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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Dinesh Singh, Presiding Member
Chairman, Punjab National Bank and
Anr. —Appellants
versus
Leader Valves Ltd. —Respondent
First Appeal No.112 of 2015
(Against the Order dated 19/12/2014 in Complaint No. 45/2010 of the State Commission Punjab)
Decided on 13.3.2020
Consumer Protection Act, 1986 – Sections 19, 2(1)(g) and 2(1)(r) – Consumer Protection Act, 2019 – Sections 41, 2(11) and 2(47) – Banking service – Unauthorised withdrawals from account – Liability for – Complainant was an account holder of the appellant-bank – Complainant brought the unauthorized transactions to Bank’s notice – Whether Bank is liable for unauthorized transactions made in the complainant’s accounts when the account holder was not at fault? – (Yes) – State Commission ordered that an amount of Rs. 23,69,482/- be refunded with interest @ 19% p.a. – Challenge against – Nothing brought on record to show that an inquiry was conducted by bank to identify the man-made/system’s failure or to fix responsibility for a huge unauthorized transfer of sums – Also nothing brought on record to show that complainant had himself made the concerned transactions. – Impugned award made by State Commission in respect of deficiency in service upheld – Costs of Rs. 1,00,000 also imposed for unfair trade practice – Direction issued. (Paras 6 to 21)
Result: Appeal dismissed.
ORDER
Dinesh Singh, Presiding Member—This Appeal has been filed under Section 19 of The Consumer Protection Act, 1986, hereinafter referred to as the ‘Act’, impugning the Order dated 19.12.2014 in C.C. No. 45 of 2010 passed by The State Consumer Disputes Redressal Commission, Punjab, hereinafter referred to as the ‘State Commission’.
The Appellants herein, Punjab National Bank, were the Opposite Parties before the State Commission, and are hereinafter being referred to as the ‘Bank’.
The Respondent herein, Leader Valves Ltd., was the Complainant before the State Commission, and is hereinafter being referred to as the ‘Complainant’.
2. Heard learned Counsel for the Bank and the Complainant, and perused the material on record including inter alia the impugned Order dated 19.12.2014 of the State Commission and the Memorandum of Appeal.
3. The short point for consideration is whether the Bank is liable for unauthorized transactions made in the Complainant’s accounts when the Complainant / account-holder was not at fault and when the Complainant / account-holder brought the unauthorized transactions to the Bank’s notice without undue delay.
4. The facts have been succinctly articulated by the State Commission in paras 1 to 3 of its Order of 19.12.2014. The same are reproduced below:
The complainant has availed the following cash credit facilities from the OP bank for the below mentioned accounts:-
a) c/c ABC Account Rs. 100 lacs
b) c/c Hypothecation Account Rs. 900 lacs
c) c/c Book Debt Account Rs. 300 lacs
Total Ceiling for a) to c) Rs. 900 lacs
2. Out of the three accounts, he was entitled to operate only hypothecation account and for this he was issued I.D. and Password. Whereas the other two accounts were for strict operation of the opposite parties alone upon which the complainant had no functional control. In the ABC account, the limit was Rs. 1 crore to be used against bill sent for collection. The complainant has been using the facility of e-banking and immediately after receiving the password, he had changed his accounts’ password and had been changing it almost every month.
3. It was further alleged that on 25.1.2010, the complainant was astonished to discover that someone had made an unauthorized transfer of a sum of Rs. 40 lacs by debiting to C/c Book Debt Account No. 3513008700036013 for which the complainant had no functional control and was credited in some other account of the opposite parties. This was immediately intimated to the opposite party and due to timely action on behalf of the complainant, the amount was traced. He further discovered that another amount of Rs. 26,48,500/- was illegally mis-appropriated from ABC Account No. 3513008700032345 of the complainant over which he had no functional control. The Ops gave reply to the complainant stating that the mis-appropriation was a result of mis-use of password provided for which they were not responsible. On the advice of the Ops, FIR was got lodged with the concerned Police Station. After this incident, they were intimated that same password was used for the operation of these two accounts. The complainant was further informed that these accounts have been frozen. On that date a sum of Rs.10,87,737/- was outstanding but withdrawls continued till 5.3.2010 by use of ATM and these withdrawls were not possible except with the tacit connivance of the opposite party and its officials. Then opposite party apprised the complainant of the IP Addresses, which were traced back to US from which the amount has been mis-appropriated. The complainant also intimated the Ops of the attempted withdrawls of Rs. 20 lacs from Delhi Branch and similar attempt was made from Bareily Branch. Then the complainant wrote a letter dated 25.2.2010 to Regional Director of the Reserve Bank of India intimating about the inaction on behalf of the Ops. The complainant had also engaged a private net security agency to assist in locating the culprits and the same net security agency had already i
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