Money & Banking

‘Writ under Article 226 lies against negligent nationalised bank’

S. Murlidharan | Updated on October 22, 2012

A bank, a nationalised bank at that, is an instrumentality of the state and hence writ under Article 226 of the Constitution lies against it, said the Madras High Court in Ashok Amritraj vs Reserve Bank of India and others.

The petitioner had placed Rs 6.35 crore in fixed deposits — nine receipts for Rs 95 lakh each and one receipt for Rs 65 lakh. Midway through, that is before the maturity of these deposits, an impostor, perhaps in cahoots with the bank staff, wanted to close these accounts by producing deposit receipts that were clearly forged as apparent from the conspicuous differences in the watermarks in the forged and original receipts normally issued by the bank.

Moreover, the impostor had walked away with the loot merely by producing an authorisation letter ostensibly given by the petitioner. Coming down heavily on the bank, the High Court wondered how a bank could be so blasé especially given the size of the deposits. The stark differences in watermarks in the deposit receipts vis-à-vis the original ones should have alerted the bank. Second, no sensible bank would issue cheques to the so-called authorised person without obtaining confirmation from the original depositor given the size of the deposits.

The High Court brushed aside the contention of the respondent bank that since facts had to be examined it was a fit case for civil proceedings and therefore a writ court could not intercede. The Court emphatically ruled that when a bank deprives a depositor of his wealth, he cannot be expected to wait patiently and watch helplessly even as the case drags on in a civil proceeding. The bank was asked to pay up.

(The author is a New Delhi-based chartered accountant)

Published on October 22, 2012

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