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IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
Suman Shyam, J.
Pallabh Bhowmick S/o Late P.R. Bhowmick – Petitioner
Versus
The Ombudsman, Reserve Bank of India and Ors. – Respondents
WP(C)/1900 of 2022
Decided On : 30-09-2022
Reserve Bank of India – Integrated Ombudsman Scheme, 2021 - Claim of refund of the fraudulent transactions – Rejection of claim - whether the respondent no. 2 Bank would be liable to compensate the petitioner for the loss of a sum of Rs. 94,204.80/-owing to the fraudulent transaction or is it a case of negligence on the part of the petitioner – Third party breach – Online transactions that took place from the petitioner’s bank account on 18/10/2021 were unauthorized and fraudulent in nature. Negligence on the part of petitioner could not be established by the respondent No. 2. Therefore, the conclusion drawn by the respondent No. 1 without any basis and hence, liable to be set-aside. (Para 30)
Finding of the Court :
“Third party breach” is not a defined expression under the RBI circular - Yet, it appears from the plain language employed in clause-8 that in case of un authorized electronic banking transaction occurring due to third party breaches i.e where the deficiency neither lies with the customer or the bank, the customer liability will be “zero” if the fraudulent transaction is reported within three working days from the date on which the customer receives the communication -25. It is no doubt correct that if a customer is negligent in handling his or her account and discloses sensitive information such as, password, OTP, MPIN, Card Number etc. resulting into fraudulent transaction, the Bank cannot be held liable for loss, if any suffered by the customer. However, in such cases, negligence on the part of the customers must be cogently established by the Bank by bringing reliable materials on record- Banks cannot absolve themselves of the liability towards losses suffered by the customers on account of unauthorized electronic transactions based on perceived negligence of the customers. Having regard to the facts and circumstances of this case as well as the materials available on record this court is of the opinion that the respondent No. 2 has failed to establish negligence on the part of the petitioner leading to the fraudulent transaction. (Para 20,25)
Result: Disposed of
JUDGMENT :
1. Heard Mr. Pallab Bhowmick, the writ petitioner appearing in person. I have also heard Mr. A. Parvez, learned Standing Counsel, State Bank of India (SBI), appearing on behalf of the respondent no. 2 and Mr. D. Nath, learned Senior Government Advocate, Assam, appearing on behalf of the respondent no. 5. None has appeared for the other respondents.
2. By filing this writ petition, the petitioner, who is an Advocate practicing before this court, has primarily assailed the order dated 07/03/2022 (Annexure-11) issued by the respondent no.1 i.e. the Ombudsman, Reserve Bank of India, Guwahati, rejecting the complaint made by the petitioner pertaining to the claim of refund of the fraudulent transactions of Rs. 94,204/- made from his bank account on 18/10/2021.
3. The brief facts of the case, as projected through the pleadings, are that the petitioner is holding a Savings Bank (SB) Account bearing No. 10823993373 with the State Bank of India(SBI), Guwahati Branch. The petitioner had made a online purchase of some garment from the “Louis Philippe” store which he wanted to return and get the money back. On 18/10/2021, the petitioner had received a call from a fraudster, who was later identified as the respondent no. 4 viz Papendra Kumar from the State of Uttar Pradesh. Posing himself to be the customer care manager of the famous brand “Louis Philippe” i.e. the respondent no. 3, the fraudster had asked the petitioner to download a ‘mobile app’ for the purpose of making a refund of Rs 4000/-in lieu of return of a garment earlier purchased by him. Bonafide believing that the call was from the customer care department of “Louis Philippe” the petitioner had downloaded the ‘mobile app’. Soon thereafter, a sum of Rs. 94,204/-was siphoned off from the bank account of the petitioner by three separate online transactions. An amount of Rs. 64,017/-was transferred from the bank account of the petitioner by Payment Gateway (PG) transactions. Immediately thereafter, two other transactions took place for the amounts of Rs. 15,093/-each. As per the averments made in the writ petition, the aforesaid fraudulent transactions took place on 18/10/2021 through mobile phones bearing numbers +91 7789956974 and +91 9188762299. The amounts were initially transferred to the beneficiary account in the Federal Bank and thereafter, shifted to other bank accounts.
4. The petitioner claims that on 18/10/2021 itself, he had informed the customer care centre of the SBI with a request to cancel the three transactions. Based on his information the SBI customer care cell complaint bearing numbers 69889484 and 69689706 were registered and the SBI debit card of the petitioner was also blocked. On 18/10/2021, the petitioner had lodged an FIR with the Jalukbari Police Station reporting the incident, based on which, Jalukbari PS Case No. 1229/2021 was registered under Sections 417/420 of the IPC. On 19/10/2021, the petitioner had made a complaint before the Branch Manager, Panbazar Branch of the SBI informing him about the fraudulent transactions from his bank account made on 18/10/2021.The petitioner had also lodged three complaints with the Cyber Crime Cell of Criminal Investigation Department (CID), Assam Police vide acknowledgement numbers 30410210067207, 30410210067210 and 30410210067509 pertaining to the three transactions. It also appears that the petitioner had reported the matter to the National Cyber Crime Reporting Portal (NCCRP) of the Ministry of Home Affairs, which was also received vide acknowledgement No. 20410210143122. According to the petitioner, even after receipt of the complaint dated 19/10/2021, the respondent no. 2 bank did not take any action so as to prevent the fraudulent transactions or to recover the amount from the recipient bank.
5. On 16/01/2022, the petitioner had received an e-mail from the respondent no. 3 informing that there ha
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