NCDRC Holds HDFC Bank Liable for Unauthorized Transactions

July 16, 2024

The National Consumer Disputes Redressal Commission (NCDRC) bench, chaired by Dr. Inderjit Singh (Presiding Member), found HDFC Bank responsible for its failure to resolve the Complainant’s issues regarding numerous unauthorized transactions. Moreover, the bank neglected to ensure the provision of SMS alerts for deductions made from the account.

Brief Background

The Complainant maintained a savings account with HDFC Bank and possessed an ATM cum debit card associated with this account. Upon attempting to withdraw funds, he discovered that Rs. 35,000/- had been withdrawn by an unauthorized party. Despite the bank’s customary practice of notifying account holders via SMS for such transactions, the Complainant did not receive any alert. Despite multiple visits to the bank to address the matter, his concerns were disregarded. Feeling aggrieved, the Complainant lodged a consumer complaint with the District Consumer Disputes Redressal Commission in Nagaon, Assam.

The District Commission ruled in favor of the complaint, instructing the Bank to reimburse Rs. 35,000/-, along with Rs. 5,000/- as compensation and Rs. 5,000/- as legal costs to the Complainant. Displeased with this decision, the Bank appealed to the State Consumer Disputes Redressal Commission, Assam (“State Commission”).

In its appeal, the Bank contended that the Complainant had only presented a photocopy of the ATM card, not the original, implying that it was not in his possession. Additionally, it argued that both the ATM card and PIN were always under the Complainant’s control, making unauthorized withdrawals highly unlikely. Furthermore, the Bank asserted that the District Commission lacked jurisdiction to adjudicate a dispute involving allegations of fraud.

The State Commission rejected the Bank’s appeal and affirmed the District Commission’s decision. Unsatisfied with this ruling, the Bank submitted a revision petition to the National Consumer Disputes Redressal Commission (“NCDRC”). However, the Complainant did not attend the NCDRC hearing.

Observations by the Commission

The NCDRC observed that Rs. 35,000/- was withdrawn in seven transactions from various locations from the Complainant’s account, which he discovered upon visiting the Bank on August 12, 2013. The Complainant filed an FIR on August 13, 2013, and informed the Bank about the unauthorized transactions, noting the absence of SMS alerts despite always receiving them for previous transactions. In defense, the Bank argued that the transactions were authorized since the Complainant had possession of both the ATM card and PIN.

The NCDRC further observed the lack of CCTV footage that could refute the Complainant’s assertions and affirmed the conclusions that the Bank did not fulfill its obligations by failing to activate SMS alerts for the transactions in question.

Emphasizing its restricted revisionary authority, the NCDRC clarified that it intervenes solely in cases involving jurisdictional errors or significant procedural lapses. Both the District Commission and the State Commission issued reasoned decisions, which the NCDRC found sufficient grounds to uphold. Accordingly, the NCDRC upheld the State Commission’s rulings and rejected the Bank’s revision petition.

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