Bank fined For Wrong Return of Cheque

Bank bounces cheque, told to pay customer Rs 10k-Times of India
BANGALORE: The KG Road branch of Vijaya Bank was ordered to pay Rs 10,000 as compensation and Rs 1,000 as litigation cost to an SB account holder for bouncing a cheque issued by the latter to another party, despite the amount being available in his account. 

The order was passed by Bangalore IV Additional District Consumer Disputes Redressal Forum, Bangalore Urban district, on April 12, based on a complaint from a senior citizen and veterinary (wildlife) consultant, Dr NK Rai, 71, against the bank. 

The case 

In his complaint, Dr Rai said he was an SB account holder with the bank since 1961 and always maintained sufficient balance, and neither did he have any liability with the bank. Dr Rai issued a cheque for Rs 4,88,000, dated May 16, 2012, to M Venkatesh, sure that his account had enough balance. 

But when Venkatesh presented the cheque from his Canara Bank account, Basaveshwara Nagar branch, the cheque was dishonoured and returned, citing "insufficient funds". A shocked Dr Rai convinced Venkatesh his account had sufficient money and asked him to present the cheque again. The cheque was dishonoured again on June 2, 2012. 

The bank failed to reply to Dr Rai's notice accusing it of deficiency of service, causing him mental agony and bringing him disrepute. Dr Rai demanded that the bank pay him a compensation of Rs 10,00,000. After the bank failed to reply, the senior citizen filed a complaint with the consumer forum. 

The defence 

The bank's defence was that the complainant was a guarantor for a loan availed by Jyothi Shetty, proprietrix, Vigneshwara Associates, T Dasarahalli. The bank pointed out that Jyothi was Dr Rai's wife and he stood guarantee for the loan. It also alleged that Jyothi had borrowed Rs 4 lakh and failed to clear it. 

"Since he is the guarantor of the loan, the liability of the principal borrower and guarantor is joint and several. As and when the bank has informed the complainant there is an outstandingamount, he has in turn informed that his wife will clear her debts and only she is responsible for the dues, though he is the guarantor for the loan... Since the complainant and his wife failed to repay the loan, the bank has exercised its lien over the funds in the account of the complaint. However, subsequently the lien noted on his account has been withdrawn and released the lien. In the meantime, the cheque issued by the complainant got bounced," the bank said, adding "there is absolutely no deficiency of service" on its part. 

The verdict 

After examining the evidence and listening to both parties, the court observed the outstandingbalance on Jyothi Shetty's loan account was only Rs 82,840. It said the statement of account proved the balance in the complainant's account on the day the cheque bounced, was Rs 4,88,296.67. The court said the bank had kept lien on the complainant's account without informing him. 

"If at all there was the balance loan in the name of the complainant's wife, the bank should have taken legal action against her, as per banking rules and regulations," the court said. 

It said the complainant has established with convincing evidence that the bank has been negligent and there has been deficiency in service on the part of the bank.
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