BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,

ERNAKULAM.

Date of filing : 24/06/2013

Date of Order : 28/04/2015

Present :-

Shri. Cherian. K. Kuriakose, President.

Shri. Sheen Jose, Member.

Smt. V.K. Beena Kumari, Member.

C.C. No. 457/2013

Between

And

O R D E R

Cherian. K. Kuriakose, President.

1. The complainant is Lieutenant Sushant Katiyar working as Lieutenant in Indian navy in INS Venduruthy in Naval Base, Kochi in Kerala. The complainant opened a Saving Bank Account in his name in the State Bank of India, Naval Base Branch at Kochi during 2010 and the Savings Bank Account No. is 20057241694. On opening the account, the bank had also issued an international debit card to the complainant for facilitating ATM transaction. The debit card was carrying the No. 511878100967. Ext. A1 is the photocopy of the debit card. The complainant left Kochi to Mumbai on 01-12-2011 on his official duty. The complainant reached Vishakhapattanam on 19-12-2011 from Mumbai and he was in INS Rana at Vishakhapattanam till 23-12-2011. He had also attended the Midshipmen Board Examination on 21-12-2011 and on 22-12-2011 held on board INS Rajput at Vizag. The duty certificate is marked in the case as Ext. A2. The complainant withdrew an amount of Rs. 12,968/- by using the ATM Card on 14-12-2011 and his account balance on that day after the transaction was Rs. 2,72,222/-. The incident which led to the complaint was that when the complainant withdrew Rs. 4,000/- from his account in Visakhapattanam on 23-12-2011, he found that Rs. 65,758.77 was lost from his account on 21-12-2011. His account balance was reduced to Rs. 2,06,463/- from the existed balance of Rs. 2,72,222/-. The complainant did not make any such withdrawal on 21-12-2011. Therefore immediately, the complainant telephoned M/s. State Bank of India, Naval Base branch and informed that there was a mistake crept in his S.B. Account on 21-12-2011. On enquiry, the 3^rd opposite party bank had intimated the complainant that the withdrawal of Rs. 65,758.77 was done at Taipei in Taiwan. Such an irregularity had happened only due to the mistake and loopholes in the accounting procedures adopted by the opposite party. The opposite parties are responsible for protecting the hard earned money of their customers and they cannot simply wash off their hands by transferring the loss to the shoulders of the complainant. The loss happened to the complainant occurred due to the deficiency in service on the part of the opposite party bank. Taiwan is a country which is far away from India and such a withdrawal happened only due to the mistake of the opposite party bank and the bank is fully responsible for such a deficiency in service on their side which led to a fraudulent transaction. The complainant is a responsible officer in Indian Navy and he had no possibility to withdraw the amount from Thaipei in Taiwan. The signature of the person in the paying slip, who made the fraudulent transaction was entirely different from the signature of the complainant. If the opposite parties or their agents were vigilant and had verified the signature difference such a fraudulent transaction could have been averted. The principle of Vicarious liability is applicable to the facts of this case, the opposite parties are jointly and severally liable for their acts committed by their agents. Ext. A4 is the paying slip in the fraudulent transaction done in the name of China Trust Authorization. The complainant did not visit any foreign county during his life time and as per Ext. A5 copy of the passport no Visa is seen stamped in it by any other county. On 24-12-2011, the complainant made a complaint before the Colaba Police Station in Mumbai informing the fraudulent transaction. He also went to the Cyber Crime Police Cell at Bandra Kurla Complex in Mumbai on the same day and had registered a complaint there. The complainant had also forwarded a complaint to M/s. State Bank of India, Naval Base branch office through e-mail on 24-12-2011. Mails were sent to the Assistant Police Inspector, Cyber Police Station, Mumbai and to the Manager, State Bank of India, Naval Base branch, Kochi. It is evident by Ext. A6. Ext. A7 is a copy of e-mail from card operations of S.B.I., Naval Base to the State Bank of India with a copy to one Mr. Prakash, State Bank of Travancore that shows that after 45 days of the mandatory locking period if there was no representation from the acquiring bank, the amount would be credited to the customer. However, no amount was credited to the account of the complainant so far. According to the complainant, he lost Rs. 66,758.77 on 21-12-2011, due to the deficiency in service on the part of the 3^rd opposite party and it has not been redressed for the last one year, and therefore, the complainant was constrained to file this complaint before this Forum for redressal of his grievances. The complainant had also filed a complaint before the Banking Ombudsman as per Ext. A11 and the Ombudsman closed the complaint with liberty to approach any other Forum for the redressal of his grievances. Ext. A12 is the order of the Ombudsman. The complainant therefore, prays for a direction to the opposite parties to return the amount of Rs. 65,758.77, which was lost from the complainant's account on 21-12-2011 with interest thereon. The complainant also claimed an amount of Rs. 1,00,000/- towards compensation and Rs. 10,000/- towards cost of the proceedings.

