Date of Filing      : 24.11.2020

                                                                                                                 Date of Disposal: 21.10.2022

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

 

 BEFORE  TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law)                  .…. PRESIDENT

                  THIRU.J.JAYASHANKAR, B.A,B.L.,                                                              .....MEMBER-I

                 THIRU.P.MURUGAN,.MCom., ICWA(Inter)., B.L.,                                    ....MEMBER-II

  

CC. No.32/2020

THIS FRIDAY, THE 21st DAY OF OCTOBER 2022

 

Mrs.U.Lakshmi,

Plot No.33,43/267,Kalamegam Street,

Rajajipuram,

Thiruvallur Taluk & District.                                                          .........Complainant. 

                                                                          //Vs//

1.The Manager,

    ICICI Bank, Thiruvallur Branch,

   4/120, J.N.Road, Thiruvallur Taluk & District.

 

2.The Manager,

    Region Office, ICICI Bank Plot No.24,

    Abihant Building, South Phase, Block No.1,

   1st Floor, Ambattur Industrial Estate, Chennai-600 058.

 

3.The Manager,

   Bharti Airtel Limited, No.215, New No.163,

   Mount Poonamallee High Road,

   Annappanthangal, Iyyapan,Chennai -56.

 

4.The Manager, Bharti Airtel Limited,

    No.42/147 & 44/146, Santhome High Road,

    Mylapore, Chennai -600 004.

 

5.The Manager Operations,

    ICICI Bank Limited,

    ICICI Bank Tower, C-Wing,

   Autumn Estate, Near Chandivali studio,

   Chandivali Farm Road,

   Opp Mhada Colony Chandivalli,

   Andheri (east) Mumbai 400 072.                                               ...Opposite parties.

 

Counsel for the complainant                               :   Mr.S.Sushilkumar, Advocate.

Counsel for the opposite parties 1, 2& 5          :   Mr.E.Anandan., Advocate

Counsel for the opposite parties 3&4                :  Exparte

                         

This complaint is coming before us on various dates and finally on 17.10.2022 in the presence of Mr.S.Sushilkumar Advocate,  counsel for the complainant and Mr.E.Anandan Advocate, counsel for the opposite parties 1, 2 & 3 and upon perusing the documents and evidences of both sides, this Commission delivered the following: 

ORDER

PRONOUNCED BY TMT. Dr.S.M. LATHA MAHESWARI,   PRESIDENT.

 

This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service in the bank service rendered by the opposite parties with regard to the fraudulent transactions in the complainant’s account along with a prayer to direct the opposite parties  to pay a sum of Rs.3,79,011/- with 6% interest from the date of lodging complaint before 1st opposite party, to pay a sum of Rs.5,00,000/- towards compensation for the mental agony, hardship and deficiency in service and to pay a sum of Rs.10,000/- towards cost of the proceedings to the complainant and to pay a sum of Rs.20,000/- towards Advocate fees to the complainant. 

Summary of facts culminating into complaint:-

 

