New Delhi, A Delhi court has directed the Indian Bank to release Rs 77,000 withheld from a pensioner’s account and said that the bank cannot deny relief to a cyber fraud victim merely by internally classifying the case as “not fraud on bank”.
Additional Sessions Judge Hargurvarinder Singh Jaggi was hearing a revision petition filed by Yogendra Kumar Singh, challenging the trial court order in which he had sought the release of funds fraudulently transferred from his pension account in three transactions on May 3, 2025.
He had immediately informed the bank’s Tughlakabad branch and also lodged a complaint with the cyber police the same day.
In an order dated May 12, the court said, “The Trial court committed a grave error by entirely overlooking these binding RBI guidelines…. while ignoring the undeniable documentary evidence of the petitioner’s bank statement showing that Rs 77,000 was already credited as ‘Shadow Credit‘ by Indian Bank on May 14, 2025″.
The court said the bank failed to place any clear evidence to show that the customer had knowingly shared OTPs or payment credentials.
“A unilateral internal classification by the bank cannot supersede the statutory safeguards designed specifically to protect victims of cyber fraud,” the court said.
The court noted that the trial court had earlier dismissed Singh’s plea seeking release of the amount after relying on a police status report stating that there was no information regarding any hold or lien amount on the National Cybercrime Reporting Portal.
“By dismissing the application solely on a narrow reading of the police report, the trial court permitted a miscarriage of justice against a vigilant citizen who fell victim to cyber fraud,” the court said.
The sessions court said the trial court overlooked the RBI guidelines on unauthorised electronic banking transactions and ignored the bank statement showing the shadow credit.
“This court is of the considered opinion that the impugned order dated September 8, 2025 passed by the Trial court suffers from patent illegality and merits interference through the exercise of the revisionary power vested in this court,” it said.
The court observed that the petitioner acted with “utmost vigilance” by reporting the fraud immediately and was entitled to protection under the RBI’s zero-liability policy.
The court directed the bank to permanently release the withheld amount and asked the parties to appear before the trial court on May 30 for compliance.
