New Delhi, The National Consumer Disputes Redressal Commission has directed Axis Bank to pay $3.19 lakh crore to a Delhi-based logistics company, making the bank guilty of “deficiency in service” for refusing to accept demonetised currency notes for deposit during the 2016 demonetisation window.
The committee, comprising Chairman Member AVM J Rajendra and Judicial Member Anup Kumar Mendiratta, was hearing the appeal filed by Procure Logistics Services Pvt Ltd against Axis Bank.
In an order dated March 10, the commission said: “It is clear that the bank failed by repeatedly preventing the complainant from depositing the notified cash into his KYC compliant account, despite multiple requests and continued to do so until the entire timeline had elapsed.”
The bank allegedly refused to accept banknotes during the limited period allowed after the government announced demonetization on November 8, 2016.
The committee indicated that there is nothing preventing the bank from accepting cash and reporting the transaction to the authorities if they find it suspicious.
“If transactions appeared suspicious, the bank was required to monitor them and report them to the relevant authorities. The legal framework did not enable the bank to unilaterally refuse to accept deposits into a KYC-compliant account within the permissible window,” the committee said.
The committee said that the explicit refusal deprived the complainant of the only legal opportunity to deposit the demonetized currency during the period of which it was notified.
The Commission noted that due to the rejection, the company suffered an immediate and irreversible loss, as the specified notes in its possession became worthless after the expiry of the deadline.
“This clearly constitutes a ‘deficiency of service’ as defined in Section 2 of the Consumer Protection Act 1986. This is independent of the legality or other regulatory framework governing cash withdrawals,” he said.
The committee said that accepting deposits into duly maintained accounts is an indisputably essential banking service and obliges the bank to act in accordance with the law.
“If any otherwise permissible transaction is refused, it must be based on compelling reasons duly communicated and supported by applicable regulatory rules,” the committee said in its order.
It then ordered Axis Bank to pay Procure Logistics Services Pvt Ltd $3.19 lakh crore at simple interest @ 6% per annum from December 30, 2016 till the date of repayment.
The committee said that the amount must be paid within two months, otherwise the bank will be responsible for paying interest at the rate of 9 percent annually for the late period.
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