Allahabad High Court
Awadhesh Singh vs Reserve Bank Of India And 2 Others on 24 March, 2021
Equivalent citations: AIRONLINE 2021 ALL 530
Bench: Surya Prakash Kesarwani, Ravi Nath Tilhari
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. - 3 Case :- WRIT - C No. - 2045 of 2020 Petitioner :- Awadhesh Singh Respondent :- Reserve Bank Of India And 2 Others Counsel for Petitioner :- Adarsh Singh,Indra Raj Singh Counsel for Respondent :- Sanjai Singh Hon'ble Surya Prakash Kesarwani,J.
Hon'ble Ravi Nath Tilhari,J.
1. With the consent of the learned counsel for the parties, this writ petition has been finally heard, without calling for counter affidavit.
2. Heard Shri Adarsh Singh, learned counsel for the petitioner and Shri Sanjay Singh, learned counsel for respondent no. 2, the Punjab National Bank, Subedar Ganj, Prayagraj.
3. This writ petition has been filed praying for the following reliefs:-
"I. Issue a writ, order or direction in the nature of mandamus directing the respondent no. 1 Reserve Bank of India, 83/142 M.G. Road, Kanpur-208001 through its Regional Director, Kanpur and respondent no. 3 Complaint and Human Resource Development Section, Regional Office, Allahabad through its Manager (Banking Ombudsman) to consider the grievance of the petitioner and resolve the same, within stipulated period as may be fixed by this Hon'ble Court.
II. Issue a writ, order or direction in the nature of mandamus directing the respondent no. 2-Punjab National Bank, Subedar Ganj Allahabad Uttar Pradesh 211012 through its Branch Manager to credit the amount of Rs. 3 lacs. in the account no. 4763000400000990 of Punjab National Bank, Subedar Ganj Allahabad, Uttar Pradesh 211012 of the petitioner along with interest at the bank rate within stipulated time as may be fixed by the Hon'ble Court."
4. In paragraph nos. 4, 5, 6 and 7 of the writ petition, the petitioner has stated as under:-
"4. That it is pertinent to mention before this Hon'ble Court that the petitioner was having a balance of amount of Rs. 4,12,815/- to his credit in the aforesaid bank account maintained with the respondent no. 2 as on 21.02.2019, however, the evening of 21.02.2019 turned into a nightmare for the petitioner when he received a call on his Mobile NO 9794866805 from Mobile No 8013571289 and the person calling introduced himself as Finance and Account Officer in the Divisional Railway Manager and told the petitioner that he needed an OTP which will be notified in his mobile number for crediting the interest toward the provident fund of the petitioner, falling prey to the aforesaid request the petitioner informed the OTP which came on his mobile number shortly thereafter, and shockingly an amount of Rs. 20000 was immediately debited from the aforesaid account of the petitioner at 6.31 p.m. followed by 4 more more debit transactions of Rs. 20000/- each happened between 6.31 to 6.34 p.m. debiting the total amount of Rs. 1 lakh from the aforesaid account of the petitioner, realizing the same the petitioner immediately contacted the toll free number 1801802223 of the bank and requested it to seize/close the account of the petitioner and lodged complaints with regard to the last 5 unauthorized transaction, which is also evident by the perusal of the statement of messages received on the mobile phone of the petitioner in the intervening period. A true copy of statement of SMS received on the mobile phone of the petitioner on 21.02.2019 are being filed herewith and marked as ANNEXURE NO. 1 to this writ petition.
5. That the petitioner also on the very next date i.e. 22.02.2019 filed a complaint before the Branch Manager Punjab National Bank Subedar Ganj, Allahabad and informed him about the fraud committed in his bank account and requested him to immediately cease the bank account and initiate refund of the amount of Rs. 1 lakh fraudently debited from his bank account, in addition to the aforesaid, the petitioner also made a complaint before the Station House Officer, Dhumanganj, Prayagraj on 22.02.2019 for lodging an First Information Report, in pursuance to which an First Information Report, was also lodged being case crime no. 0161 of 2019 under Sections 419 and 420 I.P.C., Police Station Dhumanganjj, Allahabad. A true copy of the application dated 22.02.2019 submitted before the Branch Manager, Punjab National Bank Subedar Ganj, Allahabad and copy of the application dated 22.02.2019 submitted before the Station House Officer, Police Station Dhoomanganj and Copy of First Information Report are being filed herewith and marked as ANNEXURE NO. 2 to this writ petition.
