Indore (Madhya Pradesh): Being duped in a “digital arrest” scam does not, by itself, wipe out a borrower’s liability to repay a bank loan, Indore bench of Madhya Pradesh High Court has ruled while dismissing a petition filed by a woman who sought to stop recovery proceedings against her.
Justice Sandeep N Bhatt said the court had sympathy for the petitioner, who was allegedly a victim of a digital arrest scam, but that sympathy could not defeat the bank’s right to recover money it had advanced as a loan.
The case concerned petitioner Shreya Tayal, who told the court that cyber fraudsters had impersonated a cybercrime officer and falsely accused her of involvement in a money-laundering case.
She was allegedly kept under “digital arrest” for three days and made payments to the fraudsters using a loan facility available on her credit card. She subsequently lodged an FIR after realising that she had been scammed.
Tayal had approached the High Court seeking an end to recovery proceedings initiated against her and asking that no further action be taken until the outcome of the FIR registered against the alleged fraudsters.
The bank, however, opposed the petition. Its counsel told the court that the petitioner had personally visited the bank during the period when she was allegedly under digital arrest but had not disclosed that she was being coerced by fraudsters.
The bank also said it had contacted her to verify the transaction and that she had consented to it. The bank further pointed out that the matter had been considered by the Banking Ombudsman.
The HC noted that the bank had verified the substantial transaction through calls and had made inquiries when Tayal visited its branch.
Despite this, she did not disclose anything indicating that the transaction was connected to fraud or that she was acting under coercion.
The court observed that the money had been advanced to the petitioner as a loan through her credit card and that she had used that facility to make payments to the scammer.
Consequently, it held that the bank could not be denied its right to recover the amount merely because the petitioner had subsequently claimed to have been the victim of a digital arrest scam.
The court also upheld the bank’s move to seek recovery through the revenue authorities.
It found no illegality or impropriety in the initiation of RRC proceedings, noting that the petitioner had been given sufficient opportunity to appear before the revenue authority before further orders were passed.
“Though, this court has all the sympathy with the petitioner as she is allegedly a victim of digital arrest scam,” Justice Bhatt observed, the bank’s right to recover the money could not be defeated on that ground.
The court also held that recovery of the amount by the revenue authority could not be termed illegal or arbitrary.
