ORDER

SRI.H.R. SRINIVAS.  PRESIDENT

1.     This is the Complaint filed by the Complainant against the Opposite Parties (herein referred to as OPs) under section 35 of the Consumer Protection Act 2019 for the deficiency in service in not refunding sum of Rs.1,00,556.08/- drawn by fraudulent means by using his stolen/pickpocketed credit card and also for a compensation Rs.3,50,000/- for causing mental agony, loss, hardship and inconvenience caused due to inaction of the OP in not blocking the card immediately upon reporting the theft of the credit card and other reliefs and for such other reliefs as the Hon’ble District Commission deems fit.

2.     The brief facts of the complaint are that: Complainant is an engineer by profession having SB Account with OP-2 having ATM and Credit card facility. His account bearing No.520101231590421 and the credit card No. 4691 3199 9905 8449 and Debit Card No.4199 8100 0835 9254 of Corporation Bank, Credit card No.No.4854 9806 0486 1189 of HDFC Bank and Credit card No.4207 3993 4414 9942 of State Bank of India. He visited Paris on 30.12.2019. At about 21.hrs Paris time when he was travelling in the METRO train at Paris his wallet containing 700 Euros, the credit cards issued by HDFC Bank, State Bank of India and Corporation Bank along with his driving license were pick pocketed.  Immediately he lodged a complaint before the police at Paris.  Immediately on filing of the FIR and on such communication, the corporation bank, OP did not take any action and blocked the card and as a result some transactions had taken place by using the said card to the extent 13679.18 Euros. The total value of the said Euros in Indian currency amounts to Rs.1,00,556.08/-. Immediately after returning to India, on 02.01.2020, he lodged a complaint of lost article report on 03.01.2020 before the Crime branch of Bangalore police. He made efforts with OP to recover the amount spent by the person who used his stolen credit card.  In this respect, several email correspondences were also made. Inspite of it, the credit card division of OP sent a payment outstanding statement including the one complained.  Inspite of requesting OP to take suitable action to recover the said amount, they did not take any action. 

3.     Believing in good faith, the complainant remitted the outstanding dues. To his surprise after receiving the payment, OP closed the complaint as per the email communication dated 28.01.2020.  OP is at fault in not taking immediate action in blocking the card and due to said negligence the card was used and he was put to hardship, loss and inconvenience OP are liable to pay a sum of Rs.1,00,556/- along with interest at 2% per annum on the said amount. The act of OP in not blocking the card and allowing some of the persons to use the credit card amounts to deficiency in service and hence prayed the forum to allow the  complaint.

4.     Upon the service of notice, Ops appeared before the commission and took the contention that the complaint is not maintainable either in law or on facts and complainant suppressed the material facts. Complaint is not maintainable and liable to be dismissed.  The same is filed with an oblique motive to enrich himself he is not a consumer under the Consumer Protection Act. This Commission is devoid of territorial jurisdiction as theft of credit card took plan at Paris. The complaint filed is an abuse of process of law.  Complainant has mislead this commission.  OP-1 i.e. Union Bank of India is not liable or responsible for any transaction incurred on the card account prior to the time of reporting of the loss of the card and the card holder is entirely responsible as per the MITC agreement.  The cause of action has taken out side India. Money was drawn already before reporting and complaint regarding theft/pickpocketing of wallet contains currency, credit card and driving license.

5.     Since the loss of the card was reported to the bank after the incident/transaction i.e. reported on 03.01.2020 when the transaction has happened on 31.12.2019, OP is not liable for the said happening.  The card was blocked on the complaint on 03.01.2020 through the helpline.  The presentation of the card is governed by the law of the France and incase the pin is not mandatory in Paris the same was not required.  It is further contended that the card was blocked on 03.01.2020 post all the disputed transaction. Hence the liability of all the transaction lies with card holder and the same was informed to him. Hence OPs are not liable to pay any compensation. Denying all the other allegations made against it and since the complaint has been lodged with the police at Paris, the matter has to be investigated by them. Complainant by admitting his fault, has paid the amount after issuing monthly bill. It is the duty of the card holder to secure at all times the said card and report the loss immediately and hence prayed the Commission to dismiss the complaint.

6.     In order to prove the case, both parties have filed their affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Parties?

2) Whether the complainant is entitled to the relief prayed for in the complaint?

7.     Our answers to the above points are:-

POINT NO.1 :   In the Affirmative.

POINT NO.2 :   Partly in the Affirmative.

                        For the following.

