DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE
PRESENT: Sri. P.C. PAULACHEN, M.Com, LLB : PRESIDENT
Smt. PRIYA.S, BAL, LLB, MBA (HRM) : MEMBER
Sri.V. BALAKRISHNAN, M Tech, MBA, LL.B, FIE: MEMBER
Wednesday the 27th day of March 2024
CC.114/2020
Complainant
Mrs. Deepna.P,
W/o Vijeesh.P.C,
Palayakode house,
Murampathy Post, Kodenchery,
Kozhikode- 673 580.
(By Adv. Sri. Mufeed. M.K)
Opposite Party
Manager,
State Bank of India,
Kodenchery branch,
St. Mary’s Church Building,
Kodenchery, Kozhikode- 673580.
(By Adv. Sri. T.S. Zhakoria)
ORDER
By.Sri. P.C. PAULACHEN, PRESIDENT
This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.
- The case of the complainant, in brief, is as follows:
The complainant is a customer of the opposite party bank. She is maintaining SB Account No. 20198572074 with the bank. On 27/12/2017 the complainant informed the manager of the bank over phone that she had lost her ATM Card on her way home and requested to block the ATM card in order to prevent unauthorised transactions. The manager had assured to block the card within one hour.Believing the words of the manager, the complainant did not take any further steps except applying for a new card citing the reason of loss of the card. The opposite party issued a new ATM card to the complainant in the month of January 2018 and she was using the same.
- But on 3/06/2018 when she came to the bank for entering the status in the pass book, she came to know that she had lost some amount from her account without her knowledge. A total sum of Rs. 64,400/- was withdrawn from her account by some unknown persons on different dates from 10/03/2018 to 21/05/2018 at different places. It was revealed that the opposite party had not done anything to block the lost ATM card despite her request. Pursuant to the complaint lodged by her, FIR No. 99/2018 was registered in the Kodenchery Police station. If the opposite party had acted promptly, this loss would not have happened.
- The act of the opposite party amounts to deficiency of service. The complainant was put to monetary loss and mental agony due to the irresponsible conduct of the opposite party. On 16/06/2018, the complainant issued a lawyer notice to the opposite party, which evoked no response. Hence the complaint to direct the opposite party to reimburse the amount lost and to pay compensation of Rs. 1,00,000/- to the complainant.
- The opposite party has resisted the complaint by filing written version contending that the complaint is not maintainable as CC. No. 251/2018 filed by the complainant on the very same transaction was dismissed by this Commission on 06/08/2019. According to the opposite party, there is no merit in the complaint and the same is liable to be dismissed with costs.
- The points that arise for determination in this complaint are;
1) Whether the complaint is maintainable?
2) Whether there was any deficiency of service on the part of the opposite party, as alleged?
3) Reliefs and costs.
- Evidence consists of the oral evidence of the PW1 and Exts A1 to A6 on the side of the complainant. RW1 was examined and Exts B1 to B4 were marked on the side of the opposite party.
- Heard. The complainant has filed argument note.
- Point No 1 : The opposite party has taken a contention in the written version that previously the complainant had filed a complaint against the opposite party on the very same transaction and the said complaint was dismissed on 06/08/2019 and hence the second complaint on the same set of facts and the same cause of action is not maintainable.
- It is true that CC No. 251/2018 filed by the complainant on the same set of facts and on the same cause of action was dismissed by our learned predecessors-in-office as per order dated 06/08/2019. It may be noted that the disposal of CC No. 251/2018 was not on merits. It was a dismissal for default without looking in to the merits of the case. The second complaint was filed well within the period of limitation in view of order dated 10/01/2022 in MA No. 21/2022 in MA No. 665/2021 in Suo Motu Writ Petition (C) No. 3/2020 of the Hon’ble Supreme Court in RE: Cognizance for Extension of Limitation. It is settled position that second complaint in a Consumer Forum is maintainable, if the first complaint was not decided on merits and was dismissed for default for non-appearance of the complainant. The above position is supported by the decisions of the Hon’ble Apex Court in New India Assurance Company Ltd Vs R. Sreenivasan ((2000) 3 SCC 242) and Indian Machinery Co. Vs Ansal Housing and Construction Ltd ((2016) 3 SCC 689). So the present complaint is maintainable. Point is answered in favour of the complainant.
- Point No. 2 : The complainant has approached this Commission seeking a direction to the opposite party bank to pay her a sum of Rs. 64,400/- involved in the transactions not authorised by her and also compensation of Rs. 1,00,000/- for the mental agony and hardship suffered by her on account of the alleged negligence and deficiency of service on the part of the opposite party. The grievance of the complainant is that she had lost a total amount of Rs. 64,400/- from her bank account in unauthorised transactions on different dates from 10/03/2018 to 21/05/2018, due to the negligence and deficiency in the service of the bank.
