Haryana

Karnal

CC/329/2023

Tilak Raj - Complainant(s)

Versus

State Bank Of India - Opp.Party(s)

Amit Sharma

18 Jul 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KARNAL.

                                                        Complaint No. 329 of 2023

                                                        Date of instt. 05.06.2023

                                                        Date of Decision: 18.07.2024

 

Tilak Raj aged about 70 years son of late Shri Ladha Ram, resident of house no.786, Netaji Nagar, Rohtak, now resident of house no.14-A, Minar Road, near Nayaypuri main Gate, Karnal.

 

                                                                        …….Complainant.

                                              Versus

 

State Bank of India Branch at Model Town, Rohtak through its Branch Manager.

 

                                                                …..Opposite Party.

 

Complaint under Section 35 of Consumer Protection Act, 2019.

 

Before:  Shri Jaswant Singh……President

              Shri Vineet Kaushik…..Member

      Ms. Sarvjeet Kaur..…..Member

 

 Argued by: Shri Amit Sharma, counsel for the complainant.

                 Shri Sudarshan Chaudhary, counsel for the OP.

 

                     (Sarvjeet Kaur, Member)

ORDER:   

                

                The complainant has filed the present complaint under Section 35 of the Consumer Protection Act, 2019 against the opposite party (hereinafter referred to as ‘OP’) on the averments that complainant is a retired from Haryana Police Department as Deputy Superintendent of Police at the age of superannuation and is getting pension for his livelihood. The complainant holds a saving bank account no.30075786627 with the OP. The complainant opened this account and is maintaining the same with consideration and understanding that the hard earnest amount deposited with the OP is safe and secure being Government of India undertaking is being a Government bank. On 30.09.2022, complainant received a telephonic message on his mobile phone that your electricity connection will be disconnected for non-payment of bill, if you did not want the disconnection of your connection, then call on the some particular number. On receiving such type of message, the complainant called back on the given number under pressure. On calling back on the provided number the complainant was stunned and surprised to know that an amount of Rs.40002/-were deducted from the above mentioned saving account of the complainant. The abovesaid account number if linked with the mobile number of the complainant, so how the saving bank account number of the complainant has been disclosed to the person who has called for disconnection of the electricity connection of the complainant. It is clear that the OP and the person sending the message to the complainant are working in cahoots with each other. The security and safety of the deposited amount of the complainant is the sole responsibility of the OP. The said act of the OP for not maintaining the security and safety of the amount deposited counts towards the deficiency in service and unfair trade practice on the part of the OP. The complainant requested the OP about the deduction of the said amount and also requested a number of times to refund the said hard earnest money of the complainant but to no effect.  Then complainant sent a legal notice dated 01.04.2022 to the OP but it also did not yield any result. In this way there is deficiency in service and unfair trade practice on the part of the OP. Hence this complaint.

2.             On notice, OP appeared and filed its written version raising preliminary objections with regard to maintainability; cause of action; jurisdiction and concealment of true and material facts. On merits, it is pleaded that an amount of Rs.40,002/- were deducted from the saving account of the complainant. The complainant himself shared the detail of debit card with some person, which shows that the complainant himself was negligent, because he himself shared the confidential details regarding Debit Card. Thus, the complainant himself is responsible for the said transaction and OTP was duly sent on the registered mobile number of the complainant and the same was duly received by the complainant and only after that two transactions of Rs.20,000/- each were done by the complainant himself, so there is no fault on the part of the OP in any manner. It is further pleaded that complainant himself has violated the security measures by sharing confidential information, so in the present matter the OP is not responsible for any cause, at all. There is no deficiency in service and unfair trade practice on the part of the OP. The other allegations made in the complaint have been denied and prayed for dismissal of the complaint.

3.             Parties then led their respective evidence.

4.             Learned counsel for complainant has tendered into evidence affidavit of complainant Ex.CW1/A, copy of FIR dated 10.10.2022 Ex.C1, copy of mail dated 24.01.2023 to Bank Ex.C2, copy of Track Report dated 30.09.2022 Ex.C3, copy of newspaper cutting Ex.C4, copy of complaint to Bank Ex.C5, copy of legal notice dated 01.04.2023 Ex.C6, postal receipt dated 01.04.02023 Ex.C7, intimation letter to SBI dated 01.10.2022 Ex.C8 and closed the evidence on 08.01.2024 by suffering separate statement.

5.             On the other hand, learned counsel for the OP has tendered into evidence affidavit of Jitender Narwal, Assistant Manager Ex.OP1/A, copy of statement of account Ex.OP1, copies of transaction enquiry Ex.OP2 and Ex.OP3, copy of aadhar card Ex.OP4 and closed the evidence on 29.05.2024 by suffering separate statement.

6.             We have heard the learned counsel of the parties and perused the case file carefully and have also gone through the evidence led by the parties.

