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A. P. SAHI
Public Health Foundation of India – Appellant
Versus
Bank of Maharashtra – Respondent
ORDER
The present complaint alleges deficiency against opposite party no.1 Bank of Maharashtra having been negligent and deficient in taking care of the handling a sum of Rs.27 crores entrusted to the opposite party bank in the shape of fixed deposits due to non-observance of the KYC norms by the opposite party bank resulting in siphoning of the entire funds through a fake current account. The contention of the complainant is that the amount was transferred by the complainant from its accounts directly to the bank for investing into fixed deposits that was confirmed by the bank. The remittances were made to the Inter Branch Fund Transfer Account of opposite party no.1 and instructions were issued by the complainant for deposit of the same in fixed deposits. Later on, it was found that a fake account was opened in the name of the complainant by some fraudsters and it is allegedly involving the officials of opposite party no.1, hence criminal proceedings have also been initiated that are pending but the present complaint has been filed praying for refund of Rs.27 crores invested by the complainant together with maturity amount of the fixed deposit receipts and further award of 18% in
Bank – The misappropriation and embezzlement is only a consequence of this deficient functioning of the Bank and the defence taken by it is unacceptable.
Banking Law – Embezzlement – Mere negligence of customer will not prevent it in successfully suing the bank for recovery of amount.
The court ruled that a bank's failure to update KYC in accordance with guidelines, coupled with unjustified account freezing, constitutes service deficiency warranting compensation.
(1) Detailed evidence – There is no force in contending that, that all the Complaints herein require detailed evidence and deep scrutiny which is not possible at all in summary inquiry contemplated u....
The bank acted within its authority in allowing transactions by the deceased's brother, with no sufficient evidence of fraud or deficiency in service.
The bank's failure to verify the authenticity of debit vouchers led to unauthorized withdrawals, constituting a deficiency in service and warranting compensation for the complainant's losses.
(1) Consumer Complaint – Maintainability – What needs to be seen is dominant intention or dominant purpose of transaction – Status of purchaser or recipient of goods or services, whether it is an ind....
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