The Allahabad High Court established that banks must prove customer responsibility in unauthorized online transactions based on the RBI’s 2017 circular for customer protection. The court through Justices Shekhar B. Saraf and Praveen Kumar Giri ruled that banks need to present evidence of customer mistakes during electronic banking transaction disputes.
The father-son pair sought ₹37.85 lakh back after someone transferred funds from the father’s account to the son’s account before sending the money to a different account. The customers submitted an FIR to Bank of Baroda and RBI while requesting recovery.
The court rejected their petition after reviewing transaction records together with IP address details and password change evidence. The investigation revealed that the transactions occurred intentionally instead of being caused by cyber fraud.
The court confirmed that the RBI circular protects actual victims of fraud but made it clear that the provision does not protect individuals who use it to fight personal disputes. The court found that the bank presented sufficient documentation to meet its burden of proof.
The court established a significant precedent which protects electronic banking customers while preventing baseless claims.
