Failure to present cheques within validity period constitutes deficiency in service under consumer protection laws.

The respondents deposited two CTS cheques (dated 03.03.2018) totaling ₹1,06,10,768/- into their savings accounts at the appellant bank on 29.05.2018

The cheques were returned on 30.05.2018 with the remark "bank on strike"

Despite the bank reopening on 01.06.2018 and the cheques remaining valid until 02.06.2018, the appellant failed to re-present them within the validity period

The cheques were subsequently returned as "stale/outdated" when re-presented on 04.06.2018 and 08.06.2018

The respondents alleged deficiency in service, noting they lost the opportunity to initiate proceedings under Section 138 of the Negotiable Instruments (NI) Act against the directors of the drawer company (Assotech Ltd), which was undergoing insolvency

The National Consumer Disputes Redressal Commission (NCDRC) found the bank negligent and awarded 10% of the cheque amount as compensation plus 8% interest

1. Whether the failure of the bank to re-present cheques within the validity period following a strike constitutes a "deficiency in service" under Consumer Protection laws?

2. Whether the compensation awarded by the NCDRC (10% of the cheque amount) was reasonable and commensurate with the loss suffered?

The Court applied the definitions of "service" and "deficiency" under Section 2(o) and 2(g) of the Consumer Protection Act, 1986 (analogous to Sections 2(42) and 2(11) of the 2019 Act), establishing that banking facilities are services and negligence in discharging duties constitutes deficiency

Under the Negotiable Instruments Act, 1881, the Court referenced Section 64 (presentment for payment), Section 75A (excuse for delay), and Sections 84 and 105 (reasonable time for presentment), emphasizing that once a cause for delay (like a strike) ceases, presentment must occur within a reasonable time

Regarding compensation, the Court relied on Section 73 of the Indian Contract Act, 1872, and the principles in Chief Administrator, HUDA v. Shakuntla Devi, which mandate that compensation must be fair, reasonable, and commensurate to the proved loss or injury

The Court observed that the appellant bank, acting as an agent for collection, had a duty of due diligence to present the instruments before they became stale

The bank provided contradictory evidence; while return memos showed the cheques were returned due to the strike on 30.05.2018, the bank’s affidavits falsely claimed they were returned on the evening of 01.06.2018

The Court found no justification for the bank’s failure to re-present the cheques on the working days of 01.06.2018 or 02.06.2018

This negligence deprived the respondents of their right to pursue criminal remedies under Section 138 of the NI Act

However, the Court noted that the actual loss was "indeterminate" because the outcome of any potential Section 138 proceeding—which is penal, not recovery-oriented—is speculative

Consequently, while the finding of deficiency was upheld, the Court determined that the NCDRC's award of 10% of the cheque amount was excessive as "token compensation"

The Court held that the bank is liable for negligence if it fails to re-present cheques within a reasonable time after a delay-causing event (like a strike) ceases

The Court reduced the compensation from 10% to 6% of the total cheque amount (₹1,06,10,768/-) for each complainant

The interest rate was also reduced from 8% to 6% per annum from the date of filing the complaints

The order for litigation costs of ₹50,000/- was maintained