When a cheque is dishonoured, the payee can take legal action against the drawer under the Negotiable Instruments Act. The complainant needs to produce the dishonoured cheque and the bank advice as evidence. But, what if the dishonoured cheque is lost by the bank? Here’s a case of ICICI Bank v/s Shri Sonnegowda & Ors in revision petition No. 649 of 2012, decided on April 16, 2012.
Sonnegowda had received a cheque of Rs 2 lakh from Siva Sankar, drawn on ICICI Bank. This cheque was deposited by Sonnegowda in his Pragathi Gramin Bank account, which sent it for collection to ICICI Bank. The cheque bounced due to insufficient funds. Sonnegowda wanted to institute a criminal complaint against Siva Sanker under Section 138 of the Negotiable Instruments Act, but was unable to do so, as the bank did not return the dishonoured cheque with the memo of dishonour. As both banks avoided giving proper information, Sonnegowda filed a consumer complaint in the District Forum.
Pragathi Gramin Bank filed its reply, admitting all the facts. However, it disputed any liability, claiming it was helpless as ICICI Bank had not returned the cheque. ICICI Bank tried to escape its negligence by claiming Sonnegowda was not its customer and there was no privity of contract. As no services had been rendered by ICICI Bank to Sonnegowda, a consumer complaint would not be maintainable.
The Forum held ICICI Bank liable to return the cheque to Sonnegowda. In case it was unable to do so, said it is liable to pay Rs 2 lakh, with an interest at 12 per cent per annum, plus compensation of Rs 25,000 and cost of Rs 5,000. ICICI Bank’s appeal against this order was dismissed by the Karnataka State Commission.
ICICI Bank finally approached the National Commission through a revision petition. The bank reiterated its stand. It claimed it could not be held liable for the value of a cheque dishonoured due to insufficient funds.
The National Commission observed it was an undisputed fact that Sonnegowda neither received the value of the cheque or the bounced cheque. He had been prevented from taking legal action against the drawer of the cheque, as the bank did not return the dishonoured cheque. Thus, Sonnegowda had been put to loss though he was not at fault. The liability would lie on the party responsible for losing the cheque.
As a last effort, ICICI Bank tried to blame its own advocate for not conducting the matter properly before the District Forum, and requested the case be remanded back to the Forum for fresh adjudication. Rejecting this plea, it was held the bank could take legal action against its advocate, but Sonnegowda could not be made to suffer due to this.
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The National Commission observed the Forum had given an opportunity to the bank to return the cheque with the memo of dishonour within 30 days. It held the bank was liable to pay Rs 2 lakh only in case of default. Hence, the order was fair and could not be faulted. With this observation, the National Commission refused to admit ICICI Bank’s revision petition.
While dismissing the petition, the Commission observed that the concurrent findings of the District Forum and the State Commission were proper. Also, filing a revision petition wasn’t justified, as there was no jurisdictional or legal error in the orders passed. The Commission asked the bank to pay Rs 10,000 to the legal aid in four weeks, and a nine per cent interest in case of delay in payment.
The writer is a consumer activist