Who is responsible for a stolen cheque and the amount which the original customer whose cheque was duly deposited but he did not get?
As all nationalized banks are working under the control of the Reserve Bank of India (RBI) they are expected to follow rules and regulations codified by the same regulatory authority. But if something unforeseen incident happens and if there is no co-ordination or understanding of co-operation between the banks, they are susceptible to legal confrontation.
This has happened in case of a stolen cheque which was deposited in one bank and was en-cashed by the person who stole it by producing it in the bank which had issued the cheque. A bank’s customer received a cheque which was deposited by him in the bank in which he has the account. But after the cheque was deposited it was stolen from that bank.
The person who stole the cheque went to the bank on which the cheque was drawn and en-cashed it and disappeared after getting the amount. Who is then responsible for the stolen cheque and the amount?
The said cheque is not of a small amount. It was issued to an employee of Maharashtra State Electricity Distribution Company (MSECDL) in payment of Rs1, 58 736. This was part of his total amount which he was to receive after retirement.
The person who stole the cheque received the amount but not the concerned employee Shripati Patil. He therefore demanded the amount from the bank to which he had deposited the cheque and it was after depositing it and receiving the due receipt, the cheque was stolen. Hence he should receive the amount. The bank had to pay the amount to Mr Patil who received it from Central Bank of India where he has the account in which he had deposited the cheque.
When the cheque was lost, the matter was informed to the police who circulated information about it to all banks in the area including Bank of Maharashtra on which the cheque was issued on behalf of MSEDCL. But before any such intimation, the stolen cheque was presented to the concerned branch of Bank of Maharashtra and the payment was made.
According to Bank of Maharashtra’s concerned officials the cheque was bearer and MSEDCL having account in the branch issues bearer cheques of such amounts in view of immediate availability of the amount to its employees. MSEDCL has not confirmed that the cheque was bearer, on the contrary clarified that it was crossed.
As the dispute is whether the cheque was bearer or crossed, it was also pointed out that if the amount is over Rs50,000, identity of the person should be established by way of PAN card, etc. As this was not done it was the liability of Bank of Maharashtra to pay the amount to Central Bank which has paid the said amount to Mr Patil who is the legitimate receiver of the amount.
As the Bank of Maharashtra has not yet responded positively, a legal notice has been issued on behalf of Central Bank of India with demand to pay the amount as the stolen cheque was passed without verification and identification.
Bank of Maharashtra has not yet replied but says that the matter is being considered by its legal department. Thus the issue of a stolen cheque, which is being en-cashed by its thief and liability to pay the real recipient of the amount and responsibility of identification before making payment of a cheque over a certain amount—all these matters which are important in banking transactions are now at stake and more so because the tussle is between the two nationalized banks’ branches at Kolhapur in southern Maharashtra.
An RTI query revels that the Nagpur office of the EPFO (Employees Provident Fund Organisation) has almost half its current deposits in the ‘unclaimed’ category! The story is the same across the country. As per the latest rules, unclaimed deposits will now also stop earning interest
All eyes are on the mood and tone of the Winter Session of Parliament. A plethora of changes are on the table and if the Monsoon Session is anything to go by, reformists will have a tough time
The Winter Session of Parliament, which begins on Thursday, will be a very important gauge as to the extent to which the announced reforms are being implemented. The direction of reforms in the coming months will depend on whether the ruling UPA government becomes stronger or weaker out of this winter session. This is the assessment of Nomura in its Asia Insights report.
Nomura does not see the UPA government at risk as the Congress has both inside (DMK, NCP, others) and outside (SP, BSP) support to tide over a no-confidence vote, in case the motion is raised, which itself is uncertain. The SP and the BSP are opposed to FDI (foreign direct investment) in multi-brand retail, but otherwise continue to support the government from outside. In terms of the reforms, Nomura expects the Companies Bill, Competition Bill, Banking Law and Forwards Contract Bill to sail through smoothly, but Insurance, Pension and Land Bills may face much more opposition.
Nomura’s worry is that even a discussion on FDI in multi-brand retail will lead to heated debates and could lead to disruption in parliamentary proceedings. If the debate on FDI in multi-brand retail is put to rest soon, there is hope that other reforms will also be passed. However, the Monsoon Session of Parliament did not inspire much confidence as the stand-off between the government and the opposition parties on issues of graft and corruption led to a complete washout of the parliamentary session. There is a risk that the Winter Session could go down the same road.
Media reports suggest that the TMC chief has not been able to gain enough support for the no-confidence motion, so the likelihood of the government falling is small. Instead, the government may choose to debate the thorny issue of FDI in multi-brand retail in parliament, as it is an executive decision and does not require parliamentary approval.
According to Nomura, some of the reforms announced by the government since September 2012 that will come up for approval during the Winter Session of Parliament include: