HDFC Bank Found Guilty of Denying Cash Certificate Payment, Court Orders Compensation
| ➡️ Get instant news updates on Whatsapp. Click here to join our Whatsapp Group. |
The Baramulla District Consumer Disputes Redressal Commission in Jammu and Kashmir has ruled against HDFC Bank for refusing to encash two valid cash certificates issued to a customer. The Commission held the bank responsible for denying payment even though the certificates had the bank’s official seal and signature.
What Happened?
A customer had taken two cash certificates from HDFC Bank — one for ₹2,00,000 and the other for ₹4,35,000. When he went to the bank to withdraw the money after the first certificate matured, he was told that there was no record of the certificate. He then enquired about the second certificate but received the same response.
After repeatedly requesting the bank to verify, he was told that the certificates might have been issued by an employee named Safdar Khan, who worked at the branch during that time. The customer, however, stated clearly that he deposited the money directly with the bank, and not with the employee in question.
Bank’s Response
In its written reply, HDFC Bank claimed that the certificates were fake and forged, and were not recorded in their official system. The bank also said that the customer had never lodged a complaint before. However, the bank admitted that it had taken internal action and suspended the concerned employee, Safdar Khan. Despite this, the bank insisted that there was no failure of service on their part. Importantly, the bank did not appear in court to argue its case and was declared ex parte, meaning the case proceeded in its absence.
What the Consumer Commission Said
The Consumer Commission, led by President Peerzada Quosar Hussain and Member Nyla Yaseen, ruled that HDFC Bank cannot escape responsibility by blaming a suspended employee. The Commission explained that since there is a direct relationship between the bank and its employees, the bank is vicariously liable for actions taken by its staff. The Commission also pointed out that the bank failed to properly investigate or act fairly in this case, which amounted to deficiency in service.
It further said that customers have the right to trust documents that bear the seal and signature of the bank. Referring to a 1992 Supreme Court ruling (PNB vs Surendra Prasad Sinha), the Commission said banks cannot deny liability simply because such documents are not in their internal records.
The Final Order
The Consumer Commission directed HDFC Bank to pay the customer the full matured amount of the two cash certificates, along with interest. Additionally, the bank was ordered to pay ₹50,000 as compensation for mental harassment, ₹20,000 for legal expenses, and ₹10,000 to the Consumer Welfare Fund in Baramulla.
The Commission also allowed the bank to conduct its own investigation and take action against the employee responsible, if necessary.
