MCB Bank Ltd Vs Rashid Ullah Khan and 03 others

PESHAWAR HIGH COURT, PESHAWAR

(JUDICIAL DEPARTMENT)

WP No. 5048 -P/2022

MCB Bank Limited .

................... ........ Petitioner .

V/s

Rashid Ullah Khan and 03 others.

......................Respondent s.

For the Petitioner : M/s Minhaj Ahmad Khan & Zohair Ahmad Khan, Advocates.

For the Respondents : M/s Rahat Ali Nahaqi AAG (F), Hamza Jehangir Advocate along with Rashidullah Khan respondent in person.

Date of hearing: 01.04.2026

JUDGMENT

SYED ARSHAD ALI , J: - This consolidat ed judgment shall dispose of the instant writ petition as well as the connected writ petitions, details of which have been provided in Annexure ‘A’ to this judgment, as essentially an identical issue is involved in all these petitions.

W.P No.5048 -P/2022

2.The Respondent No. 1, Rashidullah Khan, an account holder and Automated Teller Machine ( “ATM ”) cardholder of the Petitioner Bank, filed Complaint No. 2020 -875 before the Banking Mohtashib Pakistan ( “the Mohtasib” ) . He alleges that on Saturday, February 8 , 2020, he attempted to withdraw cash from a Meezan Bank Ltd. (MBL) ATM in University Town, Peshawar. The machine displayed the message: “ You cannot use this ATM. ”

On his second attempt, the card was allegedly captured by the machine. While proceeding to his own branch, he received three SMS alerts for withdrawals totaling PKR 48,000. He lodged a complaint with the Petitioner Bank the same day, but no action was taken. On February 10 or 11, 2020, he visited the MBL branch and recovered his card.

3.The Pet itioner Bank (MCB) responded that no transactions were observed at the Meezan Bank (MBL) ATM. Instead, the disputed withdrawals occurred at Askari Bank and National Bank ATMs in Peshawar using the original chip -based card. Similarly, MBL stated that no keypad jamming was reported at its terminal on February 8, 2020. Closed Circuit Television ( “CCTV ”) recordings could not be retrieved as the incident occurred more than 60 days prior. Furthermore, no transaction was recorded against the Complainant’s card at the MBL terminal, resulting in no Electronic Journal entry. MCB subsequently coordinated with Askari Bank and National Bank, who provided footage snapshots. These images depicted a bearded individual (not the Complainant) and another person wearing a helmet performing the unauthorized transactions.

4.The Banking Mohtasib dismissed the complaint on 17.01. 2022, exercising powers under Section 82D of the Banking Companies Ordinance, 1962, and Section 9 of the Federal Ombudsman Institutional Reform Act, 2013. Aggrieved by this decision, the Respondent No. 1 filed a representation before the President of the Islamic Republic of Pakistan ( “the President” ) . The President subsequently set aside

the Mohtasib’s order. He directed the Petitioner Bank to indemnify the Complainant for the loss and pay PKR 48,000 within 30 days. Consequently, the Petitioner Bank has filed the instant constitutional petition to challenge the President ’s decision. W.P No.167 -P/2024

5.The brief facts of the case are that Respondent No. 1, Malik Saeed Khan, maintained an account with United Bank Limited (UBL), Kohat Road Branch, Peshawar. In October 2021, he received spoofed calls from fraudsters. He voluntarily shared his confidential credentials and OTPs, enabling unauthorized transfers of PKR 700,000 to other banks. Consequently, he filed Complaint No. 2021 - 13070 before the Banking Mohtasib.

6.The Petitioner Bank’s investigation concluded that the fraud resulted from the customer compromising his own credentials without any bank fault. De spite this, the Mohtasib allowed the complaint on 11.05. 2023. The Mohtasib directed the Petitioner Bank to credit the Respondent’s account with the remaining PKR 500,000 plus bank charges. The President subsequently affirmed this order and declined the Petitioner Bank’s representation on 16.11.2023. Aggrieved by these decisions, the Petitioner Bank has filed this constitutional petition. W.P No.168 -P/2024

7.The Petitioner contends that Respondent No. 1, Dr. Khadija Shams, maintained an account at United Bank Limited (UBL), City Branch, Peshawar. On August 3, 2021, she received a call from a fraudster posing as a bank representative. Without

verification, she disclosed her confidential banking credentials. Subsequently, six unauthorized transactions totaling PKR 812,220 were executed through UBL’s digital banking application. She filed Complaint No. 2021 -11988 before the Banking Mohtasib. On 06.03. 2023, the Mohtasib allowed the complaint and directed the Petitioner Bank to credit her account with the full am ount and associated charges. The President dismissed the Petitioner’s representation on 08.11. 2023. Consequently, the Petitioner has filed this constitutional petition. W.P No.729 -P/2024

8.The facts of the case are that Respondent No. 1, Rais Ahmad, an account holder at Allied Bank Limited, fell victim to fraud on July 3, 2021. An unauthorized withdrawal of PKR 350,000 occurred after he allegedly shared confidential credentials and OTPs with a caller impersonating a bank official. Consequently, he filed C omplaint No. 2021 -7846 with the Banking Mohtasib. The Petitioner Bank’s Fraud Risk Management Unit ( “FRMU” ) investigated and subsequently denied his claim. However, on 27.03. 2023, the Mohtasib allowed the complaint. The Mohtasib directed the Petitioner Bank to reimburse the sum of PKR 349,760. This decision was later affirmed by the President of Pakistan, who rejected the Petitioner Bank’s representation on 16.11.2023. Aggrieved by these concurrent findings, the Petitioner Bank has filed the instant constit utional petition.

