After a long legal battle of nearly five years, Archana Sharma and her family have finally received justice in a major banking fraud case. The Madhya Pradesh IT Court has ordered seven banks and one finance company to jointly pay ₹2.5 crore as compensation for a serious case of cyber and banking fraud. This is the highest compensation ever awarded by an IT Court in Madhya Pradesh.
The court found that employees of multiple banks acted together to open fake bank accounts and misuse banking systems, leading to the siphoning of crores of rupees from the Sharma family’s accounts. Archana Sharma said the struggle for justice was extremely painful. During this period, her father passed away, and her 85-year-old mother had to continue fighting the case.
How the fraud began
The case dates back to Arera Colony, Bhopal. Archana Sharma’s father, Kedarnath Sharma, was a well-known engineer. After retiring in 1990, he settled in Bhopal and opened a savings account at HDFC Bank’s Chuna Bhatti branch. For convenience, he also opened accounts at the same branch in the names of his wife Indira Sharma and daughter Archana Sharma.
In 2006, Kedarnath Sharma met with an accident that affected his memory. Archana was already living in Dubai after her marriage in 1997, while her elderly parents lived alone in Bhopal. Around this time, Relationship Manager Sanjay Thakur began visiting the family under the bank’s Senior Citizen Service and gradually gained their trust.
Investment advice and warning signs
Thakur advised the family that more than ₹2 crore was lying idle in their savings accounts and suggested investing the amount in mutual funds to earn higher returns and regular income. Trusting him, the family agreed.
A few months later, Archana noticed that bank SMS alerts had stopped. When she contacted Thakur from Dubai, he dismissed her concerns, claiming it was a technical issue and assured her that the balance was safe. Soon after, a cheque issued by the family bounced, which was a serious warning sign.
Despite this, Thakur continued to reassure the family. In 2022, when they again tried to withdraw money, Thakur kept delaying the process, saying the paperwork was still under progress.
Discovery of the fraud
With no bank alerts and no clarity on account balances for months, Archana returned to India in January 2023. Shocked by what she discovered, she went to the cyber cell in Bhopal along with her mother and filed an FIR.
The police investigation revealed that Sanjay Thakur had withdrawn all the money from the family’s accounts. He was arrested and a criminal case was registered. Archana returned again in March 2023 to record her statement.
Police later informed the family that although Thakur could be punished in the criminal case, recovering the stolen money from him was unlikely. They advised Archana to approach the IT Court for compensation.
Court and legal battle
Archana then approached the Court of the Adjudicating Officer (IT Court) at Vallabh Bhawan. She hired a cyber law expert who studied bank statements, Demat accounts, and transaction records in detail along with a Chartered Accountant. The investigation revealed that this was not the work of one individual, but an organised banking fraud involving multiple institutions.
How the fraud was carried out
According to the findings:
- Fake bank accounts were opened in the names of Archana Sharma and her mother at Axis Bank, IndusInd Bank, and ICICI Bank in Bhopal, while Archana was in Dubai and her mother was in Pune.
- The registered mobile numbers linked to the family’s genuine HDFC Bank accounts and Demat accounts were changed without authorisation, cutting off transaction alerts.
- Net banking was activated secretly, giving full control to the fraudsters.
- Mutual fund units were sold from the Demat account, the money was transferred to HDFC accounts, and then immediately moved to the fake accounts opened in other banks.
- The court noted that changing mobile numbers, activating net banking, and altering mutual fund records could not have been done by one person alone, pointing to systemic failure and internal collusion.
Court’s verdict and responsibility of banks
While the police case focused on the individual accused, the IT Court held banks and the finance company accountable for negligence. The court ruled that their failure to protect customer data and systems made the fraud possible.
Advocate Yashdeep Chaturvedi based the case on Section 43A of the IT Act, 2000, which deals with compensation for failure to safeguard sensitive personal data. The court accepted this argument and passed the historic compensation order of ₹2.5 crore.
Legal experts have described the ruling as a landmark judgment that strengthens customer protection in digital banking. The order sends a strong message that banks cannot escape liability by blaming individual employees and must ensure robust systems to prevent fraud.
