Constitution of India.
Art. 226 : Cyber-Fraud Claim – Customer Liability under RBI Circular (RBI Circular dated 06-07-2017 – Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions) – RBI Circular protects customers only in cases of third-party breach or where no negligence is attributable to the account holder; it cannot be used as a “sword” to recast personal transactions as cyber fraud- Writ petition was dismissed. [Art. 227]
Petitioners sought mandamus directing restoration of ₹38,78,000 alleged to be fraudulently withdrawn from their accounts, relying on RBI Circular dated 06.07.2017 and decisions in State Bank of India v. Pallabh Bhowmick & Ors. in S.L.P. No. 30677/2024 and a Bombay High Court Judgment in Jaiprakash Kulkarni and others v. The Banking Ombudsman and others (W.P. no. 1150 of 2023) reported in MANU/MH/3477/2024. The Court held that the transactions were carried out by the petitioners themselves after logging into net-banking, adding beneficiaries, generating OTPs, and modifying passwords. Debit logs, IP addresses and beneficiary-addition records produced by the Bank established that the transactions were not a third-party breach but deliberate internal transfers. The petitioners received SMS alerts on 19.06.2022 yet reported the matter belatedly on 20/21 June, indicating an afterthought. RBI Circular protects customers only in cases of third-party breach or where no negligence is attributable to the account holder; it cannot be used as a “sword” to recast personal transactions as cyber fraud. The precedents cited were held inapplicable. Pallabh Bhowmick concerned genuine third-party fraud reported immediately, and Jaiprakash Kulkarni involved beneficiary additions without customer intimation. Unlike the present case where records demonstrated petitioners’ own involvement. Finding gross negligence and no proof of hacking, the Court dismissed the writ petition. (Writ-C No. 24192 of 2022, dt. 17-07-2025)
Suresh Chandra Singh Negi & Ors v. Bank of Baroda (All)(HC) MANU/UP/1956/2025.
[Coram : Hon’ble Shri Justice Shekhar B. Saraf and Hon’ble Shri Justice Praveen Kumar Giri]