Issuance of Duplicate SIM: Bharti Airtel Asked To Pay Rs2.87 Lakh Fraudulently Withdrawn from Bank Account of an Army Man
Moneylife Digital Team 18 June 2024
Highlighting the failure of Bharti Airtel Ltd (Airtel) to match and verify the existing documents of the customer with those submitted by a fraudster to obtain a duplicate SIM, the national consumer disputes redressal commission (NCDRC) directed the telecom company to pay Rs2.87 lakh fraudulently withdrawn from the customer's bank account with an interest of 4% and Rs1.15 lakh as compensation and litigation cost. 
In an order earlier this month, the NCDRC bench of Dr Inder Jit Singh (presiding member) says, "The services provided by Airtel failed to meet the reasonable standards expected, particularly given the serious implications of issuing a duplicate SIM. Accordingly, Airtel is liable for the deficiency in service, and the complainant is entitled to relief for the financial loss incurred due to Airtel's failure to perform due diligence in verifying the identity of the requester for the duplicate SIM. We do not find merit in the complaint against State Bank of India (SBI)."
While setting aside an order passed by the Uttarakhand state consumer disputes redressal commission, and upholding the order passed by the Almora district consumer disputes redressal forum, the bench observed that a prudent service provider should have matched the existing documents of the complainant with those submitted for the duplicate SIM request. 
"The failure to ensure this verification led to the issuance of the duplicate SIM, which enabled subsequent fraudulent activities. As a result of this negligence, the complainant suffered a financial loss of Rs2,87,630 withdrawn from his bank account via online services linked to the mobile number. The complainant promptly reported the fraud and attempted to rectify the situation through his department. However, Airtel's response was inadequate. Airtel's negligence in verifying the identity of the individual requesting the duplicate SIM constitutes a deficiency in service. This negligence directly resulted in the financial loss suffered by the complainant," it added.
Shyam Kumar from the 32nd Sikh regiment is a customer of Airtel. In May 2017, while posted in the Gurez sector in Jammu & Kashmir (J&K) with the 13th Sikh regiment of the Indian Army, he experienced connectivity issues due to the absence of a mobile tower at his posting location. 
On 18 May 2017, an unknown person fraudulently obtained a duplicate SIM card for Mr Kumar's mobile number. After receiving the duplicate SIM, between 21 May 2017 and 27 May 2017, the fraudster withdrew Rs2,87,630 from Mr Kumar's bank account via online services such as Paytm, Airtel Money, Snapdeal, and M Paisa. 
Mr Kumar continued to use the original SIM at his posting location and still has the connection. He applied to Airtel seeking a refund of the withdrawn amount, attributing the loss to the telecom company's issuance of the duplicate SIM based on a new address at village Silt, Anchal Govindpur, in Navada district of Bihar, without his consent, which led to the fraudulent withdrawals. 
When Airtel did not refund the amount, Mr Kumar filed a complaint before the Almora district forum.
In its order on 2 June 2018, the district forum allowed the complaint and directed Airtel to pay Mr Kumar Rs2.87 lakh with 4% interest, Rs1 lakh as compensation, and Rs15,000 as litigation cost.
Aggrieved by the district forum order, Airtel filed an appeal before the state commission. In an order on 11 January 2019, the state commission allowed the appeal filed by Airtel. It dismissed Mr Kumar's complaint, saying it was not maintainable before the district forum due to lack of territorial jurisdiction.
Mr Kumar then filed a revision petition before NCDRC. He contended that the state commission adopted an overly technical stance in its order, overlooking several critical points. As a national telecom provider, Airtel has offices nationwide, making it irrelevant where the SIM card was initially obtained. He says the complaint could logically be filed anywhere the service is provided. 
He says, "I was the victim of fraud due to the issuance of a duplicate SIM card by Airtel, leading to subsequent fraudulent activities. This serious issue should have been considered substantively rather than technically. The state commission erroneously dismissed the appeal on the grounds that no transaction occurred in Almora and thus lacked territorial jurisdiction. However, I am posted in Almora due to my service and have a legitimate right to file the complaint there." 