6.That inspite of the aforesaid complaint made by the petitioner before the Branch Manager of the aforesaid bank, it appears that no action/steps whatsoever was taken by any of the authorities of the bank for ceasing the bank account of the petitioner and initiating refund of Rs. 1 lakh fraudulently debited from his account on 21.02.2019 and as a result of which five more transactions took place on the eve of 22.02.2019 between 6.37 p.m. to 6.40 p.m. and shockingly Rs. 1 lakh more was fraudulently debited from the bank account of the petitioner in five equal amounts of Rs. 20000/- each and further Rs. 1 lakh more was fraudulently debited from his bank account on 23.02.2019 at about same time in the evening, thereby causing a loss of Rs. 3 lakhs to the petitioner on account of negligence of the Branch Manager. A true copy of statement of SMS received on 22.02.2019 and 23.02.2019 and complaint made by the petitioner and the acknowledgement of complaint made by the petitioner and a copy of the Bank Statement of the petitioner w.e.f. 21.02.2019 till 23.02.2019 are being filed herewith and marked as ANNEXURE No. 3 to this writ petition.
7. That petitioner being aggrieved against the suspicious conduct of the Bank Authorities as the non-cessation of the bank account of the petitioner even after his repeated request leading to further loss of Rs. 2 lakhs demonstrated collusion between the bank authorities and the fraudulent persons submitted another application dated 25.02.2019 before Station House Officer Dhumanganj, Prayagraj for lodging an First Information Report against the Bank authorities. A true copy of letter dated 25.02.2019 is being filed herewith and marked as ANNEXURE NO. 4 to this writ petition."
5. The aforequoted paragraph nos. 4, 5, 6 and 7 of the writ petition have been replied in paragraph nos. 3, 4 and 5 of the counter affidavit dated 29.01.2021 filed by the respondent nos. 2 and 3 which has been quoted below:-
"3. That the contents of paragraph no. 4 of the writ petition are matter of record. However, it is respectfully submitted that the petitioner being educated person shared his OTP (One Time Password) with stranger person who called the petitioner on his mobile number. Due to the sharing of the OTP (One Time Password) with stranger person, Rs. 1.00,000/- was withdrawn from the account of the petitioner.
4. That the contents of paragraph no. 5 of the writ petition are matter of record, which can be verified from the original.
5. That, the contents of paragraph nos. 6 and 7 of the writ petition is not correct as stated therein. In reply it is respectfully submitted before this Hon'ble Court that due to the system error or network/server error the account of the petitioner was not freeze by the branch office of the bank on same day. It is further respectfully submitted before this Hon'ble Court that the branch has taken the action and send the request for freezing the account of the petitioner but it seems due to the system error or network/server error the account of the petitioner was not freeze. The account of the petitioner was freeze on 23.02.2019."
6. From perusal of the pleadings as quoted above, it is clear that the respondent nos. 1, 2 and 3 have admitted the following facts:-
I - After a sum of Rs. 1 lacs in four transactions of Rs. 20,000/- each and one transaction of Rs. 19,900/- were illegaly withdrawn from the petitioner's salary bank account No. 4763000400000990 in Punjab National Bank Subedar Ganj, Prayagraj between 6.31 p.m, to 6.34 on i.e. 21.02.2019 with S.R. Nos. A096936814, A096936863, A096936901, A096936942 and A096936979.
II - The petitioner again lodged a complaint in writing and presented it before the respondent no. 2 on 21.02.2019 requesting to freeze his Bank Account. In his written complaint he has referred to his above mentioned complaint made on tollfree number of the Bank.
