Chandigarh

StateCommission

A/208/2024

STATE BANK OF INDIA - Complainant(s)

Versus

RAJESH GARG - Opp.Party(s)

ABHINEET TANEJA

30 Sep 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

 

Appeal No.	208 of 2024
Date of Institution	30.05.2024
Date of Decision	30.09.2024

 

1]      State Bank of India through its Regional Manager, Local Head Office, Sector 17, Chandigarh.

2]      State Bank of India through its Branch Manager, High Court Branch, Sector-1, Chandigarh.

.…..Appellants/Opposite Parties.

Versus

Sh. Rajesh Garg S/o Late Sh. M. L. Garg, #2070, Sector 21-C, Chandigarh.

...Respondent/Complainant.

 

 

BEFORE:  JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                SH. RAJESH K. ARYA, MEMBER

               

Argued by:- 

 

Sh.  Abhineet Taneja, Advocate for the appellant.

Sh. Rajesh Garg, respondent in person.

 

PER RAJESH K. ARYA, MEMBER

              The instant appeal has been filed by the opposite parties – State Bank of India, appellants herein, against order dated 02.04.2024, rendered by District Consumer Disputes Redressal Commission-II, U.T., Chandigarh, (hereinafter to be called as the District Commission only), vide which, Consumer Complaint No.252 of 2023 filed by the complainant – Sh. Rajesh Garg (respondent herein) has been partly allowed in the following manner:-

“12]      Taking into consideration the above discussion & findings and settled position of law, the present complaint deserves to be partly allowed and the same is accordingly partly allowed against OP No.1 & 2. The OPs No.1 & 2 are directed to refund to the complainant an amount of Rs.64,000/- debited on account of unauthorized transactions alongwith interest @9% per annum from the date of deduction of amount i.e. 15.12.2022 till the date of actual realization.

         This order be complied with by OP No.1 within 60 days from the date of receipt of its certified copy.”

2]           The case of respondent No.1/complainant before the Ld. District Commission was that he was expecting a payment of Rs.8,000/- from an individual who contacted him via OLX App. The said individual asked the complainant to share his UPI details or scan a code to facilitate the transfer. Accordingly, the complainant shared his UPI details through a WhatsApp chat. Subsequently, the said individual transferred a nominal amount of Rs.5/-, which was credited to the complainant’s savings account with the opposite parties. However, to the complainant’s shock, he soon received four automated messages from the opposite parties indicating debits of Rs.8,000/-, Rs.8,000/-, Rs.24,000/- and Rs.24,000/- from his account. He immediately disputed these transactions by sending automated messages to the opposite parties. In response, the opposite parties assured him that the issue would be resolved within 21 days. However, in an email dated 06.01.2023, the opposite parties informed the complainant that the complaint would be resolved by 26.01.2023 but no action was taken. The complainant also filed a police report with the Cyber Cell. Despite waiting for three months, the disputed amounts were not reversed by the opposite parties.

3]           On the other hand, it was the contest by the opposite parties that the disputed transactions in question were executed exclusively through UPI mode and not via any other banking method. It was acknowledged that the complainant, in his complaint, admitted to sharing his UPI details with a third party via WhatsApp. It was stated that in UPI transactions, no One Time Password (OTP) is generated by the bank’s server, instead, the customer is required to enter their personal 6-digit UPI PIN to authorize the transaction. It was further asserted that the four disputed transactions were conducted using the UPI mode, either directly by the complainant or through someone with whom he shared his UPI PIN or due to his failure to maintain the confidentiality of the PIN. The opposite parties also emphasized that there was no manual deduction of funds by them. It was further stated that UPI fund transfers can be completed solely by entering the self-generated UPI PIN, without the need for an OTP. Moreover, it is not possible to link an account to any UPI app or payment service without access to the mobile device containing the SIM card registered to the customer’s bank account.

