09 simply removed the sealing of Rs.5000/- hence the circular dated 29.03.11 only mandates sending of SMS in relation to CNP transactions. However in the present case or transactions were made at the point of sale i.e. whether the card was physically used. The complainant used his card in all transactions. Therefore, the OP is not bound to give messages for all transactions where the card is swiped.  Therefore, there is no deficiency in service on the part of the OP. OP has prayed for dismissal of the complaint.

          Complainant has filed rejoinder to the written statement of OP and reiterated all the facts of the complaint.

Complainant has filed his own affidavit in evidence. Affidavit of

Sh. A. K. Bhatnagar, Senior Manager has been filed in evidence  on behalf of the OP

Parties have also filed written arguments.

 We have heard the arguments on behalf of the complainant and OP and have also gone through the file very carefully.

A circular bearing No.RBI/2017-18/15 DBR.No.Leg.BC.78/ 09.07.005/2017-18 dated 06.07.2017 on the subject “Customer Protection- Limiting Liability of Customers in Unauthorised Electronic Banking Transactions”. This circular has been issued with reference to RBI’s Circular DBOD.leg.BC. 86/09.07/2001-02 dated 080.04.2002.  The relevant portions of the same are reproduced hereunder:-

“5.     Banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mails alerts, for electronic banking transactions. The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered. The customers must be advised to notify their bank of any unauthorized electronic banking transaction at the earliest after the occurrence of such transaction, and informed that the longer the time taken to notify the bank, the higher will be the risk of loss to the bank/customer. To facilitate this, banks must provide customers with 24 x 7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorized transactions that have been taken place and/or loss or theft of payment instrument such as card, etc. Banks shall also enable customers to instantly respond by “Reply” to the SMS and e-mail alerts and the customers should not be required to search for a web page or an e-mail address to notify the  objection, if any. Further, a direct link for lodging the complaints, with specific option to report unauthorized electronic transactions shall be provided by the banks on home page of their website. The loss/ fraud reporting system shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The communication systems used by banks to send alerts and receive their responses thereto must record the time and date of delivery of the message and receipt of customer’s response, if any, to them. This shall be important in determining the extent of a customer’s liability. The banks may not offer facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorized transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.  

          Limited Liability of a Customer     

          (a)      Zero Liability of a Customer

6.      A customer’s entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events:

i.        Contributory fraud/negligence/deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).”

          Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the  system , and  the customer notifies the bank  within the three working  days of receiving the communication from the bank regarding the unauthorized transaction.

          Burden of Proof.

12.    The burden of proving customer liability in case of unauthorised banking transaction shall lie on the bank.”

It is, no doubt, true that the date of the circular is 06.07.2017. But this has been issued with reference to Circular dated 08.04.2002. Moreover, it is a matter of common knowledge that SMS alert services are being provided by the nationalized banks as well as private sector banks since long. Therefore, where a customer has availed this facility from his/ her bank, it is the mandatory duty of the bank to send SMS alert message to the customer as and when some transaction is made from his/ her bank account or ATM or debit card or credit card. In case of failure on the part of bank to send an SMS alert to the customer in such a case the bank cannot escape from its liability on the analogy of clause 6(i) of the Circular reproduced hereinabove.

Case of the complainant is that when he updated his passbook he came to know that an amount of Rs.80,000/- had been withdrawn illegally by making purchases from 16.11.11 to 03.12.11. On the other hand, the case of OP inter-alia is that the complainant had been negligent in maintain his account as the complainant has approached the bank after four months from the commission of the fraud and hence there is no deficiency in service is made out against OP.

