The arbitrariness of banks will stop! Supreme Court strikes on check delay, High Court reprimands on account freeze

• The Supreme Court ruled that non-presentation of a check within the validity period will be considered a service error on the part of the bank.
• The court clarified that it is the responsibility of the bank to act timely and carefully in the interest of the customer.
• The Allahabad High Court reprimanded and fined banks for freezing accounts without any concrete reason.

Non-presentation of a check deposited by a bank within the validity period, without valid reason, will be treated as service error under the Consumer Protection Act, a landmark judgment has clearly warned. Supreme Courthas given Justice B. V. A bench of Nagaratna and Ujjwal Bhuyan upheld the negligence charge on the part of the bank, holding that the bank, as agent of the customer, had an obligation to present the check on time. This case pertains to a customer who had deposited two large checks in his account on May 29, 2018. The total amount of these checks was 1,06,10,768. That check was dated March 3, 2018 and was valid till June 2, 2018.

Swaraj Dweep: Golden saga of bravery composed by Andaman; India holds a world record by hoisting the world’s largest tricolor at the bottom of the sea

According to the customer, the check was initially processed and deposited, but later returned with the words ‘Online Check Return’. The bank was required to re-present those checks within their validity period, but the bank did not do so. When the checks were later presented, they were dishonored and dishonored. The bank cited the strike on May 30 and 31 as the reason for the delay, but the court ruled that June 1 and 2 were working days. (Photo Courtesy – Pinterest)

In his judgment dated April 20, Justice Ujjwal Bhuyan said the bank has an obligation to act with care and diligence in the interest of the customer. Failure to present a check within a reasonable time, even after delay, constitutes negligence. However, the court reduced the amount of compensation from 10% to 6% as the exact assessment of actual damages was unclear.

Carelessness will not be tolerated

This result clearly shows that delays, negligence and procedural errors in banking services will not be tolerated. A check deposited by a customer is a symbol of the trust reposed in the bank. If the bank fails to fulfill its obligations on time, it will be held liable under the law.

You are not an investigative agency…

High Court Reprimand

The Lucknow bench of the Allahabad High Court has taken the banks to task for arbitrarily freezing the accounts of bank customers. According to the court, the bank acts like a trustee. So they should not act like an investigative agency. Justice Shekhar B. A bench of Saraf and Justice Awadhesh Kumar Chaudhary imposed a fine of Rs 50,000 on the Indian Overseas Bank. The bank had frozen the bank account of a customer without any valid proof.

West Bengal Exit Poll: Whose government in Bengal if the exit poll fails? ‘Plan B’ of BJP and TMC ready for power!

Now the High Court has ordered the bank to pay the entire amount to the account holder within four weeks. This case is related to M/s SA Enterprises. This company, which is engaged in the business of fishing missionary, had filed a petition against the bank. Court freezing accounts without any solid basis is worrisome. Such arbitrary actions bring businesses to a standstill and tarnish the image of account holders.