The National Commission held that any individual possessing a bearer instrument is legally entitled to encash it, and the bank is bound to honour such an instrument when it is presented for payment.
Susheel Thakur had issued cheque number 090232 dated September 13, 2005, for Rs 2.7 lakh to his mother.
It was made payable to 'self or bearer' and sent through post but was lost in transit.
After issuing stop payment instructions, Thakur issued cheque number 090233 dated October 13, 2005, for the same amount. This cheque also met the same fate as the previous one.
Thakur then issued cheque number 090234 dated October 19, 2005, for the same amount, which was encashed on November 8, 2005.
When Thakur learnt that the encashment was not done by his mother, but by some unknown person, he lodged a complaint alleging negligence on the bank's part in ascertaining the identity of the person to whom payment was made.
Thakur's sister also lodged a formal police complaint on December 7, 2005.
He then received a threatening letter containing the photograph of a dead body and a warning that he, too, would be killed if he pursued the matter with the police.
Thakur suspected the involvement of the bank staff as he had earlier sent a fax message to the bank authorising his mother to execute bank transactions on his behalf.
Thakur filed a complaint with the banking ombudsman, but his complaint was rejected.
After nine years, Thakur filed a complaint in January 2015 seeking a direction to the bank to pay Rs 2.7 lakh along with 18 per cent interest, compensation, and costs, totalling Rs 22,57,400.
The bank contested the case. It pointed out that the complaint was not filed within the limitation period but after nine years of the cheque's encashment.
It stated that not one of the three envelopes containing the cheques was received by it through post.
It stated that the last cheque was presented for encashment and was honoured by making payment after verifying the drawer's signature.
Since it was a bearer cheque, the bank stated that payment had to be made to anyone who presented it, and no law made it necessary to verify the identity of the person presenting it.
It argued that there was no deficiency in service as the cheque was legitimately and properly signed. It sought a dismissal of the complaint.
The State Commission accepted the bank's arguments and dismissed the complaint. Thakur appealed against the order.
He contended that since the cheques were posted to the bank but not received by it, the bank was well aware that all three cheques were lost and ought to have refused payment.
The National Commission agreed that the complaint was time barred and there was no valid reason to condone the delay of over nine years in filing the complaint.
Nevertheless, the Commission also considered the dispute on merits.
It observed that Thakur was making false allegations by claiming that the cheques were sent to the bank, as this was contrary to his sister's complaint to the police that the cheques were sent to her.
The Commission also noted that Thakur had failed to cite any procedural lapse or breach of law on the bank's part.
Hence it concluded that Susheel had failed to prove the allegation of deficiency in service.
The National Commission pointed out that by issuing a 'self' cheque payable to 'bearer', Thakur had relinquished the right to question its encashment.
It held that any individual possessing a bearer instrument is legally entitled to encash it, and the bank is bound to honour such an instrument when it is presented for payment.
Accordingly, by its order of December 27, 2023, the National Commission dismissed Thakur's appeal.
Jehangir B Gai is a consumer activist
Feature Presentation: Aslam Hunani/Rediff.com
