IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 07th day of April, 2022
Present: Sri. Manulal V.S. President
Sri. K.M. Anto, Member
C C No. 117/2019 (filed on 20-07-2019)
Petitioner : Lijo Jose,
Vattakuzhickal (H),
Elampally P.O.,
Kottayam – 686503.
Vs.
Opposite party : Manager,
State Bank of India,
Pallickathodu,
Kottayam – 686503.
(Adv.C.J. Joseph and
Adv. Dominic D. Vallavserry)
O R D E R
Sri. K.M. Anto, Member
The complaint is filed under Section -12 of the Consumer Protection Act 1986.
The brief of the complainant case is as follows:
The complainant is an account holder of State Bank of India, Pallickathode Branch with account No.6714036308. During the early hours of 08/02/2019 an amount of Rs.31,800/- was lost from the account of the complainant. On verification it was found that someone else had done the transactions in seven instalments through internet banking from the account of the complainant. A complaint was filed before the opposite party on the same day itself. A complaint was filed before the Pallickathode Police station also. Even after three months there was no action on the petition by the opposite party. Complainant filed a petition before the banking ombudsman. The opposite party reported before the ombudsman that the money was withdrawn after getting the OTP in the mobile phone of the complainant and the Bank is not bound to refund the money. But no OTP was received in the mobile phone and the complainant received the messages after debiting the amounts from the account. Since the messages were received during the night time, the complainant got the information about the loss of money only in the morning. Immediately the matter was reported to the customer care of the banks. The transactions were done without giving OTP in the mobile phone of the complainant. The complainant suffered much hardships and mental agony besides financial loss due to the deficiency in service on the part of the opposite party. Hence this complaint.
On admission of the complaint, copy of the complaint was duly served to the opposite party. The opposite party appeared and filed their version.
According to the version filed by the opposite party, the complainant is maintaining an SB account in No.6714036308 with the Pallickathode branch of the State Bank of India, and the complainant is enjoying the internet banking facility. A complaint was received from the complainant on 08.02.2019 about the withdrawal of Rs.31,799/- in seven transactions through net banking. The internet credentials are in the custody and exclusive knowledge of the customer and it is the responsibility of the customer to safeguard the same. The customer is not supposed to access any unsecured site and furnish his internet credentials, when there is possibility of hacking or the credentials receiving wrong hands. Another possibility is that a person in close liaison with the customer could have collected the internet credentials. As per OTP log , the complainant has registered for secure OTP. So it is evident that the alleged fraudulent transactions was done using secure OTP. The OTP will only be sent to the registered mobile number of the customer and in this case the frauduster could have got the OTP details surreptitiously from the customer mobile or got the same divulged to the fraudster involuntarily. The bank had delivered SMS messages to the customer’s registered mobile number. There was negligence on the part of the complainant that he had not taken care of the alerts delivered by the bank for blocking the net banking facility. The bank is not responsible for his loss after having served SMS alerts as he had been negligent in his own responsibilities.
The complainant filed proof affidavit and marked documents Exhibits A1 to A4. The complainant was examined as PW1. The opposite party filed proof affidavit and marked Exhibits B1. On the basis of the complaint, version of the opposite party and evidence adduced, we would like to consider the following points.
- Whether there is deficiency in service from the part of the opposite party.
- If so what are the reliefs and costs.
For the sake of convenience, we would like to consider the points 1 and 2 together.
On going through the complaint, version of the opposite party and evidence on record, it is clear that the complainant is maintaining a savings bank account in No.67140363068 with the Pallickathodu Branch of the State Bank of India. An amount of Rs.31,799/- was debited from the account of the complainant in seven transactions on 08.02.2019. These seven transactions were done through net banking in the early hours of 08.02.2019 from 1.30 am to 3am.
Exhibits A1 is the copy of the complaint given to the opposite party on 08.02.2019. Ext. A2 is the petition receipt received from the Pallickathode police station.
Exhibit B1 is the document containing the details of the seven transactions on the account of the complainant on 08.02.2019. On going through Exhibit B1 we can see that two transactions were Paytm payment bank transactions for an amount of Rs.4,999/- and Rs.1800/- respectively. The remaining five transactions were INB transactions to Hindustan Petroleum Corporation for an amount of Rs.5,000/- each. The total amount transferred is Rs.31,799/-.
