In Brief
DAV Public School's bank accounts were fraudulently linked to its Principal's personal net banking account without authorization, leading to unauthorized transfers of Rs. 30 lakh. The bank's breach enabled cybercriminals to siphon Rs. 25 lakh initially, with a further Rs. 5 lakh siphoned after the school delayed lodging a formal complaint. The Supreme Court held the bank liable for gross deficiency in service but limited compensation to Rs. 25 lakh (the loss detected on day 1) as the subsequent loss was partly attributable to the school's delayed reporting. No complicity was found on the Principal's part.
The lawyer headnote and full judgment text are available to registered users.