Central Bank Drags BoM In Court

As all nationalized banks are working under the control of the Reserve Bank of India they are expected to follow the rules and regulations codified by the same regulatory authority. But if some unforeseen incident happens and if there is no co-ordination or co-operation between the banks, they are susceptible to legal confrontation. This has happened in the case of a stolen cheque which was deposited in one bank and was cashed by the person who stole it by producing it in another bank.

- Prabhakar Kulkarni

A bank’s customer, Shripati Patil, received a cheque which was deposited by him in the Central Bank of India’s branch in Kolhapur in southern Maharashtra, in which he has the account. But after the cheque was deposited, it was stolen from the Central Bank. The person who stole the cheque went to the Bank of Maharashtra (BoM) on which the cheque was drawn and cashed it and disappeared after getting the amount.

The said cheque was issued to Patil as an employee of the Maharashtra State Electricity Distribution Company (MSEDCL) in payment of Rs 1, 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 Central Bank to which he had deposited the cheque and it was after depositing it and receiving the due receipt, the cheque was stolen. The Central Bank paid the amount to Patil and then issued legal notice to the BoM for refund of the amount as that bank had allegedly cashed the stolen cheque.

As the BoM did not respond to the legal notice, the Central Bank filed a suit against the BoM for recovery of the amount of Rs 1,58,736 with interest. The suit in the court has, therefore, claimed that the BoM’s concerned branch in Kolhapur should pay Rs 2,47,054, including 18 per cent interest and a cost of Rs 5,000.