“Applicant Bank failed to perform its duties and to take precautionary measures even after timely receipt of complaint of fraudulent transaction and hence liable to compensate the complainant”
When fraudulent transactions happen unknowingly with the innocent and digital illiterate citizens, banks as well as police authorities generally only blame the victims and victims are left to blame themselves. But recently courts are taking more prudent and progressive approach and providing relief to consumers.
When it is brought to the knowledge of the courts through legal arguments that Banks have not followed the mandatory guidelines regarding on-going due diligence and zero liability guidelines, courts penalize the banks by directing compensation to be paid to the complainants.
Recently Consumer Disputes Redressal Commission Nagpur headed by Shri Sachin Shimpi and Balkrishna Chaudhari and Smt. Sheetal Petkar as its members, held State Bank of India, Tumsar Branch liable for deficiency in service and directed to pay Rs.5,00,250/- along with interest at the rate of 9% p.a. from date of incidence till its realization and additional amount of Rs 30,000 towards compensation and litigation charges to the complainant.
Complainant Mr. Vindhyan Meshram, wanted to raise complaint about defective product purchased by him through online shopping and therefore on 18 July 2021 he called customer care number. That thereafter complainant received one call regarding refund of the money in his bank account and to avail the refund amount the complainant followed instructions of the caller. The complainant thereafter was instructed to install some app on his mobile and after installation of app, he realized that he has lost total Rs.5,00,250 in thirteen transactions and beneficiaries are various online payment gateways.
The complainant immediately intimated respondent State Bank of India for further action and briefed about the entire incident and fraudulent transactions and got his bank account and debit card blocked and also reported the matter with Tumsar police, who advised him to report matter to Nagpur Police. The complainant reported the matter on www.cybercrime.gov.in portal provided for online complaint by government on 19/7/2021, i.e., on date of incidence.
The complaint was filed for failure to conduct internal investigations, to provide proper velocity check mechanism for the transaction as well as monitor transactions, when the account was having SWEEP facility and stop the fraudulent transactions even after reporting the same immediately after incidence to the bank. The complainant also alleged various deficiencies by the bank like allowing various fraudulent transfers without due care and diligence and which amounts to imperfection or inadequacy in the manner of performance of service which is required to be maintained by law etc.
Respondent State Bank of India refused to accept any liability and denied the allegations of the complainant. It is stated by the OP Bank that the complainant himself was responsible for debit of those amounts as the same were affected after sharing of OTP by him. The complainant himself was negligent while dealing with transaction.
Hon District Commission observed that the circumstances under which fraudulent transactions happened reflects that the OTP and other information were not shared intentionally by the complainant but it was fraudulently received by the third person for which first information report has been filed by the complainant. The Commission also observed that complainant has lodged the complaint within24 hours of the fraudulent transaction to the bank by giving the details of the debited amounts and informed the bank that it was fraudulent transaction which was not done by him and requested the bank for reversal of the amount in his saving bank account.
Complainant’s counsel Adv Dr Mahendra Limaye also argued that instead of tracing source of fraudulent transaction and the wrongful beneficiary of the said transaction, which could be easily done by the bank the bank chose to blame the complainant and tried to wash off its hands from entire incidence.
The commission in its order dated 29 May 2026, directed State Bank of India, branch -Tumsar, to credit amounts of Rs.5,00,250/- along with interest at the rate of 9% p.a. from 18/07/2021, date of incidence, thereon till its realization of entire amount. The commission also directed Bank to pay Rupees 30,000/- towards compensation and litigation charges to the complainant.
Adv Dr Mahendra Limaye represented the complainant. Adv Awadhoot Purohit represented State Bank of India.
This judgement of Consumer Commission will give much needed relief to Cyber Fraud victims to avail Civil remedy against the deficient service providers like banks and other payment gateways.