Cheques And Balances Your Bank Wont Tell You About

One basic rule of banking is that money can be transferred or withdrawn from a customers account only when he issues a cheque to do so. Flouting this rule, the State Bank of India allowed the transfer of money from M/s Vijay Lakshmi General Stores account on telephonic instructions which it claimed were given by the brother of one of the partners in the firm. Following a complaint, the State Consumer Disputes Redressal Commission held that no bank could transfer any amount from a customers account unless he issues a cheque and it is presented for collection. The bank was accordingly directed to reverse the entries.

 

Freni Fitter, her son and her daughter, had three separate savings bank accounts with the State Bank of India, Juhu Tara Branch, Mumbai. They were shocked to find that Rs 80,000 had been withdrawn from each of their accounts without their knowledge. It appeared that the bank had allowed Fitters ex-husband to withdraw Rs 2,40,000 without his having any authority to operate those accounts. On their protesting, Rs 80,000 was credited in the account of Fitters daughter; but the remaining Rs 1,60,000 was not.

The Maharashtra State Consumer Disputes Redressal Commission held in (1993)1 CTO 160 (CP) that the bank was guilty of deficient service by allowing unauthorised withdrawals from Fitters account and those of her son and daughter. The Commission directed the bank to credit Rs 80,000 each into the accounts of Freni Fitter and her son, plus Rs 10,000 as compensation.

Once a cheque is issued by the customer in favour of another it has to be honoured by the bank on presentation. The accountholder can, after issuing the cheque, tell his bank to stop payment instructing it to not allow the withdrawal of money from his account. The customer may do so for any reason, and the bank is bound to follow his instructions.

The National Commission in Arum Sameer Associates (P) Ltd v Regional Manager, State Bank of India, Chandigarh observed that, The banker who is under an obligation to honour the cheques of its customers is equally bound not to cash them if he has received intimation countermanding payment of such cheques in the form of stop payment advice issued by the customer. The legal effect of such an instruction to stop payment is to leave the balance in the hands of the bank as if no cheque has been issued.

Take the case of C Balakrishnan, proprietor of Parimal Automobiles, Bangalore. He issued eight cheques for Rs 4,000 each. He, however, lost his cheque book and immediately sent a registered letter to the Branch Manager of the Canara Bank requesting him to stop the payment of all eight cheques. Despite having received the instructions, the bank cleared three cheques for Rs 4,000 each.

As the bank failed to give him a plausible explanation, Bala-krishnan filed a case before the Karnataka State Commission at Bangalore. Negating the banks plea that the complainant had not given full particulars, the Commission observed that, It is really un-understandable to see what particulars the bank wanted when the complainant had furnished in his letter the cheque numbers. Holding the bank as deficient in its services, the commission directed it to pay to the complainant Rs 12,000 (the amount under three cheques) with interest at 15 per cent per annum and costs of Rs 1,000.

Most people are not aware that the Reserve Bank has issued guidelines to banks that all outstation cheques up to Rs 2,500 are to be given instant credit to the individual account without waiting for their collection. These instructions are, however, not followed by the banks.

Major A P Lawale had maintained a long-standing personal account with Punjab National Bank, Panchkula. On 28th December, 1991 he deposited a cheque of Rs 2,200 in the bank. Assuming that the credit of that amount had been given, he issued a cheque on 31st December, 1991 to his landlord, which was dishonoured by the bank.

Lawale filed a complaint with the District Consumer Disputes Redressal Forum. The Forum held that this was a case of patent deficiency in the service of the bank. It opined that no amount of compensation was sufficient for the loss of reputation and credibility of the complainant, but granted him a somewhat modest sum of Rs 2,500 as compensation.

The bank filed an appeal with the State Commission which, while dismissing it as being wholly devoid of merit, held that the instructions had been issued by the Reserve Bank, as a measure of better customer service and their enforceability has been mandated by the Government of India itself.

To expect that banking services will match the high-sounding claims made by banks may be over-optimistic. But customers must be made aware of their rights and should exercise them when the need arises. Banks too should realise that any deficiency in their service may lead to action under the Consumer Protection Act.

