Forged signatures on cheques: SC orders UCO bank to pay Rs 50 lakh to a firm

The apex court, however, accepted that safe custody of cheques was the responsibility of the firm, but asserted that bank could not wriggle out of its liability.

Stating that "bank cannot be entirely free from blemish", the Supreme Court has ordered UCO bank to pay Rs 50 lakh to a publishing firm for negligently clearing two cheques bearing forged signatures, said reports.

The firm, The Tax Publishers, suffered a loss of Rs 31 lakh when one of its employees reportedly stole two cheques and withdrew the money in March 2009.

The apex court, however, accepted that safe custody of cheques was the responsibility of the firm, but asserted that bank could not wriggle out of its liability. The top court took into consideration a report by handwriting expert and departmental inquiry before pronouncing its verdict, said a News 18 report.

The inquiry into the matter had pointed out that the fraud took place because of bank officials' negligence.

The UCO bank had approached the SC against an order by the National Consumer Commission in August last year.

Banks always warn customers that cheque books must be kept "in a secure place." Usually, these words are printed prominently in the cheque book itself.

OneIndia News