The Commission held that under the Reserve Bank of India (RBI) guidelines, the burden of establishing customer negligence in cases of unauthorised electronic banking transactions rests completely on the bank.

Facts ;

The complainant, Rakesh Kumar, was a holder of an SBI credit card. On May 23, 2024, he came across an advertisement offering a deal on the purchase of butter on an app for the “Big Bazaar” platform. During the purchase process, amounts of ₹10,000 and ₹5,000 were wrongfully charged to his credit card.

Kumar immediately informed representatives of SBI Cards about the transactions on the same day, following which his credit card was blocked on his request. He subsequently lodged a cyber-crime complaint on May 28, 2024, and completed the formalities required for chargeback of the disputed transactions.

Despite repeated requests and reminders, Kumar alleged that SBI Cards failed to pursue or conclude any investigation into the disputed transactions and that he received minimal and unsatisfactory responses from the company.

Aggrieved, he approached the Consumer Commission alleging deficiency in service and unfair trade practice.

Notice was issued to SBI Cards. However, despite service, the company did not file its written version within the period prescribed under Section 38(2)(a) of the Consumer Protection Act. The Commission also recorded that the reply subsequently filed by the company was beyond the statutory 45-day period and was not taken on record.

Commission's Observations

The Commission noted that Kumar had informed SBI Cards about the disputed transactions on the very same day, and there was no delay in intimating the company.

Referring to the RBI Circular dated July 6, 2017, “Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions,” the Commission observed that a customer can be held liable for an unauthorised transaction attributable to the customer's own negligence, but the burden of establishing such negligence rests completely on the bank.

The Commission relied on the Allahabad High Court's decision in Suresh Chandra Singh Negi v. Bank of Baroda, which held that the burden of proving consumer negligence in cases of unauthorised transactions lies on the banking institution.

It also referred to the Delhi High Court's decision in Hare Ram Singh v. Reserve Bank of India, observing that the negligence required to defeat a customer's claim under the RBI circular must be gross, utterly reckless and unconscionable. The Commission noted that the complainant had not affirmatively shared his OTP or payment credentials with any third party.

The Commission further found that the complainant had reported the transactions within the prescribed period and had his card blocked without delay. However, SBI Cards failed to provisionally credit the disputed amount within 10 working days, as required under Paragraph 9 of the RBI circular. It also failed to resolve the complaint and determine the customer's liability within the maximum period of 90 days prescribed under Paragraph 10.

Decision

Holding SBI Cards deficient in service under Section 2(11) of the Consumer Protection Act, 2019, the Commission directed it to refund ₹15,000 to Kumar with 7% annual interest from the date of the transactions, within four weeks of receipt of the order.

It further directed SBI Cards to pay ₹10,000 as compensation for harassment and mental agony within the same period.

The Commission clarified that if the awarded amount was not paid within four weeks, SBI Cards would be liable to pay 9% annual interest on the entire awarded amount from the expiry of the four-week period.