Delhi

West Delhi

CC/16/380

RAJESH GROVER - Complainant(s)

Versus

SBI - Opp.Party(s)

19 Sep 2022

ORDER

 

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-III: WEST

GOVT. OF NCT OF DELHI

C-BLOCK, COMMUNITY CENTRE, PANKHA ROAD, JANAK PURI

NEW DELHI

 

Complaint Case No. 380/2016

 

Rajesh Grover,

R/o B-1/156, Janakpuri,

New Delhi-110058.

                                                                                                 ……….Complainant.

Versus

 

1.Branch Manager,

State Bank Of India,

B-1/44, Janakpuri,

New Delhi-110058.

 

2.General Manager,

State Bank of India,

Local Head Office,

11, SansadMarg,

New Delhi-110 001.          …… Opposite Parties

 

DATE OF INSTITUTION:         JUDGMENT RESERVED ON:                DATE OF DECISION      :

02.06.2016 23.08.2022 19.09.2022

 

 

CORAM

Ms. Sonica Mehrotra, President

Ms.Richa Jindal, Member

Mr. Anil Kumar Koushal, Member

Present: Complainant in person

                Mr. Arvind Gupta, counsel  for the OP.

 

 

ORDER

 

Per: Anil Kumar Koushal, Member

 

 

            The facts as narrated in the present complaint are discussed below:

 

1. Complainant states that during his visit to Paris, France he had lost his wallet having SBI debit card No.4592-0000-683-5066 and credit cards of HDFC and ICICI Bank  on 01.06.2015.  Upon theft some one started misusing all  the three debit/credit cards referred to above.  This fact the complainant came to know when he started receiving SMSs for the transactions. At the same time he reported the complete incident to the Paris Police.  A copy of the  Police report was also submitted to the OP Bank’s Janak Puri, New Delhi Branch in person after coming back from overseas trip. As regards the debit card   issued by the OP Bank, the complainant made a telephonic  call to  them on 01.06.2015 itself  and lodged complaint vide SBI ticket No. 81501062153067000 to block the card. A letter dated 02.06.2015 in this regard was also submitted by father of the complainant on his behalf to the OP Bank to block the debit card. On return to Delhi from Paris, the complainant also wrote a letter dated 09.6.2015 to the OP Bank’s Premium Banking Branch at Janak Puri, New Delhi requesting to look into the issue and credit back the amounts of fraudulent transactions.

2.         Complainant submitted that as per  the complaint lodged with the Paris Police, the three cards which were used fraudulently  were as detailed below:

1.         HDFC Credit card - Master Card.

2.         ICICI Credit card - Visa Card.

3.         SBI Debit card - Visa Card.

 

 

Out of above three cards,  HDFC bank & ICICI bank have already reversed the fraudulent charges considering merit of the case after internal investigation. Although this may not be direct basis  to seek favour from the OP but is definitely an important point for introspection as to when other two banks with Master & Visa platform have reversed the complete amount of fraudulent use, why a reputed & customer friendly bank like OP  is taking so long  and if  desired, the statement/letter indicating reversal by the said two Banks can be produced for ready reference. The same has already been shown to OP Bank Branch manager.

3.         The following were the two fraudulent transactions carried on the debit card issued to the  complainant  by OP Bank:

01.06.2015      POS       PRCH- 11C04917

                        POS      515215086412  RATP 75         2024.66

                        PARIS

 

01.06.2015      POS  PRCH-1350   E77D

                        POS  515215000003    TEISSEIRE 75   71,791.50

                        PARIS

 

 

Out of the above two transactions, one was  swipe transaction and another  chip based.  Complainant submitted that it is clearly  evident from those two payment slips that the same did not carry his signature and this  can be verified from the OP Bank. Complainant attached with his complaint, the reports of Paris Police which clearly specified at sr.16 that the CIM (card holder Identity Method) was not specified at the time of transaction.Complainant submitted that he failed to understand as to why OP Bank   could not dispute these transactions through their VISA platform and in fact  it has facilitated such fraudulent practises by not acting promptly.

