The main legal point established in the judgment is that banks have an obligation to follow guidelines and procedures to prevent fraudulent transactions and that the business of banking carries the risk of unauthorized transactions.

ORDER

Mr. Justice D.K. Jain, President - These two Revision Petitions, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act") have been preferred by State Bank of India (for short "the Bank") and one of its Customers against order, dated 19.2.2009, passed by the State Consumer Disputes Redressal Commission, Uttar Pradesh (for short "the State Commission") in Appeal Nos. 2450/SC/04 & 127/SC/05. The State Commission has affirmed order dated 30.11.2004 passed by the District Consumer Disputes Redressal Forum, Gorakhpur (for short "the District Forum") in CC No 429/2002, whereby the District Forum had directed the Bank to refund a sum of Rs. 2,71,800 to the Complainant, being the amount credited in his Savings Bank Account from time-to-time. However, the quantum of the amount, so payable, has been reduced by the State Commission.

2. The Complainant was maintaining a Savings Bank Account No. 01190025039 with the Bank, at its Branch at Railway Colony, Gorakhpur, UP, in his name to be operated singly. He used to deposit in this account his pensionary benefits. A pass book and cheque book were issued to him as per the normal practice. In the month of December 2000, the Complainant informed the Bank that a sum of Rs. 2,71,800 had been fraudulently withdrawn from his account between the period from 9.3.2000 to 7.12.2000, by means of nineteen cheques. He claimed that during this period he was staying in Delhi with his son due to an accident and wedding. It was alleged that the cheques used for withdrawal of the said amount were not issued from the cheque book supplied to him nor did he sign any of these cheques. A complaint, alleging cheating, was also lodged by him with the police. Investigations conducted by the police and the Bank revealed involvement of the Branch Manager and one Vishal Srivastava. It transpired that two cheque books for his account were issued to one Krishan Kant Sharma. The first cheque book was issued on an application and the second one on the requisition slip of the first cheque book. However, the requisition application in relation to the first cheque book was not found in the records of the Bank.

3. All his efforts to get the said amount reimbursed were unsuccessful. Therefore, alleging deficiency in service, he filed complaint against the Bank, praying for a direction to the Bank to pay to him a sum of Rs. 2,71,960, the amount withdrawn from his account along with Rs. 50,000 and Rs. 3,500 as compensation for harassment and as costs respectively.

4. On being served, the Bank contested the claim by filing its written version, which was one of the total denial. It was, however, stated that according to the expert opinion, obtained by the Bank, signatures on the cheques in question tallied with the specimen signatures of the Complainant with the Bank. The allegation of any deficiency in service on the part of the Bank was refuted.

5. On consideration of the material on record, the District Forum came to the conclusion that since, despite direction, the Bank had failed to produce the application on which the first cheque book was issued, there was deficiency in rendering service on the part of the Bank. Accordingly, the Bank was directed to pay a sum of Rs. 2,71,800 to the Complainant along with interest @ 9% p.a. from the date of filing of the complaint and costs.

6. Being aggrieved, the Bank filed appeal before the State Commission. Rejecting the plea of the Bank that the Complaint was not maintainable as its adjudication required recording of voluminous evidence and that the report of the handwriting expert, obtained by the police, could not be relied upon without examining the handwriting expert, the State Commission reiterated that issuing cheque book without a requisition slip to an unauthorized person, which resulted in cheating and forgery, amounted to deficiency in service. Nevertheless, the State Commission was of the view that since one cheque in the sum of Rs. 14,500 had not been se