New Delhi, Mar 14 The National Consumer Disputes Redressal Commission (NCDRC) has directed Axis Bank to pay Rs 3.19 crore to a Delhi-based logistics company, holding the bank guilty of "deficiency in service" for refusing to accept demonetised currency notes for deposit during the 2016 demonetisation window.
The commission, comprising presiding member AVM J Rajendra and judicial member Anoop Kumar Mendiratta, was hearing an appeal filed by Procure Logistics Services Pvt Ltd against the Axis Bank.
In an order dated March 10, the commission said, "The bank clearly failed by repeatedly disallowing the complainant to deposit the notified cash into its own KYC-compliant account, despite multiple requests and persisted with this till the entire timeline lapses."
It was alleged that the bank refused to accept the notes during the limited period allowed after the government announced demonetisation on November 8, 2016.
The commission noted that nothing prevented the bank from accepting the cash and reporting the transaction to authorities if it found it suspicious.
"If the transactions appeared suspicious, the bank was required to monitor and report them to the competent authorities. The statutory framework did not empower the bank to unilaterally refuse acceptance of deposits in a KYC-compliant account during the permitted window," the commission said.
The commission said that the outright denial deprived the complainant of the only lawful opportunity to deposit the demonetised currency within the notified period.
Due to the refusal, the company suffered a direct and irreversible loss as the specified bank notes in its possession became worthless after the deadline expired, the commission observed.
"This clearly constitutes 'deficiency in service' as defined under Section 2(1)(g) of the Consumer Protection Act, 1986. This is independent of the legality or otherwise of the regulatory framework governing the demonetisation processes," it said.
The commission said that the acceptance of deposits in duly maintained accounts was an undisputed core banking service and obligated the bank to act in accordance with the law.
"If any transaction, which is otherwise permitted, is to be refused, the same shall be based on cogent reasons duly communicated and supported by applicable regulatory norms," the commission said in its order.
It then ordered Axis Bank to pay Procure Logistics Services Pvt Ltd Rs 3.19 crore with simple interest at 6 per cent per annum from December 30, 2016, till the date of payment.
The commission said that the amount must be paid within two months, failing which the bank would be liable to pay interest at 9 per cent per annum for the delayed period.