REASONS

POINT No.1:-

8.     On perusing the complaint, version, documents, evidence filed by the both the parties, it becomes clear that, the complainant was issued credit card with international transactions.  It is also not in dispute that the complainant lost the card due to pick pocketing at Paris in a metro train at Paris. The copy of the FIR is produced which mentions that his wallet was consisting of 700 Euros and 3 credit cards and driving license. 

9.     It is not in dispute that after the pickpocketing of the wallet consisting of the currencies, credit cards and the driving license, complainant rushed to the police station at Paris and made a complaint at 9 pm, though the said pickpocket had occurred around 5 pm. That itself cannot be a ground for the OP to deny the benefits which is available to the complainant on the ground of lost card being misused by unscrupulous persons. Though it is stated by OPs regarding the liabilities as per the Corporation Bank credit card rules, it is pertinent to note here that the RBI has issued a clear guidelines in respect of the liabilities of a credit card holder who lost the card or the same has been misused by other persons or by unscrupulous method.

10.   As per the notification issued by Reserve Bank of India, RBI/2017-18/15 DPB No.LEG BC 78/09.07.005/2017-18:

“Limited Liability of a Customer

(a) Zero Liability of a Customer

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

1. Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).
2. 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.

(b) Limited Liability of a Customer

7. A customer shall be liable for the loss occurring due to unauthorised 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 unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank.

In cases where the responsibility for the unauthorised 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

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. Banks shall provide the details of their policy in regard to customers’ liability formulated in pursuance of these directions at the time of opening the accounts. Banks shall also display their approved policy in public domain for wider dissemination. The existing customers must also be individually informed about the bank’s policy.

9. On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer’s account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any). Banks may also at their discretion decide to waive off any customer liability in case of unauthorised electronic banking transactions even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorised transaction.”

11.   When this is taken into consideration, even assuming for the movement the complaint regarding the loss of his credit card due to pick pocket at the metro station at Paris at about 5 pm and reporting the same to Police at 9 am, 3^rd party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system and the customer notify the bank within 3 days workings days of receiving communication from Bank regarding the unauthorized transaction the liability of the customer is zero.

12.   When this is taken into consideration, the complainant within 3 days has apart from sending email to the bank, made a request in writing to the home branch. When such being the case, his liability will be zero and further clause 12 of the notification, the entire burden of proving customer liability in case of unauthorized electronic banking transaction shall lie on the bank. In view of this we are of the opinion that not refunding or recrediting to the account of the complainant within 10 working days from the date of such notification by the customer and also further within 90 days from the board approved policy to settle the matter amounts to deficiency in service and unfair trade practice. It is to be noted here that the bank cannot be held responsible for not blocking the card immediately after the email sent. Before complainant reporting the loss of the card, at 9.00 pm at Paris, the card was swiped/used at POS and no withdrawal of money/ use of the card done after reporting to police at Paris or even after informing the home branch at Bangalore, before blocking on 03.01.2020. Further even though condition while issuing card presenter for arbitration, the same need not be referred to arbitration and this complaint is maintainable in view of Section 3 of the Consumer Protection Act 1986 and Section 100 of Consumer Protection Act 2019. Hence we answer POINT NO.1 IN THE AFFIRMATIVE.

POINT NO.2:

13.   In the result OPs are bound to refund Rs.1,00,556.08 along with interest at 4% per annum (SB rate of interest ) from the date of transaction i.e. on 30.12.2019 till payment of the entire amount along with damages of Rs.10,000/- and Rs.5,000/- towards litigation expenses.  Hence we answer POINT NO.2 PARTLY IN THE AFFIRMATIVE and pass the following:

ORDER

1. The complaint is partly allowed with cost.

2. OP-1 and 2 are jointly and severally hereby directed to refund a sum of Rs.1,00,556.08 to the complainant along with interest at 4% (SB rate of interest) from the date of transaction i.e. on 30.12.2019  till payment of the entire amount.

3. OPs  are also directed to pay a sum of Rs.10,000/- towards damages for causing mental agony and strain and further Rs.5,000/- towards litigation expenses.

4. OPs are hereby directed to comply the above order within six months from the date of receipt of this order and submit the compliance report thereafter.

5. Send a copy of this order to both parties free of cost.

Note: You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Commission on this day the 13^th day of December 2021)

MEMBER                PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copy of the police complaint at Paris.

Ex P2: Copy of the email correspondences.

Ex. P3: Copy of the acknowledgment.

Ex P4: Email communication.

Ex P5: Monthly account statement

Ex P6 : Aadhar Card.

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Mr. Gurubari Behera, Chief Manager of OP-1.

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: Copy of the Broacher.

Ex R2: Copy of the three transaction slips by using said cards.

Ex R3: Certificate U/s 65B of the Indian Evidence Act.

MEMBER                        PRESIDENT

RAK*