Mumbai: National Commission Orders Dena Bank To Repay ₹65 Crores To APMC For Embezzlement By Chief Manager

Mumbai: The National Consumer Dispute Redressal Commission (NCDRC) has held Dena Bank vicariously liable for the actions of its employees and has ordered the bank to repay the Mumbai Agriculture Produce Market Committee (APMC) Rs 65 crores, which were allegedly embezzled by the bank's chief manager. The commission directed the bank to pay the amount with nine percent interest from 2014 within two months.

In 2014, the APMC sought quotations from various banks for the best interest rates on fixed deposits intended to fund agricultural marketing system development. Dena Bank's Malabar Hill Branch offered the highest interest rate, prompting APMC to invest Rs 65 crores, with maturity dates between January and May 2015.

According to the order, after making the deposits, the APMC received a letter from the Economic Offence Wing (EOW) about fraud in overdraft accounts tied to their fixed deposits. The EOW informed them that the Malabar Hill Branch's Chief Manager, Preetam Nagarkar, had been arrested on charges of cheating and other offenses. Following this revelation, the APMC requested the bank to foreclose their deposits on August 7, 2014.

The bank acknowledged the deposits but refused the foreclosure, citing an outstanding overdraft of Rs 58.29 crores. Consequently, the APMC filed a complaint against the bank, accusing it of negligence. They argued that the bank failed to verify the authenticity of documents and the identity of individuals involved, leading to the embezzlement. The complaint highlighted the bank’s gross negligence and involvement of its Chief Manager, making the bank vicariously liable.

In response, the bank claimed that the complainant had not disclosed all relevant facts and had authorized unknown persons to deal with the bank, denying any fraud on its part.

After reviewing the evidence, the commission concluded that the embezzlement was indeed facilitated by the bank’s Chief Manager. It held that the bank was deficient in its services by not safeguarding the funds, leading to the loss. Thus, the bank was deemed vicariously liable for its employee’s actions and was ordered to refund the entire amount to the complainant.