NCDRC sets aside Rs 2 lakh award against Punjab National Bank in cheque reversal case
The National Consumer Disputes Redressal Commission held that Punjab National Bank was not deficient in service when it restored a cleared Rs 12.6 lakh credit to the payee's account.
Key points
- The National Consumer Disputes Redressal Commission allowed Punjab National Bank's appeal and dismissed a customer's complaint on 6 November 2026.
- The Delhi State Commission had awarded the customer Rs 2 lakh compensation with 18% default interest; that order is set aside.
- The commission held that once a cheque is cleared, a bank cannot reverse the credit without the payee's written consent.
Photo: Steven Bornholtz / Wikimedia Commons, CC BY-SA 4.0 (cropped). Representational image.
The National Consumer Disputes Redressal Commission (NCDRC) on 6 November 2026 allowed an appeal by Punjab National Bank and set aside an order of the Delhi State Consumer Disputes Redressal Commission that had awarded a customer Rs 2 lakh compensation. The commission held that the bank was not deficient in service when it restored a cleared credit of Rs 12.6 lakh to the payee's account.
What Happened
According to the order, on 25 June 2003 a savings account holder at the bank's Preet Vihar branch in Delhi dropped two cheques for Rs 8,50,000 and Rs 4,10,000 in favour of her husband, then a branch manager of the bank. She said she asked the branch within an hour to cancel the transfer. The branch reversed the credit that day, but on 27 June 2003 moved the money back to the payee's account, saying a completed credit could not be reversed without the payee's written authority.
The bank told the commission it had suspended the payee on 26 June 2003 and frozen his account in departmental proceedings, and the order records that the CBI filed a chargesheet against him. These are allegations, not findings of guilt; the accused are presumed innocent until proven guilty in court, and due process continues.
On 8 November 2005 the Delhi High Court directed the bank to release the Rs 12.6 lakh with interest to the payee, with the customer's agreement. In 2018 the State Commission found deficiency in service and awarded Rs 2 lakh with 18% default interest.
The NCDRC held that once a cheque is honoured and credited, the money belongs to the payee, and the bank cannot debit it without the payee's lawful written mandate. It held that the customer could not reopen a transaction settled by the High Court's order. It dismissed the complaint and ordered the Rs 1 lakh the bank had deposited to be refunded to it with interest.
What It Means
For bank customers, the order is a reminder that a cheque, once cleared into the payee's account, cannot simply be recalled by the person who wrote it. Stop a payment before the cheque is processed. The order may be appealed. Complaints about a bank's service can be filed at https://cms.rbi.org.in.
Source: Consumer commission order
Sources & Citations
- Consumer commission order — Consumer commission