The Hindu Business Line : `Banks must verify specimen signatures for cheque books'

SOUTH Indian Bank Ltd "failed not once, but twice'' to correctly verify/compare the signatures of an account holder on the cheques and the specimen signatures with them on record — one at the time of issue of the cheque book and again at the time the cheque was encashed.

As a result, the customer had suffered financially as large amounts had been withdrawn from his account fraudulently, the National Consumer Disputes Redressal Commission said.

The National Commission allowed the two revision petitions preferred by Mr Abdul Razak and another challenging the order dated July 29, 2000 of the State Commission, Maharashtra, setting aside the order of the District Forum which directed the respondent Bank to pay back the fraudulently withdrawn amounts with interest. The Commission held that "deficiency in rendering service is writ large on the face of it by the respondent by not comparing the signatures on the documents/instruments'' presented to them with record of signatures kept by them.

The National Consumer Redressal Commission, comprising Mr Justice D.P. Wadhwa, President, and Mr Justice J.K. Mehra and Justice Mr B.K. Taimini, Members, said that even if they did not dispute the argument of the respondent that they performed their duties in good faith when they issued the cheque books and allowed the cheques, the bank would have to explain its conduct with reference to signatures on the documents.

". Issue of cheque book is not issue of blank stationery,'' the Commission said and added unfortunately the State Commission did not go into this question. Where the State Commission appeared to have gone wrong was to compare the signature on the cheque book requisitioning application and the signature on the cheques, both of which, according to the complainant, carried the signatures of the same person, i.e., the imposter.

When the Commission members saw the signatures on the account opening form and compared them with the signatures on the cheque requisition application and the cheques, it became clear that the respondent Bank failed not once but twice to verify/compare the signatures on these instruments and the specimen signatures with them on record .

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