The Himachal Pradesh Consumer Commission has ordered two private banks to refund Rs 20 lakh and pay an additional Rs 30,000 in compensation and litigation costs to a woman after her funds were held for more than two months in a closed loan account amid conflicting instructions from both institutions.
A bench comprising Commission President Hemanshu Mishra alongside members Arti Sood and Narayan Thakur concluded that both lenders displayed institutional apathy, resulting in a gross operational default and deficiency in service. The commission noted in its September 11 order that the financial institutions engaged in bureaucratic delays and mutual blame-shifting rather than adhering to established protocols for the swift reversal of funds mistakenly credited to defunct accounts, ultimately forcing the consumer into unnecessary financial strain and legal proceedings.
Origin of the Transaction Dispute
The issue arose when the woman attempted an electronic transfer of Rs 20 lakh from her savings account at one private bank to her husband. Due to a typographical mistake, the money was routed into her husband’s personal loan account at a different private bank. That loan facility, however, had already been fully cleared and closed prior to the date of the transfer.
The complainant discovered the error immediately and alerted the beneficiary bank on April 2 to request a rollback. Three days later, on April 5, that institution instructed her to handle the matter through the branch holding her savings account. Acting on those instructions, she submitted a formal complaint to her home branch on April 14.
Her bank, however, declined to resolve the issue directly, stating that any refund was contingent on clearance from the beneficiary bank. With both lenders deflecting responsibility and issuing automated communications, the sum remained inaccessible.
Financial Strain and Collateral Borrowing
The prolonged freeze caused severe liquidity constraints for the household. Unable to retrieve the Rs 20 lakh, the woman’s husband had to pledge corporate shares on April 24 to secure an alternative loan to cover immediate cash needs.
Following the impasse, the woman filed a formal complaint with the consumer commission, alleging deficiency in service by both institutions and seeking an immediate refund alongside compensation for distress and legal expenses.
Forfeited Defence and Final Directive
While both banks entered appearances before the commission upon receiving formal summons, neither submitted a written response within the statutory 45-day window prescribed by the Consumer Protection Act, 2019. Because of this default, the commission struck off their right to reply, precluding their defences from the official record.
Applying the legal principle of non-traverse, the panel held that the complainant’s evidence and documented timeline remained entirely unchallenged and stood admitted as a matter of law.
Under the final directives, the commission ordered the immediate refund of the Rs 20 lakh and mandated a cumulative payout of Rs 30,000. Of this secondary amount, both banks must pay Rs 12,500 with accrued interest, while the husband’s bank was directed to pay an additional Rs 7,500 with interest. The two institutions were also instructed to jointly and severally pay Rs 10,000 to cover the complainant’s legal costs.
