Court Cases

Supreme Court says Bank liable for wrong done by its employees


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In a recent landmark ruling, the Supreme Court has held the District Cooperative Bank in Varanasi responsible for their service failures and affirmed their vicarious liability for the actions of their employees. The highest court directed the bank to provide compensation of Rs 25,000 to a man who was wrongly denied access to his fixed deposit almost thirty years ago.

This decision upholds the initial ruling of the district consumer forum from 1997, which had already granted compensation to the aggrieved individual. The contrary ruling of the National Consumer Disputes Redressal Commission (NCDRC) was overturned by the Supreme Court.

The case revolves around the District Cooperative Bank’s failure to release fixed deposit receipts amounting to Rs 1,60,000. The petitioner alleged that the bank unlawfully prevented him from withdrawing his funds. The district consumer forum, upon careful review, ordered the bank to refund the full amount along with 15% interest, as well as an additional Rs 25,000 in damages.

The Supreme Court, in its judgment, highlighted, “It is evident from the record that the district forum was satisfied that the appellant had indeed handed over Rs 1,60,000 to the bank’s officials. This is supported by the bank’s ledger.” The court also acknowledged the establishment of an inquiry committee that recommended criminal proceedings against certain officials, which the bank diligently pursued. Additionally, the court recognized the bank’s responsibility for the actions of its employees, as evidenced by the periodic renewal of fixed deposit receipts.

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