Present : Sri. C.T. Sabu, President
Smt. Sreeja. S., Member
Sri. Ram Mohan R., Member
24th day of February 2023
CC 58/14 filed on 31/01/14
Complainant : V.V. Jessy, W/o Jose M.P., Muttichukkaran House,
P.O. Moorkkanadu, Thrissur – 680 711.
(By Adv. C.T. Joffy & Pratheesh P. Varghese,
Thrissur)
Opposite Parties : 1) The Manager, SBI, PSB Tana Branch,
Penisular Tower, Irinjalakkuda - 680 125.
Amended as per 2) SBI, Zonal Office, Geethanjali,
Order in IA 453822 Paramekkavu Devaswam Building,
Dtd.30/05/22 Round East, Thrissur.
(OP1 By Adv. K.C. Viswambharan, Thrissur
OP 2 Ex-parte)
O R D E R
By Sri. C.T. Sabu, President :
- The facts of the case are as follows:
The complainant is a teacher with an account in the SBT Tana branch, under A/c No. 67176787271, who received two SMS from the 1st opposite party Bank (herein after referred as 1st OP) on 04/10/2013 at 9:28 PM and 9:29 PM. The SMS stated that Rs. 40,000/- (Rupees Forty thousand only) was withdrawn from the account in four transactions of Rs. 10,000/- (Rupees Ten thousand only) each from an ATM in Calcutta. The complainant had possession of both the ATM card and bank records, so she was shocked to receive the messages about the transactions. She promptly contacted the customer care centre of the 1st OP Bank to report the issue and have the card blocked, which is registered as reference No: 20131004458305. The following day, on 05/10/2013, the complainant reported the same issue to the Manager at the Irinjalakuda Branch (OP1) and provided her ATM card for inspection. She also lodged a complaint with the Irinjalakuda Police Station stating the same. The 1st OP rejected her complaint stating that it was a successful transaction. Additionally, she submitted a complaint to the 2nd Opposite party (herein after referred as 2nd OP) on 17/12/2013 but received no reply. Hence this complaint.
2.On receiving the complaint, the Commission issued proper notice to the opposite parties. The 1st OP appeared through their counsel and filed a detailed version denying the averments stated in the complaint. The 2nd OP failed to enter appearance or file their version and is set ex-parte.
3. The 1st OP filed their version denying the contentions of the complainant. While they acknowledged the issue of the ATM card and a withdrawal of Rs 40,000/- (Rupees Forty thousand only) they contended that the burden of proof lay with the complainant as the transactions were successful, and they have no liability to pay the amount. Upon receiving the complaint on 05/10/2013 at 10:00 AM, the 1st OP promptly followed all necessary procedures and registered it on their Online Complaint Site. The opposite parties also took steps to issue a duplicate card as per the complainant's request. After this, the opposite parties intimated to the complainant about the information gathered from the ATM Nodal Office that the transactions were "successful". Further, the opposite parties had requested CCTV video clippings of the disputed transactions from the SBI ATM in Alipur, Calcutta, but could not obtain the footage. They also contended that since the withdrawals were made at an SBI ATM under the Alipur branch in Calcutta, the petition is bad for non-jointer of the SBI Alipur Branch. It has to be noted that the complainant had lodged a complaint with the Banking Ombudsman, but it was subsequently closed in favour of the opposite parties. Hence they stated that there is no deficiency in their services or unfair trade practice on their part, and the complaint has to be dismissed.