4.         As per complainant, it took the OP Bank’s Janak Puri  Branch more than forty days to reply to his letter despite following up almost every second day.  Upon receipt of reply dated 27.07.2015  from the OP Bank branch,  the complainant  was astonished to note point No.2 thereof which reads as follows:

            “Used card is CHIP card and   transactions are happened by using by chip on chip POS terminal and PIN is not mandatory by using CHIP card on chip POS terminal  and for chip based transactions no authentication required.  Hence the case cannot be considered.”

But there was no response to his concern  from OP’s  Zonal Nodal officer and Chief Nodal Officer even after lapse of considerable no. of days.  Complainant further  submits that after 48 days of incident and 31 days  of submitting dispute form to the OP Bank branch, he was told that the SOP they were referring to covers fraudulent use of cards when the complainant holds the physical possession of card.  Complainant states that  he requested  the OP Bank Branch Manager  vide his letter dated 28.07.2015 to give him the correct form to which there was no response till date.  This shook  the confidence of complainant in OP’s banking practices.

5.         Complainant contended  that for redressal of his grievance, before knocking at the door of this Commission, he had  escalated his concern to  hierarchy of the OP Bank as also the Banking Ombudsman  for about 364 days.He wondered whether his hard earned money is parked in safe hands  with the OP Bank where  anyone, who misusesor by fraud gets access to his money without his  consent. A bank of  repute is not showing concern to arrest fraudulent use of their platform & in turn is actually encouraging instead of discouraging/arresting such fraudulent practices.

6.         Complainant presented that as per his knowledge, the above debit card was Chip & Pin based Visa global debit card, which  cannot be used without:

1 Secret PIN or OTP (as per RBI Mandate)

2 Cannot be swiped (as per RBI guidelines to ensure secure transaction to avoid frauds).Whereas someone misused all the three Chip & Pin cards without PIN or OTP using Visa /Master card platform.

7.         Complainant averred that  his concern was as to why an amount has been paid from his account throughfraudulent use of his debit card without his valid PIN/OTP. This was clearly against  RBI Mandate.  He submitted that as per the last  communication of OP received vide email dt. 19-11-2015, they have taken a stand that using PIN/ OTP is not a must & hence the money withdrawn by some one cannot be reversed, whereas the understanding of the complainant  is that he being an Indian National (the consumer of services) &OP bank being an  Indian scheduled bank (the Service provider) & both  the complainant and the OP are governed by RBI (The Indian Financial regulator), no one else can withdraw his money from his savings account since every transaction needs his secret PIN to be used on transactions being carried out through  CHIP & PIN based debit card. However, finding no relief, the complainant  has filed the present complaint praying as under:

“To direct OP bank (if deemed appropriate) to reverse the said amounts to restore his confidence in India's sound Consumer protection Law and also to compensate him for Interest & harassment caused by OP's attitude ( Rs.71719.50 + Rs. 2024.66 + Interest @ 24% till date Rs 19781.27+ Rs. 2,00,000/- towards harassment = Total Rs. 2,95,525.43)”.

8.         Along with the complaint, the complainant attached  correspondence exchanged by him with the OP, copy of complaint lodged with Paris Police  and other documents  as mentioned in the affidavit of evidence which were exhibited. For the sake of brevity, the same are not being mentioned here.

9.         The complainant made the following prayer:

10.       Upon notice being issued to the OP, it  filed  its written statement. It was submitted by OP that the complainant is not maintainable in the eyes of law as complainant has not approached before this forum with clean hands and has concealed the material facts from this forum which are sufficient for dismissal of the present compliant as per the settled law. Complainant has no locus standi to file the present compliant against the answering OP.  The compliant is bad for misjoinder of parties, as the answering OP is neither necessary nor a proper party in the present case. The complaint as instituted by the complainant is even otherwise devoid of merits and is without any jurisdiction, mala fide, vexatious and highlights  the misdeeds of the complainant.

