Holder in Due course
Querist :
Anonymous
(Querist) 19 January 2010
This query is : Resolved
My client has a current account in this Bank 1. Additionally, he also enjoys a Term loan provided by the Bank. The Bank has opened an internal account called as ABC Limited Term loan A/C for their operational use internal.
In a particular instant, my client had provided a crossed cheque to his branch manager of Bank #1, this chq was issued from my clients own account in an another bank (say for e.g. ABC Limited a/c in Bank 2) to be deposited in its own account in the Bank 1 (for e.g. ABC Limited account in Bank1).
Taking an advantage of an natural calamity that struck my clients factory, the vily branch manager deposited this cheque in the internal account i.e. Term Loan A/c and not the Current A/c as it is regularly done.
This cheque bounced as there was no funds created in the Bank 2 account due to the calamity.
Can the Bank fradulently clain that they are the holder-in-due-course as the name of the account are identical. Can the procedure of 138 D be initiated claiming that such a cheque was a payment to the loan account.
R.R. KRISHNAA
(Expert) 19 January 2010
The act of the bank amounts to deficiency in service and is liable to be sued before the consumer court.
Secondly the bank cannot claim to be a holder in due course merely because the accounts are identical. No 138 proceedings can be initiated on this ground.
