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HindustanTimes Fri,26 Dec 2014

Bank fails to verify cheque, ordered to pay Rs. 1 lakh fine

Kanchan Chaudhari, Hindustan Times  Mumbai, September 26, 2013
First Published: 01:12 IST(26/9/2013) | Last Updated: 01:14 IST(26/9/2013)

Clearing a bearer cheque without verifying the identity of the person withdrawing the money amounts to deficiency in service on part of the bank, a district consumer forum held last week.

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The Thane district consumer forum has directed Canara Bank to reimburse Rs. 1 lakh that was fraudulently withdrawn from the account of Ramker Jaiswal, an Ulhasnagar resident.

Also, the bank has to pay an additional compensation of Rs1 lakh for the lapse.

Jaiswal had approached the consumer forum in March 2009. He alleged that an unknown person withdrew Rs1 lakh from his account by presenting a forged bearer cheque to the Ambernath branch of Canara Bank in July 2007.

In his complaint, Jaiswal said the bank officials had cleared the cheque although the signature on it differed from his sample signature in the bank records. Therefore, the bank was guilty of deficiency in service.

The bank, however, refuted the allegations, claiming that the complainant had himself presented the cheque, signed it on the front and back, and then withdrew the money.

It also contended that Jaiswal had neither lodged any complaint about the cheque/s gone missing nor instructed them to stop payment.

The consumer forum, however, noted that the difference in the signatures was visible, but the bank failed to take note of it.

The forum said the Reserve Bank of India (RBI) had issued circulars stipulating the precautions to be taken by banks while clearing bearer cheques for withdrawing an amount of Rs. 50,000 or above, and accordingly, the bank official concerned was required to verify the identity of the person who presented the cheque for withdrawal.

It directed the bank to reimburse the amount fraudulently removed from the account within three months, along with interest at the rate of 10% per annum from July 2007.

It also directed the bank to pay the retired person an additional amount of Rs1 lakh towards compensation for the mental agony he had to undergo.


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