Legal Question in Banking Law in

I had issued post dated cheques to HDFC bank as a part of EMI for car loan. Out of the cheques presented, two cheques were returned due to mismatch of signature. I may be noted that these cheques were not for two consecutive months but the were spaced well apart. Moreover immediately after the bank notified me about the return of cheque, I paid the amount in cash. Now they say that they will charge Rs.450/- per returned cheque. When I contested they said that it is this way for loans and it is there in the loan agreement. I don�t remember signing for any such term. My questions are

1. What is the sanctity that the cheque had not been over written as all the cheques were handed over initially itself.

2. When HDFC as an institution is accepting cheques, isn�t it supposed to check and verify my signatures. (fact to be noticed is that out of six chques with HDFC, two have been returned but I have rarely faced any problem of cheque return earlier)

3. Even if nothing went wrong and the cheque was returned due to a genuine mismatch, is HDFC supposed to levy any penalty on me (it should be kept in mind that I do the cash payment immediately after being informed of such cheque returns)

4. If any such clause is there in their agreement for levying of fees for cheque returns. Isn�t the agreement illegal considering the clear guidelines spelt in banking norms that such returns are not to be penalised.


Asked on 2/19/11, 3:41 am

1 Answer from Attorneys
J. Radhakrishnan independent Practice

if cheques issued by you are returned by your bank for any reason, HDFC is entitled to collect the charges stipulated by them in the loan agreement. U should check the agreement first. If it does not contain any penal clause,you can file a complaint to the Banking Ombudsman.

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Answered on 2/19/11, 11:06 pm


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