Calcutta High Court
Tilak Shankar Mazumder vs The Office Of R.B.I. Ombudsman on 20 April, 2026
IN THE HIGH COURT AT CALCUTTA
(Constitutional Writ Jurisdiction)
ORIGINAL SIDE
Present:
The Hon'ble Justice Krishna Rao
W.P.O. No. 260 of 2025
Tilak Shankar Mazumder
Vs.
The Office of R.B.I. Ombudsman,
Reserve Bank of India & Anr.
And
Sohini Mazumder
Mr. Sourojit Dasgupta
Mr. Pujon Chatterjee
Mr. S. Bhattacharyya
....For the petitioner.
Mr. Aman Agarwal
Mr. Debabrata Das
Mr. A. Sarkar
Mr. Pratik Acharjee
....For the respondent no.1.
Ms. Sayani Roy Choudhury
Mr. Deptanay Banerjee
Ms. Biswadeepa Manial
....For Axis Bank.
2
Mr. Aniket Chaudhury
....For proforma respondent.
Hearing Concluded On : 07.04.2026
Judgment on : 20.04.2026
Krishna Rao, J.:
1. The petitioner has filed the present writ application challenging the
impugned order dated 29th January, 2025, passed by the respondent
no.1 wherein the complaint made by the petitioner was treated as, dealt
with and closed under Clause 16(2)(a) of the Reserve Bank of India-
Integrated Ombudsman Scheme, 2021.
2. The proforma respondent is the daughter of the petitioner and the
holder of add-on credit card with the petitioner’s credit card. In the
month of October, 2024, the daughter of the petitioner visited Dublin,
Ireland as a tourist. The daughter of the petitioner had a Citi Bank
credit card, which is now an Axis Bank credit card, ending with card
No. 1045, which was an add-on card to the petitioner’s credit card. On
20th October, 2024, when the daughter of petitioner was on trip to
Dublin, Ireland, she realized that her credit card has been stolen and
immediately, she received two successive e-mails from the Axis Bank
Limited about the use of credit card for two transactions of 1,000 Euros
each at a store in Dublin at 22:48 IST and 22:49 IST respectively.
Immediately, the daughter of the petitioner made a complaint to the
concerned police station on 20th October, 2024. The petitioner has also
lodged a complaint to the respondent no.2 on 21st October, 2024, about
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the said transactions and the respondent no.2 has acknowledged the
said complaint. On 23rd October, 2024, the respondent no.2 registered
the said complaint formally. The respondent no.2 also requested the
petitioner to provide the details of the last four digits of the credit card
number and the same was provided by the petitioner to the respondent
no.2. On 25th October, 2024, the daughter of the petitioner also sent a
detailed email of the incident to the respondent no.2. On 30th October,
2024, the respondent no.2 closed the complaint of the petitioner
without assigning any reason.
3. The respondent no.2 by an email dated 7th December, 2024, casts an
aspersion upon the petitioner alleging that the fraudulent transactions
in question could not have been done unless the credit card holder had
divulged the credit card number and PIN number to a third party. The
daughter of the petitioner protested against the said allegation by an
email dated 13th December, 2024 but on the same day, the respondent
no.2 rejected the objection raised by the daughter of the petitioner.
4. The petitioner being aggrieved with the decision of the respondent no.2
made a complaint to the respondent no.1 on 16th December, 2024 and
the respondent no.2 has also filed a reply before the respondent no.1
which was communicated to the petitioner by a communication dated
24th January, 2025. The petitioner has submitted a rejoinder to the
allegation to the respondent no.1 and on 29th January, 2025, the
respondent no.1 passed the impugned order dismissing the complaint
of the petitioner without assigning any reason.
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5. Mr. Sourojit Dasgupta, Learned Advocate representing the petitioner
submits that the respondent no.1 has closed the complaint of the
petitioner without assigning any reasons and only on the pretext that
the petitioner has not furnished any additional points in response to
the reply submitted by the respondent no. 2.
6. Mr. Dasgupta submits that the respondent no.1 has no authority to
dismiss the complaint of the petitioner by invoking Clause 16(2)(a) of
the Reserve Bank of India- Integrated Ombudsman Scheme, 2021, as
the said provision is not applicable in the facts and circumstance of the
case of the petitioner.
7. Mr. Dasgupta submits that the petitioner has informed about the
fraudulent use of credit card of the petitioner within 24 hours of the
fraudulent transactions. He submits that add-on credit card of the
daughter of the petitioner was stolen, thus the petitioner did not have
any liability in relation to the fraudulent transaction. There is no
negligence on the part of the petitioner or on the part of the daughter of
the petitioner.
