State Consumer Disputes Redressal Commission
Sri Thomas Ninan vs Axis Bank Ltd on 7 August, 2017
A/14/755
BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, MAHARASHTRA, MUMBAI
Appeal No. A/14/755
(Arisen out of order dated 24/07/2014 passed in complaint No.140/2013 by
District Central Mumbai)
Sri Thomas Ninan
3/104, Raj Vaibhav Complex,
Raju Nagar, Dombivali (W),
Thane - 421 202. ...........Appellant (s)
Versus
1. Axis Bank Ltd.
Bombay Dyeing Mills Compound,
Pandurang Budhkar Marg,
Worli, Mumbai - 400 025.
2. Reliance Communications Ltd.
Millennium Business Park
A 8, 1st floor, Mahpe, Near MTNL,
Opp. Mastek Thane Belapur Road,
Navi Mumbai - 400 710. ............Respondent (s)
BEFORE:
Justice A.P. Bhangale PRESIDENT
D.R. Shirasao JUDICIAL MEMBER
For the Mr.Binoy Gupta, Advocate for
Appellant: appellant.
Appellant also present in person.
For the Mr.K.A. Suryanarayanan, Advocate
Respondent: for respondent No.1.
Mr.Kirankumar Phakade, Advocate for
respondent No.2.
ORDER
Per Justice Mr.A.P. Bhangale, Hon'ble President
1. The appeal is directed against order dated 24/07/2014 passed by the District Forum, Central Mumbai dismissing the consumer complaint No.140/2013 and driving the appellant/complainant to approach the appropriate Court on the ground that it is not possible to decide the complicated questions of facts in summary procedure.
Page 1 of 10A/14/755
2. Facts which are material for deciding this appeal are as under :-
Complainant had Salary Savings Bank account bearing No. 186010100031781 with the appellant-Axis Bank Limited, Worli Branch Mumbai. According to Claimant-complainant he was not receiving the e-mail alerts as his e-mail ID was wrong. He had entered into correspondence with Axis Bank to correct his registered e-mail I.D. On 1st January 2013 the complainant received e-mail from the Customer Care of the Bank asking various details for updating his Banking ID. The complainant supplied the details. On 07/01/2013 the complainant deposited the Cheque for the sum of Rs.One Lakh in his account with the Bank. Till December 2012 the complainant had deposited several Cheques with the OP Bank. The complainant was surprised to find that amount of Rs.14,00,900/- was withdrawn from his Savings Bank Account by 22 internet transfers between the dates 08/01/2013 and 09/01/2013 to 12 different accounts of which 10 accounts were with the Axis Bank. On 10/01/2013 the complainant contacted and informed the Branch Manager of the Axis Bank and reported the matter to the Bank by complaint to the Head Office of the Bank, with written complaint to the Cyber Crime, Thane and Vishnu Nagar Police Station by FIR registered on 13/01/2013. The Bank committed deficiency in service by not depositing the amounts and restoring the position in the Savings Bank account. The Bank ought to have made immediate follow up action by lodging police complaint in to fraud committed by unknown thief by seeking transfers or withdrawals by internet transactions allowed on behalf of the Bank. There was a limit of the transaction of maximum Rs.50,000/- withdrawals from the Savings Bank account per day through internet transaction. The Axis Bank had allowed the withdrawals exceeding the permissible limits through internet transactions. According to the complainant the Bank ought to have taken care and precautions to Page 2 of 10 A/14/755 alert the consumer through e-mail, SMS etc. to the complainant. The Bank committed deficiency in service by not informing the complainant, and also was negligent in restoring the hard earned salary sums belonging to the complainant.
3. Complainant has Mobile phone number 9323074811 issued from the Reliance Telecommunications Limited (Opponent No.2) which got suddenly deactivated on 08/01/2013. Complainant had visited Franchise of the Opponent No.2 M/s.Swastik Intercom, Dombivali, complainant was advised to change SIM Card which will be reactivated within three hours but it was not activated. Complainant came to know subsequently that the same SIM Card was activated by someone in Hyderabad by negligence of Opponent No.2.
4. Under the above circumstances the complainant had approached the Banking Ombudsman, who had directed the Opponent No.1 to pay Rs.1,40,000/- to the complainant and IndusInd Bank to pay Rs.Two Lakhs only. The complainant dissatisfied, issued legal notice to the Opponents and filed the complaint for to recover the sum of Rs.14,00,900/- from the Opponents with interest at the rate of Rs.15% per annum and claim damages of Rs.Three Lakhs for the mental harassment and costs of litigation in the sum of Rs.One Lakh only.