Further, he stated that a duplicate SIM card was issued and that some unknown person misused the SIM card while he was serving in the 13th Sikh regiment of the Indian Army. "Therefore, the question of transaction does not arise as no transaction was conducted by me. The state commission completely ignored the fact that Army personnel are mostly on duty and hence it is nearly impossible for them to go and pursue a complaint where the SIM card was initially purchased. It is pertinent to mention that mobile SIM cards can be used throughout the country with no extra cost, thus negating the argument that the SIM card is restricted to the initial point of sale."
The counsel for Airtel stated that the state commission correctly determined that the district forum lacked the territorial jurisdiction to entertain the complaint. He says, "Mr Kumar incorrectly asserted that his posting in Almora and possession of the swapped SIM card granted territorial jurisdiction to the Almora district forum under Section 11(2)(c) of the Consumer Protection Act. However, he failed to provide any evidence that the cause of action arose in Almora. The original SIM was issued at Muzaffarpur in Bihar. The SIM was swapped in Nawada in Bihar and Mr Kumar's bank account, from which funds were allegedly siphoned, is also located at Muzaffarpur in Bihar. Thus, no part of the cause of action occurred in Almora."
The NCDRC bench carefully examined the orders of the state commission, the district forum, other relevant records, and the rival contentions of the parties involved. Talking about the territorial jurisdiction issue, the bench of Dr Singh says the district forum has the territorial jurisdiction in this case and has rightly considered the complaint. "The state commission went wrong in allowing the appeal filed by the Airtel on the grounds of lack of territorial jurisdiction. Hence, the order of state commission cannot be sustained."
"The district forum's decision to entertain the complaint within its jurisdiction aligns with the principles of substantial justice. The broad interpretation of jurisdiction under Section 11(2) supports Mr Kumar's ability to seek redress in a forum that minimises hardship and ensures that justice is both accessible and practical for him, given the circumstances and the nationwide operations of the telecom company," the bench says.
Further, regarding the fraudulent withdrawal and duplicate SIM issue, NCDRC observed that the district forum's investigation revealed significant discrepancies in the documentation used to issue the duplicate SIM. "Mr Kumar's original documents, including photographs and identification, were on file with the mobile company. However, these were not adequately compared with the documents presented for the duplicate SIM issuance, which featured different photographs and lacked the necessary verification."
"The district forum noted a clear discrepancy between the original documents and those provided for the duplicate SIM issuance. Airtel failed to perform due diligence in verifying the identity of the individual requesting the duplicate SIM. This lack of verification directly facilitated the fraudulent issuance. We are of the considered view that a reasonable standard of care was not maintained by Airtel," the bench says.
Setting aside the order passed by the state commission and upholding the district forum's order, NCDRC directed Airtel to pay Rs2.87 lakh with 4% interest and Rs1.15 lakh compensation and litigation cost to Mr Kumar.
(Revision Petition No573 of 2019  Date: 5 June 2024) 
Kamal Garg
4 weeks ago
The penalties imposed should be more severe so that these companies become more vigilant and compliant to the rulebook.
4 weeks ago
Electricity Bill Scam: 392 Mobiles Blocked, DoT Orders Re-verification of 31,740 Mobile Connections Linked with Fraud
Moneylife Digital Team 18 June 2024
Coming down heavily on fraudsters who used the 'electricity bill not paid' excuse to threaten disconnection and extort money from gullible people, the department of telecom (DoT) has directed telecom service providers (TSPs) to block...
Policyholders Can Cancel Insurance Policy at Any Time by Informing Insurer and Get a Refund of Balance Policy Period: IRDAI
Moneylife Digital Team 14 June 2024
The insurance regulatory and development authority of India (IRDAI) has announced several changes in insurance policies, including allowing policyholders to cancel the policy and get a refund for the remaining period and mandatorily...
Bombay HC Quashes Banking Ombudsman Order, Asks Bank of Baroda To Refund Rs76.9 Lakh Debited Fraudulently with 6% Interest
Moneylife Digital Team 14 June 2024
Highlighting the lackadaisical attitude displayed by the banking ombudsman and Bank of Baroda (BoB) while handling a cyber fraud case of the bank customer, the Bombay High Court (HC) directed BoB to refund Rs76.9 lakh fraudulently...
Fraud Alert: Mobile Apps Are Watching, Recording you!
Yogesh Sapkale, 14 June 2024
The antivirus app installed on your mobile device is expected to protect you, right? But what if the same app is also handing over your browser history to a major marketing company? In January 2020, PC magazine found out that user...
Free Helpline
Legal Credit