State Consumer Disputes Redressal Commission
K.K. Traders vs Icici Bank Limited on 10 November, 2022
PRINCIPAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No. 887 of 2019
Date of Institution : 10.12.2019
Date of Reserve : 12.10.2022
Date of Decision : 10.11.2022
K.K. Traders, through its proprietor Kewal Kishan Murgai,
Address: Street Shree Goverdhan Nath Ji, Majith Mandi, Amritsar.
E-mail id: [email protected].
.....Complainant
Versus
1. ICICI Bank Limited, ICICI Bank Towers, Bandra Kurla
Complex, Mumbai, through its Managing Director/Chairman.
E-mail id: [email protected].
2. The Federal Bank Limited, SCO 867, First Floor, NAC Mani
Majra, Chandigarh through its Managing Director/Chairman.
E-mail id: [email protected].
3. Herbal Merchandise, through its Proprietor/Director, KCR
Apartment, Shribag No.6, District Raigad, Alibag,
Maharashtra- 402201.
E-mail id: [email protected].
......Opposite parties
Consumer Complaint under Section 12
read with Section 15 of the Consumer
Protection Act, 1986.
Quorum:-
Hon'ble Mrs. Justice Daya Chowdhary, President
Mrs. Urvashi Agnihotri, Member
1) Whether Reporters of the Newspapers may be allowed to see the judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Yes/No Digest?
Consumer Complaint No. 887 of 2019 2Present:-
For the complainant : Sh. Sukhandeep Singh, Adv. For Opposite party No.1 : Sh. Tushar Arora, Adv.
For Opposite party No.2 : None For Opposite party No.3 : None URVASHI AGNIHOTRI, MEMBER:-
The complainant through its proprietor has filed this complaint under Section 12 read with Section 15 of the Consumer Protection Act, 1986 (in short "the Act"), against the opposite parties (in short "OPs") seeking the following directions:-
i) Direct OPs No.1 and 2 jointly and severally to pay Rs.37,85,000/- to the complainant, along with interest @ 12% p.a. from 17.01.2019 till its actual realization;
ii) Direct OPs No.1 and 2 to pay Rs.5,00,000/- as compensation for deficiency in service and unfair trade practice causing mental and physical harassment to the complainant and for causing monitory loss to the complainant;
iii) Direct OPs No.1 and 2 to pay Rs.50,000/- on account of litigation expenses; and
iv) Any other or consequential relief that this Commission deems fit.
2. Brief facts, as set out in the complaint are that the complainant is a proprietorship Firm engaged in trading of herbal products in a small set-up for the purpose of exclusively earning livelihood by means of self-employment. The complainant Firm is having bank account in ICICI Bank Limited and has been regularly paying charges for running the same as and when demanded by the Bank. The complainant Firm had placed an order of herbal products with OP No.3 amounting to Rs.42,09,640/- and Rs.4,24,593/- was paid as advance. Thereafter, OP No.3 issued invoice dated 16.01.2019 for the said order and sought balance amount of Rs.37,85,047/-. While issuing the said invoice, OP No.3 Consumer Complaint No. 887 of 2019 3 had mentioned the details of its bank account in Federal Bank for the purpose of transferring the balance payment through Online- Banking/NEFT. The complainant requested OP No.2-Bank to transfer an amount of Rs.37,85,000/- in favour of Account details mentioned as "A. Enterprises, ICICI Bank Ltd. Branch Andheri Mumbai, A/C No.001105028146 IFSC: ICIC0000011". Consequently, on 17.01.2019 the said amount Rs.37,85,000/- was debited from the bank account of the complainant without any further verification. However, even after the said payment, OP No.3 did not send the ordered goods to the complainant. When the complainant verified the transactions details from OP No.2-bank, he was shocked to know that the said amount was credited in favour of one "Arti Enterprises" instead of "A.Enterprises" inspite of specific instructions given to OP No.2-Bank. Both the OPs No.1 and 2 were deficient and negligent in not verifying/tallying the actual name of the beneficiary and wrongly crediting the said amount in favour of "Arti Enterprises" instead of "A.Enterprises", which has caused huge financial loss to the complainant. The complainant sent a letter dated 23.12.2019 to OP No.1 highlighting the details of aforesaid transaction and specifically highlighted the fact that "Arti Enterprises" was a fictitious account being operated in OP No.1-Bank causing huge loss to other traders like complainant. In response to the said letter, OP No.1 sent email dated 25.02.2019 stating therein that they had already initiated necessary action against the fraud account and further requested the complainant to lodge an FIR with the police/cyber cell for seeking police assistance, as they were unable to provide direct Consumer Complaint No. 887 of 2019 4 assistance on fraud issues. In the said email, OP No.1 had admitted the fact that a fictitious account was being operated in its branch. OP No.1 was liable for deficiency in service for not conducting proper verification to check such fictitious accounts and in clearing NEFT transactions without verifying/tallying with the NEFT details, which has resulted in a huge financial loss to the complainant.
