Bank can reject cheque for repayment

A bank need not accept cheques/drafts in repayment of a loan if it decides to do so, the Supreme Court observed last week in its judgment, Shakeena vs Bank of India. In this case, the borrower defaulted on repayment of a loan and the bank invoked the Securitisation Act to sell the mortgaged property. This was challenged by the borrower in the debt recovery tribunal and later in the Madras High Court. The borrower was given severl options and Opportunities to pay the amount before the sale of the property was registered. In one last-ditch effort, the borrower offered cheques for the loan amount, which were rejected by the bank maintaining that they were not a valid tender. The Supreme Court rejected the appeal of the borrower on several counts and asserted that the bank could not be faulted for rejecting the cheques.