W.P No.754 -P/2024

9.United Bank Limited (UBL) challenges the orders of the Banking Mohtasib dated 06.03. 2023, and the President of Pakistan dated 03.11. 2023. These orders directed the Petitioner Bank to reimburse PKR 540,000 to the account holder, Rajwali Khan (Respondent No. 1), following fraudulent online transactions. The Petitioner Bank contends that Respondent No. 1 voluntarily disclosed confidential credentials, including his CNIC, ATM , Personal Identification Number ( “PIN ”) , and One Time Password ( “OTP ”) , to fraudsters. Consequently, the Bank argues the Respondent is solely responsible for the resulting loss. Furthermore, the Petitioner asserts that the Mohtasib exceeded its jurisdiction under Section 82A of the Banking Companies Ordinance, 1962. The Bank maintains that the impugned orders are coram non judice and conflict with the Electronic Transactions Ordinance, 2002, and the Payment Systems and Electronic Fund Transfers Act, 2007. The Petitioner seeks to set aside the impugne d orders and dismiss the original complaint.

W.P No.997 -P/2024

10.The Petitioner Bank contends that Respondent No. 1, Zar Gulab, an account holder at Muslim Commercial Bank Limited, Khyber Bazaar Branch, Peshawar, filed Complaint No. 2021 -6961 with the Banking Mohtasib. He alleged that fraudulent transactions totaling PKR 100,000 occurred in March 2021. These transactions were purportedly induced by deceptive calls and SMS messages from

individuals impersonating State Bank of Pakistan officials. In respon se, the Petitioner Bank submitted its internal investigation report, documentary evidence, and voice recordings to contest the claim. Nevertheless, on 26.12. 2022, the Mohtasib allowed the complaint and directed the Bank to reimburse PKR 99,976. The Petitioner subsequently challenged this decision before the President of Pakistan, who dismissed the representation on 21.11.2023. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition. W.P No.1348 -P/2024

11.It is alleged i n the petition that on 15.03.2021, four electronic transactions totaling Rs.443,540/ - were conducted from the account of respondent No.1, Muhammad Ashfaq, at Habib Bank Limited, Agriculture University Branch, Peshawar, including utility bill payments and a transfer to Muslim Commercial Bank. Respondent No.1 denied authorizing these transactions but admitted disclosing his confidential details (CNIC, DOB, ATM PIN, OTP) to fraudsters posing as the petitioner Bank’s helpline. The petitioner’s internal investig ation concluded that the transactions were executed using respondent’s own login credentials and OTPs, thereby holding him responsible. His complaint before the Mohtasib was dismissed twice on 21.09.2021 and 01.06.2022 on the grounds of his own negligence. However, upon representations under Section 14 of the Federal Ombudsman Institutional Reform Act, 2013, the President set aside the Mohtashib’s orders and ultimately allowed

the complaint on 20.09.2023. The petitioner Bank has now filed the instant consti tutional petition. W.P No.3008 -P/2024

12.Respondent No. 1, Ajab Khan, maintains an account with Allied Bank Limited, Jehangira Branch. He filed Complaint No. 2021 -14347 with the Banking Mohtasib, alleging unauthorized withdrawals totaling PKR 598,426 on October 18 and 19, 2021. The Petitioner Bank’s FRMU investigated the claim and categorized it as “customer liability. ” The Bank noted that all OTPs and transaction alerts were delivered to the Respondent ’s registered mobile number, ensuring system validati on. Despite these findings, the Mohtasib allowed the complaint on 30.11. 2023. The Mohtasib directed the Petitioner Bank to reimburse the full amount to Respondent No.

1.The President of Pakistan subsequently upheld this decision and rejected the Petitioner Bank’s representation on 05.03. 2024. Aggrieved by these concurrent findings, the Petitioner Bank has filed the instant constitutional petition.

W.P No.3607 -P/2024

13.Through this petition, Allied Bank Limited challenges the orders of the Banking Mohtas ib dated 13.12. 2023, and the President of Pakistan dated 04.03. 2024. These orders stem from a complaint filed by Respondent No. 1, Sofia Noreen, concerning fraudulent withdrawals totaling PKR 315,777 from her account at the Charsadda Road Branch, Peshawar. The fraud occurred after Respondent No. 1 allegedly disclosed her banking credentials to an impersonator. The Petitioner’s FRMU investigated

the matter and concluded that the loss resulted from the Respondent’s own negligence. Despite this, the Mohtasib d irected the Bank to reimburse the full amount. The Petitioner contends that the impugned orders are illegal, arbitrary, and violate constitutional guarantees and the principles of natural justice.

W.P No.5259 -P/2024

14.Respondent No. 1, Pervez ud Din, maintains an account with Muslim Commercial Bank Limited, Saleh Khana Branch. He filed Complaint No. 2021 - 8841 before the Banking Mohtasib, alleging fraudulent withdrawals of PKR 140,490. The incident followed the capture of his ATM card at a Habib Bank Limi ted ATM in Pabbi on July 18, 2021. The Petitioner Bank conducted an internal investigation and submitted supporting documentary evidence. However, the Mohtasib accepted the complaint and directed the Bank to credit PKR 115,200 to the Respondent’s account on July 5, 2023. The Petitioner’s subsequent review petition was dismissed on 13.09. 2023. The Bank then filed a representation before the President of Pakistan, which was rejected on 19.08. 2024. Aggrieved by these decisions, the Petitioner Bank has filed th e instant constitutional petition.

W.P No.5261 -P/2024

15.Respondent No. 1, Muhammad Ishaq, filed Complaint No. 2022 -3091 -1867 with the Banking Mohtasib. He alleged that on February 10, 2022, his account with the Petitioner Bank was debited by PKR 327,000 through six unauthorized digital and e -

commerce transactions. The Petitioner Bank denied these allegations and submitted its internal investigation report along with supporting documentation. Nevertheless, on 28.02. 2024, the Mohtasib allowed the complaint and directed the Bank to credit PKR 227,000 to the Respondent’s account. The Petitioner Bank challenged this decision before the President of Pakistan. However, the representation was dismissed on 12.08. 2024. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition. W.P No.220 -P/2025

