In a significant order that will bring relief to all those who are victims of online frauds, the Secretary of Information Technology (IT) in Maharashtra has asked Bank of India to pay Rs3.50 lakh to a victim of online fraud. As per the IT Act, 2000 and a notification issued on 25 March 2003, IT Secretaries of every State and Union Territory in India act as ‘Adjudicating Officer’ in their respective State or Union Territory.
In a recent order, VK Gautam, IT Secretary, who is also Adjudicating Officer under the IT Act in Maharashtra, held that Bank of India owns, controls and operates sensitive personal data of its customers but failed to implement reasonable security practices and procedures leading to loss to complainant Nirmalkumar Athawale from Kamptee, near Nagpur. Holding Bank of India liable for violation of Section 43A of the IT Act, the IT Secretary asked it to pay Rs2.50 lakh towards wrong transactions and Rs1 lakh as legal charges and compensation for causing mental harassment.
The case is from 2015, when Mr Athawale found that Rs3 lakh were withdrawn from his joint account at Bank of India’s Vaishali Nagar, Kamptee branch. He lodged a complaint against this unauthorised withdrawal with the Bank branch and also with the Police.
Through its internal mechanism, the Bank was able to recover only Rs50,000 out of the Rs3 lakh withdrawn from Mr Athawale’s account. Under guidance from Adv Mahendra Limaye, a Cyber Legal Consultant from Nagpur, Mr Athawale filed a civil suit before the IT Secretary.
After hearing both the sides Mr Gautam, the IT Secretary held that the Bank has not only erred but also committed serious security breach by providing single customer identification code (CID) for two accounts with different constitutions besides providing net banking facility without any request from the customer. The Bank also failed to send messages for withdrawal of Rs3 lakh to Mr Athawale.
“(The) Bank has caused serious compromise with reasonable security practises,” the IT Secretary said while holding Bank of India guilty under sections 43A, G, and H of IT Act. He asked the Bank to pay Rs2.50 lakh towards wrong transactions charged on Mr Athawale’s account and Rs1 lakh towards legal charges and for causing mental harassment.
As per IT Act, the Adjudicating Officer (IT Secretary) has sole jurisdiction for adjudicating on any contravention of IT Act 2000/8 and to award compensation to those who have suffered a loss of less than Rs5 crore. The Adjudicating Officer has power of a Civil Court in resolving cybercrime cases.