BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 05^TH DAY OF SEPTEMBER 2023

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-
   1. To hold the OP guilty of deficiency of service and unfair trade practices as per the provisions of the consumer protection act 2019
   2. To direct the OP to pay Rs.2,34,927.57 which was debited amount with interest.
   3. To direct the OP to pay to the complainant a sum of Rs.5,00,000/- as damages/compensation towards mental and physical agony and hardship suffered by the complainant.
   4. For legal and incidental charges incurred by the complainant.
   5. Pass such other direction that this Hon’ble Commission deems fit to grant in the interest of justice and equity.

2. The case set up by the complainant in brief is as under:-

It is the case of the complainant that he is a valid customer of the OP for more than 20 years. He is having an account in the OP bank and they have also issued credit card facility to the complainant under card NO.4375 5136 1323 2009.  The complainant using the credit card but without his knowledge and information an amount of Rs.50,000/-, Rs.13,086.17 ps., Rs.43,531/-, Rs.31,449.50 ps., and Rs.45,652.50 ps., total amount of Rs.,1,87,719/- was debited with the complainant account. Immediately after knowing through SMS the same on 25.07.2022 the complainant had lodged the complaint to OP customer care through phone and online and blocked the credit card. After that the complainant lodged a complaint before the police inspector CEN Crime police station, south division, Bangalore, on the basis of the said complaint, the police have issued a notice to the OP on 26.07.2022 with regarding limiting of his liability in unauthorized transaction.  

3. It is further case of the complainant that he has raised the complaint with bank and they have not addressed the complaint with proper manner and not provided satisfactory reply to the complainant.  After that he has send a complaint to RBI ombudsmen, but the RBI ombudsmen has closed the complaint under clause 16(2)(a) of the Reserve Bank Integrated Ombudsmen Scheme 2021.
4. It is the main grievance of the complainant that he has not at all shared any OTP to anybody or through any SMS.  This complainant has taken all steps by raising the complaint before the bank, crime police station, though the complainant has not get any good service from the OP.  This complainant has sustained a loss of sum of Rs.1,87,719/- from his account.  Hence it is the duty of the OP to reconvey the amount to the complainant account without doing the same the OP have created a lien on the complainant’s SB account and debited an amount of Rs.2,34,927.57ps., on 27.01.2023 which clearly shows the deficiency of service rendered by the OP. The complainant has also issued legal notice on 07.02.2023. Inspite of service of notice, the OP neither issued any reply nor complied the terms of the notice. Hence the complainant has filed this complaint.
5. In response to the notice, OP appears and files their version. The OP have taken the contention that the complaint is misconceived, false and frivolous and the complainant has failed to set out any grounds for grant of the relief and it deserves to be dismissed.  
6. It is the specific case of the OP that after receipt of the complaint from the complainant on the disputed transaction this OP acted swiftly and blocked the further transaction in the credit card and investigated the mode of transaction.  During the internal investigation it is revealed that the five transactions are transactions wherein the customer has visited the respective merchant website and executed the transaction. This requires complainant’s credit card number, card verification value, expiry date on its credit card and OTP. These details are mandatory for effecting the said online transactions.
7. It is further case of the OP that the five transactions were effected on the credit card which had undergone a secured authentication, which is second level authentication specifically built in for online transaction done through merchant website.
8. As per the records of this OP the SMS alerts towards the five transactions and OTP were sent to the registered mobile number of the complainant and the OP has also disclosed the details of the transaction amount and time of OTP sent and SMS alert sent.
9. It is further case of the OP that the OTP is purely personal and privy to the customer /complainant only and would not be known to anybody unless compromised otherwise.  The card holder or the complainant is solely responsible for the security of his credit card along with CVV and should therefore take all possible steps towards ensuring the safe keeping thereof.  In the event of any disclosure or compromise of the above details to third parties then bank does not incur any financial liability arising out of the misuse thereof by unauthorized persons. The disputed five transaction in the credit card were allowed by the system as CVV, expiry date and OTP specific and not persons specific. As the transactions were qualified by information strictly personal to the complainant, this OP is precluded as per industry guidelines to repudiate the transactions with the merchant on the basis of complainant’s dispute.
10. The complaint preferred by the complainant before the Ombudsmen is also rejected holding that there is no deficiency in service. The credit card transaction will happen on real time basis and bank will not have any control over the merchant once the transactions are successful by using the valid card number.  The credit card transactions require two bit/factor authentication i.e., entering card details and OTP which is known only to the card holder/complainant.
11. It is further case of the OP that as a prudent banker has informed and notified all the transaction details to the complainant and also provided required support to the cyber-crime police to investigate the matter and also responded to the complaint.  Hence there is no any deficiency of service nor any negligence or unfair trade practice on the part of this OP.  Hence OP is not liable to pay the illegal claims made by the complainant. There is no cause of action to file this complaint and the complaint is liable to be dismissed. Therefore OP prayed for dismissal of the complaint.
12. The complainant has filed his affidavit evidence and relies on 15 documents.  Affidavit evidence of OP has been filed and relies on 05 documents.
13. Heard the arguments of advocate for both the parties.  Perused the written arguments filed by both the parties.
14. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