11.       OP submitted that  without admitting the contents of the complaint it is worthwhile mentioning here that this  forum has  no Jurisdiction to try and decide the present case as the complainant is having a bank account with the answering OP, the OP issued a debit Card number 4592-0000-0683-5066 which is used by the complainant, However, it is worthwhile mentioning here that at the time the complainant misplaced/lost the said Debit Card i.e. on 01/06/2015, he was in Paris and the said debit card used by the unknown persons as per version of the complainant in Paris is not in the jurisdiction of this  court.It is further mentioned that after withdrawals or fraudulent withdrawals/successful transaction of Rs.71791.66 and Rs.2024.66 by anyone/other persons, the complainant made complaint before the competent authority  telephonically or through online and after receiving the said complaint, the competent authority immediately forwarded the same to the concerned department. OP placed on record the statement of account for the  periodfrom  30/05/2015 to 10/06/2016  showing the two fraudulent transactions.OP stated that after receiving the said complaint, the concerned branch/authority immediately blocked the said debit card as per rules/policy. It is further submitted by the OP that after blocking the said debit card, no transaction/withdrawal has been done on the said debit card and an  intimationto this effect was also given to the complainant by the answering OP.It is further submitted that the card issued to the complainantis a CHIP Card and in the said type of card, the transactions took place by using on Chip POS terminals and hence the PIN is not mandatory by using the same in the foreign land.

12.       It is further mentionedby the OP that all debit cards with EMV CHIP in India will support PIN based transaction only as per RBI guidelines but for the CHIP based international POS transaction, PIN is not mandatory. It is further mentioned that the answering OP after receiving the complaint, verified  and investigated the same and found that the complainant made a complaint after successful transactions and hence  his  complaint was closed immediately due to said reason and  the application of the complainant could not be considered under SOP due to non-possession of ATM card physically at the time of lodging the complaint to the OP. It is worthwhile mention here that this is mandatory condition for considering the application under SOP for compensating the customer.

13.       It is further submitted by the OP  that after closing the complaint of the complainant, the answering OP informed the same to the complainant in this regard.OP stated that after receiving the closure report/letter by the complainant from the OP, he  disagreed with the same and preferred to file a complaint before the Office of the Banking Ombudsman, New Delhi and after thoroughly investigating/examining the matter, the Ombudsman found no deficiency of service on the part of the answering OP and  closed the complaint under clause 13(a) of the Banking Ombudsman Scheme 2006.

14.       OP submitted that the claim set up in the present complainant is opposed to law and  contrary to the facts and material on record. The complainant is guilty of suggestion falsi and suppression veri and due to malicious conduct, the complainant does not deserve any relief founded upon equity.  Further, the complaint does not disclose any  cause of action against the answering OP. The complainant is not entitled to any relief prayed in the complaint and the same is liable to be dismissed.

15.       The OP filed along with its written statement, copy of statement of account of complainant maintained with OP Bank for the period from 30.05.2015 to 10.06.2016, copy of complaint filed by the complainant with OP on 02.06.2015, copy of complaint filed in this case, copy of  report lodged with Paris Police along with declaration form, copy of closure report dated 27.07.2015, copy of findings of Banking Ombudsman dated 02.12.2015.

16.       Being dissatisfied with the response of OP in the written statement, complainant  filed his rejoinder and denied each and every averment made by the OP  unless the same is admitted herein.He  reiterated and reaffirmed each and every averment made in the complaint. As per complainant,   the OP has admitted the following factsin its reply:

(1) that the Complainant held a savings account with the OP Bank

(2) the OP issued a Debit Card to the Complainant.

(3) That the card was misplaced/lost in Paris, France on 01.06.2015

(4) The card was illegally used by unknown persons in Paris

(5) No safety features provided. The card was capable of being used without any authentication and cross verification-i.e. without PIN or signature of owner or One Time PIN generation since no safety feature had been provided by the OP from the very beginning for international travel/use.

(6) The OP never conveyed to the Complainant or took any waiver in writing that the OP was not liable for the said card which was capable of being used without any verification thereby flouting every notification, circular and rules and regulation of RBI.

17.       The complainant disputed the contentions of  OP and stated that  no facts have been set out by the OP as to what all has been concealed from this  Forum. The objection has been taken only as an afterthought and is without merit.

18.       According to complainant, the  OP has failed to explain how the Complainant does not fall within the definition of a "Consumer" as defined under the Consumer Protection Act and therefore has no "locus standi" to file the complaint. The OP has also not explained as to how by issuing an international debit card, the OP is not rendering any services to the Complainant. 

19.       It is further submitted by the complainant that a debit card is issued against an account held by a customer in the bank, for the customer to use his own funds/savings, and since the Complainant holds an account with the OP he is a "Customer" and a "Consumer" as defined under the CP Act. The OP has not cited any law, order or notification that debars the Complainant from approaching this Forum for redressal.

20.       The complainant denied that the complaint is bad for misjoinder of parties or that the OP is neither necessary nor proper party in the complaint. The OP has failed to explain as to how and why it is not a necessary or proper party to the present complaint and that the objection has been taken only by way of an afterthought and is without merit.

21.       Complainant  denied that this Forum has no jurisdiction as the card was lost/misplaced and used by unknown person(s) in Paris. It is  submitted that the main issue is that the OP never provided any Safety Features to secure the usage of card by customer thereby making its use convenient by unscrupulous persons in case of loss and falling into the wrong hands. The fact that the Debit Card was lost in Paris has no bearing to the case/issue at hand and that also despite there being RBI Guidelines to the effect that all Debit and Credit card transactions are to be verified by a password or Personal Identification Number (PIN) especially for a Debit Card that was capable of being used for "International travel" meaning "outside India". The objection has been taken only by way of an afterthought and is without merit. He submitted that the  statement of account filed by the OP  only certifies that amounts were withdrawn from the savings account of the Complainant and that the OP has refused to reverse the charges.

22.       According to the complainant it is also admitted by the OP in the reply that the card had a CHIP and did not require PIN as the same was not mandatory.  This is an admission on the part of OP that there were no safety features in the card. The OP also  admitted that it investigated the matter and thereafter closed the same. The OP thereby has also admitted that it never left the shores of India nor made any inquiries from Paris and did not procure or secure video footage of the card being used to make the fraudulent transactions.According to the complainant,  the OP has also indirectly admitted that the card cannot be used in a foreign country ATM machine to withdraw cash without usage of a PIN. If a PIN is required for an ATM machine in a foreign land then it should also be required for a POS machine as all POS machines require a PIN. The  OP has not filed a copy of the "SOP" and, therefore, the Complainant reserves his rights to file an appropriate response as and when a copy of the "SOP" is filed by the OP. As per complainant, it is the OP which is hiding facts from this  Forum. The closure report  is a self generated document of convenience and has no sanctity since it is being used to protect the deficient services rendered by the OP in not having any Safety Features to protect fraudulent transactions on the card of the Complainant. Further the closure of the complaint made by the Banking Ombudsman  has no bearing to the issues at hand as there is no order with regard to there being no Safety Features to protect fraudulent/unauthorised use of the card. The Complainant has every right to maintain the complaint under Section 3 of the Consumer Protection Act  and there is no bar set out in the said Act which prohibits or takes away the right of the Complainant.

23.       It is submitted by the complainant that the rules and guidelines of RBI apply to HDFC/ICICI Bank in equal measure as they do to the OP Bank and if the ICICI Bank has applied the same rules and guidelines to reverse the unauthorised transactions of the Complainant, on the same rules and guidelines of RBI, the OP should reverse the unauthorised transactions made on the card issued by it without the Safety Features.

24.       Complainant contends that while issuing international debit card, neither at the time of issue nor any time later, the OP ever informed in writing or verbally that usage of such card does not require PIN authentication when a chip based card is used in foreign land on chip POS terminal for chip based transactions. Since the same was not informed, this condition post incident, should not be considered as condition of card usage and therefore,  OP bank is responsible for releasing money/approving transaction without support of PIN authentication. It is stated by complainant that out of two fraudulent transactions only one transaction, for the sum of Rs.2024.66 (EURO 28.20) was by chip card on chip POS terminal by chip based transaction and the second one for Rs. 71,791.50 (EURO 999.93) was not chip based transaction, instead it was by swiping card & signing the counter slip. The Complainant has already submitted the counter slip copy arranged from bank/Visa team,which clearly shows that in this transaction the card was swiped and  signed by fraudulent person.

