PUNJAB NATIONAL BANK Vs. DILSHAD SHEIKH

JUDGEMENT

(1.) THE question that has come up for consideration in this case is whether a Bank, after purchasing or discounting a DD and crediting the same in the customer's account with the amount of the instrument, can dishonour the cheque(s) issued by the customer and reverse the entries of the credit?

(2.) PUNJAB National Bank (short'PNB') after having purchased DD, credited the amount in the account of the complainant, honoured few cheques against complainant's account and then later stopped payment of various other cheques. Complainant approached the State Commission for deficiency of service. Complaint was allowed by the Commission and reliefs were granted. Aggrieved by the same, PNB has approached this Court with this appeal. Short facts, which are necessary for disposal of the appeal, are as follows.

(3.) COMPLAINANT took the stand that since his cheques were dishonoured by PNB, proceedings were initiated against her by creditors and complainant was threatened of criminal prosecution. Chief Minister then intervened and it was resolved that complainant would issue a cheque for Rs. 6.50 Lacs in favour of J&K Bank, but it would not encashed until legal opinion was sought from legal experts at New Delhi whether DD was amenable to Banker's lien. Instructions were also sent in the form of communication dated October 13, 1999 to PNB that it would not encash the cheques for Rs. 6.50 lacs in case legal opinion was received against J&K Bank. Complainant alleged that J&K Bank had allowed encashment of the cheque by PNB in utter disregard of above instructions given by complainant in this regard and was deprived of the amount of the cheque. It was further alleged that PNB had charged Rs. 17,504/- as interest on the amount of Rs. 4.00 lacs already paid on cheques. Complainant had contested that service hired by her from PNB were defective and, therefore, she demanded Rs. 6.50 lacs, Rs. 17,504, Rs. 5.00 Lacs for loss to credibility, reputation and mental agony and Rs. 3.00 Lacs for harassment and mental agony.