LEGAL STROKES

25/11/2022

25/11/2022

Covid Patient gets speedy justice against Insurance Company. Complainant's Counsel Proved that Insurance Company was dodging Insurance Claim with Malafide intentions. Hon'ble Commission's order reflects justice done to the sufferers.
Hon'ble Commission's Findings:

15/04/2022

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28/10/2021

Leadership at its best. Heartiest congratulations to our sir Dr. Kailash Kumar, Associate Professor in Law, MDU CPAS, Gurugram for this remarkable accomplishment.

03/10/2021

BEWARE CREDIT CARD HOLDERS- CREDIT CARD FRAUD

Dear reader,
Under the prevailing circumstances, if you receive an OTP and transaction alert messages on your registered mobile number or/and registered email address, towards a transaction not done by you or consented by you, be ready to suffer undue hardships from your credit card company/ Bank on account of system-oriented presumptions.

Case Brief:
RBI in its directions to Banks state that Banks tend to report account as fraud only when they exhaust the chances of further recovery (RBI DIRECTIONS/ GUIDELINES- Dated 01.07.2016). RBI has a specific treatment of such cases in which even the banks have responsibility to perform, yet the Credit Card Company, in no visible adherence to the RBI directions, is insisting the card holder to pay an amount reported to be fraudulent/ unauthorized and continues to charge interest on it presuming the card holder to have acted negligently or have shared the details with someone, without putting the matter for police adjudication to inspect fraud and shying away to participate with the card holder in the police complaint filed by it.

This is a case of an educated and well qualified senior citizen holding the credit card for 10 years who recently suffered a credit card fraud and despite taking all steps required as per RBI guidelines along with other additional steps, the credit card company is pressing him to pay lakhs of rupees usurped by an unknown fraudster.

The credit card holder woke up early morning with the sound of messages alerting OTP and transaction alerts done on his credit card. He immediately called and informed the credit card company about his unawareness of the said transactions and requested his credit card to be blocked. By this time 50% of the total amount was transacted, and the card got blocked. The unknown person attempting to usurp the money, failed to transact further because of card blocking and used expertise and system failures of the credit card company to unblock the credit card by somehow using the company's banking application, which was never used/ downloaded by the card holder.

Despite knowing that the credit card has been blocked with due human intervention of the card holder himself on grounds of fraudulent transactions taking place, the credit card company allowed a system oriented unblock of the said card blocked earlier, and subsequently two more transactions took place of the same amount causing the card holder's damage to aggravate and multiply.

The card holder again got constrained to get the card blocked after which multiple fraudulent transactions failed and only then the further misuse stopped. Upon statement generation, the card holder also paid the undisputed amount for the relevant month, contesting the balance payment involved in the fraud.

Due to the credit card company’s apparent carelessness and sluggish handling of the matter, the Card holder made extra ordinary efforts to approach the merchants one after the other and gather substantial information. The matter was also reported to the police by the card holder and the entire trail of the money misused got revealed confirming the fraud mapped. Police also approached the credit card company convincing the company personnel that the card holder is a victim of cyber fraud, yet no respite given to the card holder.

The card holder approached the banking ombudsman as well and was shocked to read that the report stated that attempts were made to approach the merchant, but the transactions had taken place by then.
It is important to note that the transactions took over 4 hours to mature, from the time of reporting the blocking of the credit card.

Matter of Concern:
Reading the RBI directions in their letter and spirit, in the advent of Information Technology Act, 2000 there are multiple checks and balances and actions a credit card company/ bank must bring into practice, in the interest of consumers, some of which are: -
RBI directions between 2016-2019
• Appropriate systems and procedures to ensure safety and security of electronic banking transactions carried out by customers.
• robust and dynamic fraud detection and prevention mechanism.
• The burden of proving customer liability in case of unauthorised electronic banking transactions shall lie on the bank.
• mechanism to assess the risk (for example, gaps in the banks existing systems) resulting from unauthorized transactions and measure the liabilities arising out of such events.
• The Standing Committee on Customer Service in each bank shall periodically review the unauthorized electronic banking transactions reported by customers or otherwise, as also the action taken thereon, the functioning of the grievance redress mechanism and take appropriate measures to improve the systems and procedures.
• Zero liability of customer/ card holder unless bank proves that the loss is due to negligence by a customer, such as where he has shared the payment credentials
• Even if loss is due to negligence by a customer, such as where he has shared the payment credentials, its Liability limited to the amount transacted until he reports the unauthorised transaction to the bank. That too, the banks have the discretion to waive under its own discretion.
• Banks are required to lodge the complaint with the law enforcement agencies immediately on detection of fraud since delay may result in loss of relevant ‘relied upon’ documents, non-availability of witness, absconding of borrowers and the money trail getting cold.

The crucial matter here is that the credit card company is observed to shy away from approaching police despite holding the Card holder unilaterally negligent and/ or having shared the protected transaction details with someone solely on their untested presumption that since the secured OTP was sent to the card holder, the transaction couldn’t be possible without knowledge of the same given to the person transacting, and now evading payment to the credit card company.