1.            After hearing the Counsel for the parties and going through the evidence and record of the case, the Ld. District Commission partly allowed the complaint in the manner, as stated above.
2. The order of the Ld. District Commission has been assailed by the appellants/opposite parties on the ground that the Ld. District Commission ought to have dealt with the primary question, whether the transaction itself was unauthorized or not; whether the complainant was victim of fraud and whether he himself was negligent. It has further been stated that the Ld. District Commission relied upon only one part of the RBI guidelines where it is provided that in case of unauthorized transaction, the Bank is liable to refund the money, if the matter is reported to the Bank within 3 working days. It has further been stated that the entitlement of the customer in terms of RBI guidelines could only be decided once it would have been proved on record that the transaction was not authorized by the customer and the Ld. District Commission did not deal with this aspect of the matter. It has further been stated that the judgments relied upon by the Ld. District Commission are not applicable to the facts of the case in hand as in those cases, all the transactions were unauthorized and consequently, the same were well covered within the guidelines issued by the Reserve Bank of India.  
3.             On the other hand, the respondent/ complainant vehemently argued that in accordance with the instructions issued by the Reserve Bank of India, Annexure C/5, he is very much entitled to reversal of disputed transactions as these instructions clearly says that when the account holder disputes the transactions within minutes of receiving automated messages from the Bank, the transactions ought to be reversed as the same remain within the reversible window period during which the account holder is given the opportunity to dispute the charges, otherwise, the very purpose of receiving automated messages by the consumer with the option to dispute the transaction, is defeated. He further argued that since the debit transactions happened in his savings bank account and not through the PayTM wallet, the Bank immediately sent automated messages to him giving them the option to dispute the transactions. He further argued that since the appellants themselves admitted the transactions in question never happened through online banking or ATM card, there was no question of sharing any one-time password or confidential pin by him. He further argued that the appellants had tried to portray it as if some OTP or banking account details or any other password was shared with a stranger. He further argued that he only shared the scan code, which was solely meant for the purpose of receiving the payment through any UPI App. and for this purpose, no OTP or PIN was required to be shared by the account holder. He further argued that the appellants never brought on record any record of one-time passwords sent for the said four transactions to the respondent. He vehemently contended that it is erroneous for the appellants to say that in case of fraudulent withdrawal, without failure of the Banking System, the Bank is not liable. He further argued that the instructions of the Reserve Bank of India are only to the effect that in order to make the consumers feel secure about their online transaction, certain safety measures have been incorporated in the banking system where the account holder can dispute the transactions within the requisite time and the fraudulent transactions ought to be reversed within the prescribed time period. He further contended that the Ld. District Commission rightly partly allowed his consumer complaint after appreciating the facts and evidence before it and as such, the appeal filed by the appellants be dismissed.
4.            After considering the rival contentions of the parties and going through the impugned order and material available on record and the written arguments carefully, we are of the considered view that the appeal is liable to be dismissed for the reasons to be recorded hereinafter. As regards the contention raised by the appellants whether the disputed transactions were unauthorized or not, fraudulent ones and whether the respondent himself was negligent, it may be stated here that per record, it is very much established that the respondent did not share any OTP or his Bank Account details at any point of time. He only shared the scan code of his UPI App. meant for the purpose of receiving the money. Thus, once the respondent took all due diligence in maintaining secrecy and security relating to his OTP and Bank account details etc., he cannot be said to be negligent in any manner. Moreover, the appellants failed to make compliance of the directions of the Circular of Reserve Bank of India dated 06.07.2017, Annexure C-5, issued to all the Commercial Banks which clearly stipulated that the customer is required to report the unauthorized transaction to the Bank, which had been done in the case of the respondent. There was no delay on the part of the respondent in bring into notice of the appellants with regard to the four unauthorized transactions from his account as he intimated the same to the appellants the same day.
5.             Thus, in light of the submissions and documentary evidence placed before the Ld. District Commission, the respondent’s contention regarding the reversal of disputed transactions finds merit. The respondent, relying on Annexure C/5, is very much entitled to the reversal of the transactions in question, as these instructions unequivocally state that when an account holder disputes transactions within minutes of receiving automated alerts from the Bank, such transactions must be reversed. The rationale behind this instruction is to protect the consumer during the reversible window period, affording them the opportunity to contest any unauthorized or erroneous transactions. The failure to adhere to this procedure renders the very purpose of sending automated messages, with an option for the consumer to dispute a transaction, ineffective and meaningless. The disputed transactions occurred in his savings account and not through any PayTM wallet or similar platform. The appellants promptly issued automated alerts, thereby providing the respondent the opportunity to dispute the transactions and since the appellants themselves acknowledged that the transactions did not occur via online banking or through the use of an ATM card, as such, there was no sharing of any One-Time Password (OTP) or confidential PIN on the part of the respondent. The appellants’ attempt to contend that the respondent had shared his banking details, including OTP or passwords, with a third party, is unsupported by the facts of the case. The respondent had clarified that he merely shared a scan code, intended exclusively for receiving payments via a UPI application, for which no OTP or PIN was required to be disclosed. It was the appellants’ burden to establish any instance of OTP or PIN misuse; however, they failed to provide any documentary evidence or logs showing that OTPs were sent to the respondent for the disputed transactions. This omission has weakened their assertion that the respondent shared sensitive banking information with an unauthorized third party.
6.             Furthermore, the respondent has correctly argued that the appellants’ claim that the Bank is not liable for fraudulent withdrawals without evidence of a systemic failure is legally unfounded. The Reserve Bank of India (RBI) issued clear instructions aimed at enhancing consumer confidence in online banking transactions. These guidelines emphasize the necessity for banks to implement safety measures that allow account holders to promptly dispute unauthorized transactions. Thus, the appellants are obligated to reverse fraudulent transactions within the prescribed period when they occur within the scope of such safety measures. It is erroneous for the appellants to argue that fraudulent withdrawals do not give rise to liability on the part of the bank unless there is a proven failure of the banking system. The instructions of the RBI, which have been adopted to protect consumers from unauthorized transactions, place the responsibility on the bank to act promptly and reverse the transactions in cases where a dispute is raised within the appropriate window of time. Based on the foregoing, it is evident that the Bank’s failure to reverse the disputed transactions constituted a deficiency in service. The respondent acted promptly in disputing the transactions and complied with the requisite procedure for contesting unauthorized withdrawals. The appellants, on the other hand, failed to substantiate their claims or provide sufficient evidence that the transactions were authorized or that the respondent was responsible for disclosing any sensitive banking information. The failure to reverse the transactions despite timely dispute by the respondent amounted to violation of both the principles of fair banking practice and the regulatory guidelines set forth by the RBI. In our considered view, the Ld. District Commission rightly directed the appellants – Bank to refund to the respondent the amount of disputed transactions of Rs.64,000/- alongwith interest @9% p.a. from the date of deduction i.e. 15.12.2022.
7.          In view of the facts and circumstances of the case, we do not find any infirmity or material irregularity in the impugned order passed by the Ld. District Commission, which is legal, just and fair.
8.          For the reasons recorded above, this appeal being devoid of merit must fail and the same is dismissed with no order as to costs.
9.          Certified copies of this order be sent to the parties free of charge.
10.          File be consigned to Record Room after completion.

Pronounced.

30.09.2024.

                           [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

                                                                                

 [RAJESH K. ARYA]

MEMBER

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