Cyber Fraud: Bombay HC Directs Bank Of Baroda To Refund ₹18.79 Lakh To Victims, Cites Zero Liability Rule
· Free Press Journal
Mumbai, April 23: The Bombay High Court has directed Bank of Baroda to refund Rs 18.79 lakh to a 75-year-old Mumbai woman and her daughter-in-law, holding them victims of cyber fraud involving unauthorised internet banking transactions and finding no negligence on their part.
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Court cites SIM-swapping modus operandi
A bench of Justices Bharati Dangre and Manjusha Deshpande noted that the fraud followed a “similar modus operandi” to an earlier SIM-swapping case, where SMS alerts were disabled and transactions were carried out without authentication by the account holder.
Fraudulent transactions traced
The amount was siphoned off in December 2021 after the senior citizen’s SIM card was allegedly cloned or swapped, leaving her unaware of the transactions. The fraud came to light on December 5, when she checked her account after noticing unusual activity, only to find most of the balance withdrawn.
The unauthorised transfers took place between the evening of December 4 and December 5, during which her mobile phone had become inoperative. She subsequently lodged an FIR with the Mumbai police.
Beneficiaries added without authorisation
The court noted that four beneficiaries were fraudulently added to the account. Although one-time passwords (OTPs) were generated, they were not received by the petitioner as her mobile number was inactive. Despite this, the account continued to be operated, the court observed.
Bank held accountable under RBI norms
Emphasising that the account holders were not negligent, the bench said the bank failed to establish any sharing of OTPs. It held that the petitioners were protected under the Reserve Bank of India’s 2017 zero liability framework, which mandates reversal of unauthorised electronic transactions within 10 days.
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The court directed the bank to refund Rs 18.79 lakh with 6% interest within 12 weeks, failing which an additional 6% interest would apply until payment.
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