15. Our answers to the above points are as under:

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

16. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, affidavit evidence, written arguments and documents filed by both the parties.

17. The complainant is a valid customer of the OP for more than 20 years and he is running an account in the OP bank. The OP bank have also issued a credit card facility to the complainant under card No.4375 5136 1323 2009.  The complainant using the credit card but without his knowledge and information an amount of Rs.1,87,719/- was debited from his account.  Immediately after knowing through SMS on 25.07.2022 he has lodged a complaint to the customer care of the OP and online and blocked the credit card.  After that he has lodged a complaint before Police Inspector, CEN crime police station, South Division, Bangalore city.  The police have also issued notice to OP on 26.07.2022 with regarding to limiting of the liability in unauthorized transactions.

18. Even though the complainant has lodged complaint before the OP bank they have not properly addressed the grievance of the complainant.  After that the complainant has raised a complaint before the RBI Ombudsmen and the Ombudsmen has closed the complaint on 12.12.2022 under clause 16(20(a) of Reserve Bank Integrated Ombudsmen Scheme 2021.

19. The main grievance of the complainant is that he has not at all shared any OTP to anybody or through any SMS. The OP have taken the contention that the authority provide ample time to initiate card blocking by himself since all the SMS have mentioned the details for calling or card blocking and further alleged that due to negligence by the customer the amount was debited.

20. It is also the main grievance of the complainant that he has lost a sum of Rs.1,87,719/-.  It is the duty of the OP bank to reconvey the amount to the complainant account and without doing the same the OP bank have create a lien on the complainant savings account and debited an amount of Rs.2,34,927.57 ps., on 27.01.2023 which clearly shows the deficiency of service rendered by the OP.  In view of this the complainant has suffered a loss to the tune of Rs.2,34,927.57 ps., and also suffered mental agony, inconvenience and hardship.  The complainant has also got issued legal notice on 07.02.2023 and inspite of the service of the notice the OP neither credited the amount along with interest and panel charges nor issued any reply to the notice.

21. In support of his contention the complainant has filed his affidavit evidence, reiterated all the allegations made in the complaint and also relied on document No.1 to 15. Ex.P1 is the copy of the credit card of the complainant, Ex.P2 is the copy of the credit card bank E statement relating to July 2022, Ex.P3 is the copy of the notice given by the police to the OP, Ex.P4 to 7 are the copy of the emails, ex.P8 is the copy of the legal notice, ex.P9 and 10 are the postal receipts and copy of the post master complaint, Ex.P11 is the postal track consignment, ex.P12 is the email copy and Ex.P13 is the copy of the credit card E statement for the month of January 2022, Ex.P14 is the statement.

22. On the other hand the contention taken by the OP is that the complaint itself is not maintainable and the complainant has failed to establish the deficiency of service. The unauthorized withdrawal of the amount of the complainant are the transactions wherein the customer has visited the respective merchant website and executed the transactions which requires credit card number, card verification value, expiry date and also OTP. The five transactions were affected on the credit card which had undergone a secure authentication which is a second level authentication specifically built in online transactions done through merchant website.

