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Whenever banks are accused of allowing withdrawal of cash from an account on the basis of a forged signature, they come up with the defence that it would not have happened if only the customer had not lost his chequebook or the passbook. In most cases, banks try to escape the liability by arguing that it was the consumer who was negligent of losing the chequebook and by doing so, he had contributed to the illegal withdrawal of money. When N. Venkanna, a depositor with Andhra Bank, complained about the illegal withdrawal of Rs 34,000 from his account, the District Consumer Disputes Redressal Forum held that he could only recover from the bank, 50 per cent of the amount, as he had contributed to fraud by misplacing his chequebook and the passbook. Later, the Andhra Pradesh State Consumer Disputes Redressal Commission also agreed with the District Forum that the signature on the withdrawal form was not that of Venkanna and that the bank had negligently authorised the withdrawal of cash from his account on the basis of a forged instrument. It also held that Venkanna was also responsible for what had happened because he had not kept the passbook under lock and key. He was therefore only entitled to 50 per cent of the amount. The apex consumer court’s order in case of N. Venkanna vs Andhra Bank dismisses all such excuses as the bank not having an ultraviolet lamp or the consumer having lost his passbook or chequebook that the banks may forward. The bank had contended that Venkanna was guilty of "contributory negligence" in that he had lost his passbook. The bank had believed the withdrawal slip to be genuine because the person who brought it came with the passbook, the bank had argued. It had also argued that Venkanna had used withdrawal slips on two occasions earlier on the ground that he had lost the chequebook. So when someone presented the withdrawal form along with the passbook, the bank believed it to be genuine. The apex consumer court held that the mere fact that the consumer had misplaced his passbook could not absolve the bank of negligence in allowing the withdrawal of money based on a withdrawal slip that had a forged signature. The apex consumer court said it was true that the particular branch of the bank did not have the facility of checking the signature under the ultraviolet ray lamp. It was also true that there could be some minor changes in the signature of a person at different times. However, the bank had a duty to meticulously crosscheck the signature while passing the cheque for cash withdrawal. It cannot just rush to clear the payment merely on seeing the passbook. (N. Venkanna vs Andhra Bank, Revision Petition no 1990 of 1999). The national commission ordered that the bank refund; along with six per cent interest, Rs 34,000 that had been fraudulently withdrawn from Venkanna’s account in 1994, as a result of the negligence of the bank. The decision should force banks to be far more vigilant when it comes to their customers’ accounts. The purpose of keeping money in a bank is to ensure that it is safe. And when a customer informs the bank that he has lost a chequebook or a passbook, one would expect the bank to be extra cautious, especially while authorising withdrawal of large amounts. Failure to observe some basic precautions and due diligence would certainly constitute negligence on the part of the bank. |
