Bombay High Court Orders Refund in Cyber Fraud Case

The Bombay High Court directed Bank of Baroda to refund Rs 76 lakh to Pharma Search Ayurveda Private Limited after unauthorized transactions were made due to a third party breach. The court highlighted a July 2017 RBI circular stating customers bear zero liability in such cases where the bank deficiency is not involved.

In a landmark decision, the Bombay High Court has ordered Bank of Baroda to refund Rs 76 lakh to Pharma Search Ayurveda Private Limited after unauthorized transactions occurred due to a third-party breach. On Thursday, Justices Girish Kulkarni and Firdosh Pooniwalla emphasized that customers hold zero liability in such cases, citing a July 2017 RBI circular.

The court's directive arrived following a petition by Jaiprakash Kulkarni and the aforementioned company, challenging an earlier denial by the Banking Ombudsman to refund the stolen amount. The fraudulent transactions took place in October 2022 when beneficiaries were added to the petitioner's bank account without proper OTP verification.

Notably, the court refuted claims by Bank of Baroda that the petitioner's credentials were compromised, pointing out the failure to send OTPs and messages as stipulated in the RBI guidelines. As such, the bank has been mandated to process the refund within six weeks.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)