Fraudulent encashing of checks with forged signatures
Farah Khan
(Querist) 27 May 2014
This query is : Resolved
Dear Expert,
I forgot my check book in my shop and my employee took 5 checks out of it, forged my signature and transferred a lot of money into 2 of his accounts. I checked the messages today and saw the notification of withdrawl of the money.
The accounts have been identified/located.
What steps should I take to recover my money, and how much responsibility does the bank hold for clearing checks with forged signatures(the employee was more or less illiterate so I am sure it was not expertly forged, with little or no chance of any other partner)?
Thank you for your valuable advice!
M.Sheik Mohammed Ali
(Expert) 27 May 2014
you can make complaint forgery and cheating. and misappropriation case, and breach of trust. also.
KAMARAJ BHARATHY G
(Expert) 27 May 2014
Even if you lodge a complaint only against your employee, the investigating authority (i.e. Police) will take step to find out all the culprit, on whom you are suspecting.
Advocate M.Bhadra
(Expert) 27 May 2014
Lodge a complaint to the Police,if the police authority would not take any step then you can file a case in Judicial Magistrate Court u/sec.156(3) Cr.P.C. charge with sec.420,468 and 406 IPC.
Farah Khan
(Querist) 28 May 2014
Thanks for your responses. I have already lodged a FIR in the Police Station and the investigation has been started against the employee who has been identified for the crime. However my query is about the liability of the bank. Can take up a case with the bank to refund my money since it has been taken out through forged cheques?
Devajyoti Barman
(Expert) 28 May 2014
Yes, bank is liable for refund.
If they do not, then file case before the consumer forum.
Rajendra K Goyal
(Expert) 28 May 2014
The Bank is liable for wrongful debits in your account without your permission. If Bank does not compensate, move to consumer forum.
ajay sethi
(Expert) 28 May 2014
file complaint before consumer forum against the bank for deficiency in service . bank is supposed to take due care while releasing funds
malipeddi jaggarao
(Expert) 28 May 2014
You make an application to the Branch Manager of the concerned Bank that you have not issued the cheques (which were debited to your account). Also inform the bank to stop payment of all the cheques which were not in possession.
Request the Bank that upon verification of the Pass Book/Statement of account you found that the specific cheques debited to your were account were not signed by you and they are forged. Hence the Bank should make good of the amount immediately. You can also mention in the same appolication that you have already lodged an FIR which is under investigation stating that irrespective of the outcome of the investigation and police case, bank is liable to make good of the amount immediately.
Rule position: There is no protection to the paying bank against forgery though the signature reflects similarity. The question is if the payment is made without the signature of original depositor, the bank is liable to the depositor irrespective of the fact that who has forged it. Hence do not give any time to the bank and prevail over them to make good of your amount immediately pending police case etc.
Farah Khan
(Querist) 28 May 2014
Thanks and grateful to all of you for your kind contributions and advice.
ajay sethi
(Expert) 28 May 2014
thanks for your appreciation
Sudhir Kumar, Advocate
(Expert) 28 May 2014
go to thana. They will take him on remand and he will speak like parrot as to how he forged signature.
if not interested then keep silent.
if you just throw him out and he makes a labour complaint then your allegation will be afterthought.
T. Kalaiselvan, Advocate
(Expert) 31 May 2014
Expert Mr. Malipeddi Jagga Rao has given a excellent piece of advise and suggestion to be followed in this regard. You may flung into action immediately, subsequent to which you may contemplate to initiate legal proceedings against the Bank Manager.
Guest
(Expert) 31 May 2014
I partially agree to the views of Shri Jaggarao.
About your query, "how much responsibility does the bank hold for clearing checks with forged signatures," since handwriting experts are not posted in bank branches they have full scope of getting escaped, as they can only be expected to examine the writing style of the signature. Even if you make 10 signatures at a time, you can, yourself, notice difference in signatures from each other in one or the other aspect. They can at least put a lien on those accounts in which the money has been transferred, if convinced about your complaint. So, your efforts can go futile if you want to drag them in the court of law, unless there is a significant difference in your specimen signatures with the bank and the signatures on the cheques.
So, better seek flawless cooperation of the bank to make recovery of the wrong debit in whatever manner the bank decides, rather than dragging them in the court of law.
malipeddi jaggarao
(Expert) 01 June 2014
I differ with the opinion of expert Shri PS Dhingra as regards that the efforts can go futile if the author wishes to drag the bank in the court of law, unless there is a significant difference in the specimen signatures with the bank and the signatures on the cheques.
