State Consumer Disputes Redressal Commission
1. Icici Bank Limited, Rep. By Its ... vs Mr. Kateka Sudhakar, S/O. K.J. Lazarus, ... on 5 March, 2018
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana First Appeal No. FA/1284/2013 ( Date of Filing : 09 Nov 2013 ) (Arisen out of Order Dated 13/09/2013 in Case No. Complaint Case No. CC/39/2011 of District Hyderabad-III) 1. 1. ICICI Bank Limited, Rep. by its Managing Director, Registered office at Landmark, Race Course Circle, Vadodara-390 007. and Also at ICICI Bank Towers bandra Kurla Complex, Mumbai-400 051. ...........Appellant(s) Versus 1. Mr. Kateka Sudhakar, S/o. K.J. Lazarus, Aged 33 Years, R/o. K-69, Bhavani Residency Minister Road, Near NTR Circle Begumpet, Secunderabad. 2. 2. The Branch Manager, ICICI Bank Ltd., Navakethan, S.D. Road, Secunderabad-500 003. ...........Respondent(s) BEFORE: HON'BLE MR. JUSTICE B. N. RAO NALLA PRESIDENT HON'BLE MR. Sri. PATIL VITHAL RAO JUDICIAL MEMBER For the Appellant: For the Respondent: Dated : 05 Mar 2018 Final Order / Judgement BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD F.A.No. 1284 OF 2013 AGAINST C.C.NO.39 OF 2011 DISTRICT CONSUMER FORUM-III, HYDERABAD Between ICICI Bank Limited Rep. by its Managing Director Regd. Off at Landmark Race Course Circle Vadodara-390007 and also at ICICI Bank Towers And also at ICICI Bank Towers Bandra Kurla Complex, Mumbai-400051 The Branch Manager, ICICI Bank Ltd., Navakethan, S.D.Road, Appellants/ opposite parties AND Kateka Sudhakar S/o K.J.Lazarus Aged 33 years, R/o K-69, Bhavani Residency Minister Road, Near NTR Circle, Begumpet Secunderabad Respondent/complainant Counsel for the Appellants M/s S.Nagesh Reddy Counsel for the Respondent M/s D.Devendar Rao QUORUM : HON'BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT & SRI PATIL VITHAL RAO, MEMBER
MONDAY THE FIFTH DAY OF MARCH TWO THOUSAND EIGHTEEN Oral Order : (per Hon'ble Sri Justice B.N.Rao Nalla, Hon'ble President) *** This is an appeal filed by the opposite parties aggrieved by the orders of District Consumer Forum-III, Hyderabad dated 13.09.2013 made in CC No.39 of 2011 wherein it allowed the complaint directing the opposite parties no.1 and 2 to refund a sum of Rs.1,91,000/- with interest 9% p.a. from 17.06.2010 till realization together with compensation of Rs.20,000/- and costs of Rs.2,000/-.
2. For the sake of convenience, the parties are referred to as arrayed in the complaint.
3. The case of the complainant, in brief, is that complainant is an Account holder of the Opposite Party No.2 having a savings Account No.004801522315 since 2004. On 17.06.2010 an amount of Rs.1,91,000/- was debited from the Complainant savings account without his authorization and therefore, he lodged a complaint on 18.06.2010 with the opposite partyno.2. On verification, the Complainant came to know that series of transactions were done in a fraudulent manner and had learnt that in those series of transactions, two transactions in particular were withheld on the premise that transactions were dealt with fake accounts. The Complainant was informed by the Opposite Party No.2 that the said transactions were done fraudulently by hacking his savings account by unknown persons. However, the opposite party No.2 assured the complainant that it had started verification/investigation in the matter and further information can be provided after the completion of the verification. When the Complainant visited the Opposite Party No.2 Bank to enquire about the progress of his complaint, the Branch Manager of Opposite Party No.2 informed the Complainant that since it was an internal investigation, the details will not reflect in the customer care system. The opposite parties have entangled the Complainant into procedural trap in order to absolve the opposite parties from its negligent actions and deficient conduct. Thereafter, the complainant came to know that the cybercrime cell upon investigation has unearthed a massive fraud whereat 3 fraudsters have been traced and after locating and identifying them, the police at Delhi arrested the suspects and brought them to Hyderabad. During the interrogation the suspects have confessed that they got the information from the Bank employees Mumbai and Delhi of ICICI Banks. On 12.07.2010, the opposite parties addressed an email requesting the Complainant to furnish the details and accordingly on 15.07.2010, the required information was sent to them but despite that the case was closed for want of information. Thereafter, on 07.09.2010, the opposite parties approached the Complainant after a gap of 2 months, offered the Complainant to execute a draft deed of release However, the Complainant refused to accept the said proposal. The opposite parties were deficienct in not protecting the interest of the complainant and that some of the employees of opposite parties are in active collusion with the fraudsters caused wrongful loss to the complainant. Hence, the complaint praying to direct the opposite parties to pay Rs.1,91,000/- with interest @ 15% p.a. together with compensation of Rs.1,00,000/- and costs of Rs.40,000/-.