25.       The Complainant contended in the rejoinder that he reserves his right to file additional reply to the objections taken in the written statement of OP  as and when specific facts are averred by the OP.

26.       Complainant referred to the RBI circular No. DBOD.Leg.BC.86/09.07.007/2001-02  dt. 08-04-2002 regarding "customer service-reversal of erroneous debits arising on fraudulent or other transactions"  wherein vide para 3, RBI directed all banks as under:

"3. With a view to redressing the grievances of the customers in this regard, we have  reviewed the position and advise  that (i) xxxxxxxxxxxxxxx

(ii)in cases where neither the bank is at fault nor the customer at fault but the fault lies elsewhere in the system, then also the bank should compensate the customers (upto a limit) as  part of a Board approved customer relations policy".

27.       Complainant also referred to the RBI Circular No. RBI/2017-18/15 DBR No.Leg.BC.78/09.07.005/2017-18,dated 06-07-2017   on "customer protection - limiting liability of customers in unauthorised electronic banking transactions”, relevant parts of which read as under:

“Strengthening of systems and procedures:

3.Broadly  the electronic banking transactions can be divided into two categories:

xxxxxxxxx

 (ii) Face to face/proximity payment transactions (transactions which require the physical payment  instrument such as a card or mobile phone to be present  at the point of transaction, e.g. ATM, POS etc.”

“Zero liability of a customer:

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

xxxxxxxxx

(ii)  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 an unauthorised transaction”.

Reversal Timeline for Zero liability/limited liability of a customer

9. On being notified by the customer, the bank shall credit(shadow reversal) the amount involved in the unauthorised  electronic  transaction to the customer’s account within ten working days from the date of such notification by the customer(without waiting for settlement of insurance claim, if any).”

28.       According to the complainant, in the present case, the fraudulent transactions took place on 01.06.2015 and were reported same day to the OP through their customer care (ticket no-81501062153067000) and through letter dt. 02-06-15 handed over to OP BranchManagerby his father.  He submitted that in view of the above facts and submissions  made by him, his prayer  made in the complaint be allowed.

29.       Evidence by way of affidavit was filed by the complainant and he exhibited the documents filed on record as Ex. C.W.1/1 to 1/20.  OP also filed evidence by way of affidavit and exhibited the documents placed on record as Ex. OPR.1/1 to OPR 1/5.

30.       Written arguments were filed by the complainant and the OP.  Oral arguments of parties were heard on 23.08.2022.   Complainant in terms of the last order of the Bench dated  21.04.2015, placed on record  copy of the investigation  report received from the Paris Police whereby it was informed that the complaint filed by the complainant  has been closed.  Counsel for the OP reiterated the stand taken in the written statement and submitted that for the foreign transactions on chip based cards, no PIN is required. In support of his pleas, the  complainant placed heavy reliance on the  various circulars issued by the RBI, especially the circular No.RBI/2012-13/424,  dated 28^th February, 2013, which have been placed on record and quoted above. A copy of the Circular of RBI dated 28.02.2013 was supplied to counsel for the OP. The orders were reserved on the same day and the parties were directed to file judgments if any, in support of their case within a week.   We may note that nothing has been filed on record by either of the parties  till date.

31.       At this stage, in order to reach a logical conclusion in this case, we may refer to the relevant provisions of the  circular dated 28.02.2013  of RBI as under:

  “2.xxxxx

  A. Securing card payment transactions

  (i)All new debit and credit cards  to be issued only for domestic usage unless international use is specifically sought by the customer. Such cards enabling international usage will have to be essentially EMV Chip and Pin enabled (by June 30, 2013).

32.       After going through the contentions  of rival parties we observe that the clinching/ contentious point  in this complaint is that  the card issued  to the complainant  was a chip  card and in the said type of card the transactions had  happened  by using on Chip POS  terminals and hence the  Pin is not mandatory by using the same in the foreign national. Therefore, counsel for the OP submitted that  for the fraudulent transactions that have taken place on the debit card of the complainant in Paris, no relief can be granted to him as they were not at fault.