It is the case of the complainant that she was having Saving Account with the 1st opposite party vide account No.00010154154 and she had deposited her hard earned money in  the Bank account which also had internet facility.  A sum of Rs.10,00,000/- was credited to the complainant’s account from her husband‘s account and immediately a person from ICICI called her for an enquiry for investment but the complainant refused for the same.  Later she made a transaction on 30.08.2019 to the Sub Registrar Office for a sum of Rs.30.,650/- and the same was the last transaction she made from the Savings bank account and after that no transaction was done by the complainant till 03.09.2019.  On 31.08.2019 the complainant did not receive any incoming message from the 1st opposite party but on 01.09.2019 when complainant logged in to her account by way of internet banking  she was shocked to see that a sum of Rs.3,79,510/- was found missing from her account.  The complainant never accessed internet banking and the beneficiaries are unknown to the complainant and she made no transactions.  Immediately complainant lodged a complaint with the ICICI Customer Service Support and received a reference number SR.632163836 and she also made a complaint to the police through online portal and received the acknowledgement.  Further the complainant also visited the Thiruvallur Police Station and gave a complaint on 01.09.2019 and CSR No.700/2019 was also obtained.  As the opposite parties 1 & 2 did not function on Sunday and 02.09.2019 being a public holiday on account of Vinayaka Charturti, complainant could not give physical complaint immediately.  But on 03.09.2019 the complainant appeared before the 1st opposite party and made a complaint, who gave a Card Member dispute form and asked complainant to file the same. The complainant duly filled the same and mentioned that a sum of Rs.3,79,510/- was debited through 5 transactions.  It was submitted that the complainant never made any transaction through MMT and NEFT and she also never authorized or added any beneficiary.  The 1st opposite party thereafter did not contact her. As per the circular of RBI dated 06.07.2017 the complainant had zero liability of a customer in unauthorized electronic banking transaction. After several efforts taken by the complainant the 1st and 2nd opposite party informed that her complaint has been transferred to the Cyber Cell Department and also told her that without entering OTP sent to the registered mobile No.9566578366, the beneficiary could not be added and no transactions could have been made and it was also informed that the opposite party had intimated the same to the AIRTEL service provider.  The complainant also visited the 3rd and 4th opposite party and gave a complaint narrating the facts.   The police found that the complainant’s account had been hacked by three persons from Bangalore and they were arrested on the same day and the same was reported in the Tamil daily news paper dated 01.10.2019.  The complainant also communicated with RBI department on 30.10.2019 about the fund hacking and the police department had clearly found that the transactions were fraud which had occurred by 3rd party through the website of 1st and 2nd opposite party.  Till the date of filing the complaint, the 1st and 2nd opposite parties had not refunded the amount debited by the fraudulent transactions.  It was submitted that for not maintaining internet bank with proper security and firewall the bank should be held negligent and deficiency in service. Thus the present complaint was filed aggrieved by the act of the opposite parties by the complainant for the following reliefs as mentioned below;

 

 To direct the opposite parties to pay a sum of Rs.3,79,011/- with 6% interest from the date of lodging complaint before 1st opposite party;

 To pay a sum of Rs.5,00,000/- towards compensation for the mental agony, hardship and deficiency in service;

 To pay a sum of Rs.10,000/- towards cost of the proceedings to the complainant;

 To pay a sum of Rs.20,000/- towards Advocate fees to the complainant.  

Crux of the defence put forth by the opposite parties 1,2 & 5:-

The opposite party 1, 2 & 5 jointly filed written version disputing the complaint allegations contending that they have preliminary objection as to maintainability of the complaint.  It was submitted that the complaint discloses no cause of action against them and there was no deficiency in service on the part of the opposite parties.  It was submitted that there are certain guidelines, information, tips and awareness given to the customers to keep their account safe. Cyber crime tells that do not click on suspicious links or download apps which promises full time and part time jobs.  It was also advised that discloser of address, user id, passwords, phone number to third parties would lead to know the mobile number and bank account number to third parties and there would be chance of debit of money from the Bank account.   Though the police had found the fraud committed by the third person with regard to debit of money from the complainant’s account till today they had not disclosed the details of recovery of money from the accused person. When the matter was pending the complainant had directly filed the complaint which is not maintainable.  The RBI had already given the guidelines that if there was any default or mistake committed by the complainant they are not eligible to get any relief from the bank.  Further it was submitted that there is no deficiency in service on their part.  It was submitted that the opposite parties always value customer relationship and extend co-operation in helping all aspects. Further in the legal notice sent by the complainant it was mentioned that a sum of Rs.2,00,000/- was credited to the complainant’s account on 30.08.2019 from her husband’s account, but in the complaint it was mentioned that a sum of Rs.10,00,000/- was credited to the complainant’s account on 28.08.2019.  It was further submitted that sharing the OTP number, discloser of address, user ID, passwords, phone number to third parties would lead to know the mobile number and bank account number making chances for debiting money from the complainant’s bank account and the same shall be at the risk and responsibility of the account holder.  Further the recovery of money was not made known to the opposite parties by the police though they have arrested the accused person.  Thus submitting that there was no deficiency in service on their part with regard to the fraudulent transactions.  The opposite parties 1, 2 & 5 sought for the dismissal of the complaint. 

The complainant filed proof affidavit and documents Ex.A1 to Ex.A19 were marked on their side.  On the side of opposite parties 1, 2 & 5 proof affidavit was filed and documents Ex.B1 & Ex.B2 were filed by them.  Despite service of notice the opposite parties 3 & 4 did not appear before this commission hence they were called absent and were set exparte on 22.01.2021.