3. As per the "National Electronic Funds Transfer System Procedural Guidelines, 2011" of Reserve Bank of India(RBI), a Bank branch may reject a customer's request for transfer of fund when, in it's opinion, the beneficiary details given in the NEFT application form are not adequate to identify the beneficiary. Further it is mentioned in the said guidelines that the sending NEFT Service Centre shall accept the messages received from branches/customers through net banking platform if these are complete/in order and received within cut-off time or reject the same if the messages are incomplete/not confirming to the parameters specified. But the OPs failed to do so. This act and conduct of OPs No.1 and 2 amounts to deficiency in service and negligence on their part. Hence, this complaint for directing OPs No.1 and 2 to pay the compensation as claimed therein.
4. Notice of the complaint was issued to the OPs. But OP No.3 failed to appear before this Commission to contest the present complaint despite service by way of publication in the newspaper "The Tribune". Accordingly, OP No.3 was proceeded against exparte, vide order dated 24.07.2020 of this Commission. Consumer Complaint No. 887 of 2019 5
5. The complaint is contested by OPs No.1 and 2 by filing separate written replies. In reply to the complaint, OP No.1 has stated that the present dispute relates to a commercial transaction dealing with transfer of funds from the account of the complainant to other alleged current account. Hence, being the commercial transactions entered into during the course of a business dealing, it does not fall within the jurisdiction of this Consumer Commission. OP No.1 has further stated that the RBI has issued guidelines on Electronic Payment Products, vide its circular bearing No. RBI/2010-11/235 DPSS (CO) EPPD No./863/04.03.01/2010-11 dated 14.10.2010. The relevant portion of the said guidelines is reproduced as under:-
"................
5. Keeping in view the foregoing, in the RTGS / NEFT / NECS / ECS Credit products, it has since been decided as under:
i.Responsibility to provide correct inputs in the payment instructions, particularly the beneficiary account number information, rests with the remitter / originator. While the beneficiary's name shall be compulsorily mentioned in the instruction request, and carried as part of the funds transfer message, reliance will be only on the account number for the purpose of affording credit. This is applicable both for transaction requests emanating at branches and those originated through the online / internet delivery channel. The name field in the message formats will, however, be a parameter to be used by the destination bank based on risk perception and / or use for post-credit checking or otherwise.
ii.Originating banks may put in place an appropriate maker- checker system to ensure that the account number information furnished by their customers is correct and free from errors. This may entail advising customers enjoying online / internet banking facilities to input the account number information more than once (with the first time feed being masked as in case of change of password requirements) or such other prescriptions. Customers submitting funds transfer requests at branches may be Consumer Complaint No. 887 of 2019 6 required to write down the account number information twice in the application form.
.........................."
6. OP No.1 further stated that the transaction remitted via UTR number FDRLR52019011700144927 for Rs.37,85,000/- was successfully processed and credited to beneficiary account on 17.01.2019 respectively. As per the said RBI Circular dated 14.10.2010, transfer of funds through electronic mode will be executed only on the basis of the account number of the beneficiary provided while initiating the transaction and name of the beneficiary is not considered as the criteria for providing credit. However, on receipt of the initial complaint to the Bank regarding the incorrect funds transfer, the bank levied freeze on the said account on 28.01.2019. But the funds had already been withdrawn by the beneficiary of the said account and the customer is not contactable. The KYC during account opening was correctly taken and found genuine in nature. During investigation, the branch officials visited the customer's communication address, however, he was not available at his address and had absconded. The father of the customer is still residing at the said address. There is no lapse on the part of OP No.1. The complainant is trying to take the benefit of his own negligence/mis-statement. The complainant is himself relying on the NEFT instructions given where the account number has been mentioned as 001105028146 (held in the name of M/s Arati Enterprises). The Bank had rightly transferred the amounts as per instructions. Hence, there is no deficiency in service on the part of OP No.1. After denying the Consumer Complaint No. 887 of 2019 7 other averments made in the complaint, OP No.1 prayed for dismissal of the complaint qua it.
7. In reply to complaint, OP No.2 has raised certain preliminary objections, inter-alia, that no cause of action has arisen in favour of the complainant against OP No.2 and the present complaint is an abuse of the process of law.
8. On merits, OP No.2 has stated that on 17.01.2019 the complainant approached OP-Bank with the request to initiate a NEFT Bank Transfer in account of "A. Enterprises" having account with OP No.1 bearing No.001105028146 having IFSC Code:
ICIC0000011 amounting to Rs.37,85,000/-. The UTR number of the said transaction was FDRLR52019011700144927. OP No.1- bank initiated the said transaction with utmost diligence with the same particulars as provided by the complainant. There was no negligence or deficiency in service on the part of OP No.1-bank.
