Uttarakhand State Commission Holds Punjab National Bank Liable For Failure To Reverse Unauthorized Transactions

Brief Facts:

The Complainant had a savings account with Punjab National Bank (“PNB”). She withdrew Rs. 2,000/- from an ATM in Bhel, leaving a balance of Rs. 77,214/-. No further transactions were made after this. However, a few days later, a total of Rs. 75,000/- was fraudulently withdrawn from her account through multiple ATM transactions in Ghaziabad.

The Complainant did not receive any SMS for these withdrawals. When she discovered the fraud, she reported it to PNB's toll-free number and filed an FIR at the local police station. Despite multiple meetings with PNB officials, her concerns were not addressed. She also filed a complaint with the banking ombudsman, but no action was taken. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Haridwar (“District Commission”).

In response, PNB contended that the District Commission lacked jurisdiction since the transactions were carried out in Ghaziabad. Further, the loss was attributed to the Complainant's negligence and there was no case of card cloning. The District Commission allowed the complaint and directed PNB to pay Rs. 75,000/- with 6% interest, along with Rs. 5,000/- litigation costs. Dissatisfied by the decision, PNB filed an appeal before the State Consumer Disputes Redressal Commission, Uttarakhand (“State Commission”).

Observations of the State Commission:

The State Commission perused the RBI guidelines which emphasize the responsibility of the banks to ensure the security of electronic transactions and to promptly resolve the unauthorized ones. It was held that banks ought to secure technology infrastructure and respond swiftly to complaints pertaining to unauthorized transactions.

The State Commission further held that PNB failed to take any action against the unauthorized transactions, despite being informed immediately. It also failed to provide any evidence to prove that any concrete steps were taken after the complaint. PNB also failed to submit the video footage to verify the legitimacy of the transactions. Furthermore, police investigations indicated that the transactions might have been due to card cloning.

The State placed reliance on Praveen Kumar Jain vs. HDFC Bank Ltd. [Revision Petition No. 2082 of 2017], where it was held that banks have a responsibility to protect the accounts of the customers and impose zero liability on them when the unauthorized transactions result from the banks' deficiencies. As a result, the State Commission dismissed PNB's appeal and upheld the order of the District Commission.

Case Title: P.N.B. Main Branch vs Ms Preet Kaur

Case No.: First Appeal No. 142/2020

Advocate for the Appellant: Shri Nishant Chaturvedi

Advocate for the Respondent: Shri Hassan Mansoor

Date of Pronouncement: 22.10.2024

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