The Court emphasized the duty of care and diligence owed by Bank officials in verifying the identity and signatures of individuals making withdrawals, establishing their liability for negligence in banking service.

Mr. Justice S.K. Dubey, President—The Central Bank of India (for short the ‘Bank’) has filed this appeal against the order dated 27.2.1997 passed in Case No. 726/91 by the District Consumer Disputes Redressal Forum, Indore (for short the ‘District Forum’).

2. The facts giving rise to this appeal are thus : the respondent, the complainant before the District Forum had opened a Savings Bank Account in the Indore Branch of the Bank and had a balance amount of Rs. 14,030.30 paise in his account as on 4.2.1991 as borne out from the pass-book. On 4.2.1991, when he went to the Bank for withdrawal of the amount from his account he was informed by the Bank officials that a duplicate pass-book with another account number had been issued on an application purporting to have been signed by him and from that account a sum of Rs. 13,000/- had been withdrawn, leaving a credit balance of Rs. 1,030.30 paise only. The respondent averred that he had never submitted any application for issuing a duplicate pass-book nor he had withdrawn any amount as stated by the Bank officials. It was further averred that when the Bank officials realised that they had been cheated by someone who impersonating as the account holder had made an application for issuing a duplicate pass-book and had withdrawn the amount of Rs. 13,000/- from the account of the respondent on the basis of withdrawal forms purporting to have been signed by the respondent, the Bank officials made a report at the police station in that behalf. The respondent contended that he was assured by the Bank officials that after investigation the amount which had been wrongfully withdrawn from his account would be credited in his account, but despite repeated requests the Bank officials failed to rectify their mistake. The respondent, therefore, filed a complaint and claimed relief under the Consumer Protection Act, 1986 (for short the ‘Act’) alleging deficiency in service on the part of the Bank inasmuch as due to the negligence of the officials of the Bank, the amount of Rs. 13,000/- was unauthorisedly withdrawn from his savings account, therefore, claimed compensation for the loss suffered by him on account of the negligence of the Bank. The complaint was resisted by the Bank. It was admitted that a cheat by the name of Alimuddin had defrauded the Bank by illegally withdrawing the amount of Rs. 13,000/- from the account of the respondent. It was contended that a complaint had been lodged by the Bank officials at the police station in that behalf and that there was no negligence of the Bank or its officials, if any was that of the respondent. A news item published in local daily on 10.4.1991 regarding large scale fraud practised by the aforesaid Alimuddin was also annexed to the reply. It was contended that as a criminal case was instituted against Alimuddin on the report made by the Bank, the Consumer Forum had no jurisdiction to entertain the complaint and grant any relief to the respondent in the Act.

3. The District Forum relying on the decision of this Commission in Appeal Case No. 3/94, Central Bank of India v. Maniram, decided on 25.6.1994 dismissed the complaint vide order dated 7.11.1994 holding that it had no jurisdiction because of the pendency of the criminal case instituted against Alimuddin on the basis of the report made by the Bank and to decide the dispute involving the decision on the complicated issues of forgery and cheating.

4. Aggrieved of that order, the respondent preferred an Appeal No. 468/94. This Commission after hearing parties and after considering the allegations made vide order dated 14.8.1995 allowed the appeal and remanded the case to the District Forum to decide it afresh in accordance with law after giving opportunity to the parties to adduce evidence in the light of the observations made in the para 6 of the order which we quote :

“6. In our opinion, the District Forum failed to appreciate that the scope of enquiry in the criminal case was different from tha