Reliance Jio has slammed Paytm for dragging telecom operators to court over phishing attacks on its users. In addition, Jio has also alleged that Paytm is trying to shift the blame of its own lapses to evade legal liability of financial frauds occurring through its app.

In a counter-affidavit to a petition filed by Paytm in the Delhi High Court, Jio said that mobile phone companies cannot be held liable for unlawful activity occurring over calls and messages as per the Telecom Regulatory Authority of India’s (TRAI) Telecom Commercial Communication Customer Preference Regulation (TCCCPR), 2018, aimed at checking pesky calls and messages. Substantiating its claim, Jio added that under Section 79 of the IT Act, intermediaries are exempt from liability under the Act in respect of any third-party information, data, or communication link made available or hosted by them.

Further, Jio said that even TRAI is not empowered to act on fraudulent/unlawful activity, nor can it impose any legal obligation in this regard on service provider. It argued that the onus of preventing financial frauds lies on banks and wallet companies such as Paytm as per the Reserve Bank of India’s (RBI) mandate, which requires them to prevent, detect and restrict occurrence of fraudulent transactions including loading/reloading funds into the prepaid payment instruments (PPI).

The telco recalled two prior occasions (in June 2018 and December 2018) when the banking regulator temporarily suspended new customer registrations by Paytm on non-compliance with KYC norms for banking entities. It also alleged that RBI has not been made party to Paytm’s petition as it would lay bare the non-compliance of the payments app.

Jio alleged that Paytm is deliberately overlooking the fact that phishing scams are carried out through numerous avenues. The telco further added that that the operators did not implement strict blocking of traffic until May 31, 2020, as telemarketers were still onboarding the new and complex blockchain registry designed to monitor unsolicited commercial communication (UCC). In fact, Paytm itself registered in end-March/April 2020, i.e. shortly before filing this lawsuit.

Recently, One97 Communications Limited, parent company of Paytm, moved the Delhi High Court alleging that telcos are not blocking fraudsters defrauding its customers by phishing activities over the various mobile networks. Paytm also sought damages worth Rs 1 billion from the telcos.

The next hearing of the case is listed for June 24, 2020.