Legal Question in Banking Law in India

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.

5. If the bank ends up charging me, what should be my actions for legal recourse.


Asked on 9/20/10, 11:29 am

1 Answer from Attorneys
Vishwa Arya Arya & Co.

your remedy is to write to the bank ombudsman challenging the claim of charges in the manner you have explained in the question. Since you had immediately paid the amount and mismatch cud be due to carelessness at the end of HDFC or in comparison with no fault of yours. do not need to succumb to the pressure.

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Answered on 9/21/10, 8:59 am


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