4. The points for consideration are as follows:
1. Whether the complaint is bad for non-jointer of SBI Alipur.
2. Is there any deficiency in service or unfair trade practice?
3. If so, what relief and cost?
5. When the case came for evidence, the complainant filed the proof affidavit, in which they affirmed and explained all the averments of the complaint in detail. They produced eleven documents, marked as Exts. A1 to A7(a) and A8. Ext. A1 is the copy of application dtd. 05/10/13 submitted before the Manager, SBT PSB Tana Branch. Ext. A2 (a) is the copy of petition dtd.05/10/13 filed before Sub Inspector, Irinjalakkuda Police Station. Ext. A2 (b) is the copy of Receipt of complaint dtd.05/10/13 issued by Irinjalakkuda Police Station. Ext. A3 is the copy of letter No.AGM/TSR/101 dtd.05/10/2013 send from SBT, Tana Branch to the complainant. Ext. A4 is the copy of letter No.AGM/TSR/102 dtd.12/10/13 send from the SBT, Tana Branch to the complainant. Ext. A5 is the copy of petition dtd. 16/11/13 submitted before District Police Superintendent. Ext. A5 (a) is the copy of receipt of complaint received from District Police Superintendent. Ext. A6 is the copy of application dtd.01/11/13 submitted before AGM-ATM, ITS Dept. SBT Head Office, Thiruvananthapuram . Ext. A6 (a) is the Postal receipt. Ext. A7 is the copy of application submitted before Managing Director, SBT. Ext. A7 (a) is the Postal A/d Card. Ext. A8 (SP) are the print out of SMS. The complainant is cross-examined as PW1. The 1st OP submitted the proof affidavit in which they affirmed and explained all the contentions in tune with their version in detail. The OP produced seven documents marked Exhibit R1 to R7. Ext. R1 is the copy of d-ATM (disputed – ATM Transaction Monitor dtd.12/10/2013 issued by 1st OP. Ext. R2 is the copy of list of ATM complaint Ids rejected. Ext. R3 is the copy of Intimation given by Banking Ombudsman regarding the Dismissal of the complainant’s complaint dtd. 12/11/13. Ext. R4 is the copy of email send by the opposite party to SBI, Alipur Kolkatta. Ext. R5 is the copy of the letter sent by the opposite party to SBI, Alippur, Kolkatta. Ext. R6 is the copy of Statement of transaction for A/c No.67476787271 Smt. V.V. Jessy issued by SBT. Ext. R7 is the copy of Notification published in the Gazette of India dtd. 22/02/147 with respect to the acquisition by way of amalgamation by State Bank of India. The present manager of the Bank is cross-examined as RW1.
6. The Commission has examined the contents of affidavits, perused the documents produced and examined the depositions meticulously. It has been observed that during the trial, the SBT amalgamated with SBI. The Ext. R7 document is the gazette notification detailing the same. The complainant filed an IA 453/22 to amend the cause title and was allowed. Accordingly, the complainant amended the complaint, and SBI arrayed as OPs instead of SBT.
7. Concerning the question of whether the petition is bad for non-joinder of SBI Alipur, Calcutta Branch, the Commission rejects it on the following grounds:-
(1) State Bank of India and State Bank of Travancore are interrelated banks, and RW1 also admits it. So the joinder of a branch of interrelated Banks capable of answering the queries for each other is unnecessary.
(2) The above-said ATM is connected by the respondent Bank through their service, enabling the customers to withdraw the amount from there. So the first OP is bound to reply or answer for an act that happened in the same ATM. Since OP Bank is better positioned to accept information from the Alipur Branch, the Alipur Branch is not a necessary party.
8. Regarding unauthorised transactions, neither in the counter nor in the affidavit, the OPs have a case that it's false or the complainant herself withdrew the amount. The complainant stated that the ATM card was in her possession when the disputed transactions occurred. She further noted that the transactions had taken place remotely, several miles away from her actual location. As a consumer is concerned, the complainant took all the necessary steps to ensure her account's additional safety and get back the amount lost, as evidenced by documents A1 to A8. The OPs failed to look into the matter even after the complainant submitted the said ATM card before them the very next morning, 05/10/2013. In such an instance, the CCTV surveillance footage is necessary to provide evidence; hence, the burden of proof lies with the OPs alone and the non-production of the footage before the Commission amounts to gross negligence. Considering all the facts involved, 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. In today's digital age, the possibility that the ATM card was hacked or forged cannot be ruled out. Therefore, in the absence of any evidence to the contrary, the Commission holds the Bank liable for unauthorised transactions.