16.Respondent No. 1, Ms. Alvina Babar, maintains an account at the Muslim Commercial Bank Limited, RMI Hayatabad Branch. She filed Complaint No. 2021 -9758 -3695 with the Banking Mohtasib, a lleging six fraudulent Interbank Fund Transfers (IBFT) totaling PKR 495,000. These transactions occurred after she disclosed her account credentials to a caller impersonating a bank official. The Petitioner Bank denied the request for a refund. Upon notice from the Mohtasib, the Bank submitted its investigation report and supporting evidence. The Mohtasib partially accepted the complaint on 07.06. 2023, directing the Bank to credit PKR 100,300, rep resenting the recovered portion, and any related service char ges to the Respondent ’s account. Respondent No. 1 challenged this partial relief before the President of Pakistan. On 10.12. 2024, the President allowed the representation and directed the Petitioner Bank to reimburse the entire disputed amount of PKR

495,000. Aggrieved by this decision, the Petitioner Bank has filed the instant constitutional petition. W.P No.670 -P/2025

17.Respondent No. 1, Sahibzada Taimoor Hassan, maintained an account at the Allied Bank Limited, Pawaka, Jamrud Road Branch, Peshawar. He filed Complaint No. 2021 -13370 with the Banking Mohtasib, alleging that on November 9, 2021, a sum of PKR 381,370 was fraudulently debited from his account through multiple transactions. The Petitioner Bank denied the allegations. It contended that its FRMU found the customer liable because all OTPs and transaction alerts were successfully delivered to his registered mobile number. The Bank maintained that no system lapse occurred on its part. Despite these contentions, the Mohtasib allowed the complaint o n 29.02. 2024. The Bank was directed to credit PKR 381,370.59 to the Respondent ’s account. The Petitioner Bank filed a representation against this order, which the President of Pakistan dismissed on 12.08. 2024. Aggrieved by these decisions, the Petitioner Bank has filed the instant constitutional petition .

W.P No.671 -P/2025

18.The Petitioner, Allied Bank Limited, impugns the order dated 12.03. 2024, passed by the Mohtasib, which directed the reimbursement of PKR 409,382.02 to Respondent No. 1, Tahir Khan. The Bank also challenges the order dated 10.12. 2024, issued by the President’s Secretariat (DG Legal), which rejected its representation under Section 14 of the Federal Ombudsman Institutional Reforms Act,

2013. The Petitioner contends that its FRMU identified the loss as the customer ’s liability. The Bank asserts that all OTPs and transaction alerts were successfully delivered to the Respondent ’s registered mobile number. It further alleges that the Respondent compromised his security by disclosing sensiti ve account credentials to an unauthorized caller. Legal challenges are raised regarding the Mohtasib’s jurisdiction to adjudicate complex factual disputes. The Petitioner maintains that the Payment Systems and Electronic Fund Transfers Act, 2007, governs online fraud disputes and overrides the Mohtasib ’s general powers. Consequently, the Petitioner seeks to set aside the impugned orders as being coram non judice , unconstitutional, and in violation of Articles 4, 10 -A, and 18 of the Constitution.

W.P No.672 -P/2025

19.Respondent No. 1, Wajid Ali, maintains an account at Allied Bank Limited. On July 28, 2022, he lodged a complaint with the Bank regarding fraudulent online withdrawals totaling PKR 1,668,700. The Bank’s FRMU investigated the claim. It concluded that the liability rested with the customer, as all OTPs and transaction alerts were successfully delivered to his registered mobile number. The Bank further contended that the Respondent compromised his security by sharing sensitive credentials with unkn own callers. Dissatisfied with this outcome, Respondent No. 1 filed Complaint No. 2023 -16229 -1886 with the Banking Mohtasib. On 28.02. 2024, the Mohtasib

allowed the complaint and directed the Bank to reimburse the disputed amount. The Petitioner Bank challenged this decision through a representation to the President of Pakistan. However, the representation was rejected on 12.08. 2024. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition. W.P No.715 -B/2025

20.The Peti tioner, Allied Bank Limited, challenges the order dated 18.07. 2025, passed by the President. This order rejected the Bank ’s representation under Section 14 of the Federal Ombudsman Institutional Reforms Act, 2013, and upheld the Mohtasib’s decision dated 30.12. 2024. The Mohtasib had directed the Bank to credit PKR 420,339.61, plus related charges, to the account of Respondent No. 1. The dispute stems from unauthorized withdrawals from the Respondent ’s account. These transactions occurred after the Responden t allegedly disclosed his banking credentials to a fraudster. The Petitioner’s FRMU investigated the matter and determined that the liability rested solely with the customer. The Bank asserts that all One -Time Passwords (OTPs) and transaction alerts were successfully delivered to the Respondent ’s registered mobile number, confirming no systemic lapse on the Bank’s part. Despite these findings, the Mohtasib allowed the complaint and ordered full reimbursement. The President subsequently affirmed this decisio n. The Petitioner contends that both impugned orders are unlawful, arbitrary, and issued without jurisdiction. The Bank further argues that these decisions

contravene settled constitutional principles. Consequently, the Petitioner seeks the intervention of this Court through its writ jurisdiction to set aside the impugned orders.

W.P No.3583 -P/2025

21.Respondent No. 1, Habib Ali, maintained an account and held a debit card at the Petitioner Bank ’s Ibrahimzai Branch in Hangu. On November 23, 2020, he recei ved a call from an individual impersonating a bank official. During this call, the Respondent disclosed his personal and account credentials. Following this disclosure, the Respondent ’s account was unauthorizedly debited in the amount of PKR 249,000. He subsequently filed a complaint with the Banking Mohtasib. On 12.03. 2024, the Mohtasib dismissed the complaint. Aggrieved by the dismissal, Respondent No. 1 filed a representation before the President of Pakistan. On 14.02. 2025, the President allowed the repr esentation and set aside the Mohtasib’s order. The Petitioner Bank was directed to reimburse the loss suffered by the Respondent. The Bank now impugns this order through the instant constitutional petition.

