Bank recovery for 3 year old debit card offer

Bank had an offer wherein for using debit card 1% cashback was awarded which in turn could be converted in cash in account in same ratio / worth. I used debit card and earned cash back. Bank sent a notice on 12/06/2015 asking for recovery of excess funds credited in my bank account owing to redemption of excess cash points. They cited the The Clause on Right of Lien/Set-off, which was invoked. They gave 25/06/2015 as hold & debit date. When opposed the move, banks 1st level response was as follows : "We wish to inform you that as per product feature on your debit card, you can enjoy 1 % cash back for every Rs.100.00 spent (both online and at merchant outlets), subject to a maximum of Rs.750.00 cash back credit. The same is also mentioned in our usage guide sent along with the debit card and also available on our bank's website. In line to the said offer, any excess points credited are being tracked at our end and reversed subsequently to your card account. In Dec’12 as a product feature, Rs 750 monthly accrual cap was introduced and required communication was updated on website. However as system capability was not in place for maximum accrual cap of Rs.750, this needed a development and enhancement was done in Dec'13 and as a result the customer kept on getting higher cash backs during the period Dec'12 - Dec'13. Given the above scenario, it is just and necessary that Bank recovers the excess credits processed in your Bank Accounts during the above mentioned period." When raised it to next level, after 1 month response was as follows : "We take this opportunity to inform you that to promote usage of debit cards an offer of 1% cash back was offered to the customers on the amount of spending being done by customers through their debit cards without any upper limit on the cash back. However, with effect from December 2012, a month limit of Rs.750.00 was set and the details of the same was also updated in our bank website. We also wish to state that the welcome kit mentions that ' please visit website for changes in fees and charges' applicable. However, the systems were put in placed during December 2013 only and hence the upper limit of Rs.750.00 was not maintained in the period from December 2012 – December 2013. Post the same, the excess cashback was debited from the bank account as per internal approvals taken. The Clause on Right of Lien/Set-off, amongst the various Terms and Conditions applicable on the operation of your Bank Account/s, was hereby invoked." Letter by bank claims of updation of debit card cash back feature on bank's website. The change of cash back feature was never expressly communicated to me either through physical letter or e-mail. Grievance desk is claiming to have sent me usage guide with updated terms, which is totally false. I used debit card & accrual of cash points was done from Bank's side in their internal software system. Whatever points accrued by bank, I have redeemed either through net banking or speaking with their phone banking officer. In fact I complained to their phone banking officer that I am unable to redeem cash back points and they helped me to redeem cash back points many times. They never informed me that their is any change in scheme. Even when Bank provide the bank statement it states that "contents of this statement will be considered correct if no error is reported within 30 days of the receipt of statement." While customer can approach you about your error within 30 days but in this case bank is approaching customer after 900 days for their so called error, if any. This is sheer failure of banks internal software system and now demanding the customers to pay for it is totally unjust. So queries are : 1. Can bank initiate recovery on these grounds 2. Can such delayed action be taken even after 3 years 3. Can no information to customer through email / letter is right for claiming such recoery 4. Is only updating website is enough 5. what is remedy to us 6. Isn't bank wrong in trying to charge me for their system's failure