Uttarakhand State Commission holds Punjab National Bank responsible for its 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 thereafter. However, a few days later, a total of Rs. $75,000 was fraudulently withdrawn from his account through several ATM transactions in Ghaziabad.

The complainant did not receive any SMS for these withdrawals. When she discovered the fraud, she reported it to the PNB toll-free number and filed an FIR at the local police station. Despite multiple meetings with PNB officials, his 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 with the Haridwar District Consumer Disputes Redressal Commission (“District Commission”).

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

State Commission Observations:

The State Commission has taken cognizance of the RBI guidelines which highlight the responsibility of banks to ensure security of electronic transactions and promptly resolve unauthorized ones. It was felt that banks should secure their technological infrastructure and respond quickly to complaints regarding unauthorized transactions.

The State Commission further held that the PNB did not take any action against the unauthorized transactions although it was immediately informed about it. She also provided no evidence to prove that any concrete action was taken after the complaint. PNB also failed to submit the video footage to verify the legitimacy of the transactions. Additionally, police investigations revealed that the transactions could be due to card cloning.

The State relied on Praveen Kumar Jain v HDFC Bank Ltd. (Revision Petition No. 2082 of 2017), wherein it was held that banks have the responsibility to protect customers’ accounts and impose zero liability on them when unauthorized transactions arise as a result of deficiencies of banks. Accordingly, the State Commission dismissed PNB’s appeal and affirmed the order of the District Commission.

Case title: PNB Main Branch vs. Ms. Preet Kaur

Case number: First call no. 142/2020

Appellant’s advocate: Shri Nishant Chaturvedi

Defender of the defendant: Shri Hassan Mansoor

Date of declaration: 22.10.2024

Click here to read/download the order