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On May 24, 2008 one of the victims, who had Rs 11.93 lakh in his bank account, went to the bank to withdraw some money. To his shock the bank informed him that his account has little over Rs 10,000 as of the date. When further enquired, the bank officer told him that someone named Gurwinder Singh presented a cheque and withdrew Rs 11.83 lakh from the complainant’s bank. However, the account holder asserted that he had no knowledge of any such cheque or person.
Similar cheque fraud withdrawal incidents happened with four other individuals who also had bank accounts in the same branch of the bank. All the four individuals and the complainant himself opened the bank account in Axis Bank in 2008. Since the facts and nature of all the five complainants were the same it was decided by the consumer forum to issue a joint common order for all five of the victims
What did Axis Bank do after knowing about the cheque fraud
The bank in response to this fraud cheque withdrawal incident filed an FIR under sections 420, 467, 468, 471 and 120-B against the suspect, Gurwinder Singh. The bank had also reported the incident to the Reserve Bank of India. An internal investigation committee was also set up by the bank for investigating these specific frauds.
“The matter was placed before the bank’s special committee for monitoring large value frauds at its meeting held on July 14, 2008. The matter was also reported to RBI by way of a D.O. letter dated July 15, 2008. Finding of the inquiry was that the staff members involved in opening of accounts had complied with the laid down norms and procedures and all accounts were found to be KYC compliant. The payments made by the bank officers concerned were more of a business call and that no malafide intentions can be attributed to them,” said Axis Bank during the case proceedings.
Axis Bank contended that they had fulfilled their obligation and discharged its liability like prompt filing of FIR, investigating the matter and reporting to RBI.”Bank has made all efforts to even serve the copy of notice of the orders of the State Commission by publication in the newspapers. The Bank served notice to Gurwinder Singh through newspaper publication and the same was placed on record. We may add here that the culprit, namely, Gurwinder Singh, the police submitted an Untrace Report before Chief Judicial Magistrate, Chandigarh. As per the said Untrace Report, after investigating the matter, Police was unable to trace out the said Gurwinder Singh,” said Axis Bank during the case proceedings.The complainants were not satisfied with Axis Bank’s resolution and hence, a case was filed against the bank in the District Consumer Forum.
Case starts in District Consumer Forum
The signature on the cheque was matched with the specimen signature of the complainant. When handwriting experts were called in, different opinions were presented. On October 13, 2009, a handwriting expert’s affidavit was filed before the District Forum stating that the signatures did not match the concerned cheque. On November 5, 2009 another affidavit-in-evidence of a handwriting expert was filed before the District Forum stating therein that the signatures do match with the concerned cheque.
District Consumer Forum after going through all the facts and evidence opined that the bank was at fault, and they should pay the fraudulently withdrawn amount along with a compensation. The district consumer forum in an order dated February 26, 2010 said, “The Bank has to pay a sum of Rs 11.83 lakh for making a wrongful debit. Further, Rs 2 lakh for mental harassment and Rs 5000 for litigation costs are also directed to be given.”
Fight for justice goes on in State Consumer Commission
After Axis Bank lost the case in the District Consumer Forum, it filed an appeal with the State Consumer Forum. However, the State Consumer Forum passed an order favourable to all the five victims of the fraudulent cheque withdrawal incident.
“Commission is of the concerted view that there was glaring deficiency in rendering service on the part of Axis Bank as its officials failed to discharge their duties with proper care, caution and diligence, which led to huge financial and monetary loss to the complainants, who deposited their hard earned money in good faith in the saving bank accounts with the bank,” said the State Commission in their order dated December 11, 2014.
The State Commission ordered the bank to pay each of the five victims the entire amount which was fraudulently withdrawn using cheque and a compensation too for each of the five complainants. The collective amount withdrawn fraudulently came at Rs 68.93 lakh and the collective compensation was Rs 5 lakh.
Legal fight escalated to Supreme Court
The bank had filed a special leave petition (Civil) (number 20541 of 2015) before the Supreme Court in 2015 after losing the case in the State Consumer Commission. The Supreme Court passed an order in this regard on January 30, 2018. The order read, “SLP (Civil) No. 20541 of 2015 The court remands the matter to the State Commission to examine whether the Bank was justified in debiting the account of the respondent and decide the matter on merits in accordance with law.”
Fight again goes on in State Consumer Commission
Axis Bank alleged that the complainant and the prime suspect might be involved together in an elaborate scam against the bank.
“All the fraudulent transactions have taken place in one month from the date of opening of these accounts with the Bank precisely, which leads to a possible conclusion that the Respondents and Gurwinder Singh have joined hands with each other to defraud the Bank and that is why Gurwinder Singh has neither been made a party till Hon’ble Supreme Court directed the same vide order dated January 30, 2018 until then it was too late and Gurwinder Singh was already untraceable,” said Axis Bank before the State Commission.
However, the State Commission did not find merit in their arguments and dismissed the appeal of the bank.
Fight ends up in NCDRC
After losing the case in the State Consumer Commission, the bank filed an appeal in NCDRC. It was observed by NCDRC that there is no fault with the order passed by the State Commission, and it is well-reasoned.
“The Petitioner-Bank does not seem to have done KYC properly, despite having got documents like Voter Card as proof of identity and Electricity Bill/Phone Bill/Passport as proof of address. After giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, we uphold the order of the State Commission,” said NCDRC in an order dated December 11, 2023.
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