State Consumer Disputes Redressal Commission
Icici Bank vs Sarita Vashisht on 9 March, 2016
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No. 568 of 2015
Date of institution : 01.06.2015
Date of decision : 09.03.2016
1. ICICI Bank, GT Road, Khanna.
2. ICICI Bank, Feroze Gandhi Market, Nehru Sidhant Kendra, 2nd
Floor, Ludhiana through authorized representative, Shri Dinesh
Garg, Manager Legal.
.......Appellants-Opposite Parties Nos.1 and 2
Versus
1. Sarita Vashisht, Aged about 64 years wife of Shri Suresh
Vashisht, resident of House No.189, Ward No.16, Mohalla
Guran, Khanna.
...........Respondent No.1/Complainant
2. Standard Chartered Bank, E-28, Saket, New Delhi through its
Branch Manager.
........Respondent No.2/Opposite Party No.3
3. Name of the account holder number 059601500695 (to be
disclosed by opposite parties Nos.1 to 3). (Deleted in the
present appeal as the same has not been mentioned/identified
in the Consumer Forum order).
............Respondent No.3/Opposite Party No.4
First Appeal against the order dated
27.03.2015 of the District Consumer
Disputes Redressal Forum, Ludhiana.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President
Shri Vinod Kumar Gupta, Member
Present:-
For the appellants : Shri Puneet Tuli, Advocate. For respondent No.1 : Shri Kamal Kumar Gaind, Advocate. For respondent No.2: Shri Munish Kumar, Advocate. First Appeal No.568 of 2015 2 JUSTICE GURDEV SINGH, PRESIDENT :
Appellants/Opposite Parties Nos.1 and 2 have preferred this appeal against the order dated 27.3.2015 passed by District Consumer Disputes Redressal Forum, Ludhiana (in short, "District Forum"), vide which the complaint filed by Sarita Vashishat, respondent No.1/complainant, under Section 12 of the Consumer Protection Act, 1986, was partly allowed and these opposite parties as well as respondents Nos.3 and 4/opposite parties Nos.3 and 4 were directed to refund the balance amount of Rs.1,05,813/- within 45 days of the receipt of the copy of the order and failing that to pay interest at the rate of 9% per annum from the date of wrong transfer till the realization thereof.
2. The complainant alleged, in her complaint, that she was having account No.659601500695 with opposite party No.1-Bank. A sum of Rs.10,00,000/- was transferred through RTGS from the accounts of Susham Sharma, J.P. Sharma and M/s S&S Associates on 21.3.2014, who were maintaining accounts with opposite party No.3- Bank. Out of the said amount of Rs.10,00,000/-: Rs.3,00,000/- was to be transferred from the account of M/s S.S. Associates; and a sum of Rs.3,50,000/-, each, was to be transferred from the accounts of Susham Sharma and J.P. Sharma. The said persons duly filled up the request forms in their names and her name was mentioned as the beneficiary. The IFSC Code of opposite party No.1-Bank was also mentioned as ICIC 0006596. However, her account number was inadvertently mentioned as 059601500695 instead of First Appeal No.568 of 2015 3 659601500695. Opposite parties Nos.1 to 3 without verifying and matching all the details, as mentioned in the RTGS Forms, transferred the said amount of Rs.10,00,000/- in the account of opposite party No.4, who was having account No.059601500695 and that opposite party was resident of Hyderabad and was maintaining the account at that place. Once the IFSC Code and her name were correctly mentioned in the RTGS Forms, it was incumbent upon opposite parties Nos.1 to 3 to verify all the details before transferring the amount into the account of opposite party No.4. When the amount was not transferred in her account, she made inquiry and only thereafter it transpired that the amount had been transferred in the account of the other party. She immediately brought that fact to the knowledge of opposite parties Nos.1 to 3 and thereafter a sum of Rs.1,94,187/- was transferred in her account on 26.3.2014 and another amount of Rs.7,00,000/- was transferred on 2.4.2014; after withdrawing the same from account number 059601500695. These opposite parties have failed to transfer the balance amount of Rs.1,05,813/-; which amounts to deficiency in service on their part and they are jointly and severally liable to remit that amount, along with interest at the rate of 15% per annum. In addition to that, she claimed Rs.1,00,000/-, as compensation for the mental harassment and agony suffered by her and Rs.11,000/-, as litigation expenses. She prayed for the issuance of directions accordingly to the opposite parties.
