CHENNAI: The Madras High Court recently directed the Reserve Bank of India (RBI) to issue directions to Paytm to compensate a post-graduate medical student who had lost around Rs 3 lakh to fraudulent transactions on Paytm.
Hearing a plea filed by Dr R Pavithra, a post graduate medical student, Justice RN Manjula lamented that while encouraging the public to make online money transfers, customers are being waved away when they fall victim to fraud.
"Even though the public is encouraged to use payment banks such as Paytm, Google Pay, Amazan Pay, etc., the customer is made to run from pillar to post, in case he or she is affected due to any 3rd party violations or fraudulent intervention. What is surprising is that even when the RBI has issued detailed master directions for both banks and Prepaid Payment Instruments (PPI), every institution shifts the blame upon the other and no one has come up with a concrete idea as to who has to bear the loss suffered by the petitioner, for none of her mistakes," the court observed.
During the course of hearing, the City Union Bank submitted that the money of the petitioner was not stolen from the bank account but stolen from her Paytm account and the bank cannot be held responsible for this in any way.
Counsels Shivakumar and Suresh representing Paytm submitted that money transactions in Paytm are very secure and money transactions are not done without the customer's knowledge or sharing of bank account details.
Further, counsels VS Rishwanth and T Poornam representing RBI submitted that the Reserve Bank of India does not interfere in transactions between between "regulated entities and their customers."
Recording the submissions, the court said that while every institution was shifting the blame from itself to another, the petitioner must not suffer for no mistake of hers.
"The petitioner had promptly given her complaint to her bank, which in turn, had communicated the same to Paytm. As per RBI circulars, Paytm had to establish within 90 days of the incident that the petitioner herself was liable for the loss. However, it had failed to do so. Thus, as per the RBI guidelines, the amount was to be repaid to the customer irrespective of whether negligence was on her part or not," the Court said.
Dr R Pavithra, a post graduate medical student moved the Madras High Court seeking a direction to RBI to direct the Paytm and City Union Bank to return her money (Around Rs 3 lakh) which was stolen from her account.
According to the petitioner, two miscreants from Uttar Pradesh had hacked into her savings bank account and siphoned off the money to their Paytm accounts using the latter's digital payment interface.
Both her bank and Paytm had refused to accept responsibility for the illegal transactions.
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