Bombay HC – Bank Must Pay to Illiterate Widow for Negligence in Joint Account Fraud
The State Consumer Commission allowed the consumer complaint of the petitioner, directed the Bank to refund of Rs.25,28,515/- with interest and Rs.2 lakhs for mental harassment. The National Consumer Commission had set-aside the said order.
The husband of the petitioner- an illiterate widow – died on 10.1.2003 in accident in China. Respondent No.3 played fraud on the petitioner and surreptitiously added his name jointly with the petitioner in the savings bank account with “either or survivor” basis.
The petitioner deposited the cheque of compensation under the impression that her separate savings account was opened in the respondent bank.
However, the respondent no.3 had withdrawn the entire money. He was convicted for the said offence.
The respondent Bank allowed the respondent no.3 to withdraw entire amount ignoring all rules.
HELD that there are clear guidelines where an account holder is an illiterate person then operation by cheque and “either or survivor” facility is not permissible. Despite this, the Bank allowed the respondent no.3 to withdraw the amount using several cheques and slips of his earlier single account. It is seen that such acts constitute a clear negligence and contravention of the regulatory norms by the Bank Officer
