The Chandigarh State Consumer Disputes Redressal Commission has dismissed an appeal filed by the State Bank of India (SBI) in a ₹99,940 UPI fraud case, upholding an order directing the bank to refund the stolen money with 9% annual interest and ₹10,000 towards compensation and litigation expenses.
The ruling came after a Chandigarh resident pursued the matter for more than five years following five unauthorised transactions from his account in July 2021. The estimated payout exceeds ₹1.5 lakh.
How Did the UPI Fraud Begin?
The incident began on July 20, 2021, when a delivery agent approached the complainant regarding a wrongly delivered parcel.
The agent reportedly requested banking details to process a refund. The customer maintained that he did not disclose his UPI PIN. The following afternoon, five unauthorised transactions resulted in the withdrawal of ₹99,940 from his account.
How Did the Customer Respond?
On July 21, the complainant received alerts for withdrawals of ₹25,060, ₹25,060, ₹25,060, ₹24,560 and ₹200.
He immediately blocked his account and mobile number, informed SBI within two hours and approached the Chandigarh Police Cyber Cell.
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The customer submitted a written complaint to the bank on July 22. Despite an assurance of a refund within 15 days, the money was not returned.
What Defence Did SBI Present?
SBI acknowledged that ₹99,940 had been debited through five UPI transactions but denied any deficiency in banking services. The bank argued that such transactions required a six-digit UPI PIN and maintained that the customer had either authorised the payments or failed to protect his credentials.
It relied on RBI provisions concerning customer liability in unauthorised electronic banking transactions.
What Did the Consumer Commission Decide?
The commission held that a bank cannot avoid responsibility merely by alleging that a customer shared or failed to secure a UPI PIN.
It observed that the burden of establishing customer liability in disputed electronic transactions rests with the bank. Finding insufficient evidence against the complainant, the commission dismissed SBI’s appeal on October 21, 2026.
How Much Must SBI Pay?
The original order requires SBI to refund ₹99,940 with 9% annual interest from July 21, 2021, along with ₹10,000 towards compensation and litigation expenses. SBI had deposited ₹1,54,200 during the appeal proceedings. The commission directed that amount to be transferred for disbursement under the original order.
The420 Insight: What Does This Ruling Mean?
The decision reinforces the importance of evidence when banks seek to hold customers responsible for unauthorised transactions. It also highlights why promptly reporting suspicious withdrawals and preserving complaint records can be crucial in resolving banking disputes.
