Indian Bank is liable to compensate DAV Public School - Synopsis
Parul Madaan 6 Jan 2020

“Indian Bank is liable to compensate DAV Public School” -  DAV Public School v. The Senior Manager, Indian Bank, Midnapur Branch & Ors. CIVIL APPEAL NO. 9352 OF 2019

A case was filed by the DAV Public School against Indian Bank, Midnapur. The three accounts of the school's accounts were also tagged with the principal’s personal savings account. While the school modified its passbook, Rs.2500000/-was found to have been transferred from the school account without authorization. Another amount of 500,000/-was transferred from the account of the school before the account was closed.

The State Commission concluded that either the Principal was the mastermind or compromised with others the user ID and Password login. The appellant forum referred the facts to the NCDRC in agreement with the State Commission's partial relief and the appeal was dismissed accordingly. The school then filed a petition before this court to appeal the above-mentioned decision. The problem before this court is whether restricting compensation to Rs.100000/-is true if Rs.3000000/-is the total loss suffered. The supreme court directed the bank to award Rs.2500000 reimbursement to the school whose money had been siphoned out by the miscreants from the bank account. The bench noted that the findings of the state commission, the bank ombudsman and also the NCDRC made themselves liable to the bank by allowing the net banking facility to connect the school principal's individual account to the school's account.

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