Kerala High Court
Vinayakumar K vs The State Bank Of India on 23 June, 2025
W.A.No.1046 of 2022 1 2025:KER:44424
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
RD
MONDAY, THE 23
DAY OF JUNE 2025 / 2ND ASHADHA, 1947
WA NO. 1046 OF 2022
GAINST THE JUDGMENT DATED 27.06.2022 IN WP(C)
A
NO.30002 OF 2021 OF HIGH COURT OF KERALA
APPELLANT/PETITIONER IN WP(C):
INAYAKUMAR K.,
V
AGED 61 YEARS,S/O.KRISHNAN NAIR,
RESIDING AT 201,AH RESIDENT RESIDENCIES,
THENAVI ROAD,4TH G MAIN,HEBR 2,BLOCK,
KALYAN NAGAR,BANGLORE-560 043.
Y ADVS.
B
SHRI.V.S.BABU GIREESAN
SMT.K.PREETHA JOHN
RESPONDENTS/RESPONDENTS 1 TO 3:
1
HE STATE BANK OF INDIA,
T
REP.BY ITS MANAGING DIRECTOR,STATE BANK BHAVAN
FLOOR,MADOM CAM ROAD,MUMBAI-400 021.
2
HE REGIONAL MANAGER
T
STATE BANK OF INDIA, LOCAL HEAD OFFICE, ROTARY
JUNCTION, POOJAPPURA, MAIN ROAD, KESARI,
POOJAPPURA, THIRUVANANTHAPURAM-695 012.
W.A.No.1046 of 2022 2 2025:KER:44424
3
GM SBI COMMERCIAL BANK
A
JAS HOTEL, THYCAUD, THIRUVANANTHAPURAM-695 014.
SRI.HARISH GOPINATH - SC
HIS
T WRIT
APPEAL
HAVING BEEN
FINALLY
HEARD
ON
12.06.2025,
THE COURT ON
23.06.2025 DELIVERED
THE
FOLLOWING:
W.A.No.1046 of 2022 3 2025:KER:44424
JUDGMENT
Sushrut Arvind Dharmadhikari, J.
ThepresentwritappealfiledunderSection5oftheKerala
HighCourtAct,assailsthejudgmentdated27.06.2022passedin
W.P(C)No.30002of2021,wherebythelearnedSingleJudgehas
dismissed the writ petition filed by the appellant herein.
2. The brief facts of the case are that the appellant was
maintaining an account at the Commercial Branch,
Thiruvananthapuram of the State Bank of India. The appellant
detected some suspicious activities with respect to his account
on 20.04.2020 and sent an e.mail to the Bank on 21.04.2020
informing that he had noticed attempts to hack his account and
that he had deactivated his debit card and UPI PIN. Thereafter
the appellant asked the respondent - Bank to take steps for
securing his account. Immediately thereafter, Rs.1,00,000/- was
unauthorisedly debited from his account.Whenheinformedthis
to the Bank, on 22.04.2020 his account was frozen by the Bank.
W.A.No.1046 of 2022 4 2025:KER:44424
3. The grievance of the appellant is that the aforesaid
amount should be reimbursed by the Bank as he is notatfault.
The appellant had earlier approached this Court through
W.P(C)No.16845 of 2020 which was disposed of vide judgment
dated06.09.2021directingtherespondent-Banktoconsiderthe
grievance of the appellant afresh uninfluenced by any of the
observations in the decisions taken by the Bank earlier in the
light of Ext.P12 Circular. Thereafter the issue was reconsidered
by the Bank and the same was declined as per Ext.P3 dated
28.10.2021. Then he had filed a contempt petition which was
closed finding no disobedience of the judgment passed by this
Court. Accordingly, W.P(C)No.30002 of 2021 was filed seeking
quashment of Ext.P3 and for a direction to the respondents to
compensate the appellant for the loss sustained by him.
4.Thelearnedcounselfortheappellantcontendedthatitis
the Bank whohastosecuretheaccountandhavingfailedtodo
so, is liable to compensate for the losssustainedduetobreach
of security. In spite of having requested the Bank to secure the
W.A.No.1046 of 2022 5 2025:KER:44424
amount,nostepshavebeentaken.AspertheCircularissuedby
the Reserve Bank the Bankerisrequiredtomakegoodtheloss
suffered by the customer where unauthorised electronic
transaction takes place.Asperclause12,theburdenofproving
customer liability in case of unauthorized banking transaction is
ontheBank.Therefore,thelearnedSingleJudgehascommitted
grave error in rejecting the claimoftheappellant.He,therefore,
prayed that this writ appeal be allowed.
