In Brief
A customer obtained three Fixed Deposit Receipts (FDRs) from Bank of Punjab: two for Rs 1 lakh each (24 Feb 1996) and one for Rs 2 lakh (8 Mar 1996). The bank later refused to encash the Rs 2 lakh FDR, claiming it was issued by mistake without consideration. The District Consumer Forum held the customer entitled to encashment; the State Commission reversed this; and the National Commission dismissed the customer's revision. The Supreme Court held that a bank cannot refuse to honour an FDR it has issued merely because of its own internal error. The customer, holding the valid FDR receipt, is entitled to encashment. The bank's remedy lies against its employees, not the innocent customer. The Court allowed the appeal and restored the District Forum's order."
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