Court penalises Bank for encashment of Cheque not drawn by Account Holder

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A Noida district court has directed the Indian Overseas Bank (IOB) to pay ₹35,000 along with 6% annual interest to a customer for cashing a cheque that he had not issued.

Greater Noida Virendra Kumar had a savings bank account account with the bank’s sector 31 Nithari branch. In 2005, he found that someone had withdrawn ₹35,000 through cheque.

He informed the branch claiming that he had not issued the cheque and that his signature was forged and accused the bank of negligence in verifying signatures.

In 2006, his complaint with the consumer forum was rejected. He had then appealed to the state commission in 2012 that was also dismissed, following which he sought redressal from the national consumer commission in 2015. That year, however, his advocate moved to file a civil case with the court to recover the amount and withdrew the complaint from the commission.

“Civil Judge (Junior Division) Vandana Aggarwal decided the case ex-parte (when a party to a case, in this case, the bank, failed to appear before a court) and directed the bank to pay ₹35,000 along with 6 percent annual simple interest. The order was delivered last week,” Sanjiv Verma, president, District Courts Bar Association said on Thursday.

Indian Overseas Bank Sector 31 branch Manager Awakas Sinha said, “We have not yet received court order copy. On getting order copy we will take action as per law.”

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