Canara Bank fined for debiting fees without returning cheque to customer

The District Consumer Disputes Redressal Commission in Hooghly, West Bengal held Canara Bank responsible for deficiency in services and negligence. The bank had debited a ‘cheque return fee’ three times without returning the cheque to the complainant.

The complainant’s wife issued a cheque for Rs. 4500/- from her Union Bank of India savings account in favor of their son. The cheque was deposited in the son’s jointly operated savings account at Canara Bank for clearing. Canara Bank debited Rs. 177/- from the account as a “cheque return fee” but did not return the cheque or provide a return slip to the complainant. Canara Bank debited another Rs. 177/- for the same cheque without returning the cheque or the return slip. The complainant’s wife later closed her Union Bank of India account due to inconvenience, and Canara Bank debited another Rs. 177/- for the third time as a cheque return fee for the same cheque.

Canara Bank eventually returned the cheque to the complainant along with an official return slip stating the reason for the return as “account closed.” However, Canara Bank did not provide return slips for the earlier debits made when the Union Bank of India account was still open. The complainant filed a complaint with Canara Bank’s Circle office and later with the Banking Ombudsman, but did not receive a satisfactory response.

The Banking Ombudsman closed the case, stating that Canara Bank had refunded Rs. 354/- (twice the amount debited) and advised the complainant to seek redress from another authority if still dissatisfied. The complainant disagreed with the refund claim and approached the Consumer Affairs & Fair Business Practices (CA&FBP) for settlement. Canara Bank did not appear or communicate during the scheduled meeting, and CA&FBP advised the complainant to file a consumer complaint. As a result, the complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Hooghly, West Bengal against Canara Bank.

Canara Bank argued that the deductions were made by the clearing authority and not by the bank itself. The bank claimed to have refunded the amount to the complainant’s son via demand drafts sent by speed post, which were returned unclaimed after multiple delivery attempts. Canara Bank stated that it cannot be held responsible for the clearing authority’s actions or the inconvenience caused to the complainant’s son.

The District Consumer Disputes Redressal Commission found that Canara Bank had deducted cheque clearance charges three times without depositing the cheque amount into the complainant’s son’s account. The commission also noted that Canara Bank failed to return the cheque to the complainant, indicating negligence and deficiency in service. Therefore, the District Commission held Canara Bank liable for deficiency in services and negligence. The commission directed Canara Bank to pay Rs. 767/- to the complainant and a compensation of Rs. 15,000/-.