IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 17th day of January, 2022
Present: Sri. Manulal V.S. President
Smt. Bindhu R, Member
Sri. K.M. Anto, Member
C CNo. 57/2020 (filed on 17-03-2020)
Petitioner : Manish Jose,
S/o. P.V. Jose,
PeediyeckalKalapurackal,
Kanjirapara P.O.
Kangazha.
(Adv. Sebastian James Palakunnel)
Vs.
Opposite Parties : 1) The Manager,
Canara bank,
PulickalKavala branch,
PulickaKavala,
Vazhoor – 686 515.
(Adv. Vinu Jacob Mathew)
2) Regional manager,
Canara Bank,
2nd Floor,Payyil Kohinoor Arcade,
M.C. Road, Samkranthi,
Perumbaikadu P.O.
Kottayam – 686 028.
O R D E R
Sri. Manulal V.S. President
Case of the complainant is as follows:
The complainant is an account holder of the first opposite party bank with account number 3500 101000 896. The complainant had availed ATM facility also from the first respondent bank and was using the ATM card bearing no. 470939354895. The complainant is also having account with State bank of India,CollectorateBranch,Kottayam with account no.672404401614 and using ATM card bearing no.451150254863640.
On 27-9-2018 by about 10.15am on wards the complainant have received some messages on his mobile phone bearing no. 9447227498 regarding some fraudulent transactions and from it was revealed that an amount of Rs.99,990 were withdrawn from the complainant’s account. Complainant immediately contacted the first opposite party bank and Manager of the bank blocked the ATM card, On enquiry it is revealed that the amount was siphoned off from the account of complainant through PAYTM. On the very same day the complainant himself had send message to block the account and as per instructions from the first opposite party, the complainant had filed a complaint before the Pallickathodu Police station, The police authorities had registered a crime under Section 420 of IPC and after enquiry police had submitted the charge sheet before the JFMC court Kanjirappallly.
It is averred in the complaint that the complainant had neither used his ATM card nor he had given card to anybody else on that day. The amount had been withdrawn by somebody without the consent and concurrence of the complainant. According to the complainant there is deliberate latches from the side of the bank to secure the money which was deposited in the bank. Due to the above said transaction the complainant had suffered very huge financial loss, hardships and mental agony and the opposite parties are liable to compensate the same on the account deficiency in service from their side. Though the lawyers notice was received by the opposite parties there was no response from the side of the opposite parties. Hence this complaint filed praying for an order to direct the opposite parties to pay Rs. 99,990 together with interest and for compensation.
Upon notice opposite parties appeared before the commission and first opposite party filed the version contenting as follows:
Opposite party admitted that the complainant is holding an account with them and an ATM card was also issued to him, It is submitted in the version that on receipt of complaint on 27-9-2018 the first opposite party blocked the ATM card and complaint has been forwarded to the Card Dispute Management Section of the bank , digital Banking Service Wing Bangalore for enquiry. On enquiry it was revealed that all the transactions are Secured DomesticOnlineTransactions and the transactions were completed with full card information which includes the card number, card expiry date and CVV2. Moreover OTP generated was sent to the phone number connected with the card and the same was also used to complete the transaction, It is averred in the version that the secured data provided personally to the complainant that has been used to withdraw the alleged amount. Without authenticating the card details the one time pass word cannot be generated and the so generated pass word is provided only to the registered mobile number associated with account. The online transaction has been completed as per RBI mandates and as per VISA International Dispute Regulations the bank does not have the charge back rights in such case. The disputed transaction amount will not be reimbursed to the bank. The opposite party merely facilitate a platform for online transaction. Visa cards are doing all necessary technical acts connected with cards and they are also a necessary party to the complaint. All transaction are initiated and effectuated by the account holder, if the alleged withdrawal occurred without the authentication from the complainant then the necessary party would be the one who misused the secured data provided personally to the complainant. If any fraud has occurred complainant has the option to trace out the accused through the help ofpolice. The opposite party have taken all precautions for protecting the interest and security of the complainant. The opposite party neither adopted deficiency in service nor unfair trade practice to get unjust enrichment.
Evidence of this case consists of proof affidavit of complainant and exhibits A1 to A6 from his side and proof affidavit of the first opposite party and exhibits B1 to B3 .
On evaluation of complaint,version and evidence on record we would like to consider the following points.
- Whether the complainant had succeed to prove deficiency in service or unfair trade practice from the part of the opposite party?
- If so what are the reliefs?
For the sake of convenience we would like to consider the point number 1 and 2 together.
