The Telegraph
Since 1st March, 1999
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Court endorses chequebook charge by banks

New Delhi, Feb. 18: The Supreme Court has ruled that banks have the right to charge an extra amount of Rs 50 for issuing 100-leaf chequebooks to account holders.

A division bench of Justices Brijesh Kumar and A. Lakshmanan, in an order on February 6, dismissed the petition of a customer of Canara Bank who had challenged the bank’s right to charge the extra amount.

Archana Kamath, the customer, had first moved the District Consumer Redressal Forum, which held that the bank was not justified in recovering the charges for supplying the chequebook as it could not be done unilaterally (by the bank) without the customer’s consent. The district forum also observed that the bank did not indicate the cost involved in printing and obtaining chequebooks.

When the bank appealed in the state forum, it upheld the order of the district body. On further appeal, the national forum struck down the orders of the district and state forums and held that the charges that banks levied on customers to supply chequebooks “fell in the realm of pricing”.

“It is on account of consideration for providing banking services,” the national forum observed. “Hence, it was not within the jurisdiction of the consumer forums to go into that question relating to pricing of such services.”

Kamath then appealed against the decision of the national forum in the apex court, which said: “There has been a large-scale change and improvement in the working and manner of functioning of various institutions, including banks.”

“Very many services which were not available earlier have been introduced with the aid of mechanical and technological devices. Introduction of computerisation has its own effects. One of which is introduction of MICR cheques,” the judges observed.

“Therefore, to say that the MICR was introduced only for the facility of the bank would not be correct nor the argument that it could not be permissible for the bank to make up some amount of the cost incurred in introducing the new and modern infrastructure for improving its working.”

“We also feel that for such small charges necessitated due to general modernisation of functioning and services, the question of it being unilateral does not arise nor the question of consent of each customer,” the judges added.

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