III - The petitioner again made a complaint on the same day i.e. 21.02.2019 which he lodged on the toll free number of the Bank.
IV - The petitioner also lodged the first information report number 0161 of 2019 under Sections 419 and 420 I.P.C. P.S. Dhoomanganj, District-Prayagraj at 9.31 p.m. V - The respondent no. 2 Bank was negligent to freeze the Salary Bank Account of the petitioner which fact is evident from the averments made in paragraph no. 5 of the counter affidavit.
VI - The respondent no. 2 Bank has admitted in paragraph no. 5 of the counter affidavit that "due to the system error of network/server error, the bank account of the petitioner was not freezed by the branch office of the Bank on the same day. The account of the petitioner was freezed on 23.02.2019.
VII - After registration of the complaint filed by the petitioner with the respondent no. 2 Bank and also request for freezing aforesaid Bank Account, the respondent Bank could not freeze the Bank Account which resulted in illegal withdrawal of Rs. 99,900/- in four transactions of Rs. 20,000/- each and one transaction of 19900/- on 22.02.2019 and another sum of Rs. one lacs in five transaction of Rs. 20,000 each on 23.02.2019.
7. Learned counsel for the petitioner has produced before us the Policy/Guideline "Customer Protection-Limiting Liability of Customers in Unauthorized Electronic Banking Transactions" circulated by Reserve Bank of India vide RBI/2017-18/15 DBR. No. Leg. BC. 78/09.07.005/2017-18 dated 06.07.2017.
8. Clause nos. 5, 6, 7, 9, 11 and 12 of the aforesaid Policy/Guideline of the Reserve Bank of India are reproduced below:-
"5. Banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mail alerts, for electronic banking transactions. The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered. The customers must be advised to notify their bank of any unauthorised electronic banking transaction at the earliest after the occurrence of such transaction, and informed that the longer the time taken to notify the bank, the higher will be the risk of loss to the bank/ customer. To facilitate this, banks must provide customers with 24x7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorised transactions that have taken place and/ or loss or theft of payment instrument such as card, etc. Banks shall also enable customers to instantly respond by "Reply" to the SMS and e-mail alerts and the customers should not be required to search for a web page or an e-mail address to notify the objection, if any. Further, a direct link for lodging the complaints, with specific option to report unauthorised electronic transactions shall be provided by banks on home page of their website. The loss/ fraud reporting system shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The communication systems used by banks to send alerts and receive their responses thereto must record the time and date of delivery of the message and receipt of customer's response, if any, to them. This shall be important in determining the extent of a customer's liability. The banks may not offer facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorised transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.
Limited Liability of a Customer
(a) Zero Liability of a Customer
6. A customer's entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events:
(i) Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).
(ii) Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction.
(b) Limited Liability of a Customer
7. A customer shall be liable for the loss occurring due to unauthorised transactions in the following cases:
(i) In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank.
(ii) In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on the RBI,DBR,CO - 4 - continuation sheet part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited to the transaction value or the amount mentioned in Table 1, whichever is lower.
Table 1 Maximum Liability of a Customer under paragraph 7 (ii) Type of Account Maximum liability (₹)
- BSBD Accounts 5,000
- All other SB accounts
- Pre-paid Payment Instruments and Gift Cards
- Current/ Cash Credit/ Overdraft Accounts of MSMEs
- Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/ limit up to Rs.25 lakh
- Credit cards with limit up to Rs.5 lakh 10,000
- All other Current/ Cash Credit/ Overdraft Accounts
- Credit cards with limit above Rs.5 lakh 25,000 Further, if the delay in reporting is beyond seven working days, the customer liability shall be determined as per the bank's Board approved policy. Banks shall provide the details of their policy in regard to customers' liability formulated in pursuance of these directions at the time of opening the accounts. Banks shall also display their approved policy in public domain for wider dissemination. The existing customers must also be individually informed about the bank's policy.
