A banking error involving Rs 1.09 lakh has resulted in a significant consumer court order against Union Bank of India, with a lawyer couple awarded Rs 2.29 lakh in total relief after alleging that payments meant for their account were wrongly credited to a third party.
The case highlights the importance of proper banking procedures, customer communication and documentary evidence when financial transactions are disputed.
How the Rs 1.09 Lakh Banking Dispute Started
The lawyer couple, aged 56 and 55, maintained a joint savings account as well as a joint property term-loan account with Union Bank of India. Their loan was valued at Rs 57.80 lakh, with the couple paying monthly EMIs of Rs 66,684.
According to their complaint, four payments made by their clients between February and December 2024, amounting to a combined Rs 1.09 lakh, were allegedly credited to another person’s account instead of their own.
The couple said they informed the bank about the mistake and were assured that the issue would be corrected. However, they claimed that the amount was not returned, eventually prompting them to issue legal notices.
Another Deduction Added to the Dispute
The complaint also involved a separate deduction from the couple’s savings account.
In February 2025, the couple received a WhatsApp message informing them that Rs 3.35 lakh had been debited from their savings account and transferred to their loan account towards interest. They said the deduction resulted in their savings account showing a negative balance.
The bank’s explanation was that the loan had been sanctioned at an interest rate of 11.95 per cent, while the system had calculated interest at 9.40 per cent. According to the bank, the discrepancy was identified during an audit and the couple was orally informed about the adjustment.
Consumer Commission Finds Deficiency in Service
The Warangal District Consumer Commission examined the complaint and the bank’s defence.
The commission noted that the bank had not produced documents, including the loan agreement and audit report, to substantiate its explanation concerning the interest adjustment. It also found that the bank had not provided documentary evidence justifying the transfer of Rs 1.09 lakh to a third-party account.
The commission concluded that the transaction resulted from negligence and held that the bank’s conduct amounted to deficiency in service and an unfair trade practice.
Lawyer Couple Awarded Rs 2.29 Lakh
The consumer commission directed Union Bank of India to provide the couple with three components of relief:
- Rs 1.09 lakh — the amount allegedly transferred to the third-party account
- Rs 1 lakh — compensation for mental agony and deficiency in service
- Rs 10,000 — litigation costs
Together, the relief amounts to Rs 2.29 lakh.
What This Banking Case Means for Customers
The case underscores the importance of maintaining proper records of bank transactions and seeking written explanations when a disputed deduction or transfer occurs.
The commission’s order also illustrates that banks can face consumer proceedings when customers allege that transactions were carried out without proper intimation or supporting documentation.
For customers facing similar disputes, keeping bank statements, transaction records, correspondence, notices and other supporting documents can be important when raising a complaint.
The Bigger Lesson
The Union Bank case demonstrates how a relatively small disputed transaction can develop into a significant consumer dispute when the underlying banking records and procedures are questioned.
For customers, the episode serves as a reminder to regularly monitor bank statements and promptly report unauthorised or incorrect transactions. For financial institutions, it highlights the importance of maintaining clear documentation and communicating transaction adjustments to customers.
The case was reported by The Indian Express on September 26, 2026, based on the order of the Warangal District Consumer Commission.