For credit card companies, an authorization required to complete a credit card transaction is based upon the OTP shared that’s it. If the said OTP has been taken by someone fraudulently from the registered electronic device of the actual card holder, and a transaction takes place then be prepared to contest the same and suffer an uncontested branding of being ‘negligent’ or ‘having shared the OTP with someone and raising false dispute’.

Experience and Advise:
1. Read the definition of unauthorized transaction carefully and tally it with the facts and circumstances of the case cited, to make timely pre-emptive amends.
2. Do not opt for OTP on email.
3. Try to report the unauthorized transaction with speed of light before unauthorized transactions get confirmed. (Write an email simultaneously reporting fraud, as call centers may take time to attend your call and time is the essence.
4. Read your respective bank’s terms and conditions on credit card fraud and be in tune without waiting for fraud to happen, or find a suitable bank/ credit card company, whose terms you find reasonable at par as the RBI guidelines.
Photo credit: https://dataaspirant.com/credit-card-fraud-detection-classification-algorithms-python/

01/10/2021

LOCUS STANDI OF OBJECTING NON-EXAMINATION OF COMPLAINANT/WITNESS RESTS WITH THE COMPLAINANT AND DOES NOT VITATE THE TRIAL

Omission to examine the complainant on oath was only an irregularity not vitiating the trial. The objection regarding non-examination of the complainant was taken on behalf of the accused. A similar view was also taken in the subsequent decision of this Court reported in AIR 1958 Orissa 11. But that again was a case where the objection was taken not by the complainant, but by the accused. The correct position therefore appears to be that the omission to examine the complainant on oath under Section 200, Cr. P. C. is an irregularity, and if by reason thereof the complainant is prejudiced, he is entitled to an order that the subsequent proceedings are invalid. So far as the present case is concerned, prejudice in fact had been caused to the complainant because he had been deprived of an opportunity to explain his case to the Magistrate which he could have got had the Magistrate examined him on oath. Bharat Kishore Lal Singh v. Judhistir Modak, AIR 1929 Pat 473; Api Samal v. Bisi Mallik, AIR 1953 Orissa 83 Mahavir Prasad Agarwalla v. State, AIR 1958 Orissa 11.
It is not obligatory on the magistrate to examine the witness before issuing the process if the court is satisfied with the sole statement of the Complainant. The most important point on the filing of the complaint is whether the court on the examination of the Complainant is satisfied about case being made out prima facie against the accused person. Venkatesh Nilappa Talwar v. Laxmanavva, 1988 (1) Crimes 801.
Statutory language per se requires the magistrate’s opinion and a sufficient ground for proceeding.
Where a Magistrate chooses to take cognizance, he must comply with the requirements of section 200 and record the evidence of the complainant or his witnesses. Tula Ram & Ors vs Kishore Singh 1978 SCR (1) 615
Before issuing process to the accused, examining the complainant or his witnesses that were present, if any, is required otherwise the subsequent proceedings as examining the complainant and his witness and other assessing their evidence discharging the accused all become illegal. Davud Bhai Hasan Alli vs Abbas Bhai Abdul Karim & Anr. 1972 CriLJ 970
Non-examination of two witnesses cited in the protest petition cum-complaint did not preclude the Chief Judicial Magistrate from taking cognizance against respondent Nos.1 to 4 because he felt satisfied that a prima facie case was made out against them. Rosy v. State of Kerala (2000) 2 SCC 230. Examination of all the witnesses cited in the complaint or whose names are disclosed by the complainant in furtherance of the direction given by the Magistrate in terms of proviso to Section 202(2) is not a condition precedent for taking cognizance and issue of process against the persons named as accused in the complaint only those witnesses are required to be examined whom the complainant considers material to make out a prima facie case for issue of process. The choice being of the complainant, he may choose not to examine other witnesses. Consequence of such non-examination is to be considered at the trial and not at the stage of issuing process when the Magistrate is not required to enter into detailed discussions on the merits or demerits of the case, that is to say whether or not the allegations contained in the complaint, if proved, would ultimately end in conviction of the accused. He is only to see whether there exists sufficient ground for proceeding against the accused. With a view to clarify legal position on the subject, we deem it proper to observe that even though in terms of the proviso to Section 202(2), the Magistrate is required to direct the complainant to produce all his witnesses and examine them on oath, failure or inability of the complainant or omission on his part to examine one or some of the witnesses cited in the complaint or whose names are furnished in compliance of the direction issued by the Magistrate, will not preclude the latter from taking cognizance and issuing process or passing committal order if he is satisfied that there exists sufficient ground for doing so. Such an order passed by the Magistrate cannot be nullified only on the ground of non-compliance of proviso to Section 202(2). Shivjee Singh v. Nagendra Tiwary and others CRIMINAL APPEAL NO.1158 OF 2010

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