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The consumer court has given a historic and strict verdict in the case of serious banking and ATM fraud with a customer of State Bank of India (SBI), the country’s largest government bank. Rejecting the appeal of State Bank of India, the Delhi State Consumer Disputes Redressal Commission has completely upheld the order of the District Consumer Commission, in which the bank was directed to return the entire amount of Rs 1.30 lakh to the victim customer along with 6 percent annual interest and compensation. The court passed this decision because despite the customer’s complaint, the bank could neither preserve the CCTV footage of the ATM transaction nor present any concrete electronic record or transaction log before the court.
What was the whole matter and how Rs 1.30 lakh was stolen from the account?
According to the details of the case, an employee working as a lab assistant in a government school in Delhi had a salary account with SBI since 2002. On October 10, 2018, he had withdrawn Rs 5,000 from the ATM, after which Rs 1,12,472 were left in his account. After deposit of Rs 17,540 salary on October 11, the total balance became Rs 1,30,012.
After this, when the customer tried to withdraw money from the ATM again on 22 October 2018, a message of insufficient balance came. When he got the passbook printed, he was shocked. Passbook entries revealed that a total of Rs 80,000 was withdrawn from his account in four installments of Rs 20,000 each from the ATM on October 12, 2018. On the same day, Rs 40,000 and Rs 10,000 (total Rs 50,000) were transferred to the account of an unknown person named Sonu through two separate transactions. In this way, a total of Rs 1.30 lakh was siphoned off without the customer’s knowledge and permission.
Gross negligence and silence of the bank despite immediate complaint
The aggrieved customer lodged an FIR at Mayur Vihar Phase-I police station on 22 October 2018 and on the same day gave a written complaint at the SBI Bank branch with a formal demand to investigate the unauthorized transaction and provide CCTV footage of the ATM. After this, on March 6, 2019, the customer again wrote a letter to the bank, but neither any satisfactory investigation was done nor any clear answer was given by the SBI management.
Fed up with this neglectful attitude of the bank, the customer approached the District Consumer Forum for justice. The District Consumer Commission sent a notice to the bank, but the bank did not appear there either, after which the District Commission gave its verdict in favor of the customer. SBI had filed an appeal against this order in the State Consumer Commission.
Consumer Court’s strict comment: Bank failed to produce CCTV and electronic records
The state commission bench headed by Justice Sangeeta Dhingra Sehgal rejected SBI’s appeal outright and strongly reprimanded the bank’s working style. The commission, in its order, underlined that the customer’s debit card was never stolen or lost nor had he handed over the PIN or the card to any third person. In such a situation, it was the primary duty of the bank to keep the CCTV footage of the ATM safe as per the rules of National Payments Corporation of India (NPCI) and RBI and investigate card cloning, skimming or technical glitches in the ATM system.
The Commission clearly said that the bank is the sole custodian of electronic transaction logs, switch records, ATM journals and authentication details. Why did the bank not preserve the CCTV footage or transfer vouchers even when the customer had filed a written complaint in time? The bank was completely unable to prove that the transfer of Rs 50,000 was authorized by the customer or that the ATM withdrawal of Rs 80,000 was made by the customer himself. The Commission considered this as ‘serious deficiency in service’ on the part of the bank.
Final order of Consumer Court: Directing payment with interest and damages
Delhi State Consumer Commission directed SBI to refund the entire principal amount of Rs 1.30 lakh to the aggrieved customer along with interest at 6 per cent per annum from October 12, 2018 till the date of payment. Apart from this, an order was also passed to pay compensation of Rs 5,000 to the customer for mental harassment and an additional Rs 5,000 as litigation cost.
This court decision is a big example for crores of banking and ATM users of the country. If an unauthorized or fraudulent transaction occurs from a bank customer’s account and the customer informs the bank in time, the entire legal responsibility of proving the validity of the transaction and presenting the CCTV footage rests on the bank.