Vinayakumar K. v. The State Bank of India and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN MONDAY, THE 6[TH] DAY OF SEPTEMBER 2021 / 15TH BHADRA, 1943** **WP(C) NO. 16845 OF 2020** ## **PETITIONER/S:** VINAYAKUMAR K., AGED 59 YEARS S/O. KRISHNAN NAIR, SENIOR VICE PRESIDENT (HR) HINDUSTHAN LATTEX LTD, POOJAPPURA, THIRUVANANTHAPURAM RESIDING AT 201,AH RESIDENT RESIDENCES, THENAVI ROAD, 4TH G MAIN, HRBR 2 BLOCK, KALYAN NAGAR., BANGALORE 560 043 BY ADVS. V.S.BABU GIREESAN SMT.K.PREETHA JOHN ## **RESPONDENT/S:** 1 THE STATE BANK OF INDIA REPRESENTED BY ITS MANAGING DIRECTOR, STATE BANK OF INDIA, STATE BANK BHAVAN FLOOR, MADOM CAM ROAD, MUMBAI 400 021 2 REGIONAL MANAGER, STATE BANK OF INDIA, LOCAL HEAD OFFICE, ROTARY JUNCTION, POOJAPPURA MAIN ROAD, KESARI NAGAR, POOJAPPURA, THIRUVANANTHAPURAM, KERALA 695 012 3 MR. SREENIVASAN, AGM. SBI COMMERCIAL BANK, HAS HOSTEL, THYCADU, THIRUVANANTHAPURAM 695 014 4 THE STATE OF KERALA, REPRESENTED BY THE HOME SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM 695 014 5 THE CITY COMMISSIONER OF POLICE, OFFICE OF THE CITY POLICE COMMISSIONER, THYCADU, THIRUVANANTHAPURAM. BY ADV SRI.R.S.KALKURA ## **OTHER PRESENT:** SMT.RASHMI.KM, SR.GP **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C).No.16845/2020** **2** ## **P.V.KUNHIKRISHNAN, J.** **------------------------------W.P.(C).No.16845 of 2020** **---------------------------------------------Dated this the 06[th] day of September, 2021** ## **JUDGMENT** This writ petition is filed with following prayers: _i. Issue a writ of mandamus or any other appropriate writ, order or direction to the respondents 1 to 3 to compensate the petitioner of the loss occasioned due to the hacking connived by respondents 2 and 3._ _ii._ _iii._ _Issue a writ of mandamus or any other appropriate writ, order or direction to the respondents 4 and 5 to probe into the details as sought for in Ext.P3 against the respondents 2 and 3 also and bring the details before this Hon'ble Court._ _Issue a writ of mandamus or any other appropriate writ, order or direction to the respondents 1 to 3 to produce the entire details with them related with the hacking and action taken for compensating the loss sustained by the petitioner._ _iv. Issue a writ of mandamus or any other appropriate writ, order or direction to the respondents 1 to 3 to make a concrete policy to_ **3** ## **W.P.(C).No.16845/2020** _secure the money of the customers and to implement it as guarantee to customers to their money happened to be in the hands of the respondents like Banking System._ _v. Grant all incidental and consequential reliefs as sought for and as the Court deems fit also may be granted with the cost throughout from date of loss till repayment of the money lost from the custody of the respondents 1 to 3._ 2. According to the petitioner, there was an attempt to hack his account maintained in the 1[st] respondent Bank on 20.04.2020. The petitioner sent an e-mail on 21.04.2020 alerting the Bank about the attempted hacking. It will be better to extract the contents of the e-mail: ## _“Hello_ _Kind Attn: Mr. Sreenivas_ _This refers to my discussion had with you today morning. As explained to him, there was an attempt on yesterday (20[th] April) evening to hack my account (while doing some online transaction) and transfer some money to different accounts using my googlepay information. They tried 4 times but every time after the money debited it got credited back safely. So as of now account balance is safe. The evidence of the same are attached._ _Also, I have received some sms message that "my_ **W.P.(C).No.16845/2020** **4** _account is successfully added my account with com.olive.andhra.upi app" and money is debited._ _I had blocked my debit card and delinked UPI Pin yesterday with my bank account. Pl do the needful to secure my account from such fradulent transactions and advise further.”_ Thereafter on 21.04.2020 night, an amount of Rs.1 lakh is debited from the account of the petitioner. The grievance of the petitioner is that the Bank has not taken any steps to prevent the hacking even though he alerted the Bank as per Ext.R1(a) e-mail on 21.04.2020 at 1.26 pm. The petitioner filed several representations before the authorities. At last Ext.P11 is issued by the Bank in which it is stated that it is the default on the part of the petitioner which leads to the hacking. In such situation, this writ petition is filed. 3. Heard the counsel for the petitioner and the Standing Counsel for respondents 1 to 3. I heard the Government Pleader also for respondents 4 and 5. 