BENGALURU: In a verdict that sends a clear message to telecom service providers who enable SIM swap fraud through their negligence, they will be held fully accountable for losses caused due to cyber fraud.
The Karnataka High Court directed BSNL to pay Rs 50.50 lakh as compensation to Basaveshwara Pattana Sahakara Bank Niyamitha on account of seven fraudulent RTGS/NEFT transactions, which were facilitated by the unauthorised and negligent issue of duplicate SIMs by BSNL.
Noting that a bank had its registered mobile number compromised through a duplicate SIM issued by a telecom service provider’s official, and within hours substantial funds were drained from its account, Justice Suraj Govindaraj ordered payment of compensation with 9% interest from 2019, while allowing the petition filed by the bank in part. The transaction followed authentication by an OTP received on the duplicate SIM, which led to siphoning of Rs 87.70 lakh.
The fraud had taken place from February 6 to 7, 2019. Upon being informed of the fraud, Canara Bank had facilitated reverse credit of Rs 30 lakh.
“Thousands of SIM swap fraud cases are reported across India, causing financial losses running into hundreds of crores of rupees. In virtually all such cases, the fraud is enabled by issuing a duplicate SIM without proper verification at the telecom service provider’s end.
Regulatory advisories have been issued. Courts must send a clear message that telecom service providers who enable SIM swap fraud through their negligence will be held fully accountable in civil law for the losses they cause,” the court observed.
Modifying the order dated August 9, 2024, passed by the Permanent Lok Adalat on the quantum of compensation payable by BSNL to the bank, the court directed BSNL to pay Rs 5 lakh as compensation for consequential damages owing to its negligence, and dismissed the petition filed by BSNL challenging the award passed by the Lok Adalat on the ground that it has no jurisdiction to award the compensation.