NCDRC Held Bank Of Maharashtra Liable For Misappropriating ₹27 Crores; Orders Double Compensation To PHFI

NCDRC Held Bank Of Maharashtra Liable For Misappropriating ₹27 Crores; Orders Double Compensation To PHFI

NDRC has now ordered Bank of Maharashtra t to Repay ₹27 Crores Plus Interest for Deficient Functioning.

FPJ News ServiceUpdated: Sunday, July 07, 2024, 06:53 PM IST
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NCDRC Held Bank Of Maharashtra Liable For Misappropriating ₹27 Crores; Orders Double Compensation To PHFI | Representative pic

The national consumer dispute redressal commission (NCDRC) has held the Bank of Maharashtra responsible for misappropriating Rs 27 crores of the Public Health Foundation of India (PHFI), which was invested in the  fixed deposits of the bank. The commission has thus asked the bank to pay the bank to pay almost double the amount to PHFI. The orders passed by the commission maintained that the bank should pay back the invested amount along with nine per cent interest on the amounts, from the year 2013.

A complaint was filed by PHFI with the NCDRC claiming that Devendra Bhogale, a manger with the Bank of Maharashtra, had mentioned about the fixed deposits offered by the bank. Accordingly, PHFI had transferred Rs 27 crore in four of the branches to a “Non-Customer Inter Branch Fund Transfer Account” of the bank in September and October 2013, with instructions to keep the amounts in fixed deposits.

The bank in April 2014, had paid Rs 17.85 lakh was paid to the complainant by a Demand Draft,  towards interest and the said manager Bhogale even renewed one of the fixed deposit receipts of Rs 4 crore after it matured the same year. Meanwhile a case of fraudulent transaction was register against the bank by the Economic Offence Wing (EOW) and had also informed PHFI about the same.

After realising the same, the PHFI had approached the bank, seeking for the refund of the invested money, however it was time and again rejected by the bank, by giving reasons like the signatures did-not match with the sample signatures with the bank. However as the bank refused to refund the amount back, thus PHFI had approached the consumer forum seeking a redressal against their complaint.

The bank however in its say held that the PHFI was the one which was purely responsible for its own loss. The bank claimed that the transactions were conducted through the bank manager Bhogale and other, who were hand in glove with the frauds and that the bank had no concern, thus the bank had no connection with the fraud and hence there was not negligence on the bank’s  part.

The PHFI however placed the bank’s internal inquiry report, which had unearthed several lapses on the part of bank officials. He inquiry report’s pointed out that the banks itself maintained that the fixed deposit account’s which the bank had opened were titled as“fraud account” in the name of PHFI and the bank had turned a blind eye towards such a huge blunder.

The Commission, after going through the evidence held, “The Bank has nowhere disputed the receipt of Rs.27 crores by them from the complainant, consequently the Bank was clearly deficient in not verifying the customer identity and information from the complainants or by adopting measures that were required to be observed by the them, hence the Bank is clearly liable for the acts and omissions of its employees directly as well as vicariously. The misappropriation and embezzlement is only a consequence of this deficient functioning of the Bank and the defence taken by it is unacceptable.”

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