4. The opposite parties resisted the case contending that the complainant is not a consumer within the meaning of CP Act. The complainant having knowledge that the opposite parties are not liable for the negligent acts of the complainant in sharing the personal information of his credit/debit card with third parties which resulted for the alleged transactions and now trying to blame and extract money from the opposite parties. The complainant having availed the internet banking facility from the opposite parties by agreeing to the terms and conditions as per the account opening form as such the complaint filed is bad in law and is liable to be rejected as the dispute against opposite parties does not fall within the purview of C.P. Act. The opposite party bank upon hearing from the complainant of the alleged fraudulent transactions, began a prompt internal verification of the transactions and trace the transactions to different internet account and also marked a freeze on the said accounts. It is observed that all these amount transfers were made on 17.06.2010. As per the Bank's process, since no FIR was lodged at that time with regard to the sums claimed and the opposite party bank had no way of ascertaining the fraud. The opposite party bank sought a letter of indemnity from the complainant as is part of its regular procedure but the complainant refused to sign the indemnity letter for the opposite party bank to release the said sum. The complainant had initially complained to the call center of the opposite party bank and basing on such complaint of the complainant immediately all the five accounts were got freeze. However, by the time the complaint was made and due action taken, certain amounts were already withdrawn from the said accounts with the exception of two amounts.
5. The opposite party Bank wanted to release Rs.21,000/- first to the customer since it was an unencumbered account and the funds were readily available to be refunded and for the same the opposite party had asked the complainant to sign the deed of release, however, he refused to sign the deed of release even when it was repeatedly explained to him that as per the Bank's mandate the said deed of release was required to be signed by a customer before any action could be taken. It is the prime responsibility of any account holder to protect confidentiality of their PIN Numbers and Pass words, so that it is not misused by third parties. There is absolutely no deficiency of service by the opposite parties and as such the complaint is liable to be dismissed.
6. In proof of his case, he filed his evidence affidavit and got marked Ex.A1 to A7. The Manager (Legal) of the opposite parties filed his Evidence Affidavit and got marked Exs.B1 to B4.
7. The District Forum after considering the material available on record, allowed the complaint bearing CC No.39 of 2011 by orders dated 13.09.2013 as stated in paragraph No.1, supra.
8. Aggrieved by the said decision, the opposite party no.1 preferred the appeal contending that the Dist. Forum did not appreciate the facts in correct perspective. The District Forum failed to appreciate that the disputed transactions were done online using the confidential details of the customer and that the transactions could not have been possible unless the customer has divulged/compromised the confidential details of its accounts like user ID and password. The customer who has failed in its duty to secure the confidential details of its account and customer alone can be held responsible for any loss suffered due to his negligence and his failure to protect the confidential details of its account. The District Forum erred in not appreciating the multiple steps and safety measures taken by the Bank to facilitate an online transaction such as the User ID and password, registration of beneficiary and a Unique Registration Number sent to the customer's mobile number by SMS but instead erroneously ascribed liability on the Bank for not sending an SMS for each transaction and failed to appreciate that the SMS alerts were always sent as a value added service free of cost, post completion banking transactions, when neither the bank nor the customer can stop such transactions especially since such transactions were done through internet banking mode. Hence, the opposite parties prayed to allow the appeal by setting aside the order of the District Forum and dismiss the complaint.
9. Ms Usha Rani, Advocate represents counsel on record for appellant. Counsel for respondent present. Heard. Written arguments of both parties are filed.
10. The point that arises for consideration is whether the impugned orders as passed by the District Forum suffer from any error or irregularity or whether they are liable to be set aside, modified or interfered with, in any manner? To what relief?
11. It is not in dispute that the complainant was having savings account with the opposite party no.2 bank and that on his complaint with regard to misuse of the said account by some unknown persons in making online transactions, the Cyber Crime Cell arrested a gang which allegedly defrauded lakhs of rupees having stolen data of number of customers of the ICICI Bank including the complainant. It is the contention of the opposite parties that the complainant himself was negligent in protecting confidential information of his PIN number and Password and as such they were not responsible for his monetary loss. The opposite parties also contended that the complainant not a consumer and that the dispute against opposite parties does not fall within the purview of the C.P.Act.
12. We do not agree with the contention of the opposite parties for the reasons that 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 does 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.
13. 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 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 respondent/complainant 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.
14. In view of this, we hold in the facts and circumstances of the case that the forum was justified in not holding that Bank is liable to refund the amount which was wrongly transferred to other accounts. 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 opposite party Bank and it had 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 resorting 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 amounted to deficiency in service on the part of the opposite parties Bank, actionable by the consumer under the Consumer Protection Act,1986.
15. The Honble Supreme Court in State of Gujarath vs Shantilal Mangaldas AIR 1969 SC 634. Held the compensation to mean.. "In ordinary parlance the expression compensation means anything given to make things equivalent; a thing given to or to make amends for loss recompense, remuneration or pay, it need not therefore necessarily in terms of money. The phraseology of the Constitutional provision also indicates that compensation need not necessarily be in terms of money because it expressly provides that the law may specify the principles on which, and the manner in which , compensation is to be determined and given . If it were to be in terms of money along, the expression paid would have been more appropriate".
16. The Supreme Court held that the compensation to be awarded is to be fair and reasonable. In Charan Singh vs Healing Touch Hospital and others 2000SAR(Civil) 935 the Apex Court stressed the need of balancing between the compensation awarded recompensing the consumer and the change it brings in the attitude of the service provider. The Court held While quantifying damages , consumer forums are required to make an attempt to serve ends of justice so that compensation is awarded, in an established case, which not only serves the purpose of recompensing the individual, but which also at the same time aims to bring about a qualitative change in the attitude of the service provider. Indeed calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application. While awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to established judicial standards where the claimant is able to establish his charge.
17. For the foregoing reasons we are inclined to modify the order of the District Forum by setting aside the interest part and maintain the rest of the order.
In the result the appeal is allowed modifying the order of the District Forum. The opposite parties are directed to pay Rs.1,91,000/- to the respondent/complainant. Rest of the order is confirmed. There shall be no order as to costs.
PRESIDENT MEMBER 05.03.2018 [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER