A Customer's Right to Funds vs. a Bank's Record-Keeping Failure.


23-July-2025 Consumer Protection Act >> Consumer Rights  

In Bhagwati Prasad Kanya Mahavidyalaya v/s Central Bank Of India the complainant school opened a current account with the bank in 1990. The account had a credit balance of Rs. 93,594.10 as of April 22, 1991, and subsequently became dormant. In 2010, the school's management tried to revive the account, but the bank stated that due to its age and the transition to a Core Banking System (CBS), no records were available.

District Forum: 

The District Forum ruled in favor of the school, directing the bank to pay the deposited amount of Rs. 93,594, along with Rs. 5,000 in compensation and Rs. 2,000 for litigation costs.

 

 

State Commission: 

The bank appealed this decision. The State Commission partially allowed the appeal, modifying the order to require the school to produce the account's passbook to receive the funds and interest. The State Commission also set aside the Rs. 5,000 compensation for mental and physical pain.

NCDRC's Findings: 

The NCDRC heard the school's revision petition. It found that the school had provided sufficient evidence, including deposit slips and cheque details, to prove the existence of the account and the balance. The Commission rejected the bank's arguments that the account was untraceable due to the CBS transition, stating that a bank's internal record-keeping failure cannot negate a customer's right to their funds.

The NCDRC also dismissed the State Commission's requirement for a passbook, noting that current accounts are typically not issued passbooks. The NCDRC stated that the bank's other contentions—that a new account was opened in 2003 or that two accounts could not be held simultaneously—were also without merit as the bank provided no rules or evidence to support these claims.

Conclusion: 

The NCDRC ruled in favor of the school, allowing the revision petition. It set aside the State Commission's order and affirmed the original order of the District Forum.


Section 21, Consumer Protection Act - 1986  

Consumer Protection Act, 1986