W.P No.3866 -P/2025

22.The Petitioner states that Respondent No. 1, Fazal Badshah, maintained an account at its branch. The Respondent suffered unauthorized withdrawals totaling PKR 1,943,200 after allegedly disclosing his banking credentials to a fraudster. The Bank’s FRMU investigated the incident and determined that the liability rested with the customer. Notwithstanding this finding, Respondent No. 1 filed Complaint No.

2022 -8273 -12530 with the Banking Mohtasib. On 21.11.2024, the Mohtasib allowed the complaint and directed the Petitioner Bank to reimburse the disputed amount. The Petitioner Bank challenged this decision by filing a representation before the President of Pakistan. However, the representation was rejected on 25.11. 2024. Aggrieved by these decisions, the Petitioner Bank has filed the in stant constitutional petition to seek legal redress. W.P No.3867 -P/2025

23.Respondent No. 1, Muhammad Nawaz, maintained an account at the Petitioner Bank’s Bhakkar Road Branch in Jhang. He received a fraudulent call and inadvertently shared his banking credentials. Consequently, unauthorized withdrawals totaling PKR 996,000 occurred between April 18, 2022, and April 27, 2022. The Respondent lodged a complaint with the Petitioner Bank. The Bank’s FRMU conducted an investigation and determined that the Resp ondent was experienced in internet banking. The i nvestigation confirmed that all OTPs and transaction alerts were successfully delivered to his registered mobile number. The Bank maintained that no systemic lapse occurred, as every login and transaction was validated through passwords and financial PINs delivered to the Respondent. Furthermore, the Respondent admitted to sharing his sensitive details with a fraudster. Despite these findings, Respondent No. 1 approached the Mohtasib via Complaint No. 2022 -16137-12707. On 25.11. 2024, the Mohtasib allowed the complaint and directed the Petitioner Bank to credit PKR 996,000 to the

Respondent’s account. The Petitioner Bank challenged this order by filing a representation before the President of Pakistan. On 15.04. 2025, the President dismissed the representation. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.3868 -P/2025

24.Respondent No. 1, Mrs. Saeed Arooj, maintained an account at the Petitioner Bank’s Khyb er Super Market Branch in Peshawar. She received a fraudulent call and inadvertently disclosed her banking credentials. On July 24, 2022, unauthorized withdrawals totaling PKR 1,834,909 were made from her account. While PKR 49,800 was subsequently recovered and credited back on August 2, 2022, a balance of PKR 1,785,109 remained disputed. The Respondent lodged a complaint with the Petitioner Bank. The Bank’s FRMU investigated the matter and determined that the Respondent was proficient in internet banking. The investigation confirmed that all OTPs and transaction alerts were successfully delivered to her registered mobile number. The Bank maintained that no internal lapse occurred, as every login and transaction was system -validated through credentials and financial PINs delivered directly to the Respondent. Furthermore, the Respondent admitted to sharing her sensitive details with a fraudster. Despite these findings, the Mohtasib allowed the Respondent ’s complaint (No. 2022 - 13951-12315) on 19.11.2024. The Mo htasib directed the Petitioner Bank to reimburse the remaining PKR 1,785,109. The Petitioner Bank challenged this

decision through a representation to the President of Pakistan. On 17.02. 2025, the President dismissed the representation. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition to seek judicial review.

W.P No.3869 -P/2025

25.Respondent No. 1, Muhammad Firdous, maintained two accounts at the Petitioner Bank’s Kazi Ahed S. Benazir Abad Branch in Nawabshah. F ollowing a fraudulent call, the Respondent inadvertently disclosed his sensitive banking credentials. Consequently, unauthorized withdrawals totaling PKR 1,218,510 were executed from his accounts on June 11, 2022. The Respondent lodged a formal complaint with the Petitioner Bank. An investigation by the Bank’s FRMU determined that the Respondent was well familiar internet banking. The investigation confirmed that all OTPs and transaction alerts were successfully transmitted to his registered mobile number. The Bank asserted that no systemic failure occurred, as each login and transaction was validated through secure credentials and financial PINs delivered to the Respondent. Crucially, the Respondent admitted to sharing his details with a fraudster. Notwithstanding these findings, the Mohtasib allowed the Respondent ’s complaint (No. 2022 -9215 -12642) on 26.11. 2024. The Mohtasib directed the Petitioner Bank to reimburse the full amount to the Respondent. The Petitioner Bank challenged this decision by filing a representation before the President. On 17.04. 2025, the President dismissed the representation and

upheld the Mohtasib’s order. Aggrieved by these decisions, the Petitioner Bank has filed the instant constitutional petition.

W.P No.5301 -P/2025

26.Respondent No. 1, Asif Ali, maintained an account at Muslim Commercial Bank’s Charsadda Branch. He filed Complaint No. 2022 -16302 before the Banking Mohtasib alleging unauthorized internet banking withdrawals totaling PKR 995,000. These funds consisted of PKR 50 0,000 transferred to a customer of the Petitioner Bank and PKR 495,000 transferred to various EasyPaisa accounts. The Petitioner Bank contested the complaint and submitted its internal investigation report along with supporting evidence. The Bank maintained that the transactions were duly authenticated and that it bore no liability for the loss. Notwithstanding these submissions, the Mohtasib allowed the complaint on 12.02. 2024. The Mohtasib directed the Petitioner Bank to reimburse the entire amount to Res pondent No. 1. The Petitioner Bank challenged this decision through a representation before the President. On 18.07. 2025, the President dismissed the representation and upheld the Mohtasib’s order. Aggrieved by these findings, the Petitioner Bank has filed the instant constitutional petition. W.P No.5302 -P/2025

27.Respondent No. 1, Inayatur Rehman, maintained two accounts at the Petitioner Bank’s Sonehri Masjid Road Branch in Peshawar Cantt. On December 17, 2022, he received a call from a number mimicking the Bank’s helpline. The caller, posing as a

Bank official, solicited sensitive account details which the Respondent disclosed. Consequently, PKR 900,000 was unauthorizedly transferred via Mobile Banking to various Telenor Microfinance Bank accounts and utilized for bill payments.

