Bank told to pay $22,900 for negligence

New Delhi: The Delhi consumer commission has asked the State Bank of India (SBI) to pay 11 lakh ($22,900) for ignoring a request from an Italian company not to honour cheques from a lost cheque book.

Delhi State Consumer Disputes Redressal Commission president Barkat Ali Zaidi and member M.L. Sahni pulled up the Defence Colony branch of SBI: "When a banking institution is guilty of negligence, it cannot shirk its liability to make good the loss suffered by a consumer due to deficiency in service.

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"In the present case, the admitted facts constitute deficiency in service on the part of the bank, which, therefore, is held liable to indemnify the loss suffered by the complainant," the commission said.

The bank was told to pay 11 lakh to the company for releasing the payments and 10,000 as litigation expenses.

The bank argued that it had encashed only cheques about which the company had not given any instruction to stop payment.

The case dates back to 2003 when the Italian company informed the bank that it had lost a cheque book and no payment should be released against the unused cheques. It also listed the details of the cheques issued from the cheque book before it went missing.

Despite the complaint, the bank released payment of six cheques totalling 11 lakh. The company then approached the consumer court seeking compensation.
Source: IANS