The Delhi High Court has directed ICICI Bank to reverse a transaction of ₹3,89,981 which was inadvertently transferred by a business entity to a wrong beneficiary having a similar name.

The Petitioner, a company, had intended to transfer ₹3,89,981 to M/s V.K. Enterprises towards payment for goods purchased from the firm. However, while making the transaction through internet/mobile banking, the amount was inadvertently transferred to M/s V.K. Traders.

The Petitioner company realised the mistake after the transaction and immediately contacted V.K. Traders, requesting that the amount be returned. It also informed its bank, Indian Bank, which communicated with ICICI Bank, where the recipient's account was maintained, seeking reversal of the transaction.

The petition stated that Indian Bank subsequently furnished a recall-cum-indemnity bond to ICICI Bank, certifying that the transaction was erroneous and requesting that the amount be kept under lien pending reversal. The amount was thereafter kept under lien by ICICI Bank.

Despite several communications and requests, Petitioner claimed the amount was not returned leading it to approach the High Court.

The Counsel appearing for the Petitioner submitted that the transfer was a bona fide mistake and that the amount was intended to be paid to V.K. Enterprises but was mistakenly transferred to V.K. Traders.

The ICICI Bank on the other hand submitted that when it had queried V.K. Traders regarding the transaction, the latter had informed the bank that the amount had been correctly paid to it.

Justice Jasmeet Singh noted that V.K. Traders had been given an opportunity on July 18, 2024 to file documents substantiating its claim that the amount had been correctly paid to it. However, the Court noted that despite more than two years having passed, no such documents had been filed and nobody had appeared on behalf of the firm.

The Court also took note of the indemnity bond furnished by Indian Bank in favour of ICICI Bank, undertaking to indemnify the latter against any liability, loss or damage that it might suffer on account of reversal of the payment.

Justice Singh observed that the indemnity bond demonstrated the genuineness of the petitioner's claim as well as the support extended by Indian Bank.

The Court thus directed ICICI Bank to reverse the transaction.

The Petitioner had also sought interest on the amount. However, the Court declined the same, observing that there was no fault attributable to any of the respondents and that the transaction had resulted from Petitioner's own mistake.

Appearance: Mr. Ujwal Ghai, Adv. for Petitioner; Mr. Sumit Goel, Ms. Swati Bhardwaj, Mr. Siddharth Samaiya, Advs. for R1 Mr. Santosh Kumar Rout Standing Counsel, R2 Ms. Avshreya Pratap Singh Rudy, Adv. CGSC, Ms. Usha Jamnal, Adv. GP., ⁠Ms. Nyasa Sharma, Adv., Mr. Siddhant Nagar, Adv., Mr. Abhinav Mall, Adv., Mr. Nishtha Dhall, Adv for UOI