IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 12th day of July, 2021
Present: Sri. Manulal V.S. President
Smt. Bindhu R, Member
Sri. K.M. Anto, Member
C C No. 58/2020 (filed on 17-03-2020)
Petitioner : Manish Jose,
S/o. P.V. Jose,
Peediyeckal Kalapurackal,
Kanjirapara P.O.
Kangazha.
(Adv. Sebastian James Palakunnel)
Vs.
Opposite Parties : 1) The Manager,
State Bank of India,
Collectorate branch,
Collectorate P.O.
Kottayam – 2.
2) The Regional Manager,
State Bank of India,
Regional Business office,
Pheonix Towers, Thirunakkara,
Kottayam – 686001.
(For op1 and 2, Adv. P.G. Girija)
O R D E R
Smt. Bindhu R, Member
The complaint filed under Section 12 of the Consumer Protection Act, 1986.
The complaint is as follows.
The complainant alleges that an amount of Rs.49,990/- (Rupees Forty nine thousand nine hundred and ninety only) was withdrawn from his account on 27-09-2018. He maintains an account with the opposite party bank. He has another account with Canara bank, Vazhoor also. The above said transaction was not done by him but by somebody else through fraudulent means. He complained about this to the opposite parties, but they did not respond. The complainant lodged a complaint before the Pallikathodu police station. The police registered an FIR No.753/18 under Section 420 I.P.C. After detailed enquiry, police filed charge sheet before the Judicial First Class Magistrate Court, Kanjirappally. The complainant had neither used his ATM card nor had given the card to anybody else. The money had been withdrawn by somebody through fraudulent means. There is deliberate latches on the part of the opposite parties in giving protection to the money invested by the complainant with the opposite parties. The complainant had issued lawyers notice on 13-11-2019 and on 18-11-2019 to the opposite parties and received a reply notice on 16-12-2019 with flimsy excuses. So the complaint is filed for compensation against the loss incurred due to the deficiency in service and unfair trade practice from the part of the opposite parties.
Upon notice, the opposite parties appeared and filed version. Admittedly the account of the complainant No.67240441614 was blocked from the usage of ATM card. The complainant had never given any complaint to the opposite parties. The opposite parties came to the knowledge of the transaction only upon the receipt of the legal notice. The opposite parties were not at all aware of the police complaint or FIR. The alleged transaction was done through the paytm and not through SBI net banking or ATM cash withdrawal. For a successful transaction through paytm using ATM card, it requires the details like ATM card number, expiry date of card and CVV and OTP. Without these details transaction cannot be completed. Only upon entering the OTP which was sent to the registered phone number, which was linked to the account the transaction would have been completed. As the said phone was with the complaint the transaction could not have been done without the knowledge of the opposite parties.
The alleged transaction took place on 27-09-2018. But the complainant did not give any complaint regarding the same to the customer service center or by registering through online complaint Management system. Immediately on receipt of the lawyers notice on 16-11-2019, the opposite party had registered an online complaint with CMS to which they got a reply that the transaction had happened on a secured merchant site and as per new VISA norms, they could not raise the claim on acquiring Bank / merchant where the disputed transaction was authorized through OTP/PIN.
The complainant has adduced evidence vide affidavit in lieu of chief examination along with documents which were marked as Exts.A1 to A6. The opposite party filed affidavit along with Exts.B1 to B3.
On a detailed examination of the evidence on record and pleadings, we would like to consider the following points.
Whether deficiency in service established on the part of the opposite party and if so what are the reliefs?
The complainant alleges that an amount of Rs.49,990/- was lost from his account with the opposite party on 27-09-2018 while his ATM card and mobile phone was in his own custody. The said transaction was without his knowledge. Immediately he informed the opposite party and thereafter he filed police complaint. On enquiry it was revealed that the transaction took place through paytm. The complainant sent a legal notice to the opposite parties to which they replied as the transaction was through a secure site, it would have been done only with the knowledge of the complainant. So the opposite party bank is unable to redress the complaint of the complainant. Before this Commission also the opposite parties took the same contention.
The complainant has produced the copy of FIR though states that police has filed charge before the Judicial First Class Magistrate Court, Kanjirappally, he has not produced the copy of the final charge or any other further proceedings. The FIR produced by the complainant was against the Canara Bank, Pulikkal Kavala branch not against the opposite parties. On the other hand the opposite party produced Exts.B1 to B3. B2 is a statement of account of the complainant with regard to the transactions of the account. In B2 statement on 27-09-2018 a debit of Rs.49,990/- is shown against POS ATM PURCH. Normally in the statements issued by banks, the place of transactions also are mentioned. But here in B2, no such mention of place of transaction. Again the opposite party alleges that the transaction was done through paytm a secured merchant site where the transaction takes place only upon an OTP sent to the complainant’s phone. So the alleged transaction could not have been completed without the consent of the complainant. The complainant had entrusted him hard earned money with the opposite party. The opposite party has a bounden duty to provide security to the deposits of its customers and to provide safe transactions.
