DEHRADUN: A consumer court in Uttarakhand has set aside an earlier order directing Punjab National Bank to refund money lost in an online transaction, ruling that the disputed digital payments were carried out by the account holder himself and that neither the bank nor the payment platform bore responsibility for the loss.
A Disputed Digital Transaction
On November 26, 2020, Sachin Kumar, a resident of Haridwar, attempted to transfer ₹25,000 to an acquaintance named Mohit using Google Pay. According to Kumar, the transaction appeared to fail, but the amount was nonetheless debited from his Punjab National Bank (PNB) account. The money, he said, was not credited to the intended recipient nor refunded to him.
Two days later, Kumar claimed, he received a message on his phone. Soon after, multiple transactions were carried out from his bank account, resulting in a cumulative debit of ₹1,06,500. Believing these debits to be unauthorised, Kumar approached his bank for relief. When that effort yielded no result, he turned to the consumer dispute redressal mechanism.
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The District Commission’s Initial Ruling
In March 2021, the district consumer disputes redressal commission ruled in Kumar’s favour. Holding the bank responsible for the loss, it directed PNB to refund the amount debited from the account. The order was based on the premise that the customer had suffered financial harm through an online payment process in which the bank was a key intermediary.
PNB challenged the ruling before the Uttarakhand State Consumer Disputes Redressal Commission, arguing that the transactions in question could not be attributed to any failure on the bank’s part. During the proceedings, a critical detail emerged: the complainant admitted that all the disputed transactions had been carried out from his own mobile handset.
The State Commission’s Reversal
The state commission overturned the district commission’s order, concluding that neither PNB nor Google Pay was responsible for the loss. In its ruling, the commission held that the debits occurred due to the complainant’s negligence rather than any deficiency in banking or digital payment services.
The commission observed that initiating transactions through Google Pay requires the entry of a password, and without the correct credentials, a transaction cannot be completed. On that basis, it reasoned that the payments were made knowingly. “Thus, it can safely be said that the complainant did the transactions with open eyes,” the commission stated.
It further held that it was the complainant’s responsibility to safeguard his mobile handset and credentials, and that failure to do so could not be used to shift liability onto the bank or the digital payment platform.
Legal Reasoning and Broader Context
Setting aside the earlier order, the state commission said the district commission had failed to properly consider the material on record and had committed a “manifest error of law” in allowing the consumer complaint. The ruling underscored a key principle in digital payment disputes: liability often hinges on whether a transaction was unauthorised in a technical sense, or whether it was executed using valid credentials from the customer’s own device.