2. Notices were issued to all the opposite parties. All of them appears and filed their written statement jointly contending inter-alia as follows :-

The complaint framed is not maintainable. There was no deficiency in service as defined under the Consumer Protection Act 1986 in this case. The complainant has no cause of action. The complainant was not using the ATM card with due care and caution. The opposite parties suspects that the complainant had transferred the ATM card to somebody else to withdraw money from the ATM counters. The complainant was not keeping his ATM card safely. The amount of Rs. 65,758.77 was withdrawn on 21-12-2011 at Thaipei, Taiwan. The transaction had been taken place on presentation of the card and not otherwise, which is amply clear from the charge slip. So far as the card transactions are concerned, the moment the card was swiped, the transaction was complete and money in the account passes to the beneficiary from whom purchases are made by the complainant or his agent or anybody claiming through him. The mere fact that the signature appearing in the charge slip does not pertain to the complainant cannot lead to the conclusion that there was negligence on the part of the bank. The complainant was to put his signature on his card, but that was not seen done in this case. The absence of signature on the reverse side of the card has to be treated as a negligent act and that laches on the part of the complainant, which had ultimately led to the transactions mentioned in the complaint. The complainant being an educated person he should have been more vigilant and very careful in dealing with the facts. The opposite party bank has no control on such transaction by using the card. Whether the complainant is guilty or negligent he cannot make any claim against the bank. State Bank cards are issued on the basis of the undertaking given by the card holder that would be bound by the guide lines, terms and conditions. The complainant has had expressly agreed that any financial loss occurring to a card holder on account of loss of card or unauthorized use of card till such time as the complainant hot-lists the card will be to the card holder's account. The opposite party is not liable to reimburse the loss allegedly sustained by the complainant. The complainant has no cause of action against the opposite party, and therefore, the complaint is sought to be dismissed.

3. The evidence in this consisted of Exts. A1 to A12 were marked on the side of the complainant and he was examined as PW1. Exts. B1 to B4 were marked on the side of the opposite parties. The witness of the opposite party was examined as DW1. Heard both sides.

4. On going through the pleading, the following issues are settled for consideration :-

1. Whether the complainant has proved that there was deficiency in service on the part of the opposite party bank in delivering service to the complainant who is an account holder?

2. Has the complainant proved that the opposite party bank had committed unfair trade practice?

3. Reliefs and costs?

    

5. Issue No. i. :- The complainant was examined as PW1 in this case. He admitted that he was supplied with a brochure from the State Bank of India with regard to the terms and conditions of the use of the ATM card. There is a space provided on the reverse side of the ATM card to sign the signature of the owner of a card, the account holder. Ext. B1 is the account statement maintained by the bank. The moment when the card is swiped the amount shown in the vending machine would have been debited from the account of the card holder. For business transaction, when the card is swiped the owner of the card will have to sign and that signature has to be scrutinized. In this case, the signature was put by another person after the alleged transaction for Rs. 65,000/-and odd. The bank had informed the complainant that the card was swiped in Taiwan on their investigation. Ext. A4 is the copy of the print out in respect of the transaction in Taiwan, which has been sent by China Trust Commercial Bank. The complainant has proved that he preferred a complaint before Cyber police at Mumbai.

