Mumbai — The Bombay High Court has called on banks to adopt a more empathetic stance when addressing cyber fraud complaints, observing that their defensive postures and perfunctory denials “shake the common man’s faith in banking institutions.”
The division bench of Justices Mahesh S. Sonak and Advait M. Sethna made the remarks while setting aside an order by the Banking Ombudsman that had summarily dismissed a businessman’s complaint. The petitioner alleged that nearly ₹2 crore had been siphoned off from his IndusInd Bank account in a sophisticated cyber fraud.
The court criticized both the bank and the Ombudsman for procedural lapses, noting that the complaint had been disposed of “in a summary manner” without ensuring fair hearing or due process — a violation of natural justice principles.
Natural Justice and Institutional Accountability
Advocate Harish Pandya, representing the petitioner, told the court that his client was never heard before the order was passed and received a copy of the decision only through a Right to Information (RTI) application.
The Reserve Bank of India’s (RBI) counsel admitted that while the order was emailed, there was no confirmation that a proper hearing had taken place. The court found this inadequate, stating, “This complaint could not have been disposed of in a summary manner without even minimum compliance with the principle of natural justice or fair play.”
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Restoring the complaint to the Ombudsman, the judges directed the body to hear both the bank and the petitioner and to dispose of the case within four months. The state government was also ordered to file the relevant cybercrime report or chargesheet within four weeks.
Faith and Fairness in the Digital Age
In strong language, the bench observed that banks must move beyond procedural rigidity. “If amounts are being allegedly siphoned off from account holders, the banks must see whether any further measure needs to be taken to prevent such incidents,” Justice Sonak said.
He added that the “attitude of simply denying everything” was no longer tenable in the face of widespread cyber theft. The court emphasized cooperation between banks and the Ombudsman, underscoring that accountability, not deflection, is key to restoring citizens’ trust.
The ruling follows a series of recent cases in which courts have held that customers who promptly notify banks of unauthorized cyber transactions bear zero liability under RBI’s 2017 circulars on electronic payment security.
A Broader Call for Systemic Reform
Legal experts interpret the Bombay High Court’s observation as a broader indictment of how Indian banks handle digital fraud disputes. The judgment not only reinstates one businessman’s complaint but also reasserts that empathy, transparency, and timely redressal must be central to financial governance in the cyber era.
As India’s digital economy deepens — and cyber thefts become more intricate — the judiciary’s insistence on sensitivity may well push the banking sector to rethink its compliance-first, customer-later approach.
