BY: Rashid Paul
Srinagar March 03: The J&K State Consumer Disputes Redressal Commission (CDRC) has asked the JK Bank chairman to hold an inquiry into a case of fraud and forgery by its officials who allegedly swindled Rs 42 lakhs of one of its Srinagar based account holder entrepreneur.
The Commission president Justice (retd) Sunil Hali orderred the bank to transfer Rs 42,69,763 to a Srinagar businessman’s account who was swindled of this huge amount allegedly by the officials of the bank.
The Commission also awarded Rs 15 lakh as compensation for “tremendous mental agony and loss of business suffered” to the account holder besides asking the bank to pay 12% interest per annum from the date of filing of the grievance by the businessman.
A complaint was filed by the account holder Sheikh Imran Farooq alleging that there were some unauthorized transactions to the tune of Rs 42,69,763 from his account.
Farooq in his petition said that he never authorized the transactions, as a result of which his cash credit account had been diverted to a purpose other than against which a loan facility worth Rs 60 lakh was sanctioned in his favor.
The bank said that the amount was transferred into the loan account of his brother, who had a running loan account with the bank at Branch Unit, Bhogal, Delhi as he stood as a guarantor.
“This argument per-se cannot sustain. Even if the complainant (Farooq) had stood as a guarantor, that by in itself did not authorize the bank to recover this amount from him unless other security was furnished by the defaulter,” the Commission said, adding, the bank has wrongfully allowed transaction on forged documents.
Justice Hali observed, “the case is of unique nature where with open eyes the bank officials have committed the fraud and forgery which is a case of gross deficiency of service unmindful of the consequences”.
“Not only this, they have harassed the complainant by initiating recovery proceedings against him being fully aware that default in the cash credit account was on account of the illegal act committed by the bank,” he said.
The Commission expressed its shock over the fact that “the bank authorities have not taken any action against the defaulting officers even though more than five years have elapsed.”
The banks, it said, are the custodian of the money which belongs to the public and affecting such sham transactions results in erosion of people confidence in the banking system.
“An appropriate direction in this behalf could have been issued for registration of an FIR for taking cognizance against the erring bank officials but we constrain ourselves from doing so and we hope that the Chairman, Jammu and Kashmir Bank will take cognizance of the matter”, observed the Commission.
It directed the Chairman of the bank to appoint an inquiry team headed by an official of the General Manager rank, who shall identify the officials, having indulged in the sham and fraudulent transactions and proceed against them.
The inquiry has to be initiated within three months from the date the copy of CDRC order is served on the CEO/Chairman of the bank.
“In case the inquiry is not done within the said period,” the Commission directed that an FIR be lodged by the bank against its erring officials who have committed this fraud.