Moreover, there has been participation and cooperation with the complainant in the police proceedings initiated regarding the said transaction. After denying the other averments made in the complaint, OP No.2 has prayed for dismissal of the complaint qua to it.
9. To prove its case, the complainant firm has filed affidavit of Kewal Kishan Murgai, Proprietor along with copies of documents Ex. C-1 to C-7. The complainant has also filed an additional affidavit in support of his case. In rebuttal, OP No.1 has filed an affidavit of Mr.Jeewan Jyoti, Manager Legal along with copies of documents Ex. R-1 to R-3. OP No.2 has also filed Consumer Complaint No. 887 of 2019 8 affidavit of Mr.Sushil Kumar, Manager along with copies of documents Ex. OP-2/A to OP-2/F.
10. We have carefully gone through the entire record and written submissions filed by the parties and have also heard them at length.
11. From the pleadings of the parties and the documentary evidence available on record, it is prima facie proved that a fraud had been committed in transferring the amount to a different account which required a thorough investigation in the matter.
12. In fact the OPs have themselves asked the complainant to lodge the FIR in the matter as a fraud had been played on him. It was thereupon that the following FIR was lodged by him:-
13. Moreover, the police had already taken cognizance of the whole incident and Commissioner of the Amritsar city had already passed detailed orders in the matter on 17.12.2019, relevant extract whereof is reproduced here under:-
"During the investigation done by Incharge Economical Offence Branch-02 Amritsar City that Kasvi Gautam resident of America in connivance with Sh. Laksami wife of Kumar Chandera resident of above DP Enterprises's account (account No.3710098350- Central Bank of India Ahleshwar Branch Gujrat) of firm Arati Enterprises through Vinay Modi son of Arun Kumar resident of House No.H-4/322-A-SMC Awas Kusad Surat Gujrat and employees of ICICI Bank Sagar Avenue Andheri West at that time who opened account of firm Arati Enterprises attested that Rs.37,85,000/- were transferred to firm Arati Enterprises instead of the firm Arati Enterprises in Consumer Complaint No. 887 of 2019 9 connivance in well planned conspiracy for giving assurance to Kewal Krishan etc for giving them more benefit cheated for Rs.42,09,593/-. I am in agreement with investigation of Incharge Economic Offence Branch-02 Amritsar. If approved case be registered in Police Station Civil Lines against respondent Kaswi Gautam resident of America Siri Lakshmi wife of Kumar Chandera resident of above DP Enterprises's account holder, account holder of firm Arati Enterprises Vinay Modi son of Arun Kumar resident of H.No.H- 4/332-A-SMC Awas Kusad Gujrat and at the time of incidence officials of ICICI Bank Sagar Avenue Andheri West who opened account of firm Arati Enterprises and attested the same and transferred amount of Rs.37,85,000/- to firm Arati Enterprises instead of firm A Enterprises and committed offence u/s 420, 120-B IPC, and recommended for investigation. In addition to this if during investigation any evidence comes against someone else also then legal proceedings be initiated against him as well. Report is being produced for proper orders. Sd/- Additional Deputy Commissioner Police (Detective) Amritsar 13-12-19 on which Additional Deputy Commissioner Police (Detective) had prepared his report and sent to Hon'ble Commissioner of Police Amritsar City on which Hon'ble Commissioner of Police Amritsar City sent it with instructions in writing to Station Head Officer Police Station Civil Lines Amritsar that SHO Civil Lines to register the case and investigate".
14. Under these circumstances and when the entire matter is under the scrutiny and investigation of the Police at a very senior level and it has to be established, as to who has committed the fraud, the present complaint cannot be adjudicated by this Commission by holding parallel proceedings under the Consumer Consumer Complaint No. 887 of 2019 10 Protection Act. A number of disputed questions of fact and law are involved in this case, which requires a detailed cross- examination. It has been settled by Hon'ble Supreme Court in case Synco Industries Vs State Bank of Bikaner and Jaipur and Ors. I(2002) CPJ 16(SC): 2002 (1), that where the complicated questions of law and facts are involved, it is not possible to reach to the right conclusion/decision by exercising the limited jurisdiction and that too by summary procedure and it can be possible by the Civil Court to decide such issues.
15. Accordingly, the present complaint is dismissed. However, the complainant is at liberty to approach the appropriate Court/Authority for redressal of his grievance in accordance with law.
16. The complaint could not be decided within the stipulated period due to heavy pendency of Court cases and non- sitting of this Commission due to pandemic of Covid-19.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (URVASHI AGNIHOTRI) MEMBER November 10th, 2022 (DV)