4. It is an admitted fact that the petitioner sent Ext.R1(a) e-mail on 21.04.2020 at 1.26 pm alerting the Bank about the attempted hacking. It is also an admitted fact that after receiving the e-mail by the Bank from the petitioner, the **5** ## **W.P.(C).No.16845/2020** amount is debited from the account of the petitioner. I perused Ext.P12 circular issued by the Reserve Bank of India. It will be better to extract clauses 6, 7(i), 9 and 12 of the above circular: - _“6. A customer's entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events:_ - _(i) Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer)._ - _(ii) Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction._ _7. A customer shall be liable for the loss occurring due to unauthorised transactions in the following cases:_ - _(i) In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank._ **W.P.(C).No.16845/2020** **6** _9. On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer's account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any). Banks may also at their discretion decide to waive off any customer liability in case of unauthorised electronic banking transactions even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorised transaction._ _12. The burden of proving customer liability in case of unauthorised electronic banking transactions shall lie on the bank.”_ I think the impact of the above circular is not considered by respondents 1 to 3 in this case. According to me the respondent Bank should consider the grievance of the petitioner in the light of the above circular, specifically clauses 6(ii), 7(i), 9 and 12. 5. Therefore I think this writ petition can be disposed directing the 2[nd] respondent to reconsider the entire issue in the light of the above clauses after giving an opportunity of hearing to the petitioner and thereafter take appropriate steps in accordance to law. The petitioner is also free to produce additional evidence, if any before the 2[nd] respondent. **7** ## **W.P.(C).No.16845/2020** Therefore, this writ petition is disposed in the following manner: 1. The 2[nd] respondent is directed to consider the grievance of the petitioner narrated in this writ petition afresh, uninfluenced by any of the observations in the decisions taken by the Bank earlier. 2. The 2[nd] respondent will reconsider the matter in the light of Ext.P12 circular and also in the light of the clauses Nos. 6(ii), 7(i), 9 and 12 in it. 3. Before passing orders, the petitioner will be given an opportunity of hearing and he will be allowed to produce additional evidence, if any. 4. The above exercise should be completed within two months from the date of receipt of a copy of this judgment. Sd/- **P.V.KUNHIKRISHNAN JUDGE** JV **W.P.(C).No.16845/2020** **8** ## **APPENDIX OF WP(C) 16845/2020** PETITIONER EXHIBITS |EXHIBIT P1|COPY OF THE MAIL DATED 21-04-2020 AT| |---|---| ||1.26 P.M SENT BY THE PETITIONER TO 3RD| ||RESPONDENT| |EXHIBIT P1|COPY OF THE TELEPHONE DETAILS ON 21-| ||04-2020 OF THE PETITIONER| |EXHIBIT P2|TRUE COPY OF THE DETAILS OF FRAUD| ||FORWARDED ON 22-04-2020| |EXHIBIT P4|TRUE COPY OF THE COMPLAINT FORWARDED| ||TO THE 5TH RESPONDENT ON 23-04-2020| |EXHIBIT P3|TRUE COPY OF THE RECEIPT ISSUED BY THE| ||4TH RESPONDENT ON 23-04-2020| |EXHIBIT P4|TRUE COPY OF THE LETTER DATED 24-04-| ||2020 FORWARDED TO THE 3RD RESPONDENT| |EXHIBIT P5|TRUE COPY OF THE REPLY DATED 28-04-| ||2020 ISSUED BY THE 3RD RESPONDENT| |EXHIBIT P6|TRUE COPY OF THE LETTER DATED 29-04-| ||2020 SENT BY THE 3RD RESPONDENT| |EXHIBIT P7|TRUE COPY OF THE APPLICATION FORWARDED| ||BY THE 3RD RESPONDENT| |EXHIBIT P8|TRUE COPY OF THE LETTER FORWARDED TO| ||THE 3RD RESPONDENT| |EXHIBIT P9|TRUE COPY OF THE LETTER FORWARDED TO| ||THE 3RD RESPONDENT| |EXHIBIT P10|TRUE COPY OF THE LAWYER NOTICE DATED| ||24-06-2020 FORWARDED TO RESPONDENT 2| ||AND 3| |EXHIBIT P11|TRUE COPY OF THE REPLY NOTICE OF| ||RESPONDENTS 2 AND 3| |Exhibit P12|TRUE COPY OF THE CIRCULAR OF RESERVE| ||BANK DATED 08/04/2002.| RESPONDENTS' EXHIBITS: ANNEXURE R1(A) TRUE COPY OF THE EMAIL DATED 21.04.2020 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT **9** ## **W.P.(C).No.16845/2020** ANNEXURE R1(B) TRUE COPY OF THE EMAIL DATED 22.04.2020 ISSUED BY THE PETITIONER TO THE FIRST RESPONDENT ANNEXURE R1(C) TRUE COPY OF THE EMAIL DATED 27.4.2020 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER ANNEXURE R1(D) TRUE COPY OF THE COMPLAINT FORM SUBMITTED BY THE PETITIONER BEFORE THE FIRST RESPONDENT DATED 07.05.2020. ANNEXURE R1(E) TRUE COPY OF THE REPLY DATED 30.6.2020 ISSUED BY THE FIRST RESPONDENT OT THE PETITIONER'S COUNSEL