Cheque encashed by fraud? Bank has to pay, rules consumer forum

Rebecca Samervel, TNN | May 15, 2012, 12.35AM IST

MUMBAI: A consumer forum recently held a bank guilty of deficiency for attempting to absolve itself of responsibility in a fraudulent cheque encashment case. 

Indian Bank was reprimanded for being negligent and allowing the encashment of a cheque which was evidently tampered with. The forum ordered the bank to pay Qatar-based Riyaz Mukdam the enchased amount of Rs 2.81 lakh along with 9% interest from December 2008. This amounts to about Rs 25,000. Mukdam will also get Rs 10,000 as cost of the complaint. 

Mukdam had an NRI account in the bank's Wadala branch in Mumbai. On November 24, 2008, he sent five post-dated cheques to his brother Abbutallah in Mumbai. One of the cheques dated November 25, 2009 was for Rs 2.81 lakh. On December 12, 2008, when Mukdam asked his brother about the cheques, he was told that he hadn't received that one. When Abbutallah checked with the bank, he realized that somebody had overwritten his brother's name with another name and had encashed it at the bank's Bandra branch. The cheque's date was changed from November 25, 2008 to November 25, 2009, and Mukdam's signature was forged. He alleged that the cheque was encashed due to the bank's negligence. 

Mukdam said the bank filed a police complaint only on December 29, 2010. He alleged that after seeing the overwriting, the bank should have got suspicious about its genuineness and should not have acted carelessly. He filed a complaint with the bank's branches in Wadala and Bandra. Mukdam also filed a complaint with the Mumbai District Consumer Disputes Redressal Forum on December 10, 2010. 

The bank didn't file its defence and made no attempt to deny Mukdam's allegations. The forum held that under such circumstances, Mukdam's allegations stood intact. The forum stated that from documents presented, it was proved that the cheque was tampered with and the signature was forged. The forum said that when it was clear that there were obvious changes to the cheque, the bank should have checked with Mukdam and conducted investigations. The forum also said the bank's irresponsible behaviour was evident after it delayed filing the police complaint.