Law does not permit this aspect. Once the customer disputes the signature on the cheque, it is for the bank to prove that it is the signature of the account holder. Utmost, they refer the matter to hand-writing experts. Here the question of marking lien does not arise as the funds are already withdrawn by fraudsters. Furthermore, if it is proved by police, even if the fraud committed by the account holder's own employees, the bank has to make good of the amount. They may not do it immediately, but the position of law is very clear.
There is no protection to the banker against the payment of forged cheque.
Guest
(Expert) 01 June 2014
Mr. Jaggarao,
For your kind information, I don't prefer to give false hopes to the querists. I know you are an ex-banker, but in my views, the opinion has to be made on totality of the facts, situations, circumstances and probabilities, not on mere statement of the querist. You are welcome if you differ with my views, but it seems you have taken the stand only on the face of partial facts, whereas several facts are still hidden for the purpose of qualifying for a legal case against the bank. Besides revealing careless handling of the cheque book by the querist, the query lacks the following information:
(i) When cheques were found removed, whether she notified the instance to the bank or police;
(ii) Handwriting of drawer on the body of cheques (in addition to the disputed signature);
(iii) Whether she has seen the paid cheques personally in the bank, before raising the query, as he has raised the query on receipt of message/ notification from the bank, but without verifying the facts from the bank;
(iv) Whether she has raised any dispute about forgery of cheques with the banks;
So, with reference to your views," there is no protection to the banker against the payment of forged cheque," there is no doubt about that but, the forgery has to be proved by the querist to the satisfaction of the court and merely his statement cannot be the criteria for assuming forgery.
With reference to the description of the querist, as a banker, can you please advice me about your views on the following points?
1) About careless handling of cheque book by the account holder;
2) About no intimation to bank about loss of 5 cheques altogether;
3) About no FIR with policeabout loss of 5 cheques altogether;
4) As per his statement, if the employee was more or less illiterate, how he can be expected to forge signatures and on the basis of which record? Naturally, the signature would not have been practised copying by the employee during shop hours. Was not his own statement doubtful?
5) How the querist can be sure the cheques were not expertly forged, with little or no chance of any other partner, when he has not seen the paid cheques and he seems to have raised query only after getting message/ nitification from the bank about withdrawal of money from his account?
6) Possibility of manipulations on account of any strenuous employer-employee relations; and lastly;
7) As per the statement of the querist, "the accounts have been identified/ located," which indicates that the cheques were crossed, if the funds were transferred to the employee's two account. A question arises, had his employee forged the cheques, what was the need for crossing the cheques and why he could not use these cheques as bearer cheques for cash withdrawal and why five cheques, while only a single cheque could suffice to serve his purpose?
With referece to your perception, "here the question of marking lien does not arise as the funds are already withdrawn by fraudsters," what is the basis of your belief that the funds have already been withdrawn, when nowhere the querist hs stated that the funds have been withdrawn by the employee from his own accounts also. The querist has simply stated, "transferred a lot of money into 2 of his accounts. I checked the messages today and saw the notification of withdrawl of the money." A question arises, whether the bank send message or gives notification to the holder of origination account, if the funds are further withdrawn from the account of transferr's account also?
However, I can only wish her a success, if she wants to take any action against the bank.
Farah Khan
(Querist) 04 June 2014
Some additional inputs with respect to the above case:-
1) The Bank has been informed of the lost cheques and all balance cheques have been blocked.
2) On receipt of the scanned copies it has been noticed that the signatures have been forged and the forgery is very poor which is very evident.
3) In few cheques the wordings of the amount have been very badly written and clearly should have been rejected by the bank.
4) There is overwriting on the dates of 2 of the cheques. There is clear apparent carelessness on part of the person clearing the cheques, which was very easily avoidable.
5) Letter has been written to the concerned Bank Manager to refund the complete amount irrespective of and without waiting for completion of the Police action.
6) The employee has been arrested and but has turned out to be below 18 years of age by 1 month.
Is the Bank liable to refund the money after doing their internal enquiry OR are they required to wait for the police enquiry and need any documents from the police like expert opinion from their forgery expert, their findings of the case etc.
Thanks
Farah Khan
(Querist) 04 June 2014
The culprit has not used the cheques for withdrawing cash and has transferred the money to his account by crossing the cheques. 50% of that money has been withdrawn and balance money has been blocked by the banks.
FIR has been lodged with the Police with details of all the 5 cheques.
I agree that there has been a mistake on my part with respect to the loss of the cheque book, but had the bank been careful then the loss could have been avoided.
malipeddi jaggarao
(Expert) 05 June 2014
You lodge your claim against the bank. They may not immediately make good of the amount, but they are liable for the same.
they will keep liaising with police people for signature testing etc.
V R SHROFF
(Expert) 05 June 2014
Agrees with above experts.
Bank will have to credit your account.
Police will have to lodge FIR arrest accused and file chargesheet in court. Accused will be punished.
