The Bombay High Court recently made a significant ruling in a case involving cyber fraud. The court observed that innocent individuals are increasingly falling victim to such crimes. In light of this, the court relied on a circular issued by the Reserve Bank of India (RBI) in July 2017. The circular states that if a customer reports a fraudulent online transaction within three working days, the customer holds zero liability.
The division bench of Justices Girish Kulkarni and F.P. Pooniwalla, considering the RBI circular and the bank’s policy, directed Bank of Baroda (BoB) to return Rs 76 lakh to a company that had lost the funds to an online fraud. The court emphasized that when unauthorized transactions occur due to a breach by a third party, and the deficiency lies neither with the bank nor with the customer, but elsewhere in the system, the customer must notify the bank within a certain time frame.
In this particular case, the High Court noted that three reports from the cyber cell confirmed that the deficiency did not lie with BoB or the account holders (the petitioners). Therefore, the court concluded that the petitioners had zero liability and were entitled to a refund.
This ruling sets an important precedent in addressing cyber fraud cases and protecting innocent individuals from financial losses. It underscores the responsibility of banks to promptly refund customers who report unauthorized transactions within the specified time frame.
Very good