The Supreme Court has held that banks are liable to compensate a customer whose money is wrongly paid to another person without verifying the original signature of the account-holder as it amounted to deficiency of service. A bench of Justices D K Jain and T S Thakur said the bank was guilty of honouring the cheque presented by the fraudster by releasing an amount over and above the amount in the account even though the customer Gurnam Singh had no overdraft facility.

“On a query by the Court how in the absence of any overdraft facility being enjoyed by the complainant, a cheque for the amount which was in excess of the balance amount in the account of the complainant could be honoured, learned counsel is unable to furnish any satisfactory explanation. “In our opinion, this fact, highlighted by the State (Consumer) Commission, by itself is a glaring example of negligence/deficiency in the service of the bank,” the bench said.

The bench made the remarks while dismissing the appeal of public sector Vijaya Bank which had challenged the concurrent findings of district consumer forum, Chandigarh, State Consumer Commission and the National Consumer Commission which had held the bank guility of deficiency in service for releasing an amount of over Rs 3.5 lakh to a fraudster who had presented stolen cheques of Gurnam Singh.

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0 responses to “SC held bank liable to compensate for payment without verification of signature”

  1. anil says:

    dear sir,
    if bank give loan without veryfy signature of title deed(registree) menas registree document signature in english when bank confirmation letter signature forged in hindi of my gr.father .what solution of the matter

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