Point No.1 and 2
Admittedly the complainant is an account holder of the first opposite party bank with account number 3500 101000 896 and the first opposite party bank issued ATM card bearing no. 470939354895 to the complainant. According to the complainant on 27-9-2018 by about 10.15am onwards he received some messages on his mobile phone regarding some fraudulent transactions and from it was revealed that an amount of Rs.99,990 were withdrawn from his account. The complainant immediately contacted the first opposite party bank and lodged exhibit A1 complaint. On enquiry it is revealed that the amount was siphoned off from the account of complainant through PAYTM. It is also admitted by the first opposite party that on receipt of complaint on 27-9-2018 the first opposite party blocked the ATM card and a complaint has been forwarded to the Card Dispute Management Section of the bank , digital Banking Service Wing Bangalore for enquiry .It is submitted by the opposite party that the transactions are Secured Domestic Online Transactions and the transactions were completed with full card information which includes the card number, card expiry date and CVV2. According to the opposite party an OTP generated was sent to the phone number connected with the card and the same was also used to complete the transaction. It is also contended that the secured data provided personally to the complainant that has been used to withdraw the amount. Exhibit B1 is the reply by the Carddispute Management section to the opposite party. On perusal of exhibit B1 we can see that it is stated that they verified with VISA on line and all the transactions were secured domestic transaction and completed as per RBI mandate.
In the present case, the Complainant stated that the credit card was in his possession when the disputed transactions had taken place. He further stated that the transactions had taken place remotely, several miles away from his actual location and therefore, the reason for the fraudulent transactions must be forgery/hacking of the card or some other technical and/or security lapse in the electronic banking system through which the transactions had taken place. The Bank has merely stated that the it is due to the Card Holder's negligence that amount was withdrawn. In today's digital age, the possibility that the credit card was hacked or forged cannot be ruled out. In the absence of any evidence that the amount has been withdrawn with the authentication of the complainant , we hold the Bank liable for the unauthorized transactions.
National Consumer Disputes Redressal Commission in HDFC Bank Limited vsJesna Jose on 21 December, 2020(REVISION PETITION NO. 3333 OF 2013) held that
“11. Furthermore, the Petitioner-Bank cannot rely on arbitrary terms and conditions to wriggle out of its liability towards customers and any such terms and conditions must be in conformity with the directions issued by the RBI which is responsible for safekeeping of the Banking Systems and maintaining checks and balances in the same. As per the RBI circular, zero liability will rest with the customer, where the deficiency lies in the banking system.”
The aforesaid RBI circular as well decision of National Commission in Punjab National Bank and Anr. V Leader Valves II (2020) CPJ 92 (NC), are both squarely applicable in the present matter.
In Punjab National Bank and Anr. V Leader Valves II (2020) CPJ 92 (NC), National Consumer Disputes Redressal Commission 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, 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."
Reference is also drawn to circular bearing No. DBR.No.Leg.BC.78/09.07.005/2017-18 dated 6th July 2017, issued by the Reserve Bank of India to all commercial banks, wherein it is stated as under: -
"6. 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."
The basic principle is one must be made to pay for negligence when it has caused deficiency in service and loss to consumer actionable under the Consumer Protection Act, 1986. It is argued that complainant himself is negligent but this submissions by the opposite party is not acceptable because in cases of internet transfers unless alerted prior to or at the time of internet transfers we cannot impute any blame to the consumer, who was in darkness as to withdrawals by unknown persons by mode of internet transfers.
In the light of above discussion we are of the opinion that the 1stopposite party is deficient in service and liable to compensate the loss sustained by the complainant. Therefore we allow the complaint and pass the following order.
- We hereby direct the first opposite party to pay Rs. 99,990/- to the complaint with 6% from 17-3-2020ie the date on which the complaint is filed till realization.
- We hereby direct the first opposite party to pay Rs. 20,000/- as compensation for the mental agony caused to him due to the deficiency in service from the part of the opposite party.
Order shall be complied within 30 days from the receipt of this order failing which the compensation amount will carry further interest of 6% from the date of this order till realization.
Pronounced in the Open Commission on this the 17th day of January, 2022
Sri. Manulal V.S. President Sd/-
Smt. Bindhu R, Member Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 –Copy of petition filed before The Station House Office, Pallickathodu Police
Station by petitioner.
A2 – Copy of FIR No.753/18 registered byPallickathode Police Station
A3 series – Copy of legal notices dtd.13-11-2019 (2 nos.)
A4series – Copy of reminder letters to the opposite parties dtd.18-11-19 (2 nos.)
A5series – Postal receipts (4 nos)
A6 series – Postal acknowledgement cards (4 nos.)
Exhibits marked from the side of opposite party
B1 – Copy of E-mal from Canara Bank, Card Dispute Management Section
B2 – Reply notice dtd.19-11-2019 from 1st opposite party
B3 – Copy of letter dtd.04-10-18 by 1st opposite party to the Sub Inspector of
Police, Pallicakthode Police Station.
By Order
Senior Superintendent
