Delhi Consumer Commission says consumer forums are not equipped to handle complaints of fraud and forgery
The Delhi State Consumer Disputes Redressal Commission, headed by Justice Sangita Dhingra Sehgal (President) and Pinki (Judicial Member), has clarified that consumer forums are not equipped to handle complaints involving allegations of fraud and forgery. The Commission ruled that such cases are too complex for summary resolution typically provided by consumer forums.
Case Summary:
The complainants raised issues with Kotak Mahindra Bank, alleging unauthorized deductions of ₹1,20,000 from their account during a period when they were updating their Know Your Customer (KYC) details. Despite notifying the bank immediately, the unauthorized transactions continued, resulting in a total loss of ₹1,20,000. The bank did not act swiftly to freeze the account or provide details of the transactions. Consequently, the complainants filed a case with the District Consumer Disputes Redressal Commission, Central Delhi.
In its defense, Kotak Mahindra Bank claimed that the complainants had been negligent by sharing their account details and passwords. The bank also stated that it had requested a fund recall from other banks and payment platforms. The District Commission found that the bank had failed to protect the complainants’ funds and did not provide timely information. It ordered the bank to refund ₹1,20,000 with interest, along with ₹20,000 in compensation and ₹5,000 in litigation costs.
Dissatisfied with this decision, the bank appealed to the State Consumer Disputes Redressal Commission, Delhi.
Observations by the State Commission:
The State Commission cited the National Consumer Disputes Redressal Commission (NCDRC) ruling in Capital Charitable and Education Society Vs. Axis Bank Limited [Consumer Case No. 269/2017], which established that fraud and forgery cases fall outside the jurisdiction of consumer forums due to their complexity. The Commission emphasized that consumer protection proceedings are designed for simpler, less complex cases and are not suitable for intricate issues such as fraud and forgery.
The State Commission concluded that consumer forums, which operate under a summary procedure, are not equipped to handle the detailed examination required for fraud cases. Given the fundamental issue of fraud and the substantial evidence that necessitates thorough scrutiny, the State Commission overturned the District Commission’s decision.
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