3. The complaint was contested by opposite parties Nos.1 and 2 and opposite party No.3 was proceeded against ex parte, as it failed First Appeal No.568 of 2015 4 to put its appearance before the District Forum in-spite of its service. Opposite parties Nos.1 and 2 filed joint written reply, in which they admitted that the complainant was maintaining account No.659601500695 with opposite party No.1-Bank and that Rs.10,00,000/- had been transferred through R.T.G.S. by Susham Sharma, J.P. Sharma and M/s S.S. Associates, through opposite party No.3 and that the said amount was transferred to account No.059601500695; which was in the name of Ms. Vimala Baredu. They also admitted that the sums of Rs.7,00,000/- and Rs.1,94,187/- were recovered from the funds of incorrect beneficiary and were transferred to the account of the complainant and that a balance of Rs.1,05,813/- was left. They denied the other allegations made in the complaint and averred that the complainant is trying to take benefit of her own wrong, as the remitters/originators had wrongly mentioned her account number, whereas they were required to give the account number at two places in the RTGS Form. In that case the discrepancy regarding the account number must have come to the notice of the person filling up those forms. The remitters did not fulfil and met the guidelines of the RBI and mentioned the account number only at one place. There was clear-cut violation of the guidelines of the RBI. After the complainant made representation regarding the non-transfer of the amount in her name, they immediately took remedial action and made the wrongful beneficiary to return that amount. There was anomaly in the procedure adopted by them and they made extra effort to provide the best of services to the complainant. It was the originator-Bank, which was required to First Appeal No.568 of 2015 5 ask its customers to write down the account number information twice in the form to avoid any discrepancy. Therefore, the deficiency in service, if any, was at the end of opposite party No.3. The amounts of Rs.3,50,000/-, each and Rs.3,00,000/- remitted through RTGS were credited in the account number, so mentioned in the RTGS forms. Therefore, it cannot be said that there was any deficiency in service on their part. After the representation of the complainant was received a lien was marked on the incorrect account number on 22.3.2014. The balance amount of Rs.1,05,813/- has not been refunded by the wrong beneficiary and letter dated 18.9.2014 had already been written to that wrong beneficiary (Ms. Vimala Baredu) and necessary action on her part is awaited. As per the RBI guidelines, the responsibility for providing correct inputs in the payment instructions, particularly the beneficiary account number information, rests with the remitter/originator. Though the name of the beneficiary was required to be mentioned but reliance was to be placed on the account number for the purpose of affording credit. The remedy of the complainant is against opposite party No.3 and no such service in respect of the transfers through RTGS was hired by her from them. In respect of those transactions she is not their 'consumer'. She has no locus-standi to file the present complaint and the District Forum has no jurisdiction to entertain, try and decide the same. The complaint involves intricate questions, which can be decided after both the parties lead their evidence by producing voluminous documents. Therefore, the same is beyond the scope of inquiry before the District Forum. The First Appeal No.568 of 2015 6 complainant has no right to seek any relief against them and the complaint filed by her is not maintainable. They prayed for the dismissal thereof with costs.
4. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf partly allowed the complaint, vide aforesaid order.
5. We have heard learned counsel for the parties and have carefully gone through the records of the case.
6. It was submitted by the learned counsel for opposite parties Nos.1 and 2 that while recording the findings against opposite parties Nos.1 and 2, the District Forum totally ignored the guidelines of the RBI regarding RTGS transfers. As per those guidelines, it was the remitter/originator Bank, who was required to give the correct account number in the RTGS Form and there was no duty cast upon opposite parties Nos.1 and 2 to match the name, so given in the Form, with the account number, before transferring the funds into the account, so disclosed in the Form. It is very much clear from the averments made in the complaint itself that the remitter had given wrong account number and the funds were transferred to that account number. Therefore, it cannot be said that there was any deficiency in service on the part of opposite parties Nos.1 and 2 and the order passed by the District Forum against those opposite parties is liable to be set aside.
7. On the other hand, it was submitted by the learned counsel for the complainant that as per the guidelines issued by the RBI, a duty First Appeal No.568 of 2015 7 was cast upon opposite parties Nos.1 and 2; being the destination bank to match the account number, so disclosed in the RTGS Form, with the name of the account holder. Without making that match, no funds could have been transferred to that account. Besides the name of the complainant the IFSC Code of the beneficiary Bank was given in the RTGS Form and had opposite parties Nos.1 and 2 been careful, they would not have transferred the funds in the account of the wrong person. This act/omission on their part clearly amounts to deficiency in service and the District Forum did not commit any illegality while recording findings against opposite parties Nos.1 and 2 and also making them liable for the balance amount, which is still to be transferred to the account of the complainant.
8. The facts of the present case were not disputed before us at the time of arguments and only the duties of the remitting bank and the destination bank are to be ascertained from the guidelines issued by the RBI on the subject. Those guidelines were proved before the District Forum as Ex.R-1. The same were issued regarding the 'Electronic Payment products-Processing inward transactions based solely on account number information'. The RBI issued those instructions keeping in view the introduction of various Electronic Payment Products including RTGS to facilitate electronic transfer of funds in a secured and efficient manner. To interpret the guidelines/instructions contained in this letter dated 14.10.2010, it will be better if the relevant extracts thereof are reproduced. The same are reproduced as under:-
First Appeal No.568 of 2015 8
"3. In the CBS environment customers of a bank can be uniquely identified by their account number across branches. In terms of the extant Procedural Guidelines for RTGS / NEFT / NECS / ECS Credit, however, banks are generally expected to match the name and account number information of the beneficiary before affording credit to the account. In the Indian context, given the many different ways in which beneficiary names can be written, it becomes extremely challenging to perfectly match the name field contained in the electronic transfer instructions with the name on record in the books of the destination bank. This leads to manual intervention hindering STP and causing delay in credit or due return of uncredited instructions.
