Banks to pay compensation for wrong payment: SC

Last Updated: Thursday, December 10, 2009 - 22:46

New Delhi: The Supreme Court has held
that banks are liable to compensate a customer whose money is
wrongly paid to another person without verifying the original
signature of the account-holder as it amounted to deficiency
of service.

A bench of Justices D K Jain and T S Thakur said the
bank was guilty of honouring the cheque presented by the
fraudster by releasing an amount over and above the amount in
the account even though the customer Gurnam Singh had no
overdraft facility.

"On a query by the Court how in the absence of any
overdraft facility being enjoyed by the complainant, a cheque
for the amount which was in excess of the balance amount in
the account of the complainant could be honoured, learned
counsel is unable to furnish any satisfactory explanation.

"In our opinion, this fact, highlighted by the
State (Consumer) Commission, by itself is a glaring example of
negligence/deficiency in the service of the bank," the bench

The bench made the remarks while dismissing the appeal
of public sector Vijaya Bank which had challenged the
concurrent findings of district consumer forum, Chandigarh,
State Consumer Commission and the National Consumer Commission
which had held the bank guility of deficiency in service for
releasing an amount of over Rs 3.5 lakh to a fraudster who had
presented stolen cheques of Gurnam Singh.


First Published: Thursday, December 10, 2009 - 22:46

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