Remedies for Cheque Dishonor Due to Bank Error If a cheque is dishonored due to a bank error, the drawer (issuer) and the payee (recipient) have legal remedies against the bank. 1. Filing a Complaint with the Bank The account holder should immediately file a written complaint with the bank, explaining the error. The bank is required to rectify the mistake and, if needed, issue a written apology. If dishonor caused financial loss, the bank may be asked to compensate the account holder. 2. Banking Ombudsman Complaint If the bank does not resolve the issue, a complaint can be filed with the Banking Ombudsman under the RBI’s Integrated Ombudsman Scheme, 2021. The Ombudsman can direct the bank to compensate for the financial and reputational loss. 3. Legal Action Against the Bank Under Consumer Protection Act, 2019, the affected party can file a case in the Consumer Commission for deficiency in service and claim damages. If the dishonor leads to business loss or defamation, a civil suit for damages can also be filed. 4. Revalidation and Reissuance of Cheque The drawer can issue a fresh cheque to the payee with an explanation of the bank’s error. If charges were deducted unfairly, the bank should refund them. 5. RBI Guidelines on Wrongful Dishonor As per RBI guidelines, banks must ensure cheques are dishonored only for valid reasons. If dishonor occurs due to a system error, incorrect processing, or bank negligence, the bank is liable. Conclusion If a cheque is dishonored due to a bank’s mistake, the affected party can seek rectification, compensation, or legal remedies through the Banking Ombudsman, Consumer Commission, or civil courts.