23. The Ops have also furnished the details of the five transactions with the merchant transaction amount date and time of OTP message sent and date and time of transaction and SMS alert sent to the customer.  It is also the case of the OP that the OTP is purely personal and privy to the customer or complainant only and would not be known to anybody unless compromised otherwise. The card holder complainant is solely responsible for the security of his credit card along with CVV and should therefore take all possible steps towards ensuring the safe keeping thereof.  In the event of any disclosure or compromise of the transaction details to the third parties then bank does not incur any financial liability arising out of the misuse thereof by unauthorized persons.  They have further stated that the complaint filed by the complainant before the Ombudsmen was also rejected and the Ombudsmen is of the opinion that there is no deficiency of service on the part of the OP.  The OP have also relied on clause 16(2)(a) of the Reserve Bank Integrated Ombudsmen Scheme 2021.  It is further contention taken by the OP that in terms of the aforesaid RBI guidelines the limiting liability of customers in unauthorized electronic banking transactions customer is accountable in cases where the loss is due to the negligence by a customer. They have also enclosed the circular issued by the RBI.

24. It is further contention taken by the OP that the complainant’s credit card is active for online transaction from inception and all the transactions in the credit card were carried out with valid CVV, expiry date and OTP specific including the five transactions taken place in this complaint.  This OP bank has got right to lien u/s 171 of the Indian Contract Act.  In view of the investigation completed the temporary card was reversed or debited from aforementioned credit card on 02.08.2022, there is no deficiency of service on their part, nor there is any negligence or unfair trade practice and they are not liable for the legal claims made by the complainant.

25. On these back ground we have also gone through the final order passed by the District Commission, Ernakulam, in CC No.413/2019, between Salim P.M., -vs- State Bank of India.  The Hon’ble District Commission has allowed the complaint filed by the complainant for recovery of the amount in case of unauthorized withdrawals from his account. While passing the order the Hon’ble District Commission has made the following observations;

“The relation between a bank and its customers arises out of the contracts entered into between them.  Such contracts consists 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 customers, 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, they are implied terms of the contracts between banks and their customers.  Duties of care is an accepted implied terms of 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 authorized by him the bank is liable to the customer for the said loss.”

26. In this complaint the complainant has not at all shared any OTP to anybody or through any SMS. The complainant has sustained a loss of Rs.1,87,719/- and admittedly the unauthorized transaction took place in the midnight i.e., between 12.59 am., to 1.13 am., on 25.07.2022.  After that immediately the complainant has lodged the complaint and he has brought the unauthorized transaction to the notice of the OP bank. The OP bank has simply neglected their liability and fastened the liability on the customer/complainant alleging that the unauthorized transaction took place due to the negligence on the part of the complainant even though the complainant is very much aware of maintaining the credit card in his custody. In addition to this the OP have also taken the contention that the complaint is premature since the complaint lodged by the complaint before the Cyber-crime police station is still pending and it is not yet concluded. The complainant would have file this complaint after completion of the investigation. It is pertinent to note here that the OP bank after this incident even though it is their duty to reconvey the amount to the complainant account without doing the same they create a lien on the complainant S.B.Account and debited an amount of Rs.2,34,927.57 ps., on 27.01.2023, which clearly discloses the deficiency of service and negligence and escapism of their liability relating to the customer service. Under these circumstances, and in view of the above observation made by the Hon’ble District Commission of Ernakulam, in the similar complaint the complainant has clearly established the deficiency of service and negligence on the part of the OP.  The OP being a bank owes a duty to exercise reasonable care to protect the interest of the customer. It is the duty of the bank to take necessary steps to prevent unauthorized withdrawals from the account of its customers. The OP bank without taking proper care has simply fastened the liability on the complainant and also recover the amount of Rs.2,34,927.57ps., from the complainant S.B.account without returning the amount lost by the complainant in the unauthorized transaction. Hence we answer point No.1 in affirmative and point No.2 partly in affirmative.

27. Point No.3:- In view the discussion referred above we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OP is directed to pay a sum of Rs.2,34,927.57 ps., which was debited from the S.B.account of the complainant with interest at 10% p.a., from 27.01.2023 till realization.
3. The OP is further directed to pay a compensation of Rs.50,000/- to the complainant with litigation expenses of Rs.10,000/- to the complainant.
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.2,34,927.57 ps., till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 05^th day of SEPTEMBER, 2023)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1;