Rs 15 lakh penalty imposed on J&K Bank for fraud

Fayaz Bukhari
SRINAGAR, Mar 3:  Jammu and Kashmir State Consumer Disputes Redressal Commission has imposed penalty of Rs 15 lakhs on Jammu and Kashmir Bank for fraudulent transaction and directed the Chairman of the Bank to hold an inquiry against its officials who indulged in the sham and fraudulent transactions and proceed against them.
Commission headed by Justice (retd) Sunil Hali directed Chairman to hold an inquiry within three months into over Rs 42 lakhs fraud and forgery allegedly committed by its officials.
The petition was filed by one Sheikh Imran Farooq alleging that there were unauthorized transaction to the tune of Rs 42, 69, 763 from his account. He through his advocate Altaf Haqani filed a complaint before the Commission submitting there that he never authorized transactions, as a result of which his cash credit account has been diverted to a purpose other than against which the loan facility was sanctioned in his favour for Rs 60 lakhs.
The President Justice (retd) Sunil Hali after hearing advocate Haqani and Bank’s counsel directed the bank to transfer Rs 42,69,763 to a Srinagar businessman’s account.
The Commission  besides this also awarded  Rs. 15 lakh as compensation for “tremendous mental agony and loss of business suffered” by him besides asked the bank to pay 12% interest per annum from the date of filing of the complaint by the businessman.
Commission while passing the judgment said, it is a case 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,” the commission said.
“We are surprised that the bank authorities have not taken any action against the defaulting officers even though more than five years have elapsed”, President and Member of the Commission recorded.
Commission said, the banks are the custodian of the money which belongs to the public, underscoring that “affecting such sham transactions results in people losing confidence in the banking system.”
Commission further added, that an appropriate direction in this behalf could have been issued for registration of a 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”, the Commission directed.
The Commission also directed the Chairman of the bank to hold an inquiry headed by a General Manager of the Rank, who shall identify the officials, who indulged in the sham and fraudulent transactions and proceed against them.
“The inquiry be initiated within a period of three months from the date copy of this order is served on the CEO/Chairman of the bank”, Commission directed adding “in case the needful is not done within the said period, we direct that an FIR be lodged by the bank against the erring bank officials who have committed this fraud”.
The bank while defending the complaint 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.
Commission, however, said, this argument per-se cannot sustain. Even if the complainant, it is said, 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 and the bank has allowed transaction on forged documents. The commission, however, left it open for the bank to recover the money from the account of businessman’s brother.