5. Per contra, the learned counsel appearing for the
respondent-Bankvehementlyopposedtheaforesaidprayerand
submitted that the Bank had received Ext.R1(a) e.mail dated
21.04.2020fromtheappellantseekingclarification.Theappellant
informed the Bank that he had blocked his debit card and
delinkedtheUPI.Sincetheappellanthadalreadytakenstepsby
blockinghisdebitcardanddelinkingtheUPI,nofurtherstepsare
required to be taken on the part of the Bank. Thereafter on
22.04.2020,theBankreceivedanothere.mailExt.R1(b)fromthe
appellant asking the Banktoblocktheaccount.Immediatelythe
W.A.No.1046 of 2022 6 2025:KER:44424
Bank took steps and freezed his account. Thereafter the Bank
repliedthroughExt.R1(c)informingthattheBankwasnotinany
manner liable or responsible for the money lost and that the
question of reinvestment does not arise. He submitted that,
therefore,inviewoftheaforesaid,thewritappealdeservestobe
dismissed.
6. Heard the learned counsel appearing for the appellant
and the learned counsel appearing for the respondents.
7. For the purpose of convenience clauses 6 and 7 of
Ext.P2 - Circular is reproduced below:
"6. Acustomer'sentitlementtozeroliabilityshallarise
here the unauthorised transaction occurs in the following
w
events:
(i)Contributoryfraud/negligence/deficiencyonthepart
of the bank (irrespective of whether or notthetransactionis
reported by the customer).
(ii)Thirdpartybreachwherethedeficiencyliesneither
withthebanknorwiththecustomerbutlieselsewhereinthe
system, and the customer notifies the bank within three
working days of receiving the communication from the bank
regarding the unauthorised transaction.
(b) Limited Liability of a Customer
7.Acustomershallbeliableforthelossoccurringdue
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
W.A.No.1046 of 2022 7 2025:KER:44424
ccurring after the reporting of the unauthorised transaction
o
shall be borne by the bank.
(ii) In cases where the responsibility for the
unauthorised electronic banking transaction lies neither with
the bank nor with the customer, but lies elsewhere in the
system and when there is a delay (of four tosevenworking
daysafterreceivingthecommunicationfromthebank)onthe
part of the customer in notifying the bank of such a
transaction, the per transaction liability ofthecustomershall
belimitedtothetransactionvalueortheamountmentionedin
Table 1, whichever is lower."
8. The close scrutiny of clause 6 shows that the liability
would arise when the unauthorised transaction is the result of
contributory fraud/negligence/deficiency on the part of the Bank
or the deficiency in its system. In the present case, there is no
fraud,negligence,deficiencyonBank'spartanditisnotthecase
of the appellant that the unauthorised transaction had occurred
duetofailureortechnicalglitchinthesystem.Clause7(i)makes
itclearthatwhenthelossisduetonegligencebyacustomerby
sharingthepaymentcredentials,thecustomerwillbeartheentire
loss untilhereportstheunauthorizedtransactiontotheBank.In
the present case, the appellant had already shared the OTP,
password etc. on the social media platform. Therefore, clause
7(i) is to be borne by the customer; ie, the appellant.
W.A.No.1046 of 2022 8 2025:KER:44424
9. The learned Single Judge while dismissing the writ
petition came to the conclusion that the appellant had made a
request for freezing his account only on 22.04.2020, after the
unauthorized debit of Rs.1 lakh. Immediately the account was
frozen by the Bank and therefore, the service rendered by the
Bank cannot be held to be deficient.
10. In view of the aforesaid, the appellant has to sustain
thelossandnottheBank.ThelearnedSingleJudgewasrightin
coming to the conclusion, not to interfere with the decision by
exercising its discretionary jurisdiction under Article 226 of the
Constitution of India.
The present writ appeal, being bereft of merit and
substance, is accordingly dismissed.
Sd/-
SUSHRUT ARVIND DHARMADHIKARI
JUDGE
Sd/-
SYAM KUMAR V.M.
JUDGE
MC/13.6