The complainant has filed the copy of passbook details which we Mark A for the purposes of property identification.  The complainant  vide letter dated 10.04.12 informed the manager of OP regarding criminal withdrawal and misappropriation of amount of the complainant  from the joint saving account which we Mark B for the purposes of property identification.  The complainant  sent a letter dated 10.05.12 to the AGM Canara Bank regarding withdrawal and misappropriation of amount of the complainant  from the joint saving account which we Mark C for the purposes of property identification. The complainant  vide letter dated 14.07.12 informed the SHO P. S. Malviya Nagar regarding withdrawal of amount. The complainant sent a letter to the EOW on 14.07.12 to take action which we Mark D for the purposes of property identification.  The ACP, Crime Branch vide letter dated 21.08.12 forwarded the compensation’s complaint to the DCP, South District we Mark F for the purposes of property identification. The office of the banking obdusman vide order dated 02.12.11 closed the complaint of the complainant we Mark G for the purposes of property identification. The RBI vide letter dated  02.11.12 informed the complainant which we Mark H for the purposes of proper identification.

The OP vide letter dated 10.05.12 informed the complainant  that the matter has been referred to the Higher Authorities which we annex as Annexure-A for the purposes of proper identification. The OP vide letter dated 18.05.12 informed the complainant  that “ we are informed by our Card Division, Head Office that all these transactions in your account were done in POS. In the case of POS transactions only physical presence of card is necessary. It is evident that card is compromised.  As per Visa or Master cared guidelines, request for charge slip should be done within 120 days from the date of transaction. Since all these transactions were done November, 2011, the stipulated time period is over. The acquirer banks may not entertain for copy request. However our Card Division will be requesting for copy.” The Assistance General Manager of OP bank informed the complainant vide letter dated 20.07.12 that  “ we have forwarded your letter to our transaction banking wing with instruction to take necessary steps and informed you the position. You will be hearing them shortly.” The OP filed two circulars dated 18.02.09 and letter dated 29.03.11 issued by the RBI wherein the RBI stated that “ recently, incident of unauthorized/fraudulent withdrawals at ATMS have come to the notice of RBI. It is important to arrest the incidents of such frauds in order to further encourage card based transactions in the country where the use of credit/debit cards plays an important role. It is therefore decided that banks may take steps to put in place a system of online alerts of all types of transactions irrespective of the amount involving usage of cards at various channels. This measure is expected to encourage further usage of the cards at various delivery channels. Banks may implant this measure latest by June 30, 2011.

Therefore, in our considered opinion, OP bank has taken very self collapsible and fallacious plea that non-sending of SMS alert to the customer cannot constitute a deliberation or negligence amounting to deficiency in service. After all activation of SMS alert is not a game to be played by a person for his/ her fun and pastime. This is a very very important, legal and valuable facility being provided by the banks to their customers and as soon as some transaction is done through their bank account or through their ATM cards, they may get an alert and in case there is a wrong transaction customer may report the matter to the concerned bank and/ or local police. This is not an empty formality which can be taken in such a lighter manner with no amount of responsibility. Therefore, we do not think that OP is justified in taking such a lame excuse for not sending SMS alerts to the complainant in respect of the heavy transactions done by using the ATM card in question continuously for the period from 16.11.11 to 03.12.12.

Therefore, in the facts and circumstances of the case discussed hereinabove, we are of the considered opinion that non-sending of SMS alerts on the mobile phone of the complainant by OP bank  continuously w.e.f. 16.11.2011 to 03.12.2012 was a gross act of deficiency in service which led to withdrawal of the above said amount from the bank account of the complainant through his ATM card in question.

In view of the above discussion, we hold OP Canara Bank guilty of deficiency in service and direct OP to pay Rs. 80,000/- alongwith interest @ 6% per annum from the date of filing of the complaint till its realization to the complainant within 60 days from the date of receipt of copy of this order  failing which OP shall be liable to pay the said amount of Rs. 80,000/- alongwith interest @ 9% per annum from the date of filing of complaint till its realization. In the facts and circumstances of the case, we do not award any compensation towards mental agony etc. or cost of litigation to the complainant. Complaint stands disposed off accordingly.

Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations.  Thereafter file be consigned to record room.

Announced on 30.11.18.