BANK OF BARODA Vs MAHAVEER PACKAGING INDORE AND ORS

1. The Impugned Judgment, dated 02.01.2020, passed by Learned Adjudicating Officer/ Principal Secretary, Government of Madhya Pradesh, has been challenged in this Cyber Appeal, filed under Section 57 of the Information Technology Act, 2000, by Appellant, Bank of Baroda, Siyaganj Branch, Indore, through its Branch Manager, the then Respondent No. 1 and 2/ Opposite Party No. 1 and 2, before Learned Adjudicating Officer in complaint, against M/s Mahaveer Packaging, Indore, through its proprietor Shri Sunil Jain, 2. Ravil Lalwani, the complainant, before Learned Adjudicating Officer and Bharat Sanchar Nigam Limited (BSNL) through its General Manager, the Telecom Service Provider, who was opposite party No. 3, before Learned Adjudicating Officer in said complaint, with this contention in memo of appeal, that present Respondent Nos. 1 and 2 were the complainants, before Learned Adjudicating Officer, and had filed the complaint, seeking fair enquiry and compensation for the wrongful loss caused by the unauthorised access, hacking, negligence, failure to protect, the secure personal information, and not implementing the due diligence by Respondent No. 3, BSNL, as well as present Appellant Bank i.e., Bank of Baroda. The said complaint was adjudicated vide, Impugned Order, and this appeal is before this Tribunal, within the scheduled period of limitation and having territorial and pecuniary jurisdiction by this Tribunal.

2. The facts in brief, as narrated in memo of appeal, is that, the Principal Secretary, Government of Madhya Pradesh, Department of Science and Technology, in a complaint Case No. 21/2019, filed under Section 43, 43A read with Section 85 of Information Technology Act, 2000 (IT Act 2000), whereby Adjudicating Officer has held the Appellant Bank as well as Telecom Service Provider, i.e., Respondent No. 3, equally responsible for the fraudulent transactions, causing loss, in the tune of Rs. 2,92,000/- (Rupees Two Lakhs Ninety Two Thousand Only) of complainant, which was because of illegal transfer from the Bank account in question, vide order dated 02.01.2020, and had directed the return and payment in the ratio of half of the amount, alongwith interest 5% compounding payable at Bank rate, from date of fraudulent transaction, to the complainant, which has been assailed in this appeal, under Section 57 of IT Act, 2000.

3. Mahaveer Packaging, through Shri Sunil Jain, as a proprietor, was a customer of Appellant Bank, and it was using Net Banking facility, through a registered Mobile No. 9425101203, a SIM, issued by a Telecom Service Provider, BSNL, registered as a mobile number, for use of above Net Banking facilities in Appellant Bank.

4. In the evening of 09.08.2018, this SIM of mobile phone was got stopped and when enquiry by complainant at customer care service of Telecom Service Provider was made, this was answered by customer care executive, for having a contact at nearest Office of Respondent No. 3. On 10.08.2018, at about 10.15 AM, after a visit of complainant to Office of BSNL, Office at Indore, the issuance of duplicate SIM Card for above cell number from Ujjain Office, was apprised. It was instantly enquired and complained that this request was never made for issuance of a duplicate SIM. The fact came to the notice that some unauthorised person had obtained duplicate SIM, by using a driving license and signature, which were fake and was not of the complainant. Complainant instantly made request to Appellant Bank, that two transactions have been made in the intervening night 9th and 10th August, 2018, from the Bank account of Complainant through IMPS, by using Net Banking Service, and these were the fraudulent transactions, by way of using a forged and fictitious duplicate SIM card, obtained by some fraudsters. Thereby the loss of Rs. 2,92,000/- (Rupees Two Lakhs Ninety Two Thousand Only), by way of fraud was complained to Bank, and it was on the same day of 10.08.2018, between 11.00 A.M to 12.00 Noon. The matter was instantly reported to the Cyber Cell, Indore, Madhya Pradesh, on the same day. FIR No. 0249/2018, under Section 66C, 66D of the IT Act, 2000, along with Sections of Indian Penal Code were got lodged against unknown miscreants.

5. The complainants i.e., Respondent Nos. 1 and 2, filed a complaint on 29.03.2019, before Learned Adjudicating Officer i.e, Principal Secretary, Government of Madhya Pradesh, Department of Science and Technology, under Section 43, 43A, and 85 of IT Act, 2000, which was Annexure A-2 to Memo of Appeal. The notices were got issued, and present Appellant did appear before Learned Adjudicating Officer, and filed its reply on 19.06.2019. The compliance of Bank with regard to BSCBI, compliant and fulfilling all regulatory norms, including the guidelines issued by RBI, were placed before it. The fraud was said to be result of issuance of duplicate SIM Card by Telecom Service Provider and the compromise made by complainant with its user name and Log in password, which was within the knowledge of user itself, unless compromised with any other, may never be known to anyone. The Login ID and the password had been compromised, resulting this illegal syphoning of money. The messages were sent at the registered mobile number, but owing to issuance of duplicate SIM, these were manoeuvred by fraudsters. More so, Bank was never at any fault. Rather, it was the negligence of the user of Internet Banking Facility, as well as the Telecom Service Provider. The reply filed before Adjudicating Officer is Annexure A-3 with memo of Appeal.