Point for consideration:-

Whether the opposite parties had committed deficiency in service in the commission of fraudulent transactions with respect to the Saving Bank account of the complainant as alleged by him?

If so to what relief the complainant is entitled?

Point No.1:-

On the side of the complainant the following documents were filed in support of the complaint allegations;

Complaint issued by the complainant to Tamil Nadu Police Department through online dated 01.09.2019 was marked as Ex.A1;

Written complaint given by the complainant to the Town Police Station dated 01.09.2019 was marked as Ex.A2;

CSR.No.700/2019 issued by Town Police Station to the complainant dated 01.09.2019 was marked as Ex.A3;

Card Member Dispute Form issued by the complainant to 5th opposite party through 1st opposite party dated 03.09.2019 was marked as Ex.A4;

Screenshot of the transaction taken on 01.09.2019 was marked as Ex.A5;

Online complaint acknowledgement issued by ICICI bank to complainant dated 01.09.2019 was marked as Ex.A6;

 

Written letter issued by the complainant to the 3rd opposite party dated 10.09.2019 was marked as Ex.A7;

Newspaper cutting (Thinakaran) dated 01.10.2019 was marked as Ex.A8;

Newspaper cutting (Dina Thanthi) dated 01.10.2019 was marked as Ex.A9;

Notice issued under section 91 of CRPC by Police to 1st opposite party dated 12.09.2019 was marked as Ex.A10;

Complaint issued to RBI by complainant dated 30.10.2019 was marked as Ex.A11;

RBI notification dated 06.07.2017 was marked as Ex.A12;

Notice issued by the complainant’s counsel to the opposite parties dated 06.07.2020 was marked as Ex.A13;

Acknowledgment cards were marked as Ex.A14 to Ex.A17 for proof of delivery;

Cover returned from the 5th opposite party with reason refused was marked as Ex.A18;

Acknowledgement card for proof of deliver to the RBI was marked as Ex.A19;

On the side of opposite parties 1, 2 & 5 the following documents were filed in support of their defence;

Copy of letter dated 01.09.2019 was marked as Ex.B1;

Copy of Card Member Dispute Form and Transaction Remarks was marked as Ex.B2;

  Heard the oral arguments of both parties and perused the written arguments and evidences produced by them.  The crux of the arguments advanced by the complainant is that for the fraudulent transaction that occurred with respect to complainant’s account a sum of Rs.3,79,510/- was debited through five transactions on 31.08.2019 and that the opposite parties should be held liable as per the circular of RBI dated 06.07.2017 wherein it has been provided that the burden of proving customer liability in case of unauthorized electronic banking transactions is on the bank.  In the present case the fraudulent transactions has been immediately informed to the bank vide reference No.SR.632163836 and also proper information given and complaint was made to the police and CSR No.700/2019 was obtained.  The complainant argued that the opposite parties should refund the fraudently debited amount with interest to the complainant.  It was further argued that without entering OTP activation, from the registered mobile, those beneficiaries could not be added and also it is the duty of opposite parties to safeguard the amount deposited by their customers.  The complainant submitted that they never received any text message with OTP and also not had received any message with regard to debit of money and only on 01.09.2019 the complainant found that a sum of Rs.3,79,510/- was missing from her account.  Thus the complainant argued that it was the duty of the opposite parties to maintain internet banking facility with proper security and firewall and thus sought for the complaint to be allowed. 

On the other hand, the sum and substance of the defense raised by the opposite parties 1, 2 & 5 is that the complaint itself is not maintainable as devoid of cause of action and that the complainant is not entitled for refund of the money as without the knowledge of the complainant the money could not have been debited and somebody would have used the registered PIN number for the transactions.  Further they argued that they were always diligent with regard to the bank account.  Further it was argued by them that the fund transactions had been made only by the complainant as before initiating the fund transfer, the payee or beneficiary needs to be added using beneficiary account number and only by way of OTP which is sent to the registered mobile number. There is also a cooling period of 30 minutes post beneficiary activation.  The customer can transfer the fund post validation of confidential details i.e. user ID/passwords/grid values/OTP which is known only to the customer.  Thus, it was stated that the multiple layers of authentication has been created by the bank to ensure that the account of the customer is operated in a very secure and safe manner and with usage of confidential details which are only known to the customer/complainant.  It was also submitted that during the police enquiry the complainant had admitted that she had made some transaction in a browsing center.  Thus submitting that the alleged fraud is a subject matter of investigation and when the police had started the investigation, the present complaint involves determination of complicated question of fact and law which could not be decided by the Consumer Commission, the counsel appearing for the opposite parties 1, 2 & 5 sought for the dismissal of the complaint.

