Consumer Forum directs the Indian Overseas Bank to pay compensation of 1.5 lakh for defrauding illiterate account holder

The Villupuram Consumer Forum recently directed the Indian Overseas Bank (IOB) to pay Rs.1.5 Lakh as compensation and for the mental agony caused to an aged account holder whose money was not rightfully released to him.

The verdict was passed by a three member quorum of the District forum, presided by President RVR Deenadayalan. The forum directed the payment of the compensation, along with the payment Rs 200 that was due to the complainant-account holder, along with interest for the delayed payment. The Consumer Forum further directed IDB to render a letter of apology for all the inconvenience caused to the petitioner.

Factual Background

The complainant had opened a savings account with IOB. However, it came to his attention that an amount of Rs 5,140 in his account was misappropriated on various dates between 2016 and 2017. It came to light eventually that an amount of Rs.5,340 lying in the complainant’s savings account was withdrawn by somebody else in various transaction over a period of one and a half years.

Therefore, a complaint was lodged with the Managing Director and Chief Managing Director of the Bank as well as with Right to Information Commission. However, no response was given to the account holder. Later the an amount of Rs 5,140 was credited to his bank account, but without any interest. The complainant demanded the bank officials to pay interest for the said amount and compensation as well, to no avail.

The managers also later compelled the petitioner to sign various blank documents. After the complainant approached the police over the issue, the bank officials threatened the complainant to withdraw his complaint. This prompted the complainant to approach the consumer forum with his grievance.

The complainant submitted before the consumer forum that the bank officials had conducted a fraudulent act on their part and that there was a deficiency of service on the part of IOB. The complainant, therefore, sought for an interest on the amount due to him and a compensation of Rs.3 lakh for deficiency in service and mental agony.

IOB countered the complainant's case by submitting, inter alia, that the delay in payment was attributable to the complainant holding two accounts with the bank and not providing appropriate details regarding the same.

Consumer forum finds IOB guilty of fraud

After hearing arguments from both sides, the forum found that IOB had not submitted sufficient documents to prove their allegation that the complainant had two bank accounts. On the other hand, the forum found sufficient reason to believe that the bank had acted to defraud the complainant. In this regard, the order records,

"On perusal of accounts it is found some malpractice was done in the account of the complainant. Without connivance of the bank officials the above malpractice will not be done in the count of the complainant. The opposite parties had not given proper explanation for the transaction between the period of 5.2.2016 and to 8.5.2017"

The forum held that since IOB had only redeposited Rs. 5,140 instead of the full Rs. 5,340 due to the complainant, he was entitled to get the remaining Rs 200 along with 9% interest for the delayed payment.

Further, the Villupuram Consumer Forum awarded Rs.1.5 Lakh as compensation the account holder for the mental agony caused to an aged account holder. Moreover, the forum also imposed a cost of Rs.5,000 to the IOB.

However, the forum declined to grant the complainant's plea regarding access to ATM card withdrawal facilities for the illiterate. It was observed that the complainant had not provided any documents applying for ATM facility. Therefore, the complainant was not entitled to get relief on this aspect, the forum held.

[Read the order below]