4. Being essentially credit-push in nature, responsibility for accurate input and successful credit lies with the remitting customers and the originating banks. The role of destination banks is limited to affording credit to beneficiary's account based on details furnished by the remitter / originating bank. In order to handle surging volumes in a limited time window, some banks use name matching software, while a few others employ a risk-based approach based on the nature and value of transfer.
5. Keeping in view the foregoing, in the RTGS / NEFT / NECS / ECS Credit products, it has since been decided as under : First Appeal No.568 of 2015 9
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 required to write down the account number information twice in the application form.First Appeal No.568 of 2015 10
iii. For transactions requested at branches, the originating bank shall put in place a maker-checker process with one employee expected to input the transaction and the other checking the input. iv. Banks should put suitable disclaimers on the funds transfer screens in the online / internet banking platform and funds transfer request forms advising customers that credit will be effected based solely on the beneficiary account number information and the beneficiary name particulars will not be used therefor.
v. Destination banks may afford credit to the beneficiary's account based on the account number as furnished by remitter / originating bank in the message / data file. The beneficiary's name details may be used for verification based on risk perception, value of transfer, nature of transaction, post-credit checking, etc. vi. Member banks shall take necessary steps to create awareness amongst their customers about the need for providing correct account number information while making payments through RTGS / NEFT / NECS / ECS Credit.
vii. The system of providing mobile / e-mail alerts to customers for debit / credit to their accounts will be another way of ensuring that the debits / credits are genuine and put through / expected by them, and First Appeal No.568 of 2015 11 preferably, should be extended to all customers for all funds transfer transactions irrespective of value. viii. The above notwithstanding, in cases where it is found that credit has been afforded to a wrong account, banks need to establish a robust, transparent and quick grievance redressal mechanism to reverse such credits and set right the mistake and / or return the transaction to the originating bank. This particularly needs to function very efficiently and pro-actively till such time customers are comfortable with the new arrangements."
A minute perusal thereof makes it very much clear that a duty has been cast upon the remitting/originating Bank as well as the destination bank. The responsibility of providing correct inputs in the payment instructions particularly the beneficiary account number information rests with the remitter/originator and it is compulsory to mention the name of the beneficiary in the instructions request. However, the reliance was to be placed only on the account number for the purpose of affording credit. It was for the originating bank to put in place an appropriate maker-checker system to ensure that the account number information furnished by its customers is correct and free from errors. The customers submitting the funds transfer request at Branches are required to write down information twice in the application form. The originating Bank can afford the credit to the beneficiary's account based on the account number as remitted by the remitter/originating bank in the message/data file. However, First Appeal No.568 of 2015 12 beneficiary's name details may be used for verification based on risk perception, value of transfer, nature of transaction, post credit checking etc. It is the onerous duty of the remitting/originating bank to mention correct account number in which the funds are to be transferred but at the same time there is corresponding duty on the part of the destination bank, in the case of huge amounts, to verify the name of the beneficiary before transferring the funds in the account, so mentioned in the information, conveyed by the remitting/originating bank.
9. The complainant specifically alleged, in her complaint, that it was opposite party No.1-Bank, which was having IFSC Code as ICIC 0006596 and the said Code number was mentioned in the R.T.G.S. forms; which were proved on the record as Ex.C-1, Ex.C-4 and Ex.C-7. That fact was never denied by opposite parties Nos.1 and 2. The name of the complainant was distinctly mentioned in the RTGS Forms. In these circumstances, when the IFSC Code number of opposite party No.1-Bank was mentioned in the RTGS Forms and the complainant had her account in that Bank, the officials of that Bank were required to take care and match the account number and name of the complainant before transferring the funds to the account number; which was in some other branch of the Bank. It stands proved that opposite parties Nos.1 and 2 were also negligent while transferring the funds to the account so mentioned in the R.T.G.S. Forms. They failed to follow the above said guidelines of the RBI and it can easily be assumed that they were negligent and deficient in service. Correct findings to that effect were recorded by the First Appeal No.568 of 2015 13 District Forum and we do not find any ground to disagree with those findings. There is no merit in this appeal and the same is hereby dismissed.
10. The appellants deposited the sum of Rs.25,000/- at the time of filing of the appeal on 1.6.2015. They deposited another sum of Rs.28,000/- on 26.6.2015 in compliance with the order dated 11.6.2015. Both these amounts along with interest which has accrued thereon, if any, shall be remitted by the registry to respondent No.1/complainant by way of a crossed cheque/demand draft after the expiry of 45 days of the sending of certified copy of the order to them.
11. The arguments in this case were heard on 1.3.2016 and the order was reserved. Now, the order be communicated to the parties.
12. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (VINOD KUMAR GUPTA) MEMBER March 09 , 2016 Bansal