Bank Not Liable If Proper Inquiry Reveals Customer's Lapse In Unauthorized Transactions, Rajasthan State Commission Dismisses Appeal Against SBI

Brief Facts:

Mr Vipin Jain (“Complainant”) had a savings account in the State Bank of India (“SBI”). He possessed an ATM Card and received messages for every transaction made through it. One day, a transaction worth Rs. 15,547/- was made from the Complainant's account. He was informed only when he received a message 6 days after the transaction was made. He immediately went to update his passbook and registered a complaint with the SBI. However, the issue was not resolved. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Udaipur, Rajasthan (“District Commission”). The District Commission ruled in favour of the SBI and dismissed the complaint based on the contention that such a transaction could have occurred due to a lapse on the Complainant's part by sharing the ATM Card details.

Dissatisfied by the order of the District Commission, the Complainant filed an appeal in the State Consumer Disputes Redressal Commission, Circuit Bench Udaipur, Rajasthan (“State Commission”).

The SBI contended that due to technical issues, sometimes the delivery of the transactions' messages gets delayed. Further, it conducted due inquiry and found that such a transaction was not possible without sharing the ATM Card details such as the number and PIN. It further contended that in such cases, banks are only liable if they do not conduct any inquiry at all. Since a proper inquiry was conducted, the SBI cannot be held liable for it.

Observations by the Commission:

At the outset, the State Commission referred to the decision in the case of Ashok Kumar and Anr. vs The Manager, Punjab National Bank [Appeal No. 87/2014], wherein a bank was not held liable because it conducted a proper inquiry after the alleged unauthorized ATM card transaction and found that the transaction could not have occurred without sharing confidential ATM Card details. Applying the ratio in the present case, the State Commission did not find any negligence or deficiency in service on the part of the SBI.

Resultantly, the State Commission upheld the decision of the District Commission and dismissed the appeal.