Union Bank ‘sends’ Rs 1.09 lakh to wrong account, lawyer couple wins Rs 2.29 lakh

The commission held that the bank’s action in deducting the amount without any intimation amounted to deficiency in service and unfair trade practice. (AI-generated image)

A Telangana consumer commission has directed Union Bank of India to provide Rs 2.29 lakh in total relief to a lawyer couple after finding deficiency in service over a wrongful transfer of Rs 1.09 lakh to a third-party account.

President G Nagaraju, along with member V Janardhan Reddy of the Warangal District Consumer Commission, was hearing the complaint filed by the couple, who had a joint savings account and a joint property term loan account with Union Bank of India. 

“The unauthorised transaction which was done by the opposite parties (Union Bank of India) by crediting the amount of Rs 1.09 lakh to the credit of a third person from the complainants’ savings account, which is due to the negligent act of the opposite parties and also unfair trade practice; as such, the complainants had suffered a lot of inconvenience,” the commission said on August 24. 

Deducted Rs 3 lakh without intimation 

The couple said they had a joint savings account and a joint property term loan account of Rs 57.80 lakh, repayable in 168 monthly installments with an EMI of Rs 66,684. They had been paying the EMIs regularly and had authorised the bank to deduct the monthly installments from their savings account.

However, in February 2025, they received a WhatsApp message informing them that Rs 3.35 lakh had been debited from their savings account and transferred to the loan account towards interest. The deduction allegedly left their savings account showing a negative balance.

The couple also told the commission that four payments totalling Rs 1.09 lakh made by their clients were wrongly credited to another person’s account instead of their account. The four payments were made between February and December 2024.

The Union Bank of India was informed about the mistake and allegedly assured the couple that it would be rectified, but the amount was not returned. The couple later issued legal notices, but the bank did not rectify the transaction or provide a justification for the transfer.

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The couple was represented by advocate Pabbathi Geetha before the commission.

Bank’s defence

The Union Bank of India, through its advocate Sajid Pasha, admitted that the complainants have been paying monthly EMIs regularly without any complaint. He added that the complainants obtained a loan at an interest rate of 11.95 per cent, but the system deducted interest at the rate of 9.40 per cent instead of 11.95 per cent.

It was added that, during the audit, the mistake was traced out, and bank authorities orally informed the complainants. It was further submitted that the complainants agreed to the same and assured the bank to deduct the remaining interest from the loan account. 

‘Without intimation’ deduction

The commission held that the bank’s action in deducting the amount without any intimation amounted to deficiency in service and unfair trade practice. It also noted that the bank had not produced documents to substantiate its claim about the interest adjustment, including the loan agreement and audit report.

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It also found that the Union Bank of India failed to follow due procedure and had not provided any documentary evidence justifying the transfer of Rs 1.09 lakh to the third-party account. It held that the transaction resulted from the bank’s negligence and amounted to an unfair trade practice.

“We are of the considered opinion that service is deficient on the part of the opposite parties (Union Bank of India) in allowing the unauthorised transaction,” it added.

Accordingly, the commission directed the bank to pay an amount of Rs 1 lakh towards compensation for mental agony for the deficiency of service and also unfair trade practice adopted by it. 

The commission also asked the bank to credit an amount of Rs 1.09 lakh to the couple’s account, which was wrongly credited to a third party. It also directed the Union Bank of India to pay Rs 10,000 as costs for the litigation to the couple. 

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Takeaway 

The order highlights that banks can be held liable for deficiency in service when they deduct amounts from a customer’s account without proper intimation or supporting documentation. 

Aggrieved consumers may contact the consumer helpline in their respective states (Telangana: 0771-2582902) or call the National Consumer Helpline at 1915 for assistance.

Richa Sahay is a Legal Correspondent for The Indian Express (Digital), where she focuses on simplifying the complexities of the Indian judicial system. A law postgraduate, she leverages her advanced legal education to bridge the gap between technical court rulings and public understanding, ensuring that readers stay informed about the rapidly evolving legal landscape. Expertise Advanced Legal Education: As a law postgraduate, Richa possesses the academic depth required to interpret intricate statutes and constitutional nuances. Her background allows her to provide more than just summaries; she offers context-driven analysis of how legal changes impact the average citizen. Specialized Beat: She operates at the intersection of law and public policy, focusing on: Judicial Updates: Providing timely reports on orders from the Supreme Court of India and various High Courts. Legal Simplification: Translating dense "legalese" into accessible, engaging narratives without sacrificing factual accuracy. Legislative Changes: Monitoring new bills, amendments, and regulatory shifts that shape Indian society. ... Read More