5. The opponents contested the complaint by filing written version contending that the Complainant had disclosed the confidential details of his bank account to the anonymous mailer which led to fraudulent transactions. Since the Mobile phone of the Complainant was deactivated he purchased new mobile handset and all data was transferred to the new handset and deleted from the old handset. The complainant was informed by the Swastik Telecom that the complainant's SIM Card was activated in Hyderabad on 08/01/2013 by unknown person. Police investigation Page 3 of 10 A/14/755 was done by Cybercrime Cell. Opponent No.1 contended that fraud was committed on the basis of old data in the old mobile set. Complainant did not change the Log in ID or password. Investigation in to details was necessary as beneficiaries had Bank account with ICICI Bank and IndusInd Bank and amounts were already siphoned off by the beneficiaries. Opponents had contended that the complicated questions of fraud and forgery ought not to be dealt with by the Consumer Fora.
6. Both the parties filed documents/ affidavits in support of their contentions and also replies/counters. After considering the material before it, the forum came to pass the impugned order. Aggrieved thereby, the appellant/complainant is before us.
7. We have heard Learned Counsel Mr.Binoy Gupta for appellant and Learned Counsel Mr.K.A. Suryanarayanan for respondent No.1 and Learned Counsel Mr.Kirankumar Phakade fopr respondent No.2. With the help of both parties, we have gone through the material on record.
8. The Learned Counsel for the appellant first submitted that the opponent- bank ought to have been held guilty of gross deficiency in service to the complainant since all that was done could not have been done without the negligence of the officials concerned of the opponent No.1-Bank.
9. The Learned Counsel of the respondents sought to submit that in fact it was the complainant who had approached the Ombudsman and was awarded the compensation though partly to reimburse the damage caused to the Complainant.
10. We have carefully considered rival contentions. The undisputed facts are that the complainant had Salary Savings Account with the Axis Page 4 of 10 A/14/755 Bank Ltd. at Khar (West) Branch. In respect of the fraudulent transactions the complainant had informed within two days of the fraudulent transactions to the Bank. It was necessary for the opponent No.1 to immediately take action to lodge a complaint with the police and to recover the siphoned off sums from the beneficiaries and the intermediate Banks concerned. In the ruling in CCI Chambers Co- operative Housing Society V/s. Development Credit Bank Limited in Appeal (Civil) No.7228 of 2001 decided on 29/08/2003 the Apex Court reported as 2003 Supp (3) SCR 139, it is observed thus :-
"In Amar Jwala Paper Mills (India) and Anr.'s case (supra) this Court set aside the order of NCDRC relegating a complainant to a Civil Court in spite of the complexity of the matter because the hearing had almost concluded before the Commission.
In Dr. J.J. Merchant & Ors.'s case (supra) this Court dealing with the contention that complicated questions of facts cannot be decided in summary proceedings held - "this submission also requires to be rejected because under the Act, for summary or speedy trial, exhaustive procedure in conformity with the principles of natural justice is provided. Therefore, merely because it is mentioned that the Commission or Forum is required to have summary trial would hardly be a ground for directing the consumer to approach the civil court. For the trial to be just and reasonable, a long-drawn delayed procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is not necessary. It should be kept in mind that the legislature has provided an alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtained on such ground. It would also be a totally wrong assumption that Page 5 of 10 A/14/755 because summary trial is provided, justice cannot be done when some questions of fact are required to be dealt with or decided. The Act provides sufficient safeguards."
In our opinion the decision arrived at by the NCDRC is premature. The Commission ought to have issued notice to the respondent and taken its pleadings on record. Only when the pleadings for both parties were available should the Commission have formed an opinion as to the nature and scope of enquiry, i.e., whether the questions arising for decision in the light of the pleadings of the parties required a detailed and complicated investigation into the facts which was incapable of being undertaken in a summary and speedy manner. Then the Commission could have justifiably formed an opinion on the need of driving away the complainant to the Civil Court. Mere complicated nature of the facts and law arising for decision would not be decisive."
The jurisdiction of the Consumer Fora exists to impart speedy and expeditious cheaper justice to protect the Consumers. Section 3 of the Consumer Protection Act, 1986 do provide efficacious, additional and supplementary remedy. Complaint cannot be thrown away merely because some complicated questions may arise. Consumer Fora do have ample powers to deal with the consumer disputes to solve them and protect the consumers.
