Consumer Court orders Bank of India to pay Rs 75,000 to customer for issuing his cheque book to someone else

The District Consumer Disputes Redressal Commission-III, West Delhi bench, comprised of Ms Sonica Mehrotra (President), Ms Richa Jindal (Member), and Mr Anil Kumar Koushal (Member), held Bank of India’s Kirti Nagar branch accountable for its failure to exercise due diligence under RBI’s Cheque Truncating System (CTS) Scheme and the Negotiable Instruments Act, 1881. The bank’s negligence resulted in the unauthorized issuance of a chequebook to an individual, leading to the transfer of two cheques and financial loss for the original account owner.
Complainant’s Allegations
Mr. Umesh Arora, the sole proprietor of M/s Kailash Overseas, maintained a current account with the Bank of India at Kirti Nagar, Delhi Branch, for twenty years. In 2010, the complainant applied for a new chequebook, but the bank inadvertently issued it to someone else. Subsequently, two cheques totaling Rs. 1,26,500 were transferred from the complainant’s account without authorization.
Legal Proceedings
The complainant reported the incident to the bank’s AGM, filed a police complaint, and sent a legal notice seeking compensation. The bank denied wrongdoing, claiming the cheques belonged to an employee introduced to the bank by the complainant’s father. Unsatisfied with the bank’s response, the complainant filed a consumer complaint with the District Consumer Disputes Redressal Commission-III, West Delhi.
Bank’s Defense
The bank argued that the complaint was based on fabricated fraud to pressure the bank into compensating for losses caused by the complainant’s negligence. It claimed the cheques were issued without bank negligence, following the complainant’s instructions. The bank maintained that any connivance would be between the complainant and the introduced employee, not involving bank officials.
Commission’s Findings
The District Commission referred to the CTS Scheme introduced by RBI in 2010, emphasizing the bank’s responsibility for due diligence, particularly under the Preliminary Verification Scheme. The bank was required to adhere to Know Your Customer (KYC) norms, including verification of the instrument’s tenor and apparent physical condition. The commission noted the bank’s failure to provide adequate evidence regarding the issuance of the chequebook and verification of the complainant’s signatures.
Verdict
The District Commission held the bank liable for deficiency of service and non-compliance with CTS norms, citing a previous case precedent. The bank was directed to pay compensation of Rs. 50,000 to the complainant and Rs. 25,000 for litigation costs.
अदालत की प्रक्रिया में वादी को केवल प्रताड़ित किया जाता है। ठीक है अभी उपभोक्ता फोरम ने प्रतिवादी को 75000 का भुगतान वादी को करने का आदेश दिया है। State Consumer Form after that High Court, Supreme court, but Plantif never obtain the justice. Plantif percicuted for two decades by the lenghti procedure of court.
I am a Banker and understand the situation better than any one who did not work in the Bank. Often , customer especially business firm introduce to Bank their employees and all the daily banking transactions are made by by them. Banker do their job in good faith . In this case how it could be possible that business firm have send their employee for collecting Cheque book from the Bank and have not received it even if they have not received it the firm should have to enquire the reason for not collecting it. It means the cheque book was recieved by the firm but two cheque may be tear from that which the employee used at later stage. So the negligence on the part of firm is too. The firm was suppose to check the cheque book before receiving it whether it was intect or not.
But as usual Banker is always held responsible. If cooperative, like this decision and if not cooperating then with the charges misbehave.
Very true. This is a police case where an FIR should be issued concerning the erring employee by the firm.
I am a retired banker. If it is proved that the two cheques were misused by an employee of the account holder firm, it is very clear that the cheque book was received by the account holder firm. I think the Bank is wrongly implicated in this case. I do agree that the case can be against the employee of the account holder firm and not against the Bank.
In this case undoubtedly Bank is at fault, but cheque book issued to someone else causes delay to the sufferer. consequently delay in services in referred case didn’t affect any kind of goodwill or reputation of sufferer. Hence, in India many service provider organisations but I reiterate that Bank and its staff are always target to fine in a tune of huge amount penalty.
I request to Hon’ble Distt. commissioner that for this mistake to impose penalty of Rs,75000/- is justified? My long experience in Banking industry, this high volume of penalty
is not justified. Yes, Bank is at fault.