New Delhi: The Supreme Court has directed ICICI Bank to deposit Rs 10 crore in the National Consumer Commission, which had directed ICICI to refund the money to a cooperative bank for fraud committed by its manager.
A bench headed by Justice Madan B Lokur declined to stay the consumer commission's order unless the bank deposits the money first. The court further made it clear that it is only on the condition of the bank depositing Rs 10 crore that adverse steps against ICICI would not be taken.
"An amount of Rs 10 crore should be deposited by the petitioner — ICICI Bank Limited — before the National Consumer Disputes Redressal Commission within two weeks. Subject to deposit of Rs 10 crore, no coercive steps be taken," stated the court in a recent order.
ICICI had appealed against the commission's order in March whereby the bank was held guilty of deficiency in services. The bank was directed to refund the Mumbai District Central Co-operative (MDCC) Bank with interest a sum of Rs 10 crore.
The cooperative bank had invested the money with ICICI in fixed deposits and this money was purportedly embezzled by the branch manager of the private sector bank using forged documents.
ICICI had opposed the complaint by the MDCC contending that the complainant was not a consumer under the Consumer Protection Act as the investments made by MDCC Bank are in accordance with its bylaws for making profit amounts to commercial purpose.
But the apex consumer commission shot down this argument, saying the main objectives of MDCC Bank were to supervise and assist co-operative banks and as the term deposit was incidental to it, it could not be termed as commercial transaction.
It also held that ICICI Bank was “vicariously liable for the acts of misconduct committed by its employees and the siphoning of the funds of the complainant constitutes gross deficiency in service rendered to the complainant”.
Subsequently, on September 5, the commission noted that although the top court has issued a notice on the ICICI's appeal, there was no stay on its order. "The OP is directed to comply with the order passed by this commission within four weeks from today unless the order of this commission is stayed in the meanwhile by the Hon’ble Supreme Court,” ordered the commission, compelling ICICI to rush to the Court again to ward off coercive steps.
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