7.             Learned counsel for complainant, while reiterating the contents of the complaint, has vehemently argued that after retirement complainant resides with his son namely Gaurav HCS, who is serving as Assistant Commissioner, Municipal Corporation, Karnal.  Complainant is having a saving bank account with the OP. On 30.09.2022, complainant was present in Government Accommodation allotted to his son at Karnal and he received a telephonic message on his mobile phone that his electricity connection will be disconnected for non-payment of bill, if he did not want the disconnection then called on the particular number. The complainant called on the provided number, an amount of Rs.40002/-were deducted from the account of the complainant. The complainant immediately informed the OP regarding the said fraud transaction. The security and safety of the deposited amount of the complainant is the sole responsibility of the OP. The said act of the OP for not maintaining the security and safety of the amount deposited counts towards the deficiency in service and unfair trade practice on the part of the OP. Complainant requested a number of times to reverse the said hard earnest money of the complainant but to no effect and lastly prayed for allowing the complaint.

8.             Per contra, learned counsel for the OP, while reiterating the contents of its written version, has vehemently argued that complainant resides at Rohtak and also maintaining his saving account at Rohtak, hence this Commission has no jurisdiction to try and entertain the present complaint. He further argued that an amount of Rs.40,002/- were deducted from the saving account of the complainant. The complainant himself shared the confidential details regarding Debit Card. Thus, the complainant himself is responsible for the said transaction and OTP was duly sent on the registered mobile number of the complainant and only after that two transactions of Rs.20,000/- each were done by the complainant himself, so there is no fault on the part of the OP in any manner, thus there is no deficiency in service and unfair trade practice on the part of the OP and prayed for dismissal of the complaint.

9.             We have duly considered the rival contentions of the parties.

10.           The OP has alleged that complainant is residing and maintaining the saving account at Rohtak. Hence this Commission has no jurisdiction to try and entertain the present complaint.

11.           Complainant after retirement, resides with his son namely Gaurav HCC, who is serving as Assistant Commission in Municipal Corporation, Karnal, in Government Accommodation. On the date of incident and filing the complaint, complainant was residing at Karnal and hence as per Section 34 (d) of Consumer Protection Act, 2019, this Commission has territorial jurisdiction to try and entertain the present complaint.

12.           The core issue of the complainant is that the bank/SBI card failure to ensure a secure banking environment, resulting in unauthorized transactions, constitutes a service deficiency. The complainant seeks compensation for the amount wrongfully withdrawn, including interest from the loss date, and additional compensation for mental anguish, hardship, and financial loss caused by the bank/ SBI card negligence.

13.           The complainant has alleged that on 30.09.2022, an amount of Rs.40002/- has been deducted from the saving account of the complainant by the third person and he immediately informed the OP with regard to debiting of Rs.40002/- from his saving account and requested to block his account. The onus to prove his case was relied upon the complainant. To prove his case, the complainant has placed on file, copy of Complaint Type: Report and Track Ex.C3. The relevant portion of the said document is reproduced as under:-

“Acknowledgement no.                   31309220012524

 Category of complaint                    Online Financial Fraud

         Sub Category of complaint             Debit/Credit card Fraud/

      SimSwap Fraud

        UserId                                             gk.2612@ rediffmail.com.

        Incident Date/Tim                             30.09.2022 0:0 a.m.

        Complaint Date                                  30.09.2022

        If there is any delay in reporting        No

 

14.           The complainant further relied upon the application Ex.C8 dated 01.10.2022 to Bank regarding account debited due to financial fraud through call. The contents of the said application are reproduced as under:-

“On dated 30.09.2022 I got a whatsapp message from no.6202431307 saying my electricity connection would be disconnected by 9.30 p.m. on the same day for non-payment of bills, there was a number given in this message with no.8809160970 to call for paying dues I called this number and they told me to share debit card details for payment of penalty of Rs.2, I trusted them and shared the details after few minutes I found that instead of deducting Rs.2 my account was debited for a total of Rs.40000/- plus a transaction of Rs.2 was done fraudulently by the miscreants, I immediately called SBI helpline at 7.30 p.m. on 30.09.2022 to inform the above and got registered three complaints with no.136040061, 136039332 and 136038307, further I got my debit card UOI ID blocked, I was guided by the helpline personnel to register complaint on cyber crime portal as well, which I have got it done and please find enclosed the copy of the same.

My humple request to you is to refund my hard-earned pension money from which I run my house and punish the guilty as per rules, for this fraud I am not at all responsible and I have informed the bank within 90 minutes of my account getting debited from this fraud therefore bank must refund my money.”

 

15.           It has been proved from the Complaint Type: Report and Track Ex.C3 and application Ex.C8 dated 01.10.2022 that complainant has immediately informed the OP with regard to fraud transaction committed in his debit card but OP has failed to resolve his grievances. In this regard, we placed reliance upon the  judgment of Honorable Justice Mr. P.B. Suresh Kumar, wherein it has been held that the Bank is responsible for reimbursing the sum involved in the fraudulent ATM withdrawals. He dismissed all the defenses presented by the Bank and further concluded that:

"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."

 

16.           The above judgment highlighted several important aspects pertinent to banking, which have been consistently emphasized to various judicial authorities:

A.             In digital banking, the relationship between a agreement. remains that of a debtor and creditor, governed by their contractual banker and a customer

B.             The duty of care forms an integral, though not exhaustively defined, part of the contractual relationship between the banker and customer. This includes banks having the responsibility to exercise reasonable care in safeguarding customer unauthorized transactions. interests, particularly in preventing

C.             Banks are obligated to establish a secure electronic banking environment to prevent any forms of malicious activities that could lead to customer losses.

D.             The liability of the customer cannot be determined solely based on SMS alerts.

E.             Consequently, the Court upheld the decree, mandating the bank to compensate the customer, including interest and costs.

In the context of electronic banking, banks offering such services are obligated to establish a secure electronic banking environment to prevent any malicious activities that could harm their customers. This obligation arises from an implied term in the contracts between banks and their customers, requiring the banks to safeguard their customers' funds against unauthorized transactions.

In developed countries, specific statutes are in place to define the liabilities and provide enforcement mechanisms to protect bank customers. For instance, in the United States, the Electronic Funds Transfer Act governs such Situations, stipulating conditions under which a consumer is liable for unauthorized electronic fund transfers Similarly, in Canada, the Canadian Code of Practice for Consumer Debit Card Services protects consumers from liabilities arising from unauthorized card use.

In India, although there is no specific statutory provision, the Reserve Bank of India (RBI) exercises control over banks and has issued various directives. These directives instruct banks to implement systems and procedures ensuring the safety and security of electronics banking transactions, establish mechanisms for fraud detection and prevention, assess risks from unauthorized transactions, and take appropriate measures to mitigate these risks.

 

17.           Furthermore, in case titled as The State Bank of India Vs P:V.George wherein Hon’ble Kerala High Court in RSA 1087 of 2018 has held that even when the Customer does not respond to the SMS alerts related to a fraudulent withdrawal, the Bank cannot deny the liability on a fraudulent transaction, despite the limited liability circular of RBI.

9. Question (i) 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, RSA No. 1087 of 2018 in so far as it relates to the money deposited in the account of a customer, is that of debtor and creditor. The contractual relationship exists 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,  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 unauthorised 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."

 

18.           The point No.6 and 6 (A) of grievance redressal policy Ex.C14, is reproduced as under:-

6.     Liability of the customers in unauthorized credit card transactions:-   

       

SBI card is committed to provide superior and safe customer service experience to all its customers. In order to enable the above, SBI card has over the years invested in technology and has robust security systems and fraud detection and preventions mechanisms in place to ensure safe and secure experience to its customers.

The customer protection policy is designed to ensure customer protection relating to unauthorized transactions resulting in debits to customer’s card. The policy is based on the principles of transparency and fairness in the treatment of customers.

1. Zero liability of customer

Customer shall be entitled to full compensation of real loss in the event of contributory fraud/negligence/deficiency on the part of SBI Card (irrespective of whether or not the transaction is reported by the customer).

Customer has Zero Liability in all cases of third party breach where the deficiency lies neither with SBI card nor with the customer but lies elsewhere in the system and the customer notifies SBI card within three working days of receiving the communication from SBI Card regarding the unauthorized transaction.

19.           From the above said grievance redressal policy, it is proved that the customer has zero liability in all cases of third party breach subject to the condition that the customer notify SBI card within three working days of receiving the communication from SBI card regarding unauthorized transaction.

20.           Furthermore, the relevant portion of customer protection - limiting liability of customers in unauthorized electronic banking transactions issued by RBI vide DBR No.Leg.BC.78/09.07.005/2017-18 dated 06.06.2017, is reproduced as under:-

6 (b) Limited liability of a customer.

A customer shall be liable for the loss occurring due to unauthorized transactions in the following cases:

 

1. In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorized transaction to the bank. Any loss occurring after the reporting of the unauthorized transaction shall be borne by the bank.
2. In cases where the responsibility for the unauthorized electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on the part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited to the transaction value or the amount mentioned in Table 1 whichever is lower. 

21.           Furthermore, the Hon’ble Kerala High Court, in case  titled as State Bank of India Versus P.V. George decided on 09.01.2019 has held that banks are liable for every unauthorized online transaction. Liability on customers is limited to informing banks about the unauthorized transaction taken place. Therefore, it can easily be assumed that if any unauthorized transaction has taken place, the bank will be held accountable for such transaction provided that the bank has been informed about such transaction.

22.                  Keeping in view the ratio of the law laid down in the abovesaid judgments and the facts and circumstances of the present complaint, we are of the considered view that the act of the OP while not reversing the amount of Rs.40002/- amounts to deficiency in service and unfair trade practice.

23.           In view of the above discussion, we allow the present complaint and direct the OP to refund Rs.40,002/- (Rs. forty thousand two only) with interest @ prescribed in saving account from 30.09.2022 till its realization to the complainant We further direct the OP to pay Rs.20,000/- to the complainant on account of mental agony and harassment suffered by him and Rs.5500/- for the litigation expense. This order shall be complied within 45 days from the receipt of copy of this order. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated:18.07.2024                                                                    

                                                                  President,

                                                     District Consumer Disputes

                                                     Redressal Commission, Karnal.

 

 (Vineet Kaushik)       (Sarvjeet Kaur)

                          Member                          Member