High Court gave a big relief to crores of bank customers, now the customer will not have this responsibility
Bombay High Court on Banking Fraud - Cases of bank fraud and cyber crime are increasing rapidly. Often we get to hear news of millions of rupees disappearing from the accounts of bank customers. Recently, a similar case has come to light. Rs 76 lakh was withdrawn from the account of a company in Bank of Baroda. When the company contacted the bank, the bank washed its hands off the matter by saying that it was not responsible. In such a situation, now the Mumbai High Court has given a big decision while hearing this matter, let us know what is the whole matter-
The Bombay High Court has ruled that whenever an unauthorized transaction occurs due to a third party breach and there is a deficiency in the system and not the bank or the customer, then the customer has no responsibility in such a case.
The High Court has directed the Bank of Baroda to return Rs 76 lakh fraudulently withdrawn from a company's bank account. This decision has been given by a division bench of Justice Girish Kulkarni and Justice Firdaus Pooniwala.
The high court was hearing a petition filed by Jaiprakash Kulkarni and Pharma Search Ayurveda Pvt Ltd challenging the order passed by the Banking Ombudsman refusing to direct Bank of Baroda to refund the amount of Rs 76 lakh allegedly withdrawn from their account through cyber fraud.
Citing a July, 2017 circular issued by the Reserve Bank of India (RBI), the High Court bench said that Bank of Baroda (BOB) has a policy called Consumer Protection Policy (Unauthorised Electronic Banking Transactions) which reiterates the same.
The High Court said that this is an example of how innocent people are becoming victims of cyber fraud. The bench said, 'As per RBI's circular and the bank's policy, when an unauthorized transaction occurs due to a third party breach, the customer has no responsibility.
The fault lies neither with the bank nor with the customer, but somewhere else in the system and the customer informs the bank about the unauthorized transaction within a certain time limit.'
The court said that therefore, the liability of the petitioners in respect of the unauthorised transaction would be void as the transaction took place due to breach of third party duty, which is neither the fault of the bank nor of the petitioners.