28.The Respondent filed Complaint No. 2022 - 17284 -12059 with the Mohtasib. The Petitioner Bank’s investigation revealed that the User ID for the “MCB Live Application ” was registered on the day of the incident. The transactions were executed through a self -registration process from the Respondent’s registered mobile number following successful OTP verification. The Bank asserted that no systemic lapse occurred, as every transaction was validated through passwords and financial PINs delivered to the Respondent. The Bank emphasized that its security protocols prevent any unauthorized transaction unless the user possesses all required security credentials and OTPs.

29.Despite these contentions, the Mohtasib allowed the complaint on 14.11.2024. The Mohtasib directed the Petitioner Bank to credit the remaining balance of PKR 699,995, including associated charges, to the Respondent’s account. The Petitioner Bank challenged this decision before the President. On 17.06. 2025, the President dismissed the representation. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.5303 -P/2025

30.Respondent No. 1, Aminullah, maintained an account and held an ATM card at the Petitioner Bank’s Universi ty Town Branch in Peshawar. On December 3, 2022, the Respondent received a call from an unknown individual posing as a Bank official. Although the Respondent denied sharing his account details, PKR 170,000 was subsequently debited from his account without authorization. The Respondent filed Complaint No. 2022 -16770 with the Banking Mohtasib. The Petitioner Bank reported that two transactions totaling PKR 169,900 were executed via the “MCB Live Application ” and transferred to various beneficiary accounts at Telenor Microfinance Bank. The Bank promptly notified the member bank, which confirmed that the funds had already been withdrawn via Interbank Funds Transfer (IBFT).

31.The Bank’s investigation revealed that the Respondent’s “MCB Live ” User ID was registered on November 30, 2022, through a self -registration process. The Bank asserted that the Respondent concealed material facts and that call recordings confirmed he had shared OTP with the fraudster. The Bank maintained that no systemic lapse occurred, as all transactions were validated through secure credentials and financial PINs delivered to the Respondent ’s registered mobile number.

32.Despite these findings, the Mohtasib allowed the complaint on 23.12. 2024. The Mohtasib directed the Petitioner Bank to credit PKR 169,900 to the Respondent’s account. The Petitioner Bank challenged this decision through a representation

before the President. On 18.07. 2025, the President dismissed the representation. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.5767 -P/2025

33.The Petitioner, Allied Bank Limited, challenges the Mohtasib’s order dated 26.12. 2024, and the President’s order dated 18.07. 2025. These orders directed the Bank to credit PKR 908,500 to the account of Respondent No. 1, Ms. Shakeela Begum. The Respondent suffered unauthorized withdrawals following a fraudulent call. The Bank’s FRMU investigated the incident. The investigation concluded that the loss resulted from the Respondent’s own negligence in disclosing confidential banking credentials. The Bank maintained that no systemic or procedural lapse occurred on its part. Despite these findings, the Mohtasib allowed Complaint No. 2022 -10872 and ordered the Petitioner Bank to reimburse the disputed amount. The Petitioner Bank filed a representation before the President of Pakistan, which was subsequently dismissed. Aggrieved by these decisions, the Petitioner Bank has filed the instant constitutional petition.

W.P No.5768 -P/202 5

34.The Petitioner, All ied Bank Limited, challenges the Banking Mohtasib’s order dated 23.12.2024 , and the President’s order dated 18.07. 2025. These orders directed the Petitioner to credit PKR 1,079,000 to the account of Respondent No. 1, Shakeel Ahmad, following a fraudulent withdrawal. The Petitioner

contends that the loss resulted exclusively from the Respondent ’s negligence. Specifically, the Respondent disclosed confidential banking information to a third -party fraudster. The Bank asserts that it remained in full compliance with State Bank of Pakistan regulations and all applicable security protocols. The Petitioner seeks the annulment of the impugned orders, characterizing them as coram non judice . Furthermore, the Petitioner requests that Respondent No. 1 be directed to seek remedies before the appropriate legal forum. W.P No.5963 -P/202 5

35.Respondent No. 1 maintained an account at the Peshawar Branch of Muslim Commercial Bank Limited. On October 30, 2022, he received a call from a fraudster impersonating the Bank’s helpli ne. The caller transmitted a malicious link via WhatsApp. Upon accessing the link and disclosing his credentials, the Respondent's account was debited for PKR 373,800. The Respondent filed Complaint No. 2022 -15105 before the Mohtasib. The Petitioner Bank contested the claim through its investigation report and supporting evidence. Nevertheless, the Mohtasib allowed the complaint on 30.12. 2024, and directed the Bank to credit PKR 373,800 to the Respondent ’s account. The Petitioner Bank challenged this decisi on before the President of Pakistan. On 18.07. 2025, the President dismissed the representation and upheld the Mohtasib’s findings. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.5968 -P/2025

36.Respondent No. 1, Rehmanullah, maintained an account and held an ATM card at the Petitioner Bank’s Hangu Road Branch in Kohat. On October 24, 2022, the Respondent suffered unauthorized debits totaling PKR 698,600 following a fraudulent call. Consequently, he fil ed Complaint No. 2022 -16593 before the Mohtasib. Upon receiving notice, the Petitioner Bank submitted its internal investigation report and supporting documentation. Despite this, the Mohtasib allowed the complaint on 08.01. 2025, and directed the Bank to reimburse the full amount to the Respondent. The Petitioner Bank challenged this decision before the President. On 18.07. 2025, the President dismissed the representation and upheld the Mohtasib’s order. Having no other adequate remedy, the Petitioner Bank h as filed the instant constitutional petition to challenge these findings. W.P No.6324 -P/2025

37.Respondent No. 1, Wajid Khan, maintained an account and a debit card at the Petitioner Bank’s Mattani Branch in Peshawar. Following a call from an individual impersonating a bank official, the Respondent shared his personal credentials. This disclosure resulted in fraudulent deductions totaling PKR 1,249,400 from his account. The Respondent filed Complaint No. 2022 -17370 before the Mohtasib. The Petitioner Bank contested the claim by submitting its internal investigation report and supporting documentary evidence. Notwithstanding the Bank ’s submissions, the Mohtasib allowed the complaint on 23.12. 2024, and directed the Bank to

reimburse the disputed amount. The Petitioner Bank challenged this decision before the President of Pakistan. On 18.07. 2025, the President upheld the Mohtasib’s findings and dismissed the Bank’s representation. Aggrieved by these concurrent orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.63 25-P/2025

