Overview
- The single‑judge bench of Justice Suraj Govindaraj dismissed BSNL's challenge and on Friday increased the bank's compensation to Rs 50.50 lakh plus Rs 5 lakh in consequential damages with 9% annual interest and a three‑month payment deadline.
- The fraud began in February 2019 when a duplicate SIM issued from a BSNL office let fraudsters intercept OTPs and execute seven unauthorised RTGS/NEFT transfers totalling Rs 87.7 lakh, leaving the co‑operative bank with a net loss of about Rs 50.5 lakh after partial reversals and recoveries.
- The court applied established tort rules — duty, breach and causal loss — invoked res ipsa loquitur and held BSNL vicariously liable for wrongful conduct by an employee who allegedly issued the duplicate SIM without proper verification.
- On recoveries and insurance the judgment says direct recoveries of stolen funds must reduce the bank's net loss but collateral insurance payouts should not reduce the telecom's tort liability so as to preserve insurers' subrogation rights and insurance incentives.
- The order urges concrete safeguards: banks should register multiple OTP channels, add time delays and alternate alerts for large transfers, and educate customers, while the DoT and TRAI are called on to tighten SIM‑swap verification and notification rules which could change how telecoms and banks operate day to day.