New RBI directive protects victims of online fraud

Bank customers who find themselves at the receiving end of online fraud will only be liable to the extent of Rs 10,000 – the rest of the amount has to come from the bank. The new code says that for any unauthorized Internet banking transactions, the customer’s liability is limited, irrespective of the funds moved out of the account. An unauthorized transaction is one that does not have the express and implied approval of the account holder.

Where the customer has divulged the password or colluded directly or indirectly, the customer cannot disown the debit and is responsible for the transaction. Where he has neither contributed nor caused the debit or where he has notified or informed the bank about an unauthorized debit, the customer’s liability is limited to a maximum of Rs 10,000.

The usual norm puts the onus on customers to prove their innocence before restitution is made by the concerned bank.

Further, the code says that customers will not be liable for any loss due to unauthorized fund transfers that happen before they receive the password for Internet banking transactions. If the customer says that the unauthorized transfer of funds has been on account of a security breach by the bank and this is established, there will be no loss of money. The onus will be on the bank to establish that customers have compromised the secrecy of their password.

Salt in red chilli powder is adulteration too

Adulteration of food even with non-injurious substance would amount to an offence in law as it lowered the purity of the article, the Supreme Court declared as it sentenced a man to jail for three months for mixing salt in red chilli powder.

A bench of Justice BS Chauhan and Justice AK Sikri declined to show any ‘benevolence’ to Delhibased grocer Mithlesh Kumar, noting that the Delhi high court had already shown leniency to him by reducing the sentence from one year to three months’ rigorous imprisonment.

In his plea, 52-year-old Mithlesh contended that only salt was found as adulterant and that such adulteration was common in such cases as he was a petty shopkeeper who kept things in the open, due to which it would be possible for salt spilling into the container of red chilli powder.

The apex court did not agree. Recalling the provisions of the Prevention of Food Adulteration Act, the court said, “It is clear that an article of food may be adulterated once it does not meet the specifications and exceeds the limit prescribed under the law.

The presence of salt, that is sodium chloride, by 2.5 per cent weight as well as presence of total ash exceeding the prescribed limit is sufficient to hold that the sample drawn was adulterated, even if one was to proceed on the basis that mere addition of common salt to the chilli powder did not render it injurious to health.”

Officials of Food Safety Authority had raided Kumar’s shop in March 1993 and found his stock of chilli powder adulterated with salt and ash.