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This is an archive article published on December 24, 1998

Payment order on plain paper valid: HC

NEW DELHI, DEC 23: A Delhi court has ordered the Hong Kong Shanghai Banking Corporation Ltd HKSBCL to pay damages of Rs 10,000 along wi...

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NEW DELHI, DEC 23: A Delhi court has ordered the Hong Kong Shanghai Banking Corporation Ltd HKSBCL to pay damages of Rs 10,000 along with 12 per cent interest and cost to a customer for refusing to honour an order for payment on plain paper in the absence of a cheque.

Civil Judge Tej Singh Kashyap in his recent order on a suit by Mohini Gupta, an account holder with HKSBCL, ruled that the bank should have honoured the order after satisfying itself that the letter was issued by the account holder. quot;The letter meets the requirements of a cheque required to be submitted by a customer for encashment,quot; the Judge said.

He said during cross-examination the bank officials had admitted that a letter written by an account-holder to the bank to transfer an amount from his/her account to another account is done accordingly.

Mohini Gupta, who was admitted to a hospital for an operation on October 24, 1994, needed the money urgently but did not have the cheque book with her. She sent a withdrawal order for Rs 8,000through her husband on a plain paper which the bank refused to honour.

Gupta, subsequently withdrew the money through a ATM card thrice as only Rs 3,000 could be withdrawn on it at a time. Gupta, claiming damages of Rs 10,000 for the quot;mental agony and harassmentquot;, said in her suit her husband had to go to the bank repeatedly when she was to undergo a surgery.

 

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