6. The Adjudicating Officer, vide impugned judgment, had failed to appreciate the facts and evidence placed before it, and had passed impugned order, whereby, had imposed a penalty of Rs. 2,00,000/- (Rupees Two Lakhs Only), which were not within the jurisdiction of Learned Adjudicating Officer. The Root Cause Analysis and alleged failure to comply with the Rules, 2011, was the assumption and presumption of Learned Adjudicating Officer, whereas, Appellant Bank had complied those provisions.

Hence, this appeal with above prayer of dismissal of impugned order of Learned Adjudicating Officer.

7. Reply by Learned Counsel for complainant, is with the repetition of the complaint, and the finding given by Learned Adjudicating Officer. The Telecom Service Provider had made its liability by way of depositing ordered amount, in favour of complainant, i.e., no contest by Telecom Service Provider is there.

8. Heard Learned Counsel for Bank of Baroda as well as for complainant.

9. Gone through impugned order and the proceeding taken by Learned Adjudicating Officer.

10. Learned Counsel for Bank had rest its argument on two scores. The first one, is with regard to the compromise made by Net Bank user, by letting other know the User name and Password, with whom Net Banking was being operated. It was mandatorily within the knowledge of user only, Bank is of no concern, and even after all practices, it couldn’t know the same. The Password issued through SMS, before completion of the transaction, was used by registered mobile number user, which was someone else then the real user, because of issuance of duplicate SIM, by Telecom Service Provider, and for it, liability has been imposed by Learned Adjudicating Officer, and the same has been deposited by Telecom Service Provider. The other score is that, there is compliance of rules and guidelines of Bank of Baroda, and Bank was of no opportunity to know the address, i.e., IP address that person who syphoned the money by way of Net Banking was of Nigerian address. There was no occasion for Bank to know this.

11. From the very perusal of the impugned judgment of Learned Adjudicating Officer, it is apparent that the facts, the contention of complaint, the reply made by Bank, the evidence led before Learned Adjudicating Officer, and the points to be determined by Learned Adjudicating Officer, have been clearly and elaborately given in this judgment. The facts were admitted, the only question was with regard to compliance of the Rule, 2011 and the root cause analysis exercise, which was mandated by Reserve Bank of India, was not initiated by Appellant Bank.

12. The guidelines with regard to transfer of beneficiary, added in one stroke, not exceeding upto Rs. 25,000/- (Rupees Twenty Five Thousand Only), and in one day, not exceeding Rs. 2,00,000/- (Rupees Two Lakhs Only), was also flouted, whereas the guidelines given, by way of Right of Information Act, reply by Bank of Baroda itself, is of this specific guidelines of above pecuniary limit of transaction in favour of third party beneficiary added in above tune.

13. Hence, the reply by RTI, is with specific mention of transaction upto Rs. 25,000/- (Rupees Twenty Five Thousand Only), in favour of beneficiary added, in one instance and maximum upto Rs. 2,00,000/- (Rupees Two Lakhs Only) in a day, is there. But, admittedly, this transfer of Rs. 2,92,000/- (Rupees Two Lakhs Ninety Two Thousand Only) in one day, in two transactions, is there, which is against the guidelines of Bank of Baroda itself. More so, the very mandate of initiation of root cause analysis procedure by the Bank is not there, and Learned Counsel for Appellant has clearly admitted this fact that it was not there on record, though he has mentioned at this juncture, while dictating judgment, that his stand is this, that it was not required in case like present one, but, this Appellate Court is not going to accept this contention, because, the RBI guideline is there, and it is mandatory under Rule, 2011. More so, on a single score, of flouting of the maximum limit, and the transaction in one day, by way of Net Bank use, in transfer in third party beneficiary favour, is sufficient for imposing this liability.

14. Hence, apparently, there is no illegality, irregularity in the Judgment of Learned Adjudicating Officer, for intervention in this Cyber Appeal by this Appellate forum. Hence, this Appeal merits to be dismissed with cost.

15. Before parting with, the mentioning of this fact is needed to be made there that the Branch Manager, who preferred to file this Appeal, for such a meagre amount, is not of bonafide intention. Illegal syphoning by use of a duplicate SIM, obtained by fraudster, by way of withdrawal, through Net Banking exceeding the limit, specifically admitted and provisioned, in the reply under RTI Act, by the Bank Officer itself is the conduct of the concerned Branch Manager of the concerned Bank of Bank of Baroda, who had chosen to file this appeal, and thereby, making the complainant to suffer further, for getting this meagre amount suffered by him, by way of this unauthorised conduct. Hence, the Officer, who is in the capacity of making decision, is also expected to go through the litigating policy made by Union of India and the direction given by Hon’ble Apex Court in this regard, that the Public Offices are to be careful to see, what type of cases are to filed and what type of cases are required to be contested. Rather, than the cases to be filed and contested on personal whims of any Officer, who is at fault and who took the course of filing appeal, under its leisure intention of contest.

16. Suffice the matter, this Judgment is to be placed before the Senior-most Officer of Bank of Baroda, by the Learned Counsel of Bank of Baroda, appearing before this Appellate Forum, as well as Senior Counsel appearing for the complainant for taking some decision, considering the agony of public at large and for benefit of public at large, by taking precaution by such officers.

17. With above mentioning, this appeal is being dismissed with cost.

….......……………… (Justice Ram Krishna Gautam) Member 22.07.2026 /BN/