The opposite party bank has not conducted any proper investigation upon the complaint of the complainant. They took a blund stand that the transaction was through a secured merchant site. The bank ought to have enquired into the complaint in detail and find out if there is any involvement of third parties. If a detailed enquiry was done, the place of transaction and other details would have been revealed.
The loss of money and the lack of enquiry on the part of the opposite party will amount to deficiency in service.
In Punjab National Bank and anr. Vs. Leader Valves II (2020)CPJ92(NC) the Hon’ble NCDRC while addressing the question of liability of a bank in case of unauthorized and fraudulent electronic banking transactions, has observed as under.
“11. The first fundamental question that arises is whether the Bank is responsible for an unauthorized 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, straight way 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 or 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 State Bank of India V. P.V. George, Hon’ble Kerala High Court held that Banking Law – Unauthorised withdrawals from savings bank account – Whether Bank liable – If a customer suffers loss in connection with transactions made without his junction by fraudsters, it has to be presumed that it is on account of the failure on the part of the Bank to put in place a system which prevents such withdrawals, and the Banks are, therefore, liable for the loss caused to their customers.
9. Question (1) : The relationship between a bank and its customers arises out of the contracts entered into between them. Such contracts consist of general terms applicable to all transactions and also special terms applicable to the special services, if any, provided by the bank to its customers. The relationship between a bank and its customer, insofar as it relates to the money deposited in the account of a customer, is that of debtor and creditor. The contractual relationship exits between a bank and its customers are founded on customs and usages. Many of these customs and usages have been recognized by Courts and it is now an accepted principle that to the extent that they have been so recognized, they are implied terms of the contracts between banks and their customers. Duties of care is an accepted implied term in the contractual relationship that exists between a bank and its customer. It is impossible to define exhaustively the duties of care owed by a bank to its customer. It depends on the nature of services extended by the bank to its customers. But one thing is certain that where a bank is providing service to its customer, it owes a duty to exercise reasonable care to protect the interests of the customer. Needless to say that a bank owes a duty to its customers to take necessary steps to prevent unauthorized withdrawals 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.
10. Considering the recent surge in customer grievances relating to unauthorized transactions in the accounts of the customers enjoying electronic banking facilities like ATM-cum-Debit Cards, net banking etc., in terms of circular No.RBI/2017-18/15 dated 6/07/2017, the Reserve Bank of India has directed all banks, among others, to put in place, appropriate systems and procedures to ensure safety and security of electronic banking transactions carried out by customers; robust and dynamic fraud detection and prevention mechanism; mechanism to assess the risks resulting from unauthorized transactions and measure the liabilities arising out of such events; appropriate measures to mitigate the risks and protect the banks against liabilities arising therefrom and a system of continually and repeatedly advising customers on how to protect themselves from electronic banking and payment related frauds. It is clarified in the said circular that the customer shall have no liability at all in the case of third-party breach when the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system. The only obligation which casts on the customers of the bank in terms of the circular is that the unauthorised transactions shall be brought to the notice of the bank forthwith so as to enable the bank to block the account. The circular aforesaid only reminds the banks, their obligations and responsibilities and it does not create any new rights or obligations. In short, there is also no difficulty in holding that if a customer suffers loss in connection with the transactions made without his junction by fraudsters, it has to be presumed that it is on account of the failure on the part of the bank to put in place a system which prevents such withdrawals, and the banks are, therefore, liable for the loss caused to their customers. All over the world, the Courts are adopting the aforesaid approach to protect the interests of the customers of electronic banking.
Hence in the light of the above discussion and the judgement cited supra, we are of the considered opinion of allowing the complaint. The complaint is allowed accordingly and the opposite parties are directed to pay Rs.49,990/- to the complainant within 30 days of this order in default of which an interest @9% shall be paid till the date of realization.
Pronounced in the Open Commission on this the 12th day of July, 2021.
Smt. Bindhu R, Member Sd/-
Sri. Manulal V.S. President Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 - Copy of the petition submitted before the Pallickathdu police station
A2 -Copy of FIR in Crime No.753/2018 registered by the Pallickathodu police
station
A3 – Letter dtd.27-09-2018 submitted before the 1st opposite party
A4 series- Office copy of lawyers notice dtd.13-11-19 (2 nos.)
A5 series – postal receipts (2 nos.)
A6 series– Postal acknowledgement card (2 nos.)
Exhibits marked from the side of opposite party
B1 – Details of customer details
B2 – Copy of statement of account from – 01-09-18 to 31-12-18
B3 - Copy of reply
By Order
Senior Superintendent