11. There is increase in the grievances of the customers in relation to unauthorized banking transactions in respect of electronic online remote payment and cashless transactions e.g. internet banking, mobile banking, card not present (CNP) transactions, pre-paid payment instruments resulting in debits from their Bank accounts and customers Page 6 of 10 A/14/755 need to be protected in unauthorized electronic banking transactions. Banks need to assure safety to the customers making them feel safe and secure in respect of the electronic banking transactions. Banks are duty bound to take appropriate steps to assess the risk and provide for robust mechanism to prevent and detect fraud and to provide for liability arising out of misappropriation or fraud. Banks must ask their customers to compulsorily register for the E-mail alerts, SMS alerts, system must be such so that customers can immediately inform by reply to the Bank about any illegal or unauthorized remote or internet transaction soon after occurrence thereof. Customer's liability must be zero when he informs the Bank at the earliest possible opportunity. Burden of proof to prove customer's liability is upon the Bank in all cases of the online internet transactions, Bank must show that it had taken immediate steps to prevent and/or detect fraud. Banks transacting inter se do have means to trace the culprits on the basis of Know Your Customer (KYC) details in the Bank accounts and recover the sums wrongly transferred by electronic transfers. The basic principle is one must be made to pay for negligence when it has caused deficiency in service and loss to consumer actionable under the Consumer Protection Act, 1986. It is argued that appellant himself is negligent but this submissions by the respondents is not acceptable because in cases of internet transfers unless alerted prior to or at the time of internet transfers we cannot impute any blame to the consumer, who was in darkness as to withdrawals by unknown persons by mode of internet transfers.
12. In view of this, we hold in the facts and circumstances of the case that the forum was not justified in not holding the Axis Bank liable to restore and refund the Salary Savings money with the bank account of the Complainant account holder and take prompt steps to recover the Page 7 of 10 A/14/755 same from the culprits by lodging prompt criminal proceedings. In Criminal trial also Section 357 of the Criminal procedure Code can upon application by the aggrieved party enable any criminal Court to compensate appropriately at the conclusion of the Criminal trial apart from other remedies according to prevalent law to trace and recover the money wrongly transferred. Internet Banking is a facility made available from the Bank on payment of service charges. The Bank concerned is duty bound to protect its consumer's interest by alerting the consumer of services by E-mails and SMS communications when electronic transactions exceeding Rs.50,000/- or beyond are done on behalf of the consumer account holder. We refer Circular of Reserve Bank of India bearing DBR.No.Leg.BC.78/09.07.005/2017-18 dated 06/07/2017 regarding limiting liability of customers in unauthorised electronic banking transaction. The shift in the policy of the Reserve Bank of India fixing zero liability upon the Bank customer in case of sending funds by internet transfers through other Banks, that too without alerting the Customer by E-mails or SMS alerts must be adhered to by the nationalized and recognized Banks doing banking business in India. The burden to disown liability is heavy on the opponent No.1 Bank and it was not discharged satisfactorily in the facts and circumstances of the case. The Bank sending money by internet transfers when informed promptly by the consumer in such case is expected to lodge the complaint immediately with the police and follow the money went in to wrong hands by appropriate criminal proceedings by resort to Section 357 of the Code of Criminal Procedure. In the meantime the Bank concerned shall make good the loss caused to the Consumer by negligence on the part of the Bank or its officials. The Non-deposit and non-restoration of the money misused and/or misappropriated or wrongly sent by internet transfers, at the foot of the Savings Bank account of the Complainant Page 8 of 10 A/14/755 amounted to deficiency in service on the part of the opponent No.1 Bank, actionable by the consumer under the Consumer Protection Act,1986.
13. Impugned judgment and order therefore is unsustainable, unjust and improper.
14 . In view of the reasons stated, we pass the following order :-
We set aside and quash the impugned Judgment and order dated 24/07/2014 passed in Consumer Complaint case No.140 of 2013 by the District Forum, Central Mumbai and we allow the appeal with costs quantified at Rs.20,000/- to be paid to the appellant by the respondent No.1. We direct the opponent/respondent No.1-Bank to deposit back the sum of Rs.14,00,900/- (Rupees Fourteen Lakhs Nine Hundred only) unauthorizedly transferred to the accounts of other Banks on 08/01/2013 and 09/01/2013 from the accounts of the complainant. If the opponent/respondent No.1-Bank fails to deposit back the amount as directed within a month from the date of this order, the sum shall be payable together with interest at the rate of Rs.9% interest till realisation. The compensation for mental harassment to the appellant/complainant is arrived at Rs.One Lakh and litigation costs in the sum of Rs.25,000/- which shall be payable by opponent/respondent No.1-Bank to the appellant/complainant. Respondent/Opponent No.2 as mere service provider of the mobile SIM card activated cannot be held liable in this proceeding for want of reliable and acceptable evidence led and result of investigation against them for card activated at Hyderabad by unknown person. Complaint as against the respondent/opponent No.2 is dismissed. However, opponent/respondent No.1-Axis Bank shall be at liberty to follow up the criminal proceedings against the culprits who were benefited from the unauthorized internet transactions in this case and may Page 9 of 10 A/14/755 press for recovery and/or reimbursement of sums transferred by the Axis Bank through the internet transactions, under Section 357 of the Code of Criminal Procedure at the Conclusion of the criminal trial, if pending. Appeal is accordingly disposed of. Copies of the order be furnished to the parties.
Pronounced Dated 7th August 2017.
[ Justice A.P. Bhangale ] PRESIDENT [ D.R. Shirasao] JUDICIAL MEMBER Page 10 of 10