POS Machine's 'Successful' Receipt is Proof of Transaction; Bank Liable for Non-Credit Despite Reporting Delay: State Consumer Commission - 2025-07-27

Bank Held Liable for Failed POS Transaction Despite Merchant's Delayed Complaint, State Consumer Commission Rules

Raipur: In a significant ruling for merchants relying on digital payments, the State Consumer Disputes Redressal Commission, Raipur, has held that a bank is liable for a failed transaction even if the merchant reports it after a considerable delay. The Commission emphasized that a 'successful transaction' receipt generated by the bank's Point of Sale (POS) machine is sufficient proof for a merchant to assume the payment has been credited.

The bench, comprising Justice Gautama Chourdiya (President) and Mr. Pramod Kumar Verma (Member) , overturned a District Commission order and directed IDBI Bank to refund ₹50,000 to a jeweller, along with compensation for deficiency in service.

Case Background

The appeal was filed by Shah Javaharlal Jethalal Jewellers Pvt. Ltd. against an order of the Bilaspur District Consumer Commission. The dispute arose from a transaction on July 18, 2018, where the jeweller sold gold ornaments to a customer. A payment of ₹50,000 was made by swiping the customer's State Bank of India (SBI) card on a POS machine provided by IDBI Bank.

The machine printed a receipt confirming a successful transaction, based on which the jeweller handed over the goods. However, during a subsequent audit, the jeweller discovered that the amount was never credited to their IDBI Bank account. A formal complaint was lodged with IDBI Bank on May 19, 2020, nearly two years after the incident.

The District Commission had dismissed the jeweller's complaint, likely due to the significant delay in reporting the issue.

Arguments in the State Commission

• Appellant (The Jeweller): The jeweller’s counsel argued that they had maintained a high level of trust with their bank (IDBI) and had made regular verbal inquiries. The core of their argument was that the dispute was essentially between the two banks—IDBI Bank (the acquiring bank) and SBI (the issuing bank). Bank statements from SBI confirmed that the customer's account was debited, and the funds were never returned. Therefore, the money was lost in transit between the two banking institutions, and the jeweller should not be made to suffer.

• Respondent 1 (IDBI Bank): The bank defended the District Commission's order, stating that the jeweller's failure to file a timely complaint made it impossible to trace the funds as per RBI guidelines.

• Respondent 2 (State Bank of India): SBI's counsel presented bank statements proving that their customer's account was successfully debited for ₹50,000 on the date of the transaction. They argued that since the amount was never reversed or refunded to the customer, the transfer was successful from their end, absolving them of any liability.

Commission's Landmark Findings

The State Commission overturned the lower forum's decision, making several critical observations:

"The generation of a successful transaction receipt from the disputed swipe machine is in itself proof that the disputed amount has reached its account with Respondent No. 01 Bank... The bank cannot say that the disputed transaction amount was not received by their bank."

The Commission reasoned that when a bank provides a POS machine that issues a 'successful' receipt, the merchant is justified in believing the transaction is complete. The burden then shifts to the bank to prove otherwise or to ensure the funds are correctly credited.

The judgment noted: * The customer's SBI account was indeed debited, and the funds were never reversed. * IDBI Bank failed to provide any evidence, such as an SMS alert or other communication, to inform the jeweller that the transaction had failed despite the printed receipt. * The technical failure occurred between the debit from the customer's account and the credit to the merchant's account, making IDBI Bank, the service provider, responsible for the deficiency.

The Commission concluded that the District Commission had erred by overlooking these crucial facts and siding with the bank based on the reporting delay.

Final Order

The State Commission allowed the appeal and set aside the District Commission's order. It directed IDBI Bank to: 1. Pay the disputed transaction amount of ₹50,000 to the jeweller within one month. 2. If the payment is delayed, it will attract simple interest at 6% per annum from the date the complaint was filed (June 23, 2021) until the date of payment. 3. Pay an additional ₹10,000 for mental and financial distress and ₹5,000 towards litigation costs.