Rosy Kumar

(The author is an advocate and editor of the Consumer Protection and Trade Practices Journal)

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Keeping an eye on those heavenly bodies

Maitreyee Handique

Every so often both tabloids and respectable newspapers come out with headlines heralding news of earth-shaking importance. Were all familiar with these cosmic events will Iraq spark off World War III, will a mad dictator somewhere clone 2,000 copies of himself, will Hillary Clinton have an affair with Prince Charles.

But if youre looking for really turbulent, genuinely earth-shaking news, look to the stars. The universe seems to run like a clockwork toy to most of us the sun comes up at regulation time, the moon waxes and wanes as its supposed to. But theres more fireworks going on upstairs than all the cataclysmic events on the third rock from the sun put together. And the best thing about the longest running drama in the world is that you can watch the happenings from a safe distance. You dont have to be a rocket scientist to indulge in the worlds oldest hobby, stargazing, and the curtains always up with this theatre in the sky.

If theres an occasional grumble from the underground plates here, just spare a thought for the explosions and radiation bursts that take place all the while in outer space as stars are born and new planets take shape in sky nurseries. Proof in the form of meteorites that come showering down on earth are aplenty.

Our close encounters with objects from outer space havent been particularly friendly so far. Remember the rocky mass that fell from the sky and wiped the dinosaurs off the earths face? These small presents from the skies can cause havoc as you can see in Maharashtra. Years ago, debris from a comet struck the earth there creating a crater with a kilometre-wide radius, which is now filled with rain water and called Lonar Lake.

The next culprit Swift-Tuttle, a periodic comet last seen in 1992 is said to be on its way in 2116 to add another gigantic pockmark on the earths surface. Celestial bodies often end up crashing mid-space as did comet Shoemaker-Levy 9 with Jupiter in 1994, much to the thrill of earthly telescope peerers.

Backyard astronomers often derive a great deal of satisfaction from assembling their own telescopes. Interested parties can head for the Amateur Astronomers Association of Delhi (AAAD) and replicate the Hans Lippershey-Galileo Manoeuvre (the first invented the telescope and the latter used it for the first time in 1608). Annual membership fees are a piffling Rs 200 (equipment-making costs extra) and club meetings are held on Sunday afternoons. And on one moonless night of the month, you get to travel to a zero electricity zone like Sultanpur or Damdama lake in Haryana, to point your telescope skywards.

But to search for an object without having an orientation is like searching for a needle in a haystack, says Chander Bhushan Devgun, one of the oldest members of AAAD, which was instituted in 1986. The first step, he says, is to invest in a pair of binoculars and familiarise yourself with the phases of the moon. It makes sense to get to know the constellations before seeking out the asteroids and nebulas.

The sky is yours after that. You can watch shooting stars take off across the sky, spot comet tails and nebulas, birth place of stars, get a close up view of Proxima Centauris the nearest star after the sun or simply salute Sirius, the brightest star in the sky.

Most amateur astronomers confess that one of the greatest thrills is seeing the real colours of the stars from bluish white (hot stars) to red stars (cooler ones). Watch out for the Great Orion Nebula which appears green to the naked eye, even though photographs show that its real colour is orange. Some have a soft spot for asteroids, those mini-planets that were home to Antoine Saint Exuperys little prince and that look like potatoes and tomatoes.

Says Devgun, who switched from a family-run business to professional telescope-making a year ago: The most colourful object in the sky is Jupiter. If you want to preserve your astral wanderings for posterity, you could try astrophotography. If you can see a comet with the naked eye, it can usually be shot with a 35mm camera with a 50 mm lens and film speed of 400 ASA or higher. The exposure time could be anywhere between 20 minutes and 2 hours, depending on the comet.

Or you could embark on a quest for the Holy Grail of the amateur astronomer discover your own comet. 99 per cent of the comets discovered were spotted by amateur astronomers. So if you spot one, just call up the International Astronomical Union and you might even have a comet named after yourself so much more exciting than vanity license plates!