Saturday, October 12, 2013

The accounts with Bank are universally treated as confidential account and are not supposed to be supplied to any one without prior approval of the account holder.

Rs. 15 Lakhs damages imposed on Bank for Leakage of bank account information

Citi Bank has been ordered by State Commission, Delhi to pay Rs. 15,00,000/- to the customer as damages for leaking his bank account information. The complainant has complained that his statement of account has been un-authorisedly and illegally leaked by the bank officials by supplying copies of the statements to a third party which his opposite party produced in the civil court at Delhi in a private dispute pending against him.
The Bank maintained that statements in question filed by the complainant are on a plain paper while the bank usually furnishes such statement of accounts on their official stationary.
                Commission observed that in any case, the copies of account of the complainant were produced before the Civil Court; such accounts are universally treated as confidential account and are not supposed to be supplied to any one without prior approval of the account holder. The availability of said account to the third party, which subscribed it in the Civil Court, is therefore a flagrant violation of confidential relationship between a bank and a customer and is a betrayal of trust.
                Commission after taking all factors into consideration fixed the amount of Rs. 15,00,000/- as compensation to be paid to complainant.


(Constituted under Section 9 of The Consumer Protection Act, 1986)

Date of Decision: 10.09.2012
Complaint Case No.2009/144

Sh. Amit Mittal,                       … Complainant
R/O BD-57, Vishaka,                     through Mr. Rajesh Kaushik
Enclave, Pitam Pura                       advocate.
New Delhi

1.   Mr. Hemant Kumar             ….Opposite Parties
      Branch Manager,                     through Ms. Amrita Singh,
      Citi Bank N.A.                         advocate.
      27, Central Market,
      Sector-II, Western
      Avenue Road,
      Punjabi Bagh,
      New Delhi.

2.   Mr. N. Rajashekaran,
      All Business Head-India,
      Citi Bank N.A.
      Citi Centre, 1st Floor,
      C-61, Bandra Kurla,
      Complex, Bandra (East)

        Justice Barkat Ali Zaidi       ...   President
        Ms. Salma Noor,                 …   Member

1.          Whether reporters of local newspapers be allowed to see the judgment?                                             YES
2.          To be referred to the Reporter or not?                                                      YES

