Banking Service--Cheque Collection--Failure to Re-Present Cheques on Available Working Days Resulting in Staleness Constitutes Deficiency in Service
A bank acting as an agent for collection of cheques is under a legal obligation to exercise due diligence in presenting instruments within their validity period. Failure to re-present cheques on available working days, resulting in the instruments becoming stale, constitutes deficiency in service under consumer protection law. A bank strike does not excuse such failure where working days remained available before expiry of validity. Further, by allowing cheques to become stale, the bank extinguishes the depositor's right to initiate proceedings under Section 138 of the Negotiable Instruments Act, a remedy not barred even during insolvency of the drawer under the IBC. Thus, Bank Liable for Deficiency if Cheques Not Presented Within Validity
LOGIN TO READCaseLawToday.com is powered by M/s Law Herald Infotech