Banks Can Be Held Liable For Dishonouring Directions Issued By Banking Ombudsman For Bank-Related Consumer Grievances: Goa State Commission

Brief Facts:

The Complainant had deposited Rs. 3 Lakhs in the State Bank of India (“SBI”) branch in Mapusa. This amount was credited to her savings account on March 30, 2021. Based on this deposit, she applied for units in the Birla Multi Cap Mutual Fund using cheques from her savings account. However, these cheques were dishonoured by SBI, marked as 'refer to the drawer,' despite the availability of funds in her account.

The matter was subsequently taken to the Banking Ombudsman (an authority to resolve bank-related complaints). The case was resolved with an amount of Rs. 2,000/- credited to the Complainant's savings account as compensation. Despite this resolution, the Complainant's debit card remained inactive, and SBI continued to deny her access to the funds in her account. Consequently, the Complainant filed a consumer complaint with the District Consumer Disputes Redressal Commission, North Goa (“District Commission”).

The District Commission dismissed the complaint at the admission stage, by stating that it had no authority to issue directions to the Reserve Bank of India (“RBI”) and the Branch Manager of SBI, Mapusa, as they were governed by their own rules and regulations. Additionally, it concluded that the entire complaint did not indicate any cause of action and was therefore considered non-maintainable. Dissatisfied by the order of the District Commission, the Complainant filed an appeal before the State Consumer Disputes Redressal Commission, Goa (“State Commission”).

Observations by the Commission:

The State Commission observed that despite the Banking Ombudsman's order, the Complainant had not been allowed access to her funds, despite the availability of funds in her account. The State Commission noted that this issue should have been decided by the District Commission on its merits after admitting the complaint.

The State Commission also found it pertinent to highlight that there was nothing meritless in the complaint, contrary to the findings of the District Commission. The State Commission held that the Consumer Protection Act (“the Act”) is a pro-consumer legislation, and the rights of consumers should not be ignored. Further, dismissals without proper application of the Act and consideration could deter consumers from seeking justice.

Consequently, the State Commission allowed the appeal and set aside the order of the District Commission. The District Commission was directed to issue notices to both the RBI and the SBI to appear and file their written versions in accordance with the provisions of the Consumer Protection Act, 2019.

Case Title: Raisa X Dias vs The Governor, Reserve Bank of India and Anr.

Case No.: First Appeal 36 of 2023

Advocate for the Appellant: Appellant in person

Advocate for the Respondents: None

Date of Order: June 10^th, 2024