North Delhi District Commission Holds PNB Liable For Failure To Reverse Unauthorized Transactions And Conduct Proper Inquiry

Brief Facts:

Mr. Vinod Kumar (“Complainant”), in 2004, while posted in Delhi, opened a savings bank account with Punjab National Bank, Shastri Nagar Branch. His monthly salary was regularly deposited into this account, and he was issued an ATM cum Debit Card. The Complainant never shared his ATM card with anyone. On July 5, 2013, while posted in Patiala (Punjab), he discovered eight unauthorized transactions totalling Rs. 80,000/-, through his ATM. Despite notifying the bank and the police, only Rs. 30,000/- was credited back into his account.

Despite numerous attempts and communications with the bank officials, the remaining Rs. 50,000/- was not reversed promptly. Subsequent interactions and emails eventually led to the crediting of an additional Rs. 20,000/- to the Complainant's account. However, the full amount was not received. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-I, North Delhi (“District Commission”).

PNB, in response, argued that the Complainant's ATM cum Debit Card was always in his possession, and the alleged transactions occurred through Point of Sale Purchase (POSP). It argued that such transactions require the confidential password of the ATM card, which was with the Complainant. It emphasized that Rs. 70,000/- out of the Rs. 80,000/- has already been reversed on various dates, and the responsibility for any discrepancies lies solely with the Complainant. Additionally, it contended that the Complainant subscribed to SMS Alert services, and alerts were sent during the disputed period, indicating his awareness and consent to the transactions. It also proposed the initiation of criminal proceedings against the Complainant under Section 340 of the Criminal Procedure Code, 1973, alleging that he filed a false affidavit.

Observations by the District Commission:

The District Commission referred to the instructions issued by the Reserve Bank of India regarding "Consumer Protection- Limiting Liability of Customers in Unauthorized Electronic Banking Transactions," dated 06.07.2017. These guidelines emphasize that the burden of proving customer liability in cases of unauthorized electronic banking transactions rests on the bank. Despite this obligation, the District Commission held that PNB failed to conduct a proper inquiry into the unauthorized transactions and did not provide a suitable reply to the Complainant. The absence of a filed report or shared information regarding the inquiry led the District Commission to conclude that the bank was responsible for compensating the complainant.

The District Commission held that PNB didn't completely reverse the amount of all eight transactions, with Rs. 10,000 from one transaction remaining unreversed. Therefore, the District Commission held PNB liable for deficiency in services.

Consequently, the District Commission directed PNB to pay Rs. 10,000/- jointly and severally to the Complainant within thirty (30) days from the date of receiving the order. Additionally, PNB was directed to compensate the Complainant with Rs. 25,000/- for the mental pain, agony, and harassment endured.

The District Commission also imposed a cost of Rs.10,000/- on PNB for attempting to misguide the District Commission. Out of this cost, Rs. 5,000 was to be paid to the Complainant, while the remaining Rs. 5,000 was to be deposited in the State Consumer Welfare Fund.