A Chandigarh consumer has secured relief in a UPI fraud case after the state consumer commission upheld an order directing the bank to refund ₹99,940 withdrawn through unauthorised transactions. The decision, delivered on October 21, 2026, also requires the bank to pay 9% annual interest from July 21, 2021, along with ₹10,000 towards compensation and litigation expenses. The accumulated amount is estimated to exceed ₹1.5 lakh.
The case dates back to July 20, 2021, when a delivery agent visited the complainant to collect a parcel that had been delivered incorrectly. According to the customer, the agent requested his bank details to process a refund. He maintained that he refused to share his UPI PIN.
The following day, the customer received alerts for 5 transactions that he said he had neither initiated nor authorised. The debits included 3 transactions of ₹25,060 each, another of ₹24,560 and one of ₹200, taking the total loss to ₹99,940.
The complainant said he blocked his account and mobile number, contacted the bank within 2 hours and reported the incident to the Chandigarh Police Cyber Cell. He also submitted a written complaint to the bank on July 22, 2021. Despite repeated follow-ups, the issue remained unresolved, prompting him to approach the consumer commission.
The bank acknowledged that the amount had been withdrawn through 5 UPI transactions but denied responsibility. It argued that the payments required a self-generated 6-digit UPI PIN and alleged that the customer had either carried out the transactions himself or failed to keep his credentials secure.
The consumer commission rejected this defence, observing that the bank could not hold the customer responsible merely by alleging that the PIN had been shared or inadequately protected. It found that the bank had not produced sufficient evidence to establish the complainant’s liability.
“In the absence of sufficient evidence establishing the Complainant’s liability, the bank cannot avoid its responsibility merely on the basis of an allegation that the UPI PIN was either shared or not kept secure,” the commission said.
It further stated, “The burden of proving customer liability in case of unauthorised electronic banking transaction shall lie on the bank.”
The ruling is consistent with the Reserve Bank of India’s July 6, 2017, framework on unauthorised electronic banking transactions. Under the guidelines, customer liability depends on the circumstances of the fraud and how quickly the incident is reported. In specified cases involving third-party breaches, customers may have zero liability if they notify the bank within 3 working days. Where customer negligence is established, the liability framework is different.
The bank challenged the district consumer commission’s original order before the state commission on May 25, 2026. Although the appeal was treated as timely after the commission examined the date on which the bank received the order, it was dismissed on merits on October 21.
During the appeal, the bank had deposited ₹1,54,200. The state commission directed that this amount be transferred to the district commission for disbursement under the original order. The final payout will include the principal refund, accumulated interest and ₹10,000 in compensation and litigation expenses.
The decision reinforces that banks must provide evidence before attributing unauthorised electronic transactions to customer negligence. A PIN-based transaction alone does not establish that the account holder authorised the payment or shared confidential credentials.
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