Negligence in filling RTGS forms leads to wrongful remittance; banks are not liable for errors made by customers during the transaction process.

JUDGMENT

Satish Chandra Sharma, C.J. Aggrieved by the judgment dated 19.10.2022, passed by the learned Single Judge of this Court in W.P. (C). 4295/2018, whereby the learned Single Judge has dismissed the Writ Petition, the Appellant herein has filed the instant appeal.

2. Shorn of details, the facts leading to the instant appeal are that the Appellant herein has a current account with the Respondent No.2 herein/Oriental Bank of Commerce [now known as Punjab National Bank (hereinafter referred to as `the PNB')]. It is stated that the Appellant through its Director - Mr. Girish Chadha, wanted to transfer an amount of Rs. 15 Lakhs to one M/s JV Capital Services Pvt. Ltd. through Real Time Gross Settlement (hereinafter referred to as `the RTGS'). It is stated that the RTGS form for initiating the said transaction was filled up by the daughter of Mr. Girish Chadha, who had limited knowledge of bank dealings, and, therefore, she filled in the name of JV Capital Services Pvt. Ltd (hereinafter referred to as `the JCSPL') as the remitter instead of the Petitioner herein and further wrongly filled in name of beneficiary as "Ficus Securities Pvt. Ltd." (hereinafter referred to as `FSPL') instead of JCSPL who was supposed to be the beneficiary. It is pertinent to mention here that FSPL is a proprietary concern and the Director of the Appellant herein had dealings with FSPL. It is stated that the transaction has taken place on 04.12.2017 and on 05.12.2017 when the Director of the Appellant herein realised his mistake, he sent a request to the PNB for recalling the transaction. It is stated that pursuant to the request, a sum of Rs.4.5 lakhs was reversed on the same day from FSPL's account, but Rs. 10.5 lakhs could not be recovered. It is stated that the Appellant herein filed a complaint dated 19.01.2018 before the Banking Ombudsman of the Reserve Bank of India (hereinafter referred to as `the RBI'). The contention of the Appellant herein is that PNB has acted in violation of the Real Time Gross Settlement (RTGS) Regulations, 2013 issued by RBI (hereinafter referred to as `the RTGS Regulations') and more particularly Clause 11.1 and 11.11 of the RTGS Regulations.

3. According to the Appellant herein, Clause 11.1 of the RTGS Regulations provides that the transaction originating member will carry out due diligence while sending the payment request to the RTGS system and the originating member should also ensure two factor authentications by adopting maker-checker principle while originating a payment transaction. It is stated that Clause 11.11 of the RTGS Regulations provides that the participant/member banks have to mandatorily provide Debtor Name (the ordering customer) and Creditor Name (the beneficiary customer). It is the contention of the Appellant herein that PNB has failed in adhering to the Regulations and had processed a faulty transaction and is, therefore, guilty of wrongful remittance.

4. PNB filed a reply before the Banking Ombudsman stating that a sum of Rs.15 Lakhs was remitted to the beneficiary as per the mandate given by the complainant himself duly signed with all the details of the beneficiary account along with duly signed cheque. It is stated that when the complainant approached the Bank, an attempt was made to reverse the transaction, however, only a sum of Rs. 4.5 Lakhs was recovered because the account of FSPL had been blocked and a sum of Rs.10.5 lakhs had been retained by the National Stock Exchange (hereinafter referred to as `the NSE').

5. It is pertinent to mention here that FSPL is a NS