Whether Bank can be held liable if the cheque got dishonored due to technical glitches in the system?

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Shubham Budhiraja[1]

Mr. A purchased stocks through Angel Brokers. He issued Cheque of Rs. 2,00,000/- for the payment. The cheque got dishonored by ICICI Bank. The Bank cited technical glitch as reason. Mr. A filed consumer complaint against Bank. Hon’ble State Commission partly allowed the complaint and ordered Rs. 5,00,000 as compensation. In Appeal, Hon’ble National Commission held that[2]:

 

(i)             In order to determine the deficiency in service, it has to be seen as if there was inadequacy in the manner of performance which is required to be maintained by the service provider.

 

(ii)           Nowadays entire banking activities are linked with information technology. If for any technical fault, the transaction could not be performed, then it cannot be held as deficiency in service.

 

(iii)         Supreme Court in Consumer Unity & Trust Society, Jaipur Vs. Chairman & Managing Director, Bank of Baroda, (1995) 2 SCC 150, held that bank’s failure to render service due to illegal strike does not amount to deficiency in service.


[1] Advocate, Delhi High Court [LLB, ACS, BCOM(H)], Budhirajalawchambers@gmail.com , +91-9654055315

[2] SXJ Vasan v. Indian overseas Bank & Anr., FA/179/2022,

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