Axis Bank refused to pay money to customer citing insufficient funds, Now Court has ordered Bank to pay compensation

Bharpur Singh maintained an account with Axis Bank, holding a balance of Rs 1,193,304. On May 24, 2008, when Singh attempted to make a withdrawal, the bank denied the transaction citing insufficient funds in the account.
Investigations revealed that Gurwinder had utilized cheque number 063989 to withdraw Rs 11.83 lakh from Singh’s account. Axis Bank promptly lodged a First Information Report (FIR) with the police and reported the incident to the Reserve Bank of India in compliance with regulatory directives. However, the RBI failed to respond.
In response, Singh issued a legal notice to Axis Bank, demanding the reimbursement of Rs 11.83 lakh lost to the fraud, along with interest and compensation for harassment. Despite the bank’s non-compliance with the notice and its failure to address Singh’s grievance, he decided to file a consumer complaint before the Chandigarh District Forum.
The Chandigarh District Forum ruled in favor of Singh, ordering the bank to pay Rs 11.83 lakh, Rs 2 lakh for mental harassment, and Rs 5,000 as litigation costs. Axis Bank appealed this decision.
The Chandigarh State Commission observed that the fraud occurred within a month of opening the account. It noted that the fraudulent cheque did not belong to Singh’s series, and even an untrained eye could discern the signature variation between the forged cheque and the one on the account opening form.
Additionally, the Commission highlighted Gurwinder’s repeated use of the same modus operandi in illegally withdrawing funds from other accounts. Despite police reports indicating Gurwinder’s untraceability, the Commission concluded that the bank’s executives were negligent in failing to verify signatures before authorizing payments.
The Commission held the bank accountable for its employees’ negligence and asserted that Singh should not bear the consequences of the fraud. It directed the bank to take appropriate measures to trace and recover the amount from Gurwinder Singh.
After the State Commission upheld the order in Singh’s favor, the bank contested it by filing a revision petition. However, the National Commission dismissed the revision, citing a well-reasoned order by the State Commission and referring to a Supreme Court ruling that deemed a revision petition non-maintainable against concurrent findings by both the District Forum and the State Commission.
On December 11, 2023, the National Commission, led by Dr Inder Jit Singh, confirmed the order in Singh’s favor, dismissing the bank’s revision.
Never knew axis bank was this much waste of space. Axis bank should have reimbursed that Punjabi man on the same day he asked for reimbursement. Axis bank is private bank not government bank so why would rbi reimburse axis bank customer?
The person had to lodge complain of the Ombudsman of RBI. Ombudsman would have taken action immediately.
Excellent ruling by the court in favour of Axis bank client whose account was tampered with under the inept noses of its staff.