8. Mr. Dasgupta submits that while rejecting the complaint of the
petitioner, the respondent no.1 did not follow the guidelines of the
Reserve Bank of India dated 6th July, 2017.
9. Mr. Dasgupta has relied upon the judgment in the case of Hare Ram
Singh Vs. Reserve Bank of India and Others reported in 2024 SCC
OnLine Del 8039 and submits that the bank cannot refuse to process
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an online transfer if it appears to be authorized by the customer and
upon detecting fraud, the bank has an implied duty to exercise
reasonable care and take prompt action.
10. Mr. Dasgupta further relied upon the judgment in the case of State
Bank of India, rep. by Asstt. General Manager Vs. Pallabh
Bhowmick and Others reported in 2024 SCC OnLine Gau 1519 and
submits that the banks cannot absolve themselves of the liability
towards losses suffered by the customers on account of unauthorized
electronic transactions based on perceived negligence of the customers.
He submits that the judgement passed by the Hon’ble Division Bench of
Guwahati High Court is affirmed by the Hon’ble Supreme Court.
11. Ms. Sayani Roy Choudhury, Learned Advocate representing the
respondent no.2 submits that immediately on receipt of complaint of
the alleged fraudulent transfer of fund from the account of the
petitioner through the add-on credit card, the respondent bank blocked
the card of the petitioner. She submits that there is no deficiency of
service on the part of the respondent bank.
12. Ms. Roy Choudhury submits that on receipt of complaint from the
petitioner, the bank conducted matching of the transactions of the
account of the petitioner and the matching cannot prove, who has used
the card.
13. Ms. Roy Choudhury submits that the case of the petitioner is covered
under Clause 7(i) of the guidelines dated 6th July, 2017, as the said
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transactions have been done on the negligence of the petitioner and his
daughter, and there is no negligence or deficiency of service on the part
of the bank.
14. Ms. Roy Choudhury submits that the credit card is without OTP and
the petitioner or his daughter have never approached for OTP facilities
in their add-on credit card, thus the bank has no responsibility with
regard to the alleged fraudulent transaction.
15. Ms. Roy Choudhury submits that the daughter of the petitioner
initiated a criminal case with regard to the alleged fraudulent
transactions, the case is still pending and unless and until it is decided
who is at fault for the said transactions, the bank cannot be held liable
for the said transactions.
16. The issue in the present case whether the decision of the respondent
no.1 and respondent no.2 by rejecting the complaint of the petitioner, is
legal or is liable to be interfered with.
17. There is no dispute with regard to receipt of two successive emails by
the daughter of the petitioner from the respondent no.2 that her credit
card has been used for two transactions of 1,000 Euros each at a store
in Dublin at 22:48 IST and 22:49 IST, respectively. It is also not in
dispute that immediately the credit card was blocked and within 24
hours the petitioner registered a complaint with the respondent no.2 on
21st October, 2024.
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18. The stand taken by the respondents that the credit card which requires
no PIN, neither OTP to be used with extra caution. The petitioner had
two other cards from the State Bank of India and ICICI Bank, those
cards could not be used by any unauthorized persons as the
permission for their use was in disabled mode, thus the unauthorized
transactions on the stolen card of the respondent bank cannot be a
liability of the bank.
19. The petitioner as well as the respondent bank relied upon the standing
circular of the Reserve Bank of India dated 6th July, 2017, which lays
down certain guidelines for the customers’ protection limiting liability of
the customers in case of unauthorized electronic banking transactions.
The petitioner has relied upon Clauses 6, 9 and 12 which reads as
follows:
“Limited Liability of a Customer
(a) Zero Liability of a Customer
6. A customer’s entitlement to zero liability shall
arise where the unauthorized transaction occurs in
the following events:
(i) Contributory fraud/negligence/deficiency on
the part of the bank (irrespective of whether or
not the transaction is reported by the
customer).
(ii) Third party breach where the deficiency lies
neither with the bank nor with the customer
but lies elsewhere in the system, and the
customer notifies the bank within three
working days of receiving the communication
from the bank regarding the unauthorized
transaction.
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Reversal Timeline for Zero Liability/
Limited Liability of customer
9. On being notified by the customer, the bank
shall credit (shadow reversal) the amount involved
in the unauthorized electronic transaction to the
customer’s account within 10 working days from
the date of such notification by the customer
(without waiting for settlement of insurance claim,
if any). Banks may also at their discretion decide to
waive off any customer liability in case of
unauthorised electronic banking transactions even
in cases of customer negligence. The credit shall be
value dated to be as of the date of the
unauthorised transaction.