33.       We may here note that as per the own admission of the OP, a Chip based debit card was issued to the complainant for international usage by it and, therefore, we find that the circular dated 28.02.2013 of RBI cited by the complainant has a  direct bearing  on the issue raised in the complaint. The said circular clearly spells out that “such cards enabling international usage will have to be essentially EMV chip and Pin enabled.  This important point moulds the  case in favour of the complainant and puts the onus  of proving no deficiency on the part of the OP.

34.       As regards the Circular of RBI dated 6^th July, 2017 referred to by the complainant and quoted above, though it has very much relevance to the issue in hand  and supports the case of the complainant but we are afraid the same cannot be taken into consideration being post the fraudulent transactions which took place on Ist June, 2016.

35.       Further the circular dated 08.04.2002 also shifts the  blame on the OP  when it says that “in cases where neither the bank is at fault nor the customer at fault but the fault lies elsewhere in the system, then also the bank should compensate the customers (upto a limit) as  part of a Board approved customer relations policy”.

36.       We find fallacy in the argument of the OP when it says that the complainant is not a consumer in the eyes of law and no cause of action  has arisen against the OP and it was not a necessary party.  We may observe that the debit card in question was issued by the OP and the fraudulent transactions had taken place from the account maintained by the complainant with the OP. The OP was deficient in not adhering to various advisories issued by their regulating/supreme  authority, i.e. the RBI.  The so called SOPs spoken about  by the OP, based on which conclusion was arrived at to close the case to the detriment of the complaint, have not been placed on record to enable us  to draw any adverse/favourable  inference against the complainant.

37.       Further, the Banking Ombudsman did not close the case of complainant as it did not find any deficiency in the case but on the following ground:

“The office has examined the submissions  made by both the parties. It was observed that  the complainant’s wallet was stolen when he had gone to Paris  and transactions in his ATM card was done in card  present environment.As card swiped transactions  conducted with ATM card/Debit card/Credit card in a card present environment with the EDC machines with merchant  outlets/POS/ATMs abroad were  not covered  under the scheme, the case was closed under 13(a) of BOS, 2006”.

 

38.       Following the guidelines issued by the RBI vide its Circular dated 28.02.2013, quoted above,   we find the OP herein to be deficient in not honouring the  request for reversal of  amount of the two fraudulent transactions which took place at Paris on 01.06.2015, for which the complainant had already lodged a police complaint at Paris and taken up the same  vigorously with the OP also based on the regulations issued by the RBI.  The said proceedings as per the report dated 22.07.2022 received from the Paris police have been closed.

In  State Bank of India Vs Dr. J.C.S. Kataky, III 2018 CPJ 193 (NC) passed on 03.05.2017  in which on similar facts of fraudulent transactions entered into by using complainant’s ATM were before the Hon’ble National Commission for adjudication and the Hon’ble National Commission had framed the key issue for consideration ‘whether it was the duty of the bank to play any meaningful role in the matter when their own customer/complainant had reported to them about the alleged fraudulent transaction from his account on three different occasions on the same day’ . The Hon’ble National Commission had held after appreciating extensive arguments laid by both sides that “it was a duty of bank to have carried out necessary verification in the matter rather than washing their hands off from the whole episode holding the bank guilty of deficiency of service vis-à-vis the consumer/complainant.”

39.       Accordingly the complaint is allowed and the   OP is directed  toreverse and credit back the amounts of Rs.2024.66 and Rs.71,791.50 for wrongful debittowards the two fraudulent transactions which took place at Paris, France on 01.06.2015,  to the account of the complainant with interest @ 6% from the date of filing of the complaint till final realisation.  For the harassment and mental agony faced by the complainant for more than a year in moving around the officials of  the OP Bank and other authorities for redressal of his grievance, the OP is also directed to compensate the complainant with a sum of Rs.10,000/-.  Let this order be complied within thirty days of receipt of copy of this order.

A copy of this order shall be supplied to parties to the dispute free of cost  under Regulation 21 of CPR, 2020 on a written requisition/application being made by them in the name of  President of this Commission.

 

RICHA JINAL                    ANIL KAUSHAL            SONICA MEHROTRA MEMBER                                MEMBER                     PRESIDENT