6. The learned counsel for the opposite party argued that there was no signature of the complainant on the debit card (ATM card). Therefore the person who received the card at Taipei, Taiwan, for vending the article, could not verify the signature of the complainant. This argument cannot hold water, since the complainant himself was holding the card even when the amount was being transferred to another person at Taipei by using another card or other devises. Therefore, the argument that the complainant had not signed on the reverse side of ATM card and that was the reason why, the verification of the signature could not be done, etc. cannot be accepted in the absence of evidence of that effect.

7. Yet another argument, advanced by the learned counsel for the opposite party was that there was no deficiency in service on the part of the opposite parties with regard to this incident, because it was for the customer to keep the card in proper lock and key and to take other safety measures. Had it been so, there would not have been any probability to misuse the card given to the complainant. Neither the complainant nor the opposite party had proved the mode of losing data from the card. Therefore, the argument of that the opposite party on that account has no legs to stand. Ext. A13 is the document dated 23-07-2014, which would go to show that the Chief of Personnel, Indian Navy in New Delhi was addressed by the Chief General Manager, State Bank of India, wherein it was stated that majority of the frauds involving the ATM cards were of amount ranging from Rs. 10,000/- to Rs. 2 lakhs, have been committed in Canada using a specific merchant using the Master Card mag stripe Gold debit card issued to Defence Personnel and also to others. This statement would go to show that the incident of this nature is not an isolated one, but that there were various other instances as well committed through the specific Merchant (Target Canada/Walmart) with Master Card mag stripe gold debit cards. As per Ext. A13, it is also seen that there was an advice to the account holders not to use magnetic stripe debit cards and to use chip based cards instead. In this case, what was provided by the opposite party was a magnetic card. It is true that the incident happened in the year 2011. Ext. A13 pertains to the year 2014. However, the fact remains that thorough investigation revealed that magnetic cards are susceptible to the fraudulent transaction. Having found so, we must enter a finding that, by providing the magnetic stripped ATM cards to the customers, the bank was committing unfair trade practice knowing fully that the customer likely to lose their money due to the possible fraudulent transaction. The secrecy of an ATM card is maintained through its pin number. The opposite party bank having permitted the mercantile fraternity to use the ATM cards and to debit the money as per the purchase bills only at a swipe without requiring the secret PIN number of the account holder also would be a service which must be construed as deficient.

8. The complainant in this case has proved that he was in a ship at the time of transaction. The opposite party has no proved case that the complainant had misused his ATM card provided by the opposite party. It is proved that the complainant is still holding the card and the probability of misusing such a card by unscrupulous persons was known to the opposite party as it is evident from Ext. A13. Therefore, the complainant consumer cannot be asked to hold that responsibility for losing his money, which was confidently deposited in the opposite party bank. We find that the opposite party is liable to reimburse the amount lost by the complainant in this incident which is complained of. We have reached such a conclusion on the basis of the finding that there was clear deficiency in service on the part of the opposite party bank and also that the opposite party was practicing unfair trade practice after knowing that the magnetic type debit cards were no more safe to be used.

9. Issue No. iii. :- Having found the issue Nos. 1 and 2 in favour of the complainant, we find that the opposite party bank is liable to make good the lost money to the complainant on 21-12-2011 through the mercantile associate of the opposite party at Taipei in Taiwan. The complainant is found entitled to get a compensation of Rs. 25,000/- for his mental agony and for wrongfully preventing the complainant from using his money since 2011 onwards. The complainant is also entitled to get the costs of the proceedings before this Forum at Rs. 10,000/-. The complainant is entitled to get 12% interest on the amount of Rs. 65,758.77 and also on the amount of compensation awarded till the date of realisation from 21-12-2011, the date on which the money was lost from the account of the complainant. Cost awarded will not carry interest. In the result, the complaint is allowed, as above.

The order shall be complied with, within a period of thirty days from the date of receipt of a copy of this order.

Pronounced in the open Forum on this the 28^th day of April 2014

Sd/- Cherian. K. Kuriakose, President.

Sd/- Sheen Jose, Member.

Sd/- V.K. Beena Kumari, Member.

Forwarded/By Order,

Senior Superintendent.

A P P E N D I X

Complainant's Exhibits :-

Opposite party's Exhibits :-