Any cheque retuned in clearing with the reason 'account closed' is a fraudulent cheque.
Anguluri Annappa
(Querist) 09 March 2014
This query is : Resolved
Respected Experts,
The above subject is out of practical experience. Under Sec 138 of N.I Act bouncing of a cheque is a criminal offence.
In this context, I request you to clarify
why not the DRAWER OF A CHEQUE in particular and the banker who with gross neglience closed the account by taking a declaration that unused cheque leaves destroyed by him be held responsible for the fraudulent transaction after closing the account.
so my contention is that is that ANY CHEQUE RETURNED WITH THE REASON THAT 'ACCOUNT CLOSED' IS A FRAUDLENT CHEQUE AND AN IMMEDIATE CASE SHOULD BE FILED WITH THE POLICE ON THE PERSONS RESPONSIBLE
FOR DEFRAUDING THE PUBLIC AND SOMETIMES EVEN BANKERS. This query is not just for acedemic interest. pl clarify.
Annappa
R.V.RAO
(Expert) 09 March 2014
the drawer of cheque has obviously played mischief.first he has issued cheque,and then not to attract sec.138, he closed the account.banker honestly believed the declaration that unused chqs. were destroyed.
even the the banker came to know the mischief only after bouncing of cheque by the drawer.
i view that in the case of closed bank account,you can only file cheating case against the drawer. the banker role cannot be suspected.
Anirudh
(Expert) 09 March 2014
Dear Mr. Annappa,
Do you mean to say that Bank should also be held responsible for closing the account, without ensuring the return of unused cheque leaves by the account holder?
If that is your thinking - then think whether the Banker should close the account or not when requested in writing by the Account holder, in some of the few hypothetical situations mentioned below:
1. The account holder says that the cheque book has been lost.
2. Some cheque leaves have been cancelled / destroyed by me. (Should the bank insist for cancelled / destroyed cheque?)
3. I have issued instructions in writing for 'stop payment' of some cheque(s).
When there are adequate measures (like Sec. 138, Summary suit etc.) available to deal with the mischievous issuer (drawer) of the cheque, I do not think Bank's culpability could be alleged in the closure of any account, pending payment/clearance of any cheque that might have been issued by the account holder, especially when the banker cannot be said to hold any grudge against any holder of the cheque.
Again to bring any charge against the Bank and to sustain it successfully is not that easy.
V R SHROFF
(Expert) 09 March 2014
BANK CANNOT BE HELD RESPONSIBLE.
Rajendra K Goyal
(Expert) 09 March 2014
Repeated query:
http://www.lawyersclubindia.com/experts/Banker-s-accountability-return-of-cheques-reg-456821.asp
http://www.lawyersclubindia.com/experts/Banker-s-accountability-return-of-cheques-reg-456831.asp#.UxwPH4VRx3A
Anguluri Annappa
(Querist) 09 March 2014
Respected Sirs,
Thank you all for immediate response.
At the outset, I would like to express that in the present day environment BANKING is not that an EASY matter even after so much technological input.
In the name of competetion, all banks especially the so called high profile banks going out of their way to find quantum business rather than quality business.
When they open an account why they are demanding all the essential proofs to fulfil KYC norms etc. to safe gaurd themselves without caring a rap for the customer's credentials. Any fraudester can
easily open an account by providing the required forms, immediately get an ATM card and 100 leaves cheque book, just by depositing10 or 25 thousand rupees. After 4 or 5 months operation, he politely request the bank to close his account for his personal reasons by giving a declaration that unused cheque leaves were destroyed/lost by him. How any bank take it for granted, and close the account saying OK OK we are always at your service, and say TA TA, and GOODDAY.
Why not they are doing the same while issuing a duplicate DD. Why they are demanding an indemnity bond. They can honestly believe the customer and issue a duplicate DD. But they are not doing the same. WHY.
In the name of liberalisation, so many
ATMs are being installed whether they work
properly or not, leaving the ATMs open 24 hrs. In Bangalore ATM case, there was a big
uproar throughout country, why bankers were
held responsible for that incident. Immediately all banks issued orders to their branches to provide a latch with a lock and key so that nobody can pull the shutters down.
Whethr the entire intelligence could nab that criminal. NO!. People also forgotten the issue.So a criminal's calculation will mostly be successful, whether you agree to my point or not, as he has no rules and regulations to follow, but to put his plan in perfect action.
In the present case, the drawer closed the acount well before issuing this cheque. In another case, two cheques for Rs 85 lakhs were returned with the same reason ACCOUNT CLOSED. Whether any of the experts accept that banker was not acted with gross/criminal neglience and honestly believed the drawer's declaration and closed the account. sorry for taking
so much of your valuable time, if any expert pore this message.
