Failure To Reverse Failed Transactions And Provide ATM CCTV Footage, Jalna District Commission Holds Bank Of Maharashtra Liable

Brief Facts:

The Complainant held an individual savings account with the Bank of Maharashtra (“Bank”). For conducting transactions, the Bank issued an ATM card to the Complainant. On April 29, 2022, the Complainant visited the ATM located at Shani Mandir Chowk in Old Jalna to withdraw cash. During this visit, the Complainant withdrew a total of Rs. 19,000/- by conducting two separate transactions of Rs. 9,500/- each. The Complainant repeated this process on May 2, 2022, withdrawing another Rs. 19,000/- through two transactions of Rs. 9,500/- each. However, the Complainant did not receive receipts for these transactions.

On May 13, 2022, while reviewing the entries in the passbook, the Complainant discovered discrepancies. For the two transactions conducted on April 29, 2022, totalling Rs. 19,000/-, the passbook reflected four transactions, resulting in a deduction of Rs. 38,000/-. Similarly, for the two transactions on May 2, 2022, totalling Rs. 19,000/-, the passbook also showed four transactions, leading to another deduction of Rs. 38,000/-.

In total, the Complainant had withdrawn Rs. 38,000/- from the aforementioned transactions. However, the savings account showed an erroneous deduction of Rs. 76,000/-, representing eight transactions of Rs. 9,500/- each. The Complainant had thus received only Rs. 38,000/-, while an excess amount of Rs. 38,000/- was wrongly debited from the account.

Upon realizing the error, the Complainant immediately informed the Bank on May 13, 2022, and followed up again on May 26, 2022, regarding the incorrect transactions. The Bank rejected the complaint and demanded Rs. 590/- for the pre-arbitration process. The Complainant sent a legal notice, demanding the CCTV footage and logbook entries of transactions. However, the Bank did not reply. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Jalna, Maharashtra (“District Commission”).

Contentions of the Bank:

Apart from the fact that the Complainant was a savings account holder, the Bank denied the Complainant's contentions. It contended that the Complainant had performed four transactions of Rs. 9,500/- each on April 28, 2022, and another four transactions of Rs. 9,500/- each on May 2, 2022. According to the Bank, all these transactions were successful, and the Complainant received the total amount corresponding to the transactions performed.

Furthermore, the Bank pointed out that the Complainant had not deposited the requisite fees needed for the arbitration process. It stated that Rs. 590 per transaction was required for the further arbitration process as per the norms of the National Payments Corporation of India (NPCI). Since the Complainant did not deposit the necessary amount, the complaint was not forwarded to the NPCI.

Observations by the Commission:

The District Commission noted that the Complainant performed four transactions of Rs. 9,500/- each on April 28, 2022, and another four transactions of Rs. 9,500/- each on May 2, 2022, totalling eight transactions. However, only four of these transactions were successful, while the other four were wrongly debited.

Further, the Complainant filed a written complaint to the Bank requesting a refund. Despite receiving the complaint, the Bank delayed action until May 26, 2022, when it informed the Complainant that the transactions were deemed successful and suggested pre-arbitration if the Complainant was not satisfied. The Complainant subsequently requested pre-arbitration on May 26, 2022, but the Bank reiterated the successful transaction claim and demanded Rs. 590/- per transaction for further arbitration.

The District Commission observed that the Bank failed to investigate the alleged transactions promptly. According to a Reserve Bank of India circular dated September 20, 2019, banks are required to reverse failed transactions within five days. The Bank, however, did not adhere to this directive. Instead, it forwarded only two of the eight disputed transactions to its claims department, neglecting the other six.

Furthermore, the District Commission highlighted that the Bank did not follow guidelines issued by the National Payments Corporation of India (NPCI), which mandate maintaining transaction records, performing daily reconciliation, and ensuring proactive credit adjustments for failed transactions. The Bank's failure to follow these procedures and its arbitrary demand for arbitration fees of Rs. 590/- per transaction were deemed negligent.

The District Commission also noted that the Bank did not provide the requested CCTV footage of the transactions. The Bank's failure to produce this footage contributed to the finding of negligence and deficiency in service.

Conclusively, the District Commission determined that the Bank acted arbitrarily and negligently, failing to resolve the dispute through proper mechanisms. As a result, the District Commission directed the Bank to pay the Complainant Rs. 38,000/- along with 8% interest.

Case Title: Vilas vs The Manager, Bank of Maharashtra

Case No.: Consumer Complaint No. 276 of 2022

Advocate for the Complainant: Adv. M.S. Dhannavat

Advocate for the Respondent: Adv. Vinayak G. Chitnis