Seeking protection for innocent bank customers caught in the crossfire of cyber fraud investigations, a public interest litigation (PIL) has been filed in the Jharkhand High Court seeking safeguards against account freezing, police action and criminal proceedings when suspicious money is transferred into their accounts without their knowledge.
The PIL, filed by advocate Achyut Swaroop Mishra, highlights what it describes as a gap in the digital banking system, where safeguards exist for authorised transactions but little protection is available to account holders who unknowingly receive funds from unidentified sources.
The petition notes that banking transactions are protected through mechanisms such as one-time passwords (OTPs), PINs and two-factor authentication. However, it argues that there is no comparable mechanism to establish whether a recipient actually knew about or consented to an unsolicited transfer.
As a result, an innocent account holder may face cybercrime investigations, freezing of bank accounts, notices from banks or police and even litigation despite having no involvement in the underlying fraud, the petition states.
Receipt of funds not proof of criminal intent
The petitioner has argued that the mere credit of money into a bank account cannot establish the recipient’s knowledge, consent or involvement in a transaction. Before criminal action is initiated, authorities should independently determine the account holder’s knowledge, control over the transaction, any benefit received and criminal intent.
The PIL has urged the Reserve Bank of India (RBI) to introduce a consent-based digital verification mechanism for suspicious or high-risk incoming transactions. Under the proposed system, recipients would be alerted and asked to digitally confirm whether they recognise the transaction.
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