9. Furthermore, the 1st OP Bank cannot rely on arbitrary terms and conditions to wriggle out of its liability towards customers, and any such terms and conditions must conform with the directions issued by the RBI, which is responsible for the 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 and decision of Honourable NCDRC 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 I (2020) CP 92 (NC), the Honourable NCDRC, while addressing the question of liability of a Bank in case of unauthorised and fraudulent electronic banking transactions, has observed as under:
"1. The first fundamental question that arises is whether the Bank is responsible for an unauthorised 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
2. Contributory fraud/ negligence/deficiency on the part of the Bank (irrespective of whether or not the transaction is reported by the customer).
3. 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."
All these facts are discussed in detail by the Honourable NCDRC in the RP 3333 of 2013.
10. For the reasons discussed above, we are of the considered view that there is a clear deficiency in service and unfair trade practise. Also, the misdeeds of the Opposite Parties have inflicted financial loss, mental agony and hardship on the complainant. The complainant is entitled to the amount lost due to the unauthorised transaction from her account with interest. The opposite parties necessarily have to compensate the complainant.
In the result, the complaint is allowed, and the opposite parties are directed to pay the complainant a sum of:
- Rs 40,000/- (Rupees Forty thousand only) with 12% interest per annum, from the date of unauthorised withdrawal, ie from 04/10/2013 till the date of realisation.
- Rs 25,000/- (Rupees Twenty five thousand only) towards the compensation for the financial loss, mental agony and hardships sustained.
- Rs 10,000/- (Rupees Ten thousand only) towards the cost of the complaint.
The order shall be complied within one month of receiving a copy of this order, failing which, the complainant is entitled to a 12% interest per annum for the sum towards compensation and cost, as well, from the date of order, till the date of realisation.
Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Commission this the 24th day of February 2023.
Sd/- Sd/- Sd/-
SreejaS. Ram Mohan R C. T. Sabu
Member Member President
Appendix
Complainant’s Exhibits :
Ext. A1 copy of application dtd. 05/10/13 submitted before the Manager, SBT
PSB Tana Branch.
Ext. A2 (a) copy of petition dtd.05/10/13 filed before Sub Inspector,
Irinjalakkuda Police Station.
Ext. A2 (b) copy of Receipt of complaint dtd.05/10/13 issued by Irinjalakkuda
Police Station.
Ext. A3 copy of letter No.AGM/TSR/101 dtd.05/10/2013 send from SBT, Tana
Branch to the complainant.
Ext. A4 copy of letter No.AGM/TSR/102 dtd.12/10/13 send from the SBT,
Tana Branch to the complainant.
Ext. A5 copy of petition dtd. 16/11/13 submitted before District Police
Superintendent.
Ext. A5 (a) copy of receipt of complaint received from District Police
Superintendent.
Ext. A6 copy of application dtd.01/11/13 submitted before AGM-ATM, ITS
Dept. SBT Head Office, Thiruvananthapuram.
Ext. A6 (a) Postal receipt.
Ext. A7 copy of application submitted before Managing Director, SBT.
Ext. A7 (a) Postal A/d Card. Ext. A8 (SP) are the print out of SMS
Complainant’s Witness :
PW 1 V.V. Jessy
Opposite Parties’ Exhibits :
Ext. R1 copy of d-ATM (disputed – ATM Transaction Monitor dtd.12/10/2013
issued by 1st OP.
Ext. R2 copy of list of ATM complaint Ids rejected.
Ext. R3 copy of Intimation given by Banking Ombudsman regarding the
Dismissal of the complainant’s complaint dtd. 12/11/13.
Ext. R4 copy of email send by the opposite party to SBI, Alipur Kolkatta.
Ext. R5 copy of the letter sent by the opposite party to SBI, Alippur, Kolkatta.
Ext. R6 copy of Statement of transaction for A/c No.67476787271 Smt. V.V.
Jessy issued by SBT.
Ext. R7 copy of Notification published in the Gazette of India dtd. 22/02/147
with respect to the acquisition by way of amalgamation by State Bank
of India.
Opposite parties’ witness :
RW1 Aby Poulose
Id/-
President
