The Consumer Disputes Redressal Commission, Thrissur, comprising President C. T. Sabu and Member Ram Mohan R., has held IndusInd Bank Ltd. liable for deficiency in service after ₹4.22 lakh was transferred from a customer's Non-Resident External (NRE) account without authorisation. The Commission found that the bank failed to establish the authenticity of the alleged email instructions...
The Consumer Disputes Redressal Commission, Thrissur, comprising President C. T. Sabu and Member Ram Mohan R., has held IndusInd Bank Ltd. liable for deficiency in service after ₹4.22 lakh was transferred from a customer's Non-Resident External (NRE) account without authorisation. The Commission found that the bank failed to establish the authenticity of the alleged email instructions and telephonic confirmation and directed the opposite parties to refund the amount along with compensation and litigation costs
Facts:
The complainant, Gopinathan, an NRI, maintained a Non-Resident External (NRE) account with IndusInd Bank's Thrissur branch. He alleged that ₹4.22 lakh was transferred from his account without his authorisation and that the bank failed to refund the amount despite repeated requests.
According to the complainant, on July 28, 2014, he instructed the bank to transfer ₹1 lakh to an individual known to the bank. The transfer was completed on July 30, 2014. However, on August 1, 2014, another sum of ₹4.22 lakh was transferred from his account to an account maintained with South Indian Bank's Shillong branch in the name of M/s Delta Electrical and Refrigeration Services. The complainant denied issuing any instruction or providing telephonic confirmation for this transaction. He stated that he learnt about the disputed transfer on August 4, 2014, when the bank contacted him, and immediately sought restoration of the amount.
The bank lodged a police complaint on August 5, 2014, leading to the registration of Crime No. 2356/2014. It also approached the beneficiary bank regarding suspected email hacking and the allegedly fraudulent transaction. However, the disputed amount was not refunded to the complainant.
Aggrieved by the non-refund of the disputed amount, the complainant approached the Consumer Commission alleging deficiency in banking services and seeking a refund of ₹4.22 lakh, compensation and litigation costs.
The bank contended that the transfer was made pursuant to an email dated July 31, 2014, followed by telephonic confirmation on August 1, 2014. It argued that the complainant had accepted the risks associated with email and telephone banking. The bank also stated that it had lodged a police complaint regarding suspected email hacking and alleged that the complainant was acting in collusion with the beneficiary of the transaction.
Observations and Decision:
The Commission observed that the complainant was a consumer of banking services and that the bank failed to establish that the disputed transfer of ₹4.22 lakh was authorised by him. The bank did not produce sufficient electronic records or reliable evidence to prove the authenticity of the alleged email instructions and telephonic confirmation. Its own contemporaneous documents indicated that the transaction was suspected to involve email hacking and fraud.
The Commission rejected the bank's allegation of collusion, observing that it was unsupported by convincing evidence. It also held that lodging a police complaint did not absolve the bank of its obligations towards the customer. Relying on M/s Canara Bank & Ors. v. Vijaya Kumaran Raghavan (NCDRC, December 4, 2019), Vidhyadhar v. Manikrao (1999) 3 SCC 573, and the principles discussed in State Bank of India v. Pallabh Bhowmick & Ors., the Commission concluded that the bank had failed to exercise due diligence, amounting to deficiency in service.
The commission allowed the complaint and directed the opposite parties to jointly and severally refund ₹4.22 lakh to the complainant, pay ₹50,000 as compensation for inconvenience, hardship and financial loss, and ₹10,000 towards litigation costs. All amounts were directed to carry 9% annual interest from the date of filing the complaint until realisation. The opposite parties were directed to comply with the order within 30 days of receiving a copy of it.