Supreme Court in the case of The Chairman & Managing Director v. R. Chandramohan observed that  “If one of the Directors allegedly committed fraud or cheating, employees of the bank could not be held liable, if they had acted bona fide and followed the due procedure. Respondent-complainant having miserably failed to discharge his burden to prove that service was deficient on the part of the employees of the appellants-bank within the meaning of Section 2(1)(g) of the Act.”

An appeal was moved before the Apex Court challenging the Judgment and Order passed by the National Commission arising out of the Judgment and Order passed by the State Consumer Disputes Redressal Commission. Mr Chandra Mohan (Director of “D-Cube Constructions (P) Ltd) had a current account with the appellant’s bank and he was the only one authorized to operate it. Ravindra, an NRI residing in Malaysia had purchased three flats and in return, he sent two demand drafts amounting to Rs. 8 lakhs. The demand drafts were not credited into the instructed current account. Later it was found out that a separate account in the name of “D-Cube Construction” was opened and the said two drafts were credited to that account, as the said demand drafts were in the name of “D-Cube Construction”. A complaint was filed before the State Commission and respondents were directed to pay Rs. Eight lakhs with compensation of Rs.1 lakh. The appeal was filed before National Commission which was also dismissed and the matter went to Supreme Court.

The bench of Justices Ajay Rastogi and Bela M. Trivedi relied on the judgement given in Oriental Insurance Co. Ltd. v. Munimahesh Patel, held that “even if the allegations made in the complaint are taken on their face value, then also it emerges that there was no wilful fault, imperfection, shortcoming or inadequacy in the discharge of the duty on the part of the employees of the appellants’ bank, which could be termed as “deficiency in service” under Section 2(1)(g) of the said Act.