The Punjab State Consumer Disputes Redressal Commission found that MPIN authentication alone did not prove customer negligence and upheld compensation for a Bathinda resident who reported the debits promptly.
The Punjab State Consumer Disputes Redressal Commission has upheld an order requiring a bank to repay Rs 72,495, with interest from June 4, 2019, to a Bathinda resident whose savings account was drained through 11 unauthorised UPI transactions. The tribunal also directed the bank to pay Rs 5,000 in compensation and Rs 5,000 towards litigation costs, leaving intact an earlier ruling by the District Consumer Disputes Redressal Commission in Bathinda.
According to the complaint, Vijay Kumar began receiving transaction alerts on June 4, 2019, when multiple withdrawals were made in quick succession, including several for Rs 4,999 and Rs 10,000. He alerted bank staff and showed them the messages, but further debits allegedly continued while officials tried to block the account. The commission recorded that the money was taken through 11 UPI transactions via the Paytm application on June 4 and 5, 2019, and noted that Kumar also approached the police the same day, resulting in a daily diary report.
The bank argued that the payments had been approved using Kumar’s UPI PIN, or MPIN, and said the credentials must have been shared or compromised. It also maintained that no deficiency in service had been shown and that another private bank involved as the payment service provider had not been joined in the case. The state commission rejected that reasoning, saying the mere fact that a transaction was authenticated through MPIN was not enough to prove customer negligence. It said the bank had produced no convincing evidence that Kumar had authorised the payments or that any lapse on his part led to the compromise of his code.
In reaching its decision, the commission relied on the Reserve Bank of India’s July 6, 2017, circular on customer liability in unauthorised electronic banking transactions. That framework provides for zero liability in specified cases, including third-party breaches where the customer is not at fault and reports the matter within three working days of the bank’s notice. The tribunal found that Kumar had complained within the required time and that the bank had failed to establish negligence on his part, bringing the case within the RBI’s protection for prompt reporting of unauthorised transactions.
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