Justice Barkat Ali Zaidi, President

1.                          Facts of the case as alleged by the complainant are that the complainant who is a Citigold customer holding three citi bank gold credit cards, including credit card (account) No.4385-8791-0057-4015, issued by Citi Bank, N.A. Punjabi Bagh, New Delhi, the statement of which relating to the period of November 2003 to January 2009, , has been unauthorisedly and illegally leaked by the bank officials by supplying copies of the aforesaid account to a third party, which his opposite party produced in the civil court at Delhi in a private dispute pending against him. His case is “Code of Bank’s Commitments to Customers” provides that all personal information of the clients, should be kept as private and confidential. His credit card account therefore should not have been revealed to anyone. The guidelines issued by the Reserve Bank of India prescribe that no information of a credit card customer can be supplied to any third party, barring some exceptional circumstances, which did not exist here. His case is that the complainant in this regard wrote several letters to various authorities of Punjabi Bagh branch of Citi Bank and to the Business Head of the country and other responsible officers of the OP but the response sent by them failed to satisfactorily explain the leakage of supplying the copies his statement of account of the credit card to the third party, and why and how the confidential information was leaked from the Bank, in this manner.
2.                          The OP Bank has been thus extremely negligent in protecting his confidential information with regard to his credit card statement, causing him immense prejudice, causing mental stress, trauma and distress and increasing his financial liability. He has therefore come up with a complaint before this Commission with a claim of Rs.30,00,000/- as compensation against the two OPs i.e. Sh. Hemant Kumar, Branch Manager, Citi Bank, N.A. Punjabi Bagh and Sh. N. Rajashekaran, All Business Head-India.
3.                          OPs have opposed the claim by filing their separate written statements, on similar lines alleging therein that the two individuals have not rendered any service to the complainant in their individual capacity. The complaint is therefore liable to be dismissed for misjoinder and non-joinder of necessary parties. The complaint involves complex question of facts, which require oral and documentary evidence, the dispute should therefore go to the Civil Court. Their averment is that the complainant has not disclosed any of the particulars of the third person to whim the Bank is being accused of having leaked the complainant’s statement of account and, whose presence is necessary for proper and effective adjudication of the complaint. Their further averment is that the copy of statement of account filed by the complainant in the complaint is on plain paper-sheet, while the statement of account, which the Bank provides are on the official stationary of the Bank. They have averred that the enquiry made by the Bank revealed that no copies of account/information, has been given from the Bank to anyone, and thus no cause of action therefore arises against them. They have pleaded that the complainant in connection of his three credit cards is also having Add On cards, and Add On card holder in this might have obtained this information. OPs denied any deficiency in service or negligence on their part and have prayed for dismissal of the complaint with exemplary costs.
4.                          The complainant in his rejoinder reiterated his averments made in the complaint, pleading that the OP No.1 being the Branch Manager of the Citi Bank Branch which maintains his account and other all Business Head of the country are responsible for the breach and liable to pay him compensation.
5.                          In support of his case, and in his evidence the complainant filed his own affidavit annexing copy of statement of account in question and various communications between him and the Bank. As against it in his evidence Special Power of Attorney Sh. Jagdish Salwan, of the OPs has filed his affidavit for OP No.2, while OP No.1 has given no evidence in his support.
6.                          We have heard Sh. Rajesh Kaushik, counsel for the complainant and Ms. Amrita Singh, counsel for the OPs.
7.                          An application under section 26 of The Consumer Protection Act 1986, filed by OP No.2 pending the complaint is also being disposed off alongwith this complaint, vide this order, for the reason that the question raised in the application, is involved in the main case itself, and the matter raised hereunder and could be decided at the time of final hearing and cannot and could not be decided as a preliminary issue.
8.                          It may be mentioned at the outset, that it is not disputed that the Citigold card allotment of the complainant is wrong or false. The only thing said in this connection from the side of the OPs is that the copies of statement in question filed by the complainant are on a plain paper, while the Bank usually furnishes such statement of accounts on of their official stationary. It will thus appear that in any case, the copies account of the complainant were produced before the Civil Court, such accounts are universally treated as confidential account and are not supposed to be supplied to any one without prior approval of the account holder. There are specific guidelines of the Reserve Bank of India in this regard which fact is not disputed. The availability of said account to third party, which subscribed it in the civil court, is therefore a flagrant violation of confidential relationship between a Bank and a customer(consumer), and is a betrayal of trust which not only calls for an alarm and dismay, but also for adequate financial compensation.
9.                          It was contended from the side of the OPs that the complainant has not furnished, before the Commission, the particulars of civil court case, in which the accounts were filed, that hardly makes any difference, so long it is not disputed that no such accounts were filed. Because case of the OP is that, accounts were filed on plain paper whatever the case may have been, the leakage of the account and the presentation thereof, before the civil court, is a matter of concern and a violation of confidentiality!
10.                       One of the contentions of the OPs is that they have made enquiries and that the accounts were not furnished by the Bank as mentioned above. It is not disputed that the accounts were false or incorrect. The fact that they found their way in the civil court case, clearly indicates, that they were leaked from the Bank. It is for the Bank and the OP No.1 to find out as to how the documents got leaked. It is not sufficient for the OPs to mention that they did not furnish those documents. The relationship between the Bank and the customer implied absolute liability, and it is for the OPs and their Bank to explain any circumstances which absolves them of liability.
11.                       One of the contention from the OPs is that the question involves are complicated questions of law and facts, and require evidence, and the matter should go to the civil court. This contention cannot be justified, because the simple question here, is of, violation of confidence between the Bank and customer, in furnishing confidential accounts.
12.                       It was also argued that the Bank has not been a party to the proceedings and the OPs cannot be made individually liable for the default. It cannot be said in the circumstances of the case that the Bank was a necessary party, the non-joinder whereof was crucial and fatal, because, it is not one of the functions of the Bank to furnish confidential accounts to third parties. It is not within the framework of the official work of the Bank, for any employee, to furnish confidential account of customer to third party. This is an unlawful activity. It is not part of the routine functioning of the Bank. The person who is responsible for such leakage, is therefore primarily responsible, for the loss and damage suffered by the consumer.
13.                       It has also been pointed out by OPs that complainant has an Add On cardholder, who can also obtain information of his accounts and as such there is a possibility that the Add On Cardholder of the card in question might have obtained the information of the accounts. It has to be seen in this connection that the contention from the OPs is that they do not know, how the accounts were smuggled and laid before the Court? If the Add On cardholder had obtained the accounts his application could have been available, and there would have been a record of information being supplied to him. The case of the complainant is that how the information was leaked out? It was also contended by the counsel for the OPs that there is lack of bonafides on the part of the complainant which should disentitle for any relief from the Court, in as much, as he has been dishonest to his adversary in civil court proceedings, by trying to conceal his accounts. We do not know, what are the circumstances, and whether the complainant means are fair in trying to withhold information about his account, and merely because, the complainant does not want his accounts to be presented before courts, it cannot be inferred to his being dishonest and unfair, to his adversary, so as to disentitle him, from any relief from the Court.
14.                       As regards the fixation of liability it has to be noticed that OP No.1 Sh. Hemant Kumar, the Branch Manager is the person responsible for the functioning of the Branch, and he has to owe responsibility for all matters relating to the Branch. The OP no.1 who is the Branch Manager has therefore to be held responsible for the leakage. However, as and when any enquiry is held and any specific employee is found responsible for the leakage, the, OP No.1 Branch Manager will have the option, of recovering the amount from him.
15.                       As regards the OP No.2, Sri S. Rajashekharan it will be seen that he is the Head of Business of the Citi Bank branches for the whole of India. His relation with the incident is therefore too remote, to invite liability, for any such mischief or negligence.
16.                       OP No.1 Branch Manager has therefore to be made liable for payment of compensation.
17.                       As regard the quantum of compensation, it must be realized that in cases of this nature, the amount of compensation has to include element of fine, and while fixing the amount, it has to be borned in mind, that the amount should be such, so as to deter other financial organizations from any such performance, and to be more vigilant and watchful. All these considerations must join in determining the amount of compensation. In the end, it must however, be said, that despite all consideration the amount has, as of necessity, to be somewhat arbitrary in character. Taking all factors into consideration we will fix the amount of Rs.15,00,000/- (Rs. Fifteen Lac).
18.                       The OP No.1 Sh. Hemant Kumar, Branch Manager, Citi Bank, N.A., Punjabi Bagh, New Delhi will pay Rs.15,00,000/- (Rs. Fifteen Lac) as compensation to the complainant while OP No.2 is discharged from any liability on this score.  The amount so fixed will be paid within sixty days of the receipt of the order.
19.                        A copy of this order be provided to the parties, free of costs, and thereafter the file be consigned thereafter to Record room. 
                   Announced on 10th day of September 2012.

 (Justice Barkat Ali Zaidi)

(Salma Noor)

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