- In order to substantiate her case, the complainant has got herself examined as PW1, who has filed proof affidavit and deposed in terms of the averments in the complaint and in support of the claim. Ext A1 is the copy of the first page of the bank pass book of the complainant, Ext A2 is the copy of the relevant page of the pass book of the complainant showing the transactions, Ext A3 is the copy of the application for ATM card, Ext A4 is the copy of FIR No. 99/2018 of Kodenchery police station, Ext A5 is the copy of the lawyer notice dated 14/06/2018 and Ext A6 is the copy of the postal acknowledgement card.
- RW1 is the present manager of Kodenchery branch of the State Bank of India and he has filed proof affidavit and deposed supporting and reiterating the contentions in the written version. According to RW1, the complainant informed the bank about the loss of money only on 02/06/2018. Further, according to RW1, the transactions were done by the complainant herself or by divulging the PIN number to third parties and the bank used to send SMS messages to the mobile phone of the customers for all ATM and POS transactions. Ext B1 is the ATM request form, Ext B2 is the ATM request application of Sri. Vijeesh.P.C, Ext B3 is the statement of account and Ext B4 is the SMS log of the transactions.
- It is not disputed that the complainant herein is the customer of the opposite party bank at their Kodenchery branch. Her SB account number is 20198572074. The allegation of the complainant is that she had lost a total sum of Rs. 64,400/- from her account without her knowledge. While in the box as PW1, the complainant has asserted that during the period from 10/03/2018 to 21/05/2018 she had lost Rs. 64,400/- in transactions not authorised by her. Ext A2 shows the said transactions. Ext A4 shows that she had set the law in motion regarding the unauthorised transactions. Ext A2 would further show that some of the transactions were from far off places like Rupahi in Nagoan district, Assam and Sunari in the state of Rajasthan. The opposite party has no case that the complainant herself had withdrawn the amount from such far off places. Nothing contrary is brought out or proved. The case of the complainant that a total sum of Rs. 64,400/- was withdrawn from her account maintained with the opposite party bank in transactions not authorised by her stands proved.
- As per circular No. RBI/2017-18/15 (DBR No. Leg. BC.78/09.07.005/2017-18) dated 06/07/2017 of the Reserve Bank of India, the burden of proving customer liability in a case of unauthorised electronic banking transaction shall lie on the bank. PW1 has categorically deposed before this Commission that on 27/12/2017 itself she had called the manager of the bank and had informed him about the loss of the ATM card and requested him to block the ATM card, who had assured to do so. On 29/12/2017, she personally visited the bank and Ext A3 application form was given to the manager. It is the definite case of PW1 that she had only signed Ext A3 and the tick mark was made by the manager in the relevant column. PW1 had reiterated and reaffirmed in the re-examination that she went to the bank on 29/12/2017 for blocking the ATM card and to apply for a new one. There is absolutely no reason to disbelieve PW1. Even though PW1 was cross examined in detail, nothing has been brought out to discredit her version.
- RW1, who is the present manager of the bank, has no direct knowledge about the incident. This is admitted by RW1 in the cross examination. He was not in that branch at the relevant time. From his evidence it is clear that he was not aware of what exactly transpired between the complainant and the then branch manager. Therefore, nothing is brought out in evidence against the evidence of the complainant by examining RW1, who is totally in darkness as to what transpired on the relevant dates.
- On 14/06/2018 the complaint had issued Ext A5 lawyer notice to the bank. The receipt of Ext A5 is not disputed by the bank. This is further evidenced by Ext A6 postal acknowledgment card. It is clearly stated in Ext A5 that on 27/12/2017 the complainant had called and informed the branch manager about loss of the ATM card and also requested for blocking the card in order to prevent unauthorised transactions and that the manager had assured that the card would be blocked within one hour. It is seen that the bank had not issued any reply to Ext A5. If the contention of the bank that on 27/12/2017 the complainant had not called the manager informing about the loss of the ATM card and requesting to block it, is true and correct, nothing prevented the bank from sending a reply to Ext A5 stating the real facts. But that was also not done. This is also a circumstance which goes against the opposite party bank.
- The learned counsel for the opposite party submitted that the complainant might have divulged the confidential secret password and credentials with respect to her account to fraudsters and thereby the fraudsters might have made use of the password details of the complainant and done fraud transactions and made loss to the complainant. There is absolutely nothing in evidence to show that the complainant had divulged the secret password and credentials of her account to anyone. It is the duty of the bank to exercise reasonable care to ensure full security and set up internal control system to combat frauds. Any latches in this regard amounts to deficiency of service.