9. On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer's account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any). Banks may also at their discretion decide to waive off any customer liability in case of unauthorised electronic banking transactions even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorised transaction.
11. Taking into account the risks arising out of unauthorised debits to customer accounts owing to customer negligence/ bank negligence/ banking system frauds/ third party breaches, banks need to clearly define the rights and obligations of customers in case of unauthorised transactions in specified scenarios. Banks shall formulate/ revise their customer relations policy, with approval of their Boards, to cover aspects of customer protection, including the mechanism of creating customer awareness on the risks and responsibilities involved in electronic banking transactions and customer liability in such cases of unauthorised electronic banking transactions. The policy must be transparent, non-discriminatory and should stipulate the mechanism of compensating the customers for the unauthorised electronic banking transactions and also prescribe the timelines for effecting such compensation keeping in view the instructions contained in paragraph 10 above. The policy shall be displayed on the bank's website along with the details of grievance handling/ escalation procedure. The instructions contained in this circular shall be incorporated in the policy.
Burden of Proof
12. The burden of proving customer liability in case of unauthorised electronic banking transactions shall lie on the bank."
9. From the facts admitted by the respondent Bank in its counter affidavit as aforenoted and the guidelines of the Reserve Bank of India, it is evident that there was negligence on the part of the respondent Bank due to which a sum of Rs. ninety nine thousand and nine hundred in four transactions of Rs. 20,000/- each and one transaction of Rs. 19,900/- on 22.02.2019 and another sum of Rs. one lacs in five transaction of Rs. 20,000 each on 23.02.2019 were illegally withdrawn through electronic Bank transaction, from the salary bank account of the petitioner. As per aforenoted guidelines of the Reserve Bank of India which is binding upon the respondent Bank, the respondent Bank was to ensure immediate response and to freeze the Bank Account after the petitioner reported unauthorized transaction on 21.02.2019
10. For the unauthorized aforesaid banking transactions in the bank account of the petitioner on 22.02.2019 and 23.02.2019 as per Clause VI of the aforequoted policy of the R.B.I., the petitioner is entitled to zero liability because the unauthorized transaction was the result of negligence on the part of the respondent Bank.
11. As per Clause 9 of the aforenoted policy of the Reserve Bank of India, on being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorized electronic transaction to the customer's account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any). Banks may also at their discretion decide to waive off any customer liability in case of unauthorized electronic banking transactions even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorized transaction.
12. Since it is admitted by the respondent Bank that despite the petitioner lodged the complaint and notified it on 21.02.2019 and yet the respondent bank had not freezed the aforesaid bank account of the petitioner, as a result of which Rs. 1,99,900 were unauthorizedly withdrawn from the bank account of the petitioner. Therefore, in terms of aforenoted clauses of the policy of the Reserve Bank of India, the bank is liable to credit the amount involved in the unauthorized transaction in petitioner's account to the extent of the transactions which took place on 22.02.2019 and 23.02.2019.
13. So far as the transaction which took place on 21.02.2019, we are not expressing any opinion with regard to the liability of the respondent Bank in terms of clause 9 of the aforequoted policy.
14. So far as the closure of complaint of the petitioner by Banking Ombudsman is concerned, we find that the complaint of the petitioner was closed merely on the ground that the ground of complaint do not fall within clause 8 of the Banking Ombudsman Scheme 2006.
15. Perusal of Clause 8 of the Banking Ombudsman Scheme, 2006 shows that it does not cover the controversy as involved in the present writ petition. Therefore, the closure of the complaint by the Banking Ombudsman does not come in the way of the petitioner to get credit of the unauthorized transactions in terms of Clause 9 of the Reserve Bank of India Policy.
16. For the reasons stated above, the writ petition is partly allowed.
17. The respondent no. 2 i.e. the Punjab National Bank, Subedarganj, Prayagraj is directed to take action and give credit of the unauthorizedly withdrawn amount to the petitioner in terms of the aforenoted policy of the RBI, expeditiously, preferably within ten days from the date of presentation of a copy of this order.
Order Date :- 24.3.2021 SY