On appreciation of the evidences and pleadings we are of the view that the present complaint has to be allowed.  The complainant had stated that immediately coming to know about the debit of Rs.3,79,510/-  she had informed the opposite parties as well as the Police Authorities enabling them to start investigation and thus we could not find any lethargic attitude on the part of the complainant.  Further the complainant had relied upon the RBI circular dated 06.07.2017 wherein it has been specifically mentioned about the procedure with respect to the unauthorized transactions.  It has been provided as follows;

“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.  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.  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.”

Further with regard to the liability of the bank and the customer it has been provided that under what circumstances the customer shall have zero liabilities. In clause 6;

Limited Liability of a Customer

(a)Zero Liability of a Customer

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

Contributory fraud/negligence/deficiency in 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 regard the unauthorized transaction.

(b) Limited Liability of a Customer:

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

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.

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, which is lower.

Table 1

Maximum Liability of a Customer under paragraph 7 (ii)

Type of Account. Maximum liability

. BSBD Accounts.        5,000/-

.  All other SB accounts.

. Pre-paid Payment instruments and Gift Cards.

. Current/Cash Credit/Overdraft Accounts of MSMEs.

. Current accounts/Cash Credit/Overdraft Accounts of individuals with annual average balance (during 365 days preceding the incidence of fraud)/limit up to Rs.25 lakh.

.  Credit cards with limit up to Rs.5 lakh.

 

 

  

        10,000/-

. All other Current/Cash Credit/Overdraft Accounts.

. Credit cards with limit above Rs.5 lakh.         25,000/-

 

Further, if the delay in reporting is beyond seven working days, the customer liability shall be determined as per the bank’s Board approved policy.  Bank shall provide the details of their policy with regard to customers’ liability formulated in pursuance of these directions at the time of opening the accounts.  Bank shall also display heir approved policy in public domain for wider dissemination.  The existing customers must also be individually informed about the bank’s policy.”

Therefore as per the circular under clause 6(2) it is specifically mentioned that the zero liability of customers arises when the third party breach where the deficiency lies neither with the bank nor with the customer and the customers notifies the bank within three working days of receiving the communication from the bank regarding the unauthorized transaction.  In the present case the alleged unauthorized transaction had occurred on 01.09.2019 and on the same day the complainant had informed the police and the opposite party’s customer care and only due to the public holiday had approached the opposite party in person on 03.09.2019 and filled the card member dispute form which has been marked as Ex.A4.  Thus it is seen that immediately the complainant had intimated the opposite party.  Under clause 12 of the RBI circular it has been clearly mentioned that the burden of proof with regard to the customer liability in case of unauthorized electronic banking transaction shall lies on the bank. In the present case the opposite party had come on with a defence that the complainant is responsible for the fraudulent transactions and that somebody would have operated the system by revealing OTP. The said defence is without any evidence and thus they failed to prove that the complainant herself is responsible for the fraudulent transaction and only due to the negligence of the complainant that she made the payment carelessly or send OTP enabling the hackers to debit the money from her account.  When it is the specific case of the complainant that she did not receive any OTP or SMS messages, and when no default or mistake committed by the complainant/customer was proved by the bank as per the RBI circular.  We hold that the complainant is eligible for the refund of the amount as per clause 9 wherein it has been clearly mentioned that “On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorized electronic transaction to the customer’s account within 10 working days from the date of such notification by the customer (without waiting for the settlement of insurance claim, if any)”.  Further as per clause 10 of the RBI circular when the bank is unable to resolve the complaint or determine the customer liability, if any within 90 days the banks are liable as prescribed under paragraphs 6 to 9 and the amount is to be paid to the customer.  Thus in the present case when the default or mistake on the part of the complainant was not proved by the opposite party and also when the police authorities had found that some third party hackers had committed the fraud and when the complaint could not be resolved within 90 days, we hold that the bank/ opposite party had failed to provide sufficient protection for the amount in the account of the customers and should be held liable in accordance with the RBI circular dated 06.07.2017.  Thus we answer the point accordingly holding that the opposite parties 1, 2 & 5 had committed deficiency in service with regard to the fraudulent transactions that took place in complainant’s Saving Bank Account.