- The learned counsel for the opposite party has further submitted that the bank has SMS system to alert the customers regarding the transactions. But it may be noted that some may not be in the habit of checking the SMS. The bank cannot escape from the liability by merely saying that the customer might have received the SMS alert. In State Bank of India V/s George (2019(1) KLT 505) the Hon’ble High Court of Kerala has observed as follows;
“ Various services are being provided by banks to their customers. In fact, banks are soliciting business by advertising the various services provided by them to theircustomers in connection with different accounts. SMS alert is one of the facility extended by most of the banks to their customers in connection with the savings bank accounts having electronic banking facilities including ATM-cum-Debit card facilities. Such facilities are provided not only to those who specifically request for the same, but also to those who do not ask for such facilities. Could such a facility voluntarily given by banks to their customers determine the rights of parties, is the question. According to me, only if there exists a specific term in the contract between a bank and its customer to the effect that the bank would be exonerated from the liability in connection with the unauthorised transactions if the customer does not respond to the SMS alert, SMS alerts cannot be the basis for determining the liability of the customer, for, there would be account holders who may not be in the habit of checking SMS alerts at regular intervals and account holders like the plaintiff in the instant case who is working in an offshore oil rig, who may not be able to access their mobile phones for several days having regard to the peculiarity of their avocation. The defendant has no case that there is a contract between them and the plaintiff to the effect that if the plaintiff does notrespond to the SMS alerts given by them regarding the withdrawals from his accounts, they would not be liable for the loss, if any, caused to the plaintiff ”.
In this case the opposite party has no case that there exists such a contract between the bank and the complainant.
- In Punjab National Bank and Anr Vs Leaders Valves Ltd (II (2020) CPJ 92 (NC)) the Hon’ble National Consumer Disputes Redressal Commission has held in paragraph 11 as follows;
“ The first fundamental question that arises is whether the bank is responsible for an unauthorised transfer occasioned by an act of malfeasance on the part of functionaries of the Bank or by an act of malfeasance by any other person (except the complainant/account -holder). The answer, straightaway, is in the affirmative. If an account is maintained by the bank, the bank itself is responsible for its safety and security. Any systemic failure, whether by malfeasance on the part of its functionaries or by any other person (except the consumer/account-holder), is its responsibility, and not of the consumer”.
- In the circular of the Reserve Bank of India referred to above, it is stated as follows;
“ A customer’s entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events:
- 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 three working days of receiving the communication from the bank regarding the unauthorised transaction”.
In the instant case, there is nothing to indicate that there was any contributory negligence from the side of the complainant. The loss of the ATM card was timely intimated to the manager.
- In the decision in State Bank of India V/s George referred to above, the Hon’ble High Court of Kerala has held that “ The relationship between the bank and its customer in so far as it relates to money deposited in the account of the customer, is that of debtor and creditor ”. Further it was held that “A bank owes a duty to its customers to take necessary steps to prevent unauthorised withdrawal from their accounts. As a corollary, there is no difficulty in holding that if a customer suffers loss on account of the transactions not authorised by him, the bank is liable to the customer for the said loss”. In this case, the complainant has suffered loss on account of the transactions not authorised by her. She has immediately informed the bank about the loss of her ATM card and requested for blocking it. No action is seen taken by the bank to block the ATM card in order to prevent unauthorised withdrawals from her account. Therefore the bank is liable to the complainant for the said loss.
- From the above discussion, it is to be held that there was negligence and deficiency of service on the part of the opposite party bank and hence the bank is liable to the complainant for the loss of Rs. 64,400/- on account of the transactions not authorised by her. The complainant is also entitled to get Rs. 5,000/- as cost of the proceedings. Point found accordingly.
- Point No. 3:- In the light of the finding on the above points, the complaint is disposed of as follows;
a) CC.114/2020 is allowed in part.
b) The opposite party bank is hereby directed to pay the complainant or credit to her account Rs. 64,400/- (Rupees sixty four thousand four hundred only) involved in the transactions not authorised by her, within 30 days of the receipt of copy of this order.
d) The opposite party is directed to pay a sum of Rs. 5,000/- (Rupees five thousand only) as cost of the proceedings to the complainant.
Pronounced in open Commission on this, the 27th day of March, 2024.
Date of Filing: 19/06/2020
Sd/- Sd/- Sd/-
PRESIDENT MEMBER MEMBER
APPENDIX
Exhibits for the Complainant :
Ext A1 - Copy of the first page of the bank pass book of the complainant.
Ext A2 - Copy of the relevant page of the pass book of the complainant showing the transactions.
Ext A3 - Copy of the application for ATM card.
Ext A4 - Copy of FIR No. 99/2018 of Kodenchery police station.
Ext A5 - Copy of the lawyer notice dated 14/06/2018.
Ext A6 - Copy of the postal acknowledgement card.
Exhibits for the Opposite Party
Ext B1 - ATM request form.
Ext B2 - ATM request application of Sri. Vijeesh.P.C.
Ext B3 - Statement of account.
Ext B4 - SMS log of the transactions.
Witnesses for the Complainant
PW1 - Deepna.P (Complainant)
Witnesses for the opposite party
RW1 – Sreejit.K.S
Sd/- Sd/- Sd/-
PRESIDENT MEMBER MEMBER
True Copy,
Sd/-
Assistant Registrar.
