A district consumer commission in Kerala has ordered a bank to pay Rs 70,000 to an account holder after Rs 10,000 was debited from his balance during an unsuccessful cash withdrawal over a decade ago.
In a ruling issued on August 31, the Thrissur District Consumer Commission directed the bank to refund the debited Rs 10,000, along with Rs 50,000 in compensation for financial hardship and mental distress, and Rs 10,000 toward litigation expenses. The bank has been given one month to disburse the total amount.
Dispute Followed Decade-Long Impasse
The dispute stems from an incident on March 1, 2014, when the customer attempted to withdraw Rs 10,000 from an automated teller machine operated by a different bank. The terminal initiated the process but failed to dispense any currency. The complainant subsequently discovered that the sum had been deducted from his account.
After his grievances went unaddressed, the customer issued a formal legal notice through his counsel, advocate A D Benny, in March 2015. With the dispute remaining unsettled, he approached the district forum seeking a refund and compensation for the deficiency in service.
Commission Rejects Bank Defence Over Record Discrepancies
Opposing the complaint, the account holder’s bank, represented by advocate K N Santhosh, contended that internal transaction statements and account records showed a completed withdrawal. The bank maintained that its internal verification deemed the transaction successful and insisted the funds had been dispensed.
However, a bench comprising Commission President C T Sabu and members Sreeja S and Ram Mohan R found that the operating ATM’s electronic audit records did not record the disputed transaction. The commission held that the bank had rejected the customer’s legitimate grievance without providing verifiable documentation demonstrating that the cash had actually reached his hands.
Home Bank Held Responsible For Network Failures
Clarifying the responsibilities of financial institutions in inter-bank ATM networks, the commission determined that an account holder’s contractual relationship lies squarely with the institution holding their account. The bench observed that consumers cannot be expected to independently establish technical failures occurring within shared banking infrastructure.
The forum ruled that even when a transaction fails at a third-party ATM, the customer’s home bank remains obligated to investigate the discrepancy, reconcile accounts with the operating institution, and safeguard the depositor’s funds. Finding no independent negligence or service deficiency on the part of the bank operating the ATM terminal, the commission dismissed all claims against it.
The commission also highlighted that while the customer had initially claimed only Rs 10,000 in compensation, the prolonged delay and the gravity of the bank’s administrative failure warranted a higher penalty. The bench noted that as a bona fide customer, the complainant was entitled to prompt, transparent, and efficient banking services.
