Bank Liable For Cheque Lost From Drop Box; Fraud Doesn't Oust Consumer Forum's Jurisdiction: State Consumer Disputes Redressal Commission - 2025-01-27

Bank Held Liable for Cheque Stolen from Drop Box, Ordered to Pay ₹1.5 Lakh

Jaipur: The State Consumer Disputes Redressal Commission has ruled that a bank's failure to secure its cheque drop box constitutes a "deficiency in service," holding it liable for a customer's loss even when the cheque was fraudulently encashed by a third party. The Commission overturned a District Forum's decision, emphasizing that the presence of fraud does not strip a consumer court of its jurisdiction to decide on service-related negligence.

The bench, comprising Justice Nirmal Singh Medatwal (Judicial Member), Justice Surendra Kumar Jain (Judicial Member), and Mr. Ramphool Gurjar (Member), directed Union Bank of India to pay ₹1,00,000 for the cheque amount and an additional ₹50,000 as compensation for mental and physical anguish to the complainant, Poonam Rawat.

---

Background of the Case

The dispute began on December 21, 2015, when Poonam Rawat’s father-in-law deposited a ₹1,00,000 cheque, issued to Ms. Rawat, into the drop box at the Union Bank of India's Johri Bazar branch in Jaipur. The cheque was meant for deposit into her savings account with the same bank.

When the amount was not credited, an inquiry revealed a shocking lapse in security. The cheque had been stolen, and the payee's name was forged to "Vishal Gupta." It was then fraudulently deposited and cleared through UCO Bank's Johri Bazar branch into an account at its Chandigarh branch. A police investigation was initiated, but the perpetrator, Vishal Gupta, who used a fake address, could not be traced.

Ms. Rawat filed a complaint with the District Consumer Commission, Jaipur-III, which dismissed her case on December 29, 2023. The District Commission reasoned that the matter involved complex questions of fraud and forgery, requiring extensive evidence, and thus fell outside its summary jurisdiction. It also noted that the fraudster, Vishal Gupta, and the UCO Bank's Chandigarh branch were not made parties to the case. Ms. Rawat then appealed this decision to the State Commission.

---

Arguments Before the State Commission

Appellant's Arguments (Poonam Rawat): Ms. Rawat’s counsel argued that the loss was a direct result of Union Bank's negligence. They presented evidence, including CCTV footage, showing her father-in-law entering the bank and spending 12 minutes on the premises to deposit the cheque. The core argument was that the bank failed in its fundamental duty to secure the drop box, which allowed the cheque to be stolen and misused. This failure, they contended, was a clear "deficiency in service," and the bank was solely responsible for the subsequent fraud.

Respondent's Arguments (Union Bank of India): The bank denied liability, claiming there was no proof the cheque was ever deposited in its drop box. It argued that the case involved serious criminal acts of forgery and fraud, which are beyond the scope of a consumer forum's summary proceedings. Citing a Supreme Court precedent, the bank contended that such complex matters should be adjudicated by a civil court. It also maintained that the complaint was not maintainable without impleading the fraudster Vishal Gupta and the UCO Bank's Chandigarh branch.

---

Commission's Findings and Rationale

The State Commission critically analyzed the evidence and rejected the bank's contentions. It observed that the bank's primary duty was to ensure the security of items placed in its custody, including cheques in its drop box.

The judgment noted, "...the most important link in this case is that the cheque in the name of the appellant/complainant was deposited by her father-in-law in the drop box at the Johri Bazar branch of Union Bank, and it was from there that this cheque was misappropriated. Therefore, the Johri Bazar branch of Union Bank of India is fully responsible for this act..."

The Commission found the bank's denial of the deposit unconvincing, as it failed to rebut the CCTV evidence with an affidavit. It concluded that the cheque was indeed deposited and subsequently lost due to the bank's negligence.

Addressing the jurisdictional issue, the Commission held that the District Forum had erred. It clarified that while a third party committed fraud, the root cause of the complainant's loss was the bank's deficiency in service.

“This fact becomes secondary that the payment of the cheque was received by Vishal Gupta by committing forgery on the cheque, because it has been proved by preliminary evidence that Union Bank of India allowed the cheque to be misappropriated from its drop box," the Commission stated.

The bench ruled that the consumer's complaint was about the bank’s service failure, not against the fraudster. Therefore, the consumer forum was the appropriate venue to adjudicate the dispute.

---

Final Order

The State Commission set aside the District Commission's order and allowed the appeal. It directed Union Bank of India to pay the complainant a total of ₹1,50,000 within two months. Failure to comply will attract an interest of 9% per annum on the entire amount from the date of the order until payment. The case against UCO Bank was dismissed.