Point No.2:-

With regard to the relief to be granted we find that as per clause 9 it is seen that in case of zero liability of the customer the amount involved in the unauthorized electronic transaction shall be credited to the customer‘s account within 10 days from the date of such notification by the customer without waiting for settlement of insurance claim, if any.  In such circumstances we direct the opposite parties 1, 2 & 5 to pay a sum of Rs.3,79,011/- with 6% interest from the alleged date of complaint.  Further for the mental agony suffered by the complainant we award Rs.25,000/- as compensation which we thought would be appropriate in the facts and circumstances.  We also award Rs.5,000/- towards cost of litigation to the complainant.  Thus we answer the point accordingly. 

In the result, the complaint is dismissed against the opposite parties 3& 4 and partly allowed against the opposite parties 1,2 & 5 directing them

a) to pay a sum of Rs.3,79,011/- (Rupees three lakhs seventy nine thousand  and leaven only) to the complainant with 6% interest from 01.09.2020 till realization; 

b) to pay a sum of Rs.25,000/- (Rupees twenty five thousand only) towards compensation for the mental agony caused to the complainant

c)  to pay a sum of Rs.5,000/- (Rupees five thousand only) towards litigation expenses to the complainant. 

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 21st day of November 2022.

 

  Sd/-                                                  Sd/-                                                           Sd/-

MEMBER-II                                  MEMBER-I                                               PRESIDENT

 

 

List of document filed by the complainant:-

 

Ex.A1 01.09.2019 Complaint given by complainant to Tamil Nadu Police Department through online. Xerox

Ex.A2 01.09.2019 Written complaint given to the Town Police Station by the complainant. Xerox

Ex.A3 01.09.2019 CSR.No.700/2019 issued by Town Police Station. Xerox

Ex.A4 03.09.2019 Card Member Dispute Form issued by complainant to 5th opposite party through 1st opposite party. Xerox

Ex.A5 ............. Screenshot of the transaction taken on 01.09.2019. Xerox

Ex.A6 01.09.2019 Online complaint acknowledgement issued by ICICI Bank to complainant. Xerox

Ex.A7 10.09.2019 Letter issued by the complainant to the 3rd opposite party. Xerox

Ex.A8 01.10.2019 Newspaper cutting (Thinakaran). Xerox

Ex.A9 01.10.2019 Newspaper cutting (Dina Thanthi). Xerox

Ex.A10 12.09.2019 Notice issued under section 91 of CRPC by police to 1st opposite party. Xerox

Ex.A11 31.10.2019 Complaint issued to RBI by complainant. Xerox

Ex.A12 06.07.2017 RBI Notification. Xerox

Ex.A13 06.07.2020 Notice to opposite parties by the complainant’s counsel. Xerox

Ex.A14 ............. Acknowledgment card for proof of delivery to the 1st opposite party. original

Ex.A15 ............. Acknowledgment card for proof of delivery to the 2nd opposite party original

Ex.A16 ............. Acknowledgment card for proof of delivery to the 3rd  opposite party original

Ex.A17 ............. Acknowledgment card for proof of delivery to the 4th opposite party original

Ex.A18 ............ Covered returned from the 5th opposite party for the reason refused. original

Ex.A19 ............. Acknowledgement card of RBI. original

 

 

List of documents filed by the opposite parties 1, 2 & 5:-

 

Ex.B1 01.09.2019 Copy of Bank Letter.

Ex.B2 03.09.2019 Coy of Card Memebr Dispute Form and Transaction Remarks.

 

 

   Sd/-                                                  Sd/-                                                           Sd/-

MEMBER-II                                  MEMBER-I                                               PRESIDENT