SBI Directed To Pay Rs 1 Lakh To Customer For Failed ATM Transaction

The State Bank of India (SBI) has been directed by the District Consumer Disputes Redressal Forum at Hyderabad to pay compensation and litigation costs worth Rs 1 Lakh to a customer for debiting his account despite failed ATM transaction.

What Happened?

Udaru Sarvotama Reddy went to an SBI ATM in Hyderabad to withdraw Rs 10,000 but the transaction was declined due to some technical glitch, and he did not get the cash. However, the said amount was debited from his account about 20 days later.

When he approached the bank, he was told that the money was ‘kept on hold’ for some time until they got the confirmation that the ATM cash was disbursed. They claimed that the transaction was successful and his account was debited appropriately.

Reddy subsequently approached the Banking Ombudsman, Hyderabad, for redressal of his issue that closed the proceedings without inquiring him.

He then approached the forum under Section 12 of Consumer Protection Act, 1986, claiming that there was a deficiency in the Bank’s services.

The Respondent Bank during the proceedings maintained that the transaction was successful and the amount could not be immediately debited due to some technical glitch. It further said that it was a natural corollary that Reddy received the said amount and no excess amount was found in the ATM after the transaction was made.

The Bank disputed the Forum’s jurisdiction and said:

1. The dispute in question was not a Consumer dispute
2. The dispute involved complicated questions of facts and law which required adjudication by a competent Civil Court.

The bench of President, Nimma Narayana and Member, Meena Ramanathan declined the Respondent’s arguments and said that as the Complainant had his savings account at the Respondent bank and he was admittedly a ‘customer’, the question of lack of jurisdiction did not arise at all. Further, the bank was also the service provider of the Complainant since he used the bank’s ATM.

It was then noted by the bench that the Complainant had approached the bank and the Banking Ombudsman within 90 days from the dates of the transactions, but the bank could still not manage to file the CCTV footage in support of their contention.

Livelaw quoted the bench as saying: “there is no proof of [the customer] having made a complaint with the SBI from the date of the incident and the obligation on the part of SBI to produce CCTV footage was ruled out due to expiry of maximum preservation period of 90 days from the date of the incident, is nothing but false. Non-production of CCTV footage by the opposite party No.1 & 2 even though complainant made a complaint to them within 90 days preservation period from 26-01-2017 leads to an adverse inference that the complainant did not receive Rs. 10,000”.

It added: “The very fact that Rs. 10,000 was debited to the account of the complainant on 15-02-2017 shows that there were technical problems with the SBI ATM. The complainant not getting cash of Rs. 10,000 from SBI ATM on 26-01-2017 is quite probable. There is, therefore, deficiency of service on part of opposite parties No.1 & 2 in providing service to the complainant”.

The Bank was then directed by the Commission to pay compensation of Rs 90,000 for causing mental agony and inconveniences to the complainant. The Bank was further awarded litigation costs of Rs. 10,000, which is payable within 30 days. Failing to do so, the Complainant shall be entitled to interest @ 8 % per annum.

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