Burden of Proof
12. The burden of proving customer liability in
case of unauthorised electronic banking transaction
shall lie on the bank.”
20. The respondent bank issued credit card to the petitioner with add-on
facilities to the petitioner without any PIN or OTP. The respondent bank
has not placed any documents or evidence to show that if the credit
card is issued without any PIN or OTP facilities, the liability is upon the
card holder for any fraudulent transactions is made by using the said
card. It is true that the customer should be cautious while using credit
card facilities either it is with or without OTP or PIN facilities, but in the
present case, it is the specific case of the petitioner that the credit card
was stolen and used for fraudulent transactions and immediately when
the petitioner received about the intimation about the fraudulent
transactions, the petitioner made complaint to the bank and bank has
blocked the card. It is not the case of the bank that the petitioner has
made a false complaint to the concerned police authorities with regard
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to theft of the credit card and concocted a false story and no fraudulent
transaction was made. The documents which the petitioner has relied
upon, reveals that within 24 hours of the incident, the petitioner has
made a complaint to the bank and the bank has acknowledged the
same.
21. In the case of State Bank of India, rep. by Asstt. General Manager
(supra), the Hon’ble Division Bench of the Gauhati High Court
interpreted Clause 9 of the circular dated 6th July, 2017 as follows:
“36. Clause 9 deals with reversal timeline of
zero liability/limited liability of customers in case of
unauthorized electronic banking transaction, it
would be the discretion of the bank to waive off
any customer liability even in case of negligence of
the customer. On a reading of the above clauses, it
can be inferred that in case of un-authorized
electronic transactions the Bank would have a duty
to reverse the payment and credit the amount
involved in the un-authorized transaction within a
time frame, provided the fraudulent transaction is
reported by the Customer within the time frame
provided in the Circular. In an appropriate case,
even the negligence, if any, on the part of the
customer, can be waived by the Bank.”
22. The respondent bank relied upon Clause 7(i) of the said Circular which
reads as follows:
“7. A customer shall be liable for the loss
occurring due to unauthorized 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
unauthorized transaction to the bank. Any
loss occurring after the reporting of the
10unauthorized transaction shall be borne by the
bank.”
23. The respondent bank failed to bring any documents to establish that
the loss is due to negligence of the petitioner. The only contention made
by the respondent bank is that the credit card, which requires no PIN
or OTP to be used, must have been put on extra caution. It is the
specific case of the petitioner that the credit card was stolen and used
for unauthorized transactions and police complaint was also made. The
bank has not proved that the said complaint is false or at no point of
time, the card was stolen or any unauthorized transaction was made.
24. Clause 8 of the Circular deals with third party breaches, where the
deficiency lies neither with the bank nor with the customer but lies
elsewhere in the system. By a plain reading of Clause 8, it appears that
in case of unauthorized electronic banking transaction occurred due to
third party breaches i.e. where the deficiency neither lies with the
customer or the bank, the customer liability is “Zero” if the fraudulent
transaction is reported within 3 (three) days from the date on which the
customer receives the communication.
25. Clause 12 of the Circular provides for burden of proof. As per the said
clause, the burden of proving customer liability in case of unauthorized
electronic banking transactions shall lie on the bank.
26. In the present case, there was two unauthorized electronic transactions
on 20th October, 2024, at 22:48 IST and 22:49 IST and immediately the
same was informed to the bank and within 24 hours, the petitioner has
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made complaint to the bank but except blocking the card, the bank has
not taken any steps and rejected the complaint of the petitioner. The
respondent no.1 by the impugned order dated 29th January, 2025,
closed the complaint of the petitioner only on the ground that the
petitioner has not submitted any additional points to the reply of the
respondent no.1.
27. This Court finds that the respondents failed to establish that the
unauthorized electronic transactions were made due to the negligence
of the petitioner. The respondents failed to consider the complaint of
the petitioner with regard to unauthorized electronic transactions in
accordance with the Circular dated 6th July, 2017.
28. In view of the above, the impugned orders dated 29th January, 2025,
passed by the respondent no. 1 and 7th December, 2024, by the
respondent no. 2 are set aside and quashed. The respondent no.2 is
directed to refund the amount of fraudulent electronic transactions
dated 20th October, 2024, along with charges in the account of the
petitioner forthwith.
29. WPO No. 260 of 2025 is allowed.
(Krishna Rao, J.)
