Pranav B Prem

The Delhi State Consumer Disputes Redressal Commission, comprising Hon’ble Ms. Bimla Kumari, Presiding Member, allowed an appeal filed by Naushad Ahmed against Corporation Bank (now Union Bank of India) concerning a fraudulent withdrawal of ₹4,80,000/- from his account. The Commission set aside the District Forum’s order dated 13.09.2019 and remanded the matter back to the District Forum for adjudication on merits, directing that it be disposed of at the earliest.

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Brief Facts of the Case

The appellant, Naushad Ahmed, maintained a savings account with Corporation Bank. In September 2012, he was approached by one Mehtab, who claimed he could assist in obtaining a home loan. Acting on this assurance, Ahmed handed over two blank cancelled cheques bearing numbers 398666 and 398667. Days later, he was informed that ₹4,80,000/- had been withdrawn from his account by an unknown person, Ajit Singh. Ahmed alleged that the bank had released the amount to a stranger without verifying his identity and had thereby acted negligently. He lodged an FIR (No. 342/2012) at P.S. Welcome Colony and claimed deficiency in service on the part of the bank. The complaint was filed before the District Consumer Forum, New Delhi, in 2012.

District Forum’s Decision

After nearly seven years of pendency, the District Forum dismissed the complaint on 13.09.2019, holding that the case involved complex questions of fact and law which required elaborate evidence and cross-examination of witnesses. The Forum opined that such issues could not be dealt with under its summary jurisdiction and that the complainant should approach a civil court for relief.

Contentions of the Appellant

The appellant contended that the District Forum failed to consider that the cheque was a “self-cheque” and that the bank, despite negligence and possible collusion, encashed it in favour of an unknown person. He argued that the forum had erred in dismissing the complaint when all evidence and arguments had already been presented. Ahmed also asserted that the Consumer Forum, under Section 13(4) of the Consumer Protection Act, 1986, possesses powers equivalent to a civil court — including the ability to summon witnesses, record evidence, and issue commissions. Therefore, the Forum should have adjudicated the matter instead of relegating him to a civil court after seven years. He further claimed that the bank had failed to report the fraud to the Reserve Bank of India and other authorities, reflecting clear negligence and violation of banking norms.

Contentions of the Respondent

The bank, in its defence, argued that the appellant himself was negligent in handing over the cheque to a stranger without ensuring its cancellation or proper details. It submitted that its vigilance branch had investigated the matter and found no fraudulent activity. The bank contended that the District Forum had rightly held that the case required detailed examination, which was beyond its jurisdiction.

The respondent further alleged that the appellant was attempting to take undue advantage by fabricating a false story and that the appeal was filed only to avoid the court fees associated with a civil suit.

Findings and Observations of the Commission

The Commission observed that the complaint had been filed in 2012 but was dismissed only in 2019, even though both sides had completed their evidence and arguments. The Commission found that the District Forum failed to exercise the powers vested in it under Section 13(4) of the Consumer Protection Act, 1986, which grants the same authority as a civil court to summon witnesses, receive evidence, and issue commissions for examination.

Referring to the Supreme Court’s ruling in Amar Jwala Paper Mills (India) and Another v. State Bank of India (1998), the Commission noted that once evidence has been recorded, the forum must itself decide the matter and not direct the complainant to a civil court after years of litigation. The Commission emphasized that remanding a complainant to a civil court at such a late stage could effectively deny justice, as limitation would have already run out. The Commission held that the District Forum had misjudged its jurisdiction and wrongly dismissed the complaint. It reiterated that consumer fora are empowered to handle disputes involving evidence and cannot avoid adjudication merely on the ground of complexity.

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Setting aside the District Forum’s order dated 13.09.2019, the Delhi State Consumer Commission remanded the matter to the District Forum with directions to adjudicate it on merits and dispose of it expeditiously, considering that the complaint dates back to 2012. The appeal was allowed, and the Commission directed that both parties bear their own costs.

Cause Title: Naushad Ahmed V. Corporation Bank & 2 Ors. 

Case No: FA/545/2019

Coram:  Hon’ble Ms. Bimla Kumari (Presiding Member)