Stay vigilant against risk of cheque fraud

Mansinghka had been remiss in allowing a stranger to write the cheque. Disappearing magic ink was used which allowed the fraudsters to alter amount and payee name

Sanosh Mansinghka of Mansinghka Agencies held a current account with Bank of India. He issued a cheque dated August 28, 2015 for Rs 399 payable to Dainik Bhaskar. He handed it over to some persons who claimed to have been deputed to collect subscription for the newspaper.

This cheque was encashed, but the amount debited was Rs 495,000 and payment was made to one Suresh Kumar Meena. On learning about the fraud, Mansinghka lodged an FIR at the Bhilwara Police Station on August 28, 2015. He also made a representation to Bank of India.

Mansinghka later followed up with an application under the Right to Information Act. The bank then admitted to lapses while processing the cheque. None of the prescribed precautions was taken: Cheques of over Rs 1 lakh have to be scrutinised under an ultraviolet lamp; the customer needs to be contacted if there is suspicion about the legitimacy of the payment; and the identity of the walk-in customer has to be confirmed. Police investigation revealed that an unknown person had used a photocopy of the identity of Suresh Kumar Meena to collect payment on the cheque. The bank had failed to match the copy with the original identification card.

Mansinghka filed a consumer complaint before the Bhilwara consumer forum, which sent the cheque to the Forensic Science Laboratory (FSL) for examination. The lab report showed that the amount had been altered from Rs 399 to Rs 4,95,000 and the payee’s name had been changed from Dainik Bhaskar to Suresh Kumar Meena. The Forum directed the bank to pay Rs 4,95,000 along with 9 per cent interest from July 9, 2016. In addition, Rs 1 lakh was awarded as compensation and Rs 20,000 for legal expenses.

The bank appealed to the Rajasthan State Commission, which set aside the order and remanded the matter back to the District Forum to consider whether the fraudster Suresh Kumar Meena would be a party to the dispute.

Aggrieved that the matter had to start afresh almost from scratch, Mansinghka filed a revision petition before the National Commission, pointing out that the issue involved pertained to lapses in following the Reserve Bank of India's (RBI) guidelines.

The National Commission noted that there were several factual errors in the State Commission’s order regarding the identity of the drawer, the payee, and the verification of the Aadhaar card. The RBI has permitted the selective application of its guidelines in case of suspicion only. In this case, Mansinghka had been remiss in allowing strangers to write the cheque, so disappearing magic ink had been used. This allowed the fraudsters to alter the amount and payee's name. Also, the fraud had taken place as the Aadhaar card identification was on the record, and the payment had been signed and acknowledged by the recipient. So, it would be necessary to ascertain whether there was any collusion between Mansinghka and Suresh Kumar Meena. The National Commission concurred with the view that Suresh Kumar Meena should be added as a necessary party and the matter adjudicated afresh by the District. Forum.

Accordingly, by its order of March 4, 2021 delivered by Anup Thakur, the National Commission concluded that the dispute was not simply regarding violation of RBI guidelines. It was a case of fraud and contributory negligence that needed to be adjudicated properly.

The writer is a consumer activist