Elucidation on aspect of ‘care’ required to seek statutory protection under Section 131 is to be found in Indian Overseas Bank v. Industrial Chain Concern, (1990) 1 SCC 484. We must be realistic and pragmatic not to narrow down Banker’s protection under Section 131 to make Banker’s position vulnerable.

Officers of Banks are not required to be Amateur Detectives, albeit they can be attributed degree of intelligence ordinarily required from a person in their position. Therefore, microscopic examination of cheque paid in collection may not ordinarily be necessary, but this may be required when facts are sufficient to raise reasonable ground to suspect there may be a wrongdoing.

Explanation II to Section 131, inserted with effect from 06.02.2003, states, it is duty of every Banker, who receives payment based on an electronic image of a truncated cheque, to verify prima facie genuineness of cheque, and exercise due diligence and ordinary ‘care’ to verify fraud, forgery or tampering apparent. Disregarding circumstances, which on face of it gives rise to suspicion, may amount to ‘negligence’ on part of Collecting Banker. Bank can escape only when Banker acts in ‘good faith’ and without ‘negligence’; latter is sine qua non for a Banker to get absolved under Section 131. Kerala State Co-operative Marketing Federation v. State Bank of India, (2004) 2 SCC 425 with reference to Sections 131 and 131A, observes, onus of proving, Banker had acted in ‘good faith’ and without ‘negligence’, is on Collecting Bank.

– Hon’ble Justice Sanjiv Khanna, Pradeep Kumar v. Post Master General, [Civil Appeal Nos. 8775-8776 of 2016].