38.The Petitioner Bank states that Respondent No. 1, an account holder at the Bank’s Mardan Branch, received a fraudulent call mimicking the official bank helpline on November 18, 2022. Although the Respondent retained possession of his ATM card and chequebook, PKR 300,500 was unlawfully transferred from his account following the call. The Respondent filed Complaint No. 2022 -17436 before the Mohtasib. The Petitioner Bank contested the matter, submitting its inte rnal investigation report and supporting evidence. On 23.12. 2024, the Mohtasib allowed the complaint and directed the Bank to reimburse the full amount. The Petitioner Bank subsequently filed a representation before the President of Pakistan. On 18.07. 2025, the President affirmed the Mohtasib ’s decision and rejected the Bank’s representation. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.6331 -P/2025

39.Respondent No. 1 maintained two accounts at the P etitioner Bank’s Parachinar branches. He lodged Complaint No. 2022 -10122 before the Mohtasib, alleging unauthorized internet banking debits

totaling PKR 1,566,200 on June 11 and 12, 2022. The Respondent asserted that these transactions occurred without his participation or the receipt of any SMS alerts. The Petitioner Bank contested the claim by submitting its internal investigation report and supporting documentation. Nevertheless, on 26.12. 2024, the Mohtasib allowed the complaint and directed the Bank to reimburse the disputed amount along with associated charges. The Petitioner Bank challenged this decision before the President of Pakistan. On 18.07. 2025, the President dismissed the representation and affirmed the Mohtasib’s order. Aggrieved by these concurrent findings, and having no other adequate remedy, the Petitioner Bank has filed the instant constitutional petition. W.P No.7364 -P/2025

40.Respondent No. 1, Muhammad Ameen, maintained an account at Allied Bank Limited’s Torah Bazaar Branch in Kohat. Following the disclosure of his banking credentials to a fraudster, unauthorized withdrawals totaling PKR 1,750,000 were debited from his account. Consequently, the Respondent filed Complaint No. 2022 -7624 before the Mohtasib. The Petitioner Bank’s FRMU denied the claim. The Bank argued that the financial loss resulted from the Respondent’s own negligence. Notwithstanding this defense, the Mohtasib allowed the complaint on 26.12. 2024, and directed the Bank to credit PKR 1,500,000 to the Respondent ’s account . The Petitioner Bank challenged this decision through a representation to the President. On 18.07. 2025, the President dismissed the representation and upheld

the Mohtasib ’s findings. Aggrieved by these orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.9755 -P/2025

41.Respondent No. 1, Muhammad Jasim, maintained an account at the Petitioner Bank’s Kohat Branch. He filed Complaint No. 2023 -08694 before the Mohtasib, alleging fraudulent transactions totaling PKR 499,000 during 2023. The Respondent claimed that an unknown caller, impersonating a bank officer, deceived him into disclosing his account credentials. These credentials were subsequently used to transfer funds unauthorizedly to a Telenor Microfinance Bank account. Upon receiving notice, the Petitioner Bank submitted its internal investigation report and supporting documentary evidence to establish its non -liability. Despite these submissions, the Mohtasib allowed the complaint on 07.03. 2025, and directed the Bank to rei mburse the disputed amount. The Petitioner Bank challenged this decision before the President. On 11.11.2025, the President dismissed the representation and upheld the Mohtasib’s findings. Aggrieved by these concurrent orders, the Petitioner Bank has filed the instant constitutional petition.

W.P No.848 -P/2026

42.Respondent No. 1, Sartaj Khan, maintained an account at the Petitioner Bank’s Mattani Branch in Peshawar. He lodged Complaint No. 2023 -03150 before the Mohtasib, alleging unauthorized debits tota ling PKR 324,250 on December 21, 2022. The Petitioner Bank contested the claim by submitting its

internal investigation report and supporting documentary evidence to negate liability. Nevertheless, on 25.03. 2025, the Mohtasib allowed the complaint and directed the Bank to reimburse the disputed amount. The Petitioner Bank challenged this decision before the President. On 22.12. 2025, the President dismissed the representation and upheld the Mohtasib’s findings. Aggrieved by these concurrent orders, the Petit ioner Bank has filed the instant constitutional petition.

Gist of factual matrix

43.All t hese petitions arise from a proliferation of digital banking and ATM frauds. In each instance, account holders were victims of unauthorized financial withdrawals. The common nexus involves the compromise of confidential banking crede ntials. These sensitive details including One -Time Passwords (OTPs), Personal Identification Numbers (PINs), CNIC numbers, and login identifiers were disclosed to fraudsters impersonating b ank officials or using spoofed helplines .

44.The case of Rashid Ullah in W.P. No. 5048 - P/2022 is factually distinct. According to the Petitioner Bank’s inquiry, funds were withdrawn from Askari Bank and National Bank ATMs in Peshawar using the Respondent’s original chip -based card. The Respondent contended that his card was captured by a Meezan Bank ATM and subsequently returned to him. However, Meezan Bank reported no incidents of keypad jamming or terminal malfunctions on the date in question. Record transpires that u pon receipt of these complaints, the

respective banks conducted internal investigations. Each bank concluded that the liability rested with the account holder and communicated these findings accordingly .

