The National Consumer Disputes Redressal Commission, presided by Justice Sudip Ahluwalia, held Canara Bank liable for service deficiency due to its failure to present cheques on time, causing them to become stale.
Case Summary
The complainant, holding a Savings Bank Account with Canara Bank’s Maharani Bagh Branch, had deposited two CTS cheques issued by Assotech Ltd. The cheques, valued at Rs. 11,36,868 and Rs. 94,73,900, were credited to her account but later debited under the “Online cheque return” process. The bank attributed this to a “connectivity failure,” and the second cheque was returned as “Instrument outdated/stale.”
The complainant alleged that the bank failed to present the cheques for clearing within their validity, leading to a financial loss of Rs. 1,06,10,768 and depriving her of legal remedies against Assotech Ltd. She issued a legal notice seeking compensation, but after receiving no response, she approached the National Commission, demanding the amount of the cheques with 18% interest and Rs. 25,00,000 for damages.
Bank’s Defense
The bank denied all claims except those admitted. It argued that the cheques were lodged promptly but were returned due to a nationwide bank strike. The bank re-submitted the cheques for clearing based on the complainant’s request. The bank also raised procedural objections, claiming the complaint was flawed due to non-joinder of Vijaya Bank, the drawee bank, and that no prior notice was served under Section 80 of the Code of Civil Procedure. Additionally, the bank argued that it could not be held responsible for losses caused by the legal strike.
National Commission’s Observations
The National Commission found that Canara Bank failed to provide an explanation for not re-forwarding the cheques on June 2, which was a working day. The bank attempted to shift the blame onto the complainant, alleging that the cheques were only re-forwarded based on her instructions on June 4 and June 8, without providing any evidence of such instructions. Furthermore, the bank’s claim of a “technical failure” on June 2 was not supported by its previous affidavits.
The commission ruled that the bank’s service was deficient, as the cheques were not presented in a timely manner, leading to them becoming stale. The argument that the cheques could not have been encashed due to a holiday on June 3 was rejected, as the bank was still liable for not presenting them on the correct date.
Additionally, the bank contended that Assotech Ltd., the drawer of the cheques, was under liquidation, making recovery impossible. The complainant argued that the bank’s negligence deprived her of the right to initiate legal action against Assotech Ltd.’s directors under Section 138 of the Negotiable Instruments Act. The commission acknowledged that while the complainant’s rights were hindered, the outcome of any legal action remained uncertain. Click here to read more court cases.