Yours sincerely,
Annappa
Anirudh
(Expert) 09 March 2014
Dear Mr. Annappa,
I vouch for the bank and can dare say that the Bank has not committed any criminal negligence.
In your anxiety, you are trying to link up so many unconnected things.
YES, YOU MAY HAVE YOUR OWN IDEA AND THINKING AND PERCEPTION. That is an altogether another matter. But that will not stand test of judicial scrutiny.
All the bests.
Guest
(Expert) 09 March 2014
No real problem has been discussed. So, it is certainly an academic query.
However, the incident cannot be treated as fraud if the cheque was issued prior to the closure of account.
Further, on what basis you consider gross negligence of the bank, if that closed the account by taking a declaration that unused cheque leaves destroyed? If a holder of account gives a false declaration only he is liable for his wrong statement, not the bank is miable to be held responsible or taken as negligence of bank.
So, mind it, any solution depends solely on the facts/data of the case, not on general assumptions through academic query without quoting any fact, figures dates, etc.
T. Kalaiselvan, Advocate
(Expert) 09 March 2014
There is no negligence on the part of the bankers because they go by the words of the customers. How will the banker come to know that whether his customer has really destroyed all the balance cheques or ot he cannot enter his premise for a physical verification (?) The bankers cannot be held responsible for the fraudulent activities of its customers and it is not their duty as well, they will abide by their own rules and regulations governing the issues.
Sudhir Kumar, Advocate
(Expert) 11 March 2014
Agreeing with experts above, I will add that you are not able to convey your problem. Take help of a friend and write query.
Sudhir Kumar, Advocate
(Expert) 11 March 2014
title of your query
Any cheque retuned in clearing with the reason 'account closed' is a fraudulent cheque
Ans : Yes. Unless cheque is in charity. Cheque is issued with intention of not paying.
Sudhir Kumar, Advocate
(Expert) 11 March 2014
please bring facts if a meaningful advise is needed on any fact.
Anguluri Annappa
(Querist) 13 March 2014
Respected Sirs,
Cheques retd with the reason ACCOUNT CLOSED-- Frauds by customers…reg...
WRT the above, briefly, I explain that any chq ( Date of the chq after date of closure of a/c ) returned by any bank is a fraudulent cheque.
Some customers are closing their accounts by just giving ( tick based ) declaration for the unused chq leaves having destroyed by themselves and the banks are happily closing the a/cs. Later on the chq leaves are finding their way into the hands of fraudsters, and if any chq is presented in clg, the concerned banks simply returning the chq with ACCOUNT CLOSED reason and washing their hands off. This loophole is being exploited by the fraudsters and bankers as well. In fact, it became a safety net for the bankers in particular.
So, in total ACCOUNT CLOSED reason is being deliberately misused by fraudsters and the bankers as well. I suppose, in these txns the original customer-drawer will nowhere be in the picture, in order to escape his liability.
WRT the above, I add that once a chq is presented in clg after closure of the a/c, is either an issued chq or lost one, but can not a destroyed one, as a destroyed chq cannot be presented.
So before closing the a/c on declaration basis, it is the absolute responsibilty of the banker to insist on the customer to stop payment of issued/lost chqs, then only the concerned a/c should be closed, otherwise banker is clearly negligent in his duty. Later on for any loss occurred the concerned bank is also liable along with his customer. But the onus falls first on the banker himself for his negligence
. Further I mention that while returning a chq mere ACCOUNT CLOSED is a total cover up without disclosing the status of the chq being returned such as stopped/lost /stale etc., especially in the present case. So, along with ACCOUNT CLOSED reason the STATUS of the chq should also be mentioned, then the chances of fraud could be minimized. Only in the case of courts attachment/tax authorities attachment order, bankers inform account closed information, in other financial txns they cannot do the same.
Now, I certainly hope that I could deliver what is there in my mind regarding this problem and I earnestly request all of you to give your valuable judgement.
Yours faithfully,
Annappa
Sudhir Kumar, Advocate
(Expert) 16 March 2014
WHEN A PERSON CLOSES ACCOUNT BEFORE OR AFTER ISSUE OF CHEQUE THEN HE SHOWS INTENTION OF NOT PAYING THE MONEY DUE ON CHEQUE WHEREAS ISSUE OF CHEQUE (UNLESS GIVEN IN CHARITY) ADMISSION TO PAY ANY LIABILITY. THIS IS FRAUD.
Guest
(Expert) 16 March 2014
Hypothetical academic query, not your personal or official problem. Discuss the problem with fact & figures, if this is a real problem you are facing with.
ajay sethi
(Expert) 16 March 2014
if a customer has made a declaration that un used cheque leaves have been destroyed bank accepts declaration of customer in good faith . in such a case if cheques are fraudulently used bank is not to be blamed .
it is duty of customer to return unused leaves at time of closure of account .you cannot haul the bank for negligence
