You go to your bank to withdraw some cash and find that someone else has already cleaned out your account by forging your signature!

This is exactly what happened to N.Venkanna. When he issued a cheque for withdrawing a sum of Rs 35,000 from his savings bank account in Andhra Bank, he was told that he did not have sufficient balance. Shocked, he made enquiries and found that someone had withdrawn Rs 34,000 from his account.

Even after he filed a complaint and got the forensic experts to certify that the signature on the withdrawal form was forged, the bank refused to take responsibility for the loss of money from his account. In fact, the bank accused Venkanna of “contributory negligence” in that he had lost his passbook. Pointing out that the person who had issued the withdrawal form had come with the passbook and this had led the bank to believe that the signature was genuine, the bank said it cannot be held liable.

The District Consumer Forum before which Venkanna filed a complaint, held the bank guilty of negligence. However, the consumer had also been negligent in losing his passbook and therefore was entitled to only 50 per cent of the amount that he had lost, the Forum held. When this was upheld by the Andhra Pradesh State Commission, the consumer filed a revision petition before the apex consumer court.

Now, in many earlier cases of unauthorised withdrawal of money, the apex consumer court has held that the bank is guilty of negligence if it is found that it has authorised withdrawal of money on a cheque where forgery is apparent. This case, however, was different in that here the consumer had lost his passbook. In fact, the consumer had earlier asked the bank for a new cheque book on the ground that he had lost it and on the bank’s refusal to issue another cheque book, had used a withdrawal form on two occasions.

So the main issue here was whether the bank could escape liability on the ground that the consumer had contributed to it. The apex court’s conclusion that the mere fact that the consumer had misplaced his passbook would not absolve the bank of its liability and it had to pay the consumer Rs 34,000 along with six per cent interest, would help a number of consumers placed in similar circumstances. (RP number 1990 of 1999).