Liability of the bank for negligence and deficiency in service in returning a dishonoured cheque immediately without waiting for rectification of the technical fault.

ORDER

Gurusharan Sharma, President - Complainant is appellant. This appeal is directed against order dated 24.8.2006, passed by District Consumer Disputes Redressal Forum, Dhanbad, in Consumer Complaint No. 217 of 2005, whereby the complaint was disposed of as under:

'so in the circumstances stated above this complaint case is allowed and complainant is ordered to pay all the due premium within 40 days. In the meantime the O.P. is also to be ordered to pay compensation of Rs. 500.00, but in this case cheque of the complainant was dishonoured for that dishonoured cheque OP is not to be punished. O.P. has already agreed to pay a rebate of Rs. 1,000.00 so let this case be disposed of in the light of grace given by the O.P. to complainant.

2. The complainant had taken Life Insurance Policy for a sum of Rs. one lac, which commenced from 28.12.2001. The yearly premium payable for the said policy was Rs. 7,480.00.

3. In respect of the yearly premium due, in the month of December, 2003, the complainant deposited cheque No. 605331 dated 15.3.2004 for Rs. 7,704.40 paise [Rs. 7,480.00 premium amount + Rs. 224.00 interest for delayed payment] drawn on Allahabad Bank, Kumardhubi branch. The L.I.C. of India deposited the said cheque on the next day with its banker, Bank of India, Chirkunda Branch, through pay-in-slip No. 11794. On 20.3.2004 the Bank of India, Chirkunda branch returned the cheque with cheque return memo from Allahabad Bank with endorsement Refer to Drawer .

4. L.I.C. of India claimed to have intimated the complainant regarding dishonour of cheque by letter dated 21.3.2004 by post. The cheque was accepted by L.I.C. of India, subject to realization and in the event of dishonour of cheque the receipt granted therefor stood automatically cancelled. In the passbook of the complainant's Bank account produced before the District Forum, no debit entry was made for the aforesaid amount. The policy was already in lapsed condition on that date, when the aforesaid cheque was deposited and as such dishonoured cheque had no effect on lapsation of the policy. In the policy itself it was mentioned that a grace period of thirty days was provided for payment of premium, where it was payable on yearly basis.

5. According to the Allahabad Bank, Kumardhubi branch, the cheque in question was received from the Bank of India, Chirkunda branch for clearance on 18.3.04, but due to sudden technical fault in computer the said cheque could not be cleared and it was returned to the Bank of India, Chirkunda branch vide cheque return memo with remarks Refer to Drawer on the same date i.e. 18.3.04 itself. It has further been stated that liability of Allahabad Bank was over as soon as the aforesaid intimation was sent to the Bank of India. It was also admitted that due to the technical fault in Computer in the cheque return memo the remarks was made Refer to Drawer and not with the remarks Insufficiency of Funds .

6. After hearing the parties at length and perusing the record, we find that on the question of lapse of the policy and its renewal / revival the District Forum on agreement between the complainant and the L.I.C. of India passed the following orders:

The learned Advocate Mr. Dutta concedes to the fact that policy of the complainant may be renewed subject to payment of three yearly due premium with interest after going through the formalities required. The O.P. is also agreeable that in the total amount of interest calculated for default payment is not payable by the complainant in its entirety for the relief and comfort of the complainant. O.P. is ready to give the grace of Rs. 1,000.00 to the minus to the amount paid as interest. In other words entire interest cannot be realised. O.P. will give entire amount less Rs. 1,000.00 of the amount.

Although there was certain clerical mistakes in the aforesaid part of the impugned order, but it is clear that the complainant was ready to pay the entire due premium amount with interest for renewal/revival of the po