New Delhi: The Delhi High Court has agreed to examine a public interest litigation (PIL) seeking framing of comprehensive guidelines to curb the growing menace of frauds perpetrated through the Unified Payments Interface (UPI).
Issuing notice, a bench of the Chief Justice D.K. Upadhyaya and Justice Tejas Karia sought responses from the Union government, the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) on the plea filed by retired Central government employee Pankaj Nigam.
The petition, filed under Article 226 of the Constitution through advocate Nishchaya Nigam, seeks directions to authorities to frame effective safeguards against UPI-based frauds, contending that unchecked digital payment scams pose a threat not only to citizens’ finances but also to their fundamental rights under Article 21.
In the absence of an effective mechanism to prevent, report, and recover from online financial scams, victims are left “running from pillar to post”, the plea said.
The petition stated that members of the public are increasingly being “defrauded by unknown persons through the UPI platform”, adding that the threat is “not only restricted to their hard-earned money but also to their life and liberty”.
According to the petition, the petitioner himself was duped of Rs 1,24,616 on February 15, 2024, while searching for rental accommodation through property aggregation websites.
Despite lodging a complaint on the National Cyber Crime Portal and informing the banks concerned, no recovery has been made so far, and the identity of the alleged fraudster remains undisclosed.
Referring to NPCI’s UPI Dispute Redressal Mechanism, the petition said it “merely categorises the complaints under predefined sub-categories and does not provide real-time access to details such as the recipient’s bank account information or other specifics related to the disputed transaction”.
It added that “there is no verification or acknowledgement issued to the complainant, preventing them from tracking the status of their complaint or using it as evidence”.
The plea contended that victims presently have to approach multiple authorities — banks, payment service providers, telecom operators and cyber police — resulting in delays that defeat timely recovery efforts.
“There exists no one-point complaints mechanism to report such frauds,” the petition said, adding that the fragmented system forces victims to knock on multiple doors and discourages reporting of cyber crimes within the crucial response window.
The PIL seeks a direction to make it mandatory for only fully KYC-compliant bank accounts to participate in UPI transactions, arguing that non-compliant accounts enable fraudsters to operate anonymously.
It further prayed for the creation of a dedicated integrated platform linking the National Cyber Crime Helpline Portal with UPI applications, banks, payment service providers and telecom operators to ensure simplified reporting and prompt recovery mechanisms.
The plea also sought directions to authorities to preserve transaction-related details, including account information, metadata, IP logs and chain-of-custody proof of sender and recipient, to facilitate faster investigation and prosecution.
Additionally, the petitioner has urged the Delhi High Court to include UPI frauds involving amounts below Rs 10 lakh within the e-Zero FIR initiative for automatic registration of cases and to frame a specialised Standard Operating Procedure (SOP) for investigation of multi-jurisdictional cyber frauds.
Relying on official data, the petition stated that digital fraud in India surged fivefold to Rs 14.57 billion in the financial year ending March 2024, while domestic UPI payment fraud increased from Rs 111 crore in FY 2020-21 to Rs 573 crore in FY 2022-23.
The plea contended that fraudsters have adopted multiple techniques, including “Digital Arrest, use of Artificial Intelligence (AI), spamming multiple collect requests, fake UPI-QR Codes, schemes promising high return on investment, etc.,” to dupe innocent users.
(IANS)
