The Aryavarth Express
Agency (New Delhi): The Supreme Court of India has allowed an appeal filed by Leelawati Devi and another party, setting aside an order of the National Consumer Disputes Redressal Commission (NCDRC) in a case involving fraudulently obtained fixed deposit receipts (FDRs).
The appellants had filed a consumer complaint before the District Consumer Forum, alleging that the District Cooperative Bank Ltd., Durga Kund Branch, Varanasi, had refused to allow them to encash FDRs worth Rs. 1,60,000 that they had deposited with the bank. The District Forum ruled in favor of the appellants, directing the bank to refund the amount along with 15% interest and Rs. 25,000 as compensation. The bank’s appeal to the State Commission was dismissed, prompting it to file a revision petition with the NCDRC.
The NCDRC allowed the bank’s revision petition, stating that the FDRs had been “obtained by respondent No. 1 in a fraudulent manner without depositing any amount” and that they did not bear the signature of the manager, who was the only authority competent to issue them. However, the Supreme Court found that the District Forum had been satisfied that the appellants had indeed handed over the money to the bank’s officials, as evidenced by the bank’s ledger. The court also noted that the bank had set up an inquiry committee that recommended criminal proceedings against certain officials, and that the FDRs had been renewed multiple times.
In its order, the Supreme Court held that the NCDRC’s findings were contrary to the record and could not be sustained. It stated that the bank was vicariously liable for the acts of its employees. The court allowed the appeal, set aside the NCDRC’s judgment, and restored the District Forum’s order directing the bank to refund the amount with interest. The bank was given eight weeks to comply with the order, failing which the appellants could initiate execution proceedings.
The court’s decision emphasizes the responsibility of banks to safeguard the interests of their customers and holds them accountable for the fraudulent acts of their employees. It serves as a reminder that consumer rights must be protected and that financial institutions cannot evade liability by claiming that their employees acted without authorization.