Consumer Forum Asks Karnataka Bank To Release Hold and Allow Customer To Use Undisputed Amount

Moneylife Digital Team 16 July 2022

Consumer Interest

In a significant ruling, the Nagpur District Consumer Disputes Redressal Commission asked Karnataka Bank to allow a complainant to operate his bank account by putting on hold only Rs10,000 Until further orders. This case highlights the disadvantages of digital transactions, where the recipient is supposed to verify the identity and genuineness of the transferer or else face a hold on his bank account irrespective of the amount involved in the suspicious transaction.

In an ex-parte interim order issued on 15 July 2022, the bench of Sanjay Vasudeo Patil (president) and members Chandrika Bais and Subhash Ajne says, "Respondent-Bank is directed to put hold on the amount of Rs10,000 till further order and shall allow the complainant to operate the account in respect of remaining amount in the account."

In this case, the complainant, Ramanuj Satyanarayan, a company secretary (CS) by profession, received a payment of Rs1.99 lakh on 2 June 2022 in his bank account for professional services he provided to a client. However, the Bank prevented him from withdrawing the amount credited in his account the next day.

On further enquiries with the bank, he was told that the account through which he had received the money was reported as involved in suspicious transactions. While the Telangana police has asked for hold of Rs10,000 only, the Bank, however, put hold on the entire payment Mr Satyanarayan received from his client.

Karnataka Bank further asked the account-holder either to bring an order from a court or directions from Telangana police to remove the hold on the amount involved in the transaction. Police from Telangana refused to cooperate and release the hold on the bank account.

The account-holder approached the Commission through advocate Dr Mahendra Limaye. After a detailed hearing on 14 July 2022, the Commission asked the Bank to remove the hold on the account and keep the hold only for Rs10,000, which the consumer has received from the disputed account.

Dr Limaye says, "The judgement will have far-reaching impacts because of late it is observed that police tend to put on hold all the subsequent beneficiaries without assessing or investigating their role in the fraudulent activities reported to them."

"In the digitalised online payment mechanism, it is practically impossible for the beneficiary to verify the transferer's identity. This lacuna is putting genuine bank account-holders to run from post to pillar when he faces such problem of hold on his account," he added.

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