The Legal Anth rology

45.The primary legislation to supervise and regulate Payment Systems and Electronic Fund Transfers and standards for protection of consumers and to determine respective rights and liabilities of the financial institutions are regulated through the Payment Systems and El ectronic Fund Transfers Act, 2007 ( “Act of 2007 ”) . The ‘Electronic Fund Transfer’ ( “EFT” ) means any transfer of funds, other than a transaction originated by cheque, draft or similar paper instrument, which is initiated through an Electronic Terminal, telephonic instrument, point -of- sale, Terminal, stored value card Terminal, debit card, ATM, computer magnetic tape or any other electronic device so as to order, instruct or authorize a Financial Institution to debit or credit an Account . Whereas ‘Electronic Payment System’ means implementation of Payment System Electronically . The State Bank of Pakistan regulates the Payment S ystem/ Operator s of Payment S ystem through issuance of guidelines, circulars, by elaws etc . The Act of 2007 provides a comprehensive mechanism delineating the bank and consumer relationship, liability of the bank to protect the consumer from risk and fraud in the electronic payment system, to apprise the consumer of the legal implication of the 1 S. 2 (t) of the Act of 2007 2 S. 2 (v) of the Act of 2007 3 S. 3 of the Act of 2007

electronic payment system and grievance red ressal mechanism. Chapter -VII and VIII of the Act of 2007 are crucial to the determination of the consumer and the bank/financial institution relationship . Section 36 of the Act of 2007 requires the financial institution to notify any error to the consumer relating to an unauthorized EFT , an error which has occurred during the said transaction. Section 37 of the Act of 2007 makes the financial institution responsible to respond to any complaint filed by the consumer , including the crediting of a consumer’s account and concluding the investigation within ten business days after receipt of notice of the error. Similarly, section 39 of the Act of 2007 puts responsibility upon the financial institution if any case is brought against it for unauthorized transaction for which the financial institution is responsible. Thus, under section 37 of he Act of 2007 the bank must prove within ten days that OTP/PIN was entered and it identifies authorized user, if in absence of such proof, the amount should be recredited in the account of the consumer and in absence of such inquiry within the statutory period, the bank shall be responsible for recredit of the amount; besides three time damages if a suit is brought before the Court for compensation. Section 40 of the Act of 2007 delineates the liability of the consumer for any unauthorized EFT if the card/access means use was an acceptable card and authorized means the holder of the card provides a way to identify the authorized user signature, PIN/OTP, fingerprint etc. Thus, i f the consumer

voluntarily shared OTP/PIN, Password with a fraudster, the bank cannot be held liable for any unauthorized transaction , subject to the burden of proof that the bank has to discharge under section 41 of the Act of 2007. Chapter IX of the Act of 2007 provides a forum to a consumer to bring an action against the bank for unauthorized transfer before the Civil Court of competent jurisdiction as provided under section 55 of the Act of 2007. Besides, the Act of 2007 also criminalized violations aff ecting electronic commerce, cheating by use of electronic devices etc.

PSD Circulars

46.The State Bank of Pakistan has issued PSD Circular No. 03 of 2018 dated 09.05.2018 regulating EFT . Regulation -6 delineates the responsibility of an Authorized F inancial I nstitution s ( “AFI s ”) relating to the unauthorized fund transfer and similarly, the responsibility of the beneficiary of AFI s has been provided under Regulation -7. The compensation policy is delineated under Regulation 9, which envisages that originatin g/beneficiary AFI s shall be liable to its consumer for an unauthorized transaction, loss and/or damage caused by the failure of an electronic fund transfer system or equipment to complete a transaction accepted by the Terminal in accordance with the consumer instruction mentioned in section 43 of the Act of 2007. The AFI s before activating the EFT channel are required to inform the consumer in English and Urdu languages, the EFT limits on payment instruction s as well as on ADCs, the channel s as well as the contact numbers for

reporting of loss /theft of a payment etc. Under R egulation -12 all AFIs shall maintain a function al and fully equipped Custom er S ervice S upport Centre that is able to handle EFT related queries, issues and disputes.

47.The comprehensive security and digital banking process was subsequently circulated through BPRD Circular No. 04 of 2023 dated 14.04.2023, regulating the Transactional Control, Post Incident Follow -up, real -time Fraud Monitoring Control etc. Thus, the EFT is regulated by the Act of 2007 and the various PSDs as well as other Circulars/Regulations issued by the State Bank of Pakistan and if such a dispute arises between the consumer as well as the financial institution, it should be decided strictly in accordance with the Act of 2007 , Regulation determining the liability of both the consumer and AFIs. Under the Act of 2007 , the forum for redressal of the said mechanism is a civil court of competent jurisdiction as provided under section s 50 and 55 of the Act of 2007 .

Jurisdict ional remit of Banking Mohtasib 48. Part -IVA of Banking Companies Ordinance, 1962 (“BCO, 1962”) deals with the appointment and function and jurisdiction of a Banking M ohtasib. The one of the essential function of the Banking Mohtasib is provided under section 82 -B (5) of the BCO, 1962 that the Banking Mohtasib is authorized to entertain a complaint in case of failure of any bank to act in accordance with the Banking Laws and Regulation including policy directives or guidelines issued by the State Bank of Pa kistan from time to time, delays or

fraud in relation to the payment or collection of cheques, drafts or other instrument s or the transfer of fund s and fraudulent or unauthorized withdrawal s of debit entries in the Accounts. The Banking Mohtasib , under section 82 -E , if it reaches a conclusion that the complaint filed by any consumer is justified in part or in whole, he at the first instance , shall facilitate amicable settlement ; however, in case of differences, he may direct the Bank for reasonable compensa tion to the consumer. The effectiveness of the jurisdiction of the Banking Mohtasib is further confirmed by the Federal Ombudsmen Institution Reform Act, 2013 , authorizing the Banking Mohtasib to punish a person for contempt of its lawful orders.

49.The jurisdictional fa ct of the Banking M ohtasib has been considered by various High Courts. In the case of Messrs Muslim Commercial Bank Ltd through lawful attorney vs. Federation of Pakistan through Director, (Legal -II), President’s Secretariat and 2 others (2 020 CLD 829) and Faysal Bank Limited and another vs. Banking Mohtasib and others (2020 CLD 548), it was held by the Sindh High Court that section 82 of the BCO , 1962 contains an exhaustive delimitation of the jurisdiction and the ambit of the Banking Mohtasib. The Court was pleased to hold that if any funds from the bank account of a depositor have been fraudulently taken away on account of negligence or collusion of the functionaries of the bank, the law clearly provides the forum to agitate the matter and the said forum is the Banking Mohtasib.

