CASE TITLE: NEIL E. LOBO VS. BANK OF BARODA
CASE NUMBER: F.A. NO. 1662/2018
NATIONAL CONSUMER DISPUTES RESOLUTION COMMISSION
HELD THAT: No assumption of deficiency in service can be made without evidence, and the responsibility to prove the same lies with the complainant.
BRIEF FACTS
1. The complainant, an NRI residing in the USA, held a bank account with Bank of Baroda (formerly Vijaya Bank) for investment transactions in India.
2. In 2013, the complainant discovered that $80,000 (amounting to Rs. 43,87,531) had been transferred to the account of one Sheila Montgomer in North Carolina, USA, in two instalments without his authorization.
3. The complainant suspected his email had been hacked and the instructions for the transfers were sent by the hacker.
4. He filed complaints with the police and the Cyber Crime Branch, and also approached the Banking Ombudsman.
5. However, the Ombudsman declined to handle the case, citing the need for more extensive documentary and oral evidence.
6. The complainant then filed a case with the State Commission of Karnataka, alleging that the bank had processed the unauthorized transfers based on a forged email, without verifying the identity of the applicant or obtaining the original transfer forms.
7. The Commission dismissed the complaint, stating it involved criminal elements, for which an FIR had already been filed, and that the complainant had not included the Financial Advisor as a necessary party.
8. The State Commission advised the complainant to approach the proper forum under the Information Technology Act, leading to the appeal of this decision requesting the claim be reconsidered.
9. Consequently, the complainant appealed before the National Commission.
CONTENTIONS OF THE BANK
The bank contended that the funds were transferred based on authorization from the complainant's registered email, and the transactions were conducted per the account holder's instructions.
THE COMPLAINANT'S CLAIM that his email was hacked was under investigation by the Cyber Crime Branch, involving complex issues of forgery and criminality under the Information Technology Act.
The bank argued that such matters, which require detailed adjudication, could not be addressed in summary proceedings under the Consumer Protection Act.
The bank denied any arbitrary actions, stating that the instructions were received from an authorized email. It also supported the State Commission's decision, which found no liability on the bank, as criminal elements were involved, making the case unsuitable for summary proceedings before the Consumer Forum.
Relying on the case Santhosh Sharma, the bank emphasized that the forum lacked jurisdiction over disputed facts and criminal issues. The bank further cited a Supreme Court ruling (City Union Bank Ltd. v. R. Chandramohan), which held that consumer proceedings could not address complex questions involving fraud or criminality. Therefore, the appeal was deemed not maintainable and deserved dismissal.
OBSERVATIONS BY THE NATIONAL COMMISSION
The National Commission observed that the alleged transfer of funds from the complainant's account occurred due to the hacking of his email, from which instructions were issued to the bank to transfer 80,000 USD in two transactions.
The complainant had approached the Banking Ombudsman, which declined to consider the case, citing that it involved criminal elements and required investigation by an appropriate agency under the Information Technology Act.
The State Commission also held that the complaint, stemming from the hacking of the complainant's email leading to the transfer of funds, had to be treated as a criminal matter.
Liability under the Consumer Protection Act would only arise if a deficiency on the part of the bank in handling the transfers was established.
Citing the Supreme Court decision in Chairman and Managing Director, City Union Bank Limited & Anr. (2023) 7 SCC 775, the commission reiterated that no presumption could be made regarding deficiency in service unless proven by the complainant, who bears the burden of proof. Since no such deficiency was demonstrated, the commission upheld the State Commission's decision and dismissed the appeal.
CONCLUSION
It is an established law that a person has to submit appropriate evidence to substantiate his claim of deficiency of service against a person or entity. In this case since email of complainant has been hacked and transaction has been done through email authorisation. The bank has followed instructions according to terms and conditions of the service provided by the bank and hence there is not deficiency in service by bank.
DISCLAIMER: The case law presented here is only for sharing information with readers. The views expressed here are of personal nature. In case of necessity do consult with professionals.
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