Banks can be held liable if their officials clear cheques that have visible signs of forgery or tampering, the Mumbai Suburban District Consumer Disputes Redressal Forum ruled recently.
The forum bench consisting of its president JL Deshpande, members Deepa Bidnurkar and VG Joshi ordered the State Bank of India as well as the ICICI Bank to pay compensation of Rs50,000 each to Santacruz resident Ansari Yousuf Mohammed.
According to his complaint, in March 2004, Ansari had issued a cheque of Rs500 to one Vajid for opening a bank account with ICICI Bank. Vajid added the figure 55 ahead of the original amount – making it worth Rs55,000. He also wrote ‘fifty-five thousand’ in words and submitted the cheque for opening a bank account with the Mira Road branch of ICICI Bank. The Santacruz (West) branch of State Bank of India cleared the cheque.
The bank account was opened in Ansari’s name without verification and Vajid also obtained his passbook, chequebook and withdrew an amount of Rs53,500 from the account.
Ansari moved the consumer forum in June 2007 alleging deficiency on part of the State Bank of India.
Counsel for the bank, however, maintained that their officers had taken proper precaution while clearing the cheque and had placed reliance on a National Consumer Commission’s decision holding that bank employees were not expected to obtain opinion of handwriting experts or minutely examine the cheque while clearing it.
The consumer forum found that the forgery was clearly visible and even a look at the cheque made it clear that the figure of 55 was added ahead of the original sum, both in figures and in words. Therefore, the forum held the bank officials guilty of negligence in clearing the cheque.
The forum found fault with ICICI Bank for opening the account in Ansari’s name without proper verification.
“We are examining the judgment and may go in for an appeal as the payment of an altered cheque is the sole responsibility of the paying banker,” a spokesperson for ICICI Bank said.
Although, State Bank of India did not respond to calls, one of their officials said on condition of anonymity that the bank generally preferred to honour the consumer court’s orders and not to go in appeal.