50.The Baluchistan High Court in the case of Habib Bank Limited vs. Muhammad Ayub Mengal and others (2022 CLD 1448) has also noted a similar observation , holding that if the bank failed to detect the fraud timely and to initiate criminal proceedings through FIA against a fraudulent transaction, the Banking Mohtasib has the jurisdiction to entertain such a complaint and pass an appropriate order. In the case of Habib Bank Limited through Litigation Officer vs. Feder ation of Pakistan through President Secretariat Islamabad and 2 others (2018 CLD 1152) , the Islamabad High Court also effectively answered the jurisdiction of the Banking M ohtasib in case of fraud attributed to the AFI triable by Banking Mohtasib as far as the payment of compensation is concerned.

51.The Lahore High Court in the case of United Bank Limited vs. President of the Islamic Republic of Pakistan and others (2025 CLD 834) has thoroughly examined the jurisdiction of the Banking Mohtasib and the vie w taken by the Court was affirmative regarding the jurisdiction of the Banking Mohtasib in the matter relating to unauthorized withdrawa l of the money from the accounts of Bank customers . However , in the said judgment has remanded the matter to the Banking Mohtasib to redetermine the liability in terms of the statutory dispensation i.e. the Act of 2007 and PSD Circulars.

52.The Islamabad High Court in a recent judgment passed in WP No. 34664 of 2022 dated 08.01.2026 ( United Bank Limited vs. The President of the Islamic Republic of Pakistan etc ) has taken a different view

relating to the jurisdiction of the Banking Mohtasib to decide the disputed question of facts.

53.The nutshell of the above discussion is that in cases where a consumer’s complaint arises from a bank’s failure to implement and comply with the directions of the State Bank of Pakistan, and from its statutory obligation under the Act of 2007 to protect the consumer’s electronic fund transfer (EFT), the Banking Mohtasib has jurisdiction to pa ss an appropriate order. This jurisdiction exists notwithstanding the fact that the consumer also has an independent remedy before the Civil Court under sections 50 and 55 of the Act of 2007, allowing them to file a suit for compensation against the bank. Both statutes, the BCO, 1962 and the Act of 2007, operate within their respective spheres. The Act of 2007 does not bar the jurisdiction of the Banking Mohtasib to entertain a complaint under section 82 -B(5) of the BCO, 1962. Instead, the jurisdiction of t he Civil Court provides an additional remedy to the consumer in cases of non -compliance by a financial institution with its statutory obligations, enabling the consumer to maintain a suit for recovery of compensation, which may include up to triple damages sustained due to the institution’s failure to protect the consumer’s fund transfer.

54.The jurisdiction of the Banking Mohtasib in such circumstances is limited to disputes between the consumer and the AFIs relating to the failure of the AFIs to protect the consumer’s fund transfer. However, if during an inquiry , it comes to the notice of the Banking Mohtasib that the consumer failed to

maintain the confidentiality of their OTP/PIN, which identifies them as the authorized user, or if the consumer voluntarily shared confidential instructions with the fraudster , facts that must be proven by the bank , then the Banking Mohtasib will not proceed further with the complaint. Nevertheless, even if a fraudster has illegally obtained secret information relating to the operation of a consumer’s bank account, the consumer cannot be left without remedy. Since all such transactions, including physical transactions through ATMs, are properly documented, the fraudster can be identified either through the payee details in electronic transfers or, in the case of ATM transactions, through snapshots procured from real -time surveillance by the relevant bank. In such cases, the appropriate remedy is to approach the Federal Investigation Agency (FIA) for initiation of criminal pr oceedings. The FIA is exclusively tasked with dealing with cybercrime under the Prevention of Electronic Crimes Act, 2016, as well as section 62 of the Act of 2007.

55.In the present cases, the petitioner Banks submitted their investigation reports, as required under section 29 of the Act of 2007, through the FRMU s of the respective institutions. These investigation reports concluded that the losses suffered by the complainants were the result of their own negligence in failing to protect their confidentia l banking credentials, rather than any maladministration or systemic failure on the part of the Banks. Consequently, the worthy Mohtasib and

the worthy Preside misconstrued both the evidence available on record and the statutory framework provided under the Act of 2007, as well as the PSD Circulars delineating the liability of AFIs vis -à-vis consumers. This misappreciation, overlooked by both the worthy Mohtasib and the worthy President, has caused serious prejudice to the cases of the petitioners/Banks. In doing so, these bodies exceeded their jurisdiction while recording the impugned findings, thereby acting in violation of the statutory dispensation noted above.

56.That said, this Court remains mindful of its jurisdictional contours. When the High Court, while exercising constitutional jurisdiction, forms the opinion that the concurrent findings of the courts below are not based on a correct appreciation of evidence, the appropriate course of action is to remand the matter to the trial court for fresh fin dings after considering the material or law that was previously omitted from consideration. This legal position is well settled in Shabbir Hussain vs. Muhammad Afzal (1972 SCMR 47) , Muhammad Younus Khan vs. Government of N.W.F.P. (1993 SCMR 619) and Maqbool Ali and another vs. Mst. Raheela and others (CPLA No. 1106 of 2024 , decided on 13.05.2025).

57.In view of the above, these writ petitions are allowed; the impugned order s of the worthy Mohtasib as well as the worthy President are set aside, and the mat ter is remanded to the worthy Mohtasib for a fresh decision. The jurisdictional remit of the worthy Mohtasib shall be to

redetermine the liability of the respective parties in accordance with the aforesaid legal discourse.

Judge

Judge

Date of hearing & announcement Of judgment..............01.04.2026

Date of preparation & signing Of judgment..............27.06.2026

N awab Shah CS ( DB) Justice Syed Arshad Ali & Justice Ms. Farah Jamshed