American Express Bank told to make good lossApril 30th, 2008 - 8:35 pm ICT by admin
New Delhi, April 30 (IANS) Coming down heavily on the American Express Bank for failing to safeguard traveller’s cheques it had issued, a consumer forum asked it to pay $700 in traveller’s cheques or cash to a client who lost his unutilized cheques. “In our view, due diligence and caution was not taken by the bank to safeguard the traveller’s cheques. They cannot escape from the liability of encashment of the traveller’s cheques as these cheques can be encashed,” observed Justice J.D. Kapoor of the Delhi Consumer Forum in a recent judgement.
He observed that reasonable care has to be taken by the bank in encashing traveller’s cheques by any unauthorized person. Even if such cheques are lost it does not prima facie show that their holder did not exercise due diligence or care.
The case pertains to one Vivek Garg, who had procured traveller’s cheque worth $800 from the American Express Bank for his Singapore visit.
After finishing his work in Singapore, Garg left for Delhi March 21, 2006 and on reaching Delhi he noticed that he had lost his unutilized traveller’s cheques of $700.
On the same day he informed the bank about the loss. He was assured by the bank that the payment of $700 had been blocked and was safe and will be refunded back to him within a week.
But the bank assurance proved false.
The company on their behalf argued in court that traveller’s cheques are as good as currency notes and whosoever is the bearer can encash them and, therefore, blocking their encashment is not possible.
However, Garg’s lawyer argued that the traveller’s cheques cannot be encashed without presenting the passport and obtaining a counter-signature of the holder.