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American Express on stolen cheques

Statesman News Service |

press trust of india
New Delhi, 1 July
 American Express Banking Corp. has been asked by the Delhi State Consumer Commission to pay Rs 80,000 as compensation to a woman for encashing traveller cheques stolen from her despite being informed about the theft.
The state commission observed that since the bank allowed encashment of the cheques despite receiving information about the theft, its concerned officials “in conspiracy” with others “deliberately” did not stop payment on the stolen cheques. “When the information was received by the appellant/ opposite party (American Express) with regard to the theft of the traveller cheques, it was incumbent on the part of the appellant to stop the payment, which has not been done.
“Obviously, there is sheer negligence on the part of the appellant and we have no hesitation in saying that concerned officials of the appellant bank in conspiracy with others deliberately did not stop the payment and encashed the same,” a Bench presided by members V K Gupta and S C Jain said.
The order came on the bank’s appeal against the decision of a district forum which had directed American Express to pay Rs 80,000 to the complainant, Delhi resident Sushma Agarwal.
The commission, while dismissing the bank’s appeal, noted that the complainant’s husband had on 7 July 2003 registered an FIR and also informed American Express about the theft of the cheques, but it still encashed them on 22 July 2003.
American Express in its appeal had contended that Agarwal had signed on the cheque and its overleaf and handed it over to some other person (her husband) and in such a case, the bank cannot be blamed. The commission, however, rejected the contention. According to Agarwal’s complaint in the district forum, the cheques were stolen from her husband’s car while he had stopped over at a chemist shop while on his way to submit the unused cheques at the bank.