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2025 Supreme(Online)(SCDRC) 1877
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
SANGITA DHINGRA SEHGAL, CJ, PINKI, J
UCO BANK – Appellant
Versus
MRS. TEJ CHADHA – Respondent
FIRST APPEAL NO. 649/2023
For the Appellants/Petitioners: Ms. S. Sood
For the Respondents: Mr. Kunal Sinha, Mr. Sanjay Shisodia
Banks must exercise due diligence to verify signatures on cheques and are liable for unauthorized withdrawals.
Headnote:The Appellant, UCO Bank, challenged the order issued by the District Consumer Disputes Redressal Commission under the Consumer Protection Act. The Commission found that UCO Bank permitted unauthorized withdrawals amounting to Rs. 15,30,000 from the Respondent's account without her consent. The Court held UCO Bank failed to verify signatures on cheques, which were found to be forged. The principal issues concerned the service of notice under Section 65 of the Consumer Protection Act and whether the District Commission correctly determined the bank's negligence. The Court ruled that a bank must exercise due diligence to prevent unauthorized withdrawals, irrespective of the customer's actions. The Appeal was dismissed, confirming the lower court's direction for the bank to pay Rs. 11,40,000 with interest for unauthorized transactions and mental harassment compensation.
| Table of Content |
|---|
| 1. consideration of proper notice under the consumer protection act. (Para 1 , 7 , 8) |
| 2. analysis of service notice sufficiency. (Para 9 , 10 , 11) |
| 3. determining bank negligence in verifying signatures. (Para 12 , 13 , 14) |
| 4. outlining the bank's liability for unauthorized transactions. (Para 15 , 16 , 17) |
JUDGMENT
1. The Appellant has preferred the present Appeal under Section 41 of the Consumer Protection Act , 2019 to set aside the impugned order dated 05.09.2023 passed by the District Consumer Disputes Redressal Commission- II, Udyog Sadan, C-22 & 23, Qutub Institutional Area (Behind Qutub Hotel), New Delhi-110016 in Complaint Case No. 131/2020 titled as “Mrs. Tej Chadha vs. Uco Bank” filed by Respondent/Complainant against the Appellant/Opposite Party. Vide impugned order dated 05.09.2023, the District Commission held as follows:
“1. Succinctly put, complainant who is a widow aged about 84 years held a joint account with her husband in UCO Bank, hereinafter referred to as OP. It was a Savings account in which the pension of her late husband was credited from his employer i.e the High Court of Delhi.
2. It is stated that the complainant after the death of her husband in 2017, was solely operating the Savings Bank account SB No.15530100003806 (as survivor). It is next stated that complainant along with her family had gone to visit US and Canada on 28.05.2018 and returned to India on 03.7.2018. After she returned to India, Complainant's son on 06.07.2018 updated the passbook and was shocked to notice several entries of cash withdrawals in the total sum of Rs.11,00,000/- and of a cheque payment in the sum of Rs.4,30,000/- during the period ranging from 29.05.2018 to 15.06.2018, the period when complainant was not in India.
3. It is stated that following cash withdrawals and cheque payment was done:
1. Date: 29.05.2018: Paid to “Self”- Rs.1,00,000/- vide Cheque No. 000202
2. Date: 01.06.2018: Paid to “Self”- Rs.2,00,000/- vide Cheque No. 000203
3. Date: 04.06.2018: Paid to “Self”- Rs.2,00,000/- vide Cheque No.000205
4. Date: 06.06.2018: Paid to “Self”- Rs.2,00,000/- vide Cheque No:000208
5. Date: 11.06.2018: Paid to "Self"- Rs.2,00,000/- vide Cheque No.000211
6. Date: 13.06.2018: Paid to "Self"- Rs.2,00,000/- vide Cheque No.000210
7. Date: 15.06.2018: Paid to “Dinesh Verma”- Rs.4,30,000/- vide Cheque No. 000206
4. It is stated that Complainant had neither signed any cheques nor given any instructions for withdrawals and/or for payments. It is further stated that complainant’s son on 09.07.2018 went to OP to make enquiries with respect to the unauthorized transactions without the knowledge and/ or instructions of the complainant. It stated that the Branch Manager got the records verified and it was established that signatures of the cheques used for the above mentioned seven transactions during the period ranging from 29.05.2018 to 15.06.2018 were ‘forged’ and not of the complainant. A written complaint regarding the unauthorized transactions/ or withdrawal was filed on 10.07.2018 with OP.
5. It is next stated that OP bank is trustee of the money of its customers, it is the duty of the officials of OP bank to check and verify the signatures on the cheques before honoring them. It is stated that due to lack of duty to take care and negligence of OP and its officials sum of Rs.15,30,000/- was withdrawn from the account of the complainant, without her instructions.
6. It is further stated that the complainant requested OP to reverse the above impugned entries/transactions but till date OP has taken no action on the complainant/request of the complainant. Complainant’s son lodged an FIR in Police Station, Tilak Marg on 10.07.2018 with respect to the illegal transactions and FIR no.87/18 U/s 380/420/468/471/34 IPC was registered. It is further stated that during investigation it has come on record that the accused persons therein, in pursuance to conspiracy had stolen the cheque book of complainant and forged her signature in order