Four transactions were done from IP address 106.199.124.76 and three transactions were done from IP address 106.198.254.4. The opposite party acknowledges that the complainant had lost money from his account and someone by fraudulent means done the transactions. The complainant deposed before the Commission that the internet credentials were not given to anyone else. The opposite party bank failed to give security to his money.
In Punjab National Bank and anr. Vs. Leader Valves II (2020)CPJ92(NC) the Hon’ble NCDRC while addressing the question of liability of a bank in case of unauthorized and fraudulent electronic banking transactions, has observed as under.
“11. The first fundamental question that arises is whether the Bank is responsible for an unauthorized 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, straight way 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 or on the part of its functionaries or by any other person(except the consumer / account holder) is its responsibility, and not of the consumer”.
In State Bank of India V. P.V. George, Hon’ble Kerala High Court held that Banking Law – Unauthorised withdrawals from savings bank account – Whether Bank liable – If a customer suffers loss in connection with transactions made without his junction by fraudsters, it has to be presumed that it is on account of the failure on the part of the Bank to put in place a system which prevents such withdrawals, and the Banks are, therefore, liable for the loss caused to their customers.
10. Considering the recent surge in customer grievances relating to unauthorized transactions in the accounts of the customers enjoying electronic banking facilities like ATM-cum-Debit Cards, net banking etc., in terms of circular No.RBI/2017-18/15 dated 6/07/2017, the Reserve Bank of India has directed all banks, among others, to put in place, appropriate systems and procedures to ensure safety and security of electronic banking transactions carried out by customers; robust and dynamic fraud detection and prevention mechanism; mechanism to assess the risks resulting from unauthorized transactions and measure the liabilities arising out of such events; appropriate measures to mitigate the risks and protect the banks against liabilities arising there from and a system of continually and repeatedly advising customers on how to protect themselves from electronic banking and payment related frauds. It is clarified in the said circular that the customer shall have no liability at all in the case of third-party breach when the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system. The only obligation which casts on the customers of the bank in terms of the circular is that the unauthorised transactions shall be brought to the notice of the bank forthwith so as to enable the bank to block the account. The circular aforesaid only reminds the banks, their obligations and responsibilities and it does not create any new rights or obligations. In short, there is also no difficulty in holding that if a customer suffers loss in connection with the transactions made without his junction by fraudsters, it has to be presumed that it is on account of the failure on the part of the bank to put in place a system which prevents such withdrawals, and the banks are, therefore, liable for the loss caused to their customers. All over the world, the Courts are adopting the aforesaid approach to protect the interests of the customers of electronic banking.
Hence in the light of the above discussion we are of the opinion that there is zero liability on the part of the complainant with regard to the loss of money since the matter was reported to the opposite party on the same day itself. The opposite party failed to take prompt action on the petition filed before him and to refund the money to the complainant. This act of the opposite party amounts to deficiency in service on their part. We allow the complaint and pass the following order.
- The opposite party is directed to pay Rs.31799/- to the complainant within 30 days from the date of receipt of this order in default of which an interest at the rate of 6% p.a. from the date of this order shall be paid till the date of realization.
- The opposite party is directed to pay an amount of Rs.2000/- as compensation for the mental agony and sufferings with cost Rs.1000/-
Dictated to the Confidential Assistant, transcribed and typed by her, corrected by me and pronounced in the Open Commission on this the 07th day of April, 2022.
Sri. K.M. Anto, Member Sd/-
Sri. Manulal V.S. President Sd/-
Appendix
Sworn Statement
PW1- Lijo Jose
Exhibits marked from the side of complainant
A1- Copy of the complaint given to the opposite party on 08.02.2019
A2- Petition receipt received from the Pallickathode police station
A3- Mathrubhoomi online news dated 20.05.2019(Subject to proof)
A4- Manorama online news dated 17.09.2019 (Subject to proof)
Exhibits marked from the side of opposite party
B1- The SBI letter dated 04.07.2019 giving the details of the transaction
By Order
Assistant Registrar
