Delhi District Court
M/S Unique Infoways Pvt. Ltd vs Syndicate Bank on 20 January, 2020
CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020
: IN THE COURT OF :
DR. V.K. DAHIYA
ADDITIONAL DISTRICT JUDGE01:
SOUTHWEST DISTRICT: DWARKA COURTS:
NEW DELHI
CS No. 229/2016 (517304 / 2016)
In the matter of:
M/s Unique Infoways Pvt. Ltd.
(Through its Director)
Sh. Vipul Jain,
308, Osian Building,
12, Nehru Place,
New Delhi 110019
.....Plaintiff
Versus
Syndicate Bank
A bank incorporated under Banking companies
(Acquisitiotn and Transfer of Undertakings) Act
having offices at different places including one at
Pochanpur, Dwarka, New Delhi 110075
....Defendant
Date of Institution of suit : 09.07.2010
Date of transfer to this court : 27.07.2016
Date of reserving judgment : 18.01.2020
Date of pronouncement : 20.01.2020
Appearance:
1. Sh. Randhir Jain Advocate, Ld. Counsel for plaintiff
2. Ms. Anju Jain, Advocate Ld. Counsel for defendant
Page No. 1 of 27
CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020
SUIT FOR RECOVERY OF RS. 63,86,000/ ( RUPEES SIXTY
THREE LAKHS EIGHTY SIX THOUSAND ONLY )
J U D G M E N T:
1. The present suit has been filed by the plaintiff against the defendant seeking recovery of Rs. 63,86,000/ (Rupees Sixty Three Lakhs Eighty Six Thousand Only) along with pendentelite and future interest.
2. Relevant facts as emanating from the plaint, giving rise to the cause of action in favour of plaintiffs, for filing the present suit are that facts of the case are as under:
a) It is averred that the plaintiff is a company incorporated under the companies Act having its registered office in Delhi whereas, Sh. Vipul Jain is one of its Directors.
b) It is averred that defendant is a bank which is wholly controlled, managed and supervised by the Reserve Bank of India.
c) It is averred that on 04.06.2007 a bank draft in the amount of Rs. 8,86,000/ bearing No. 191717 dated 02.06.2006 issued by Pochanpur branch, Delhi of the defendant was handed over to the plaintiff in payment of goods sold by the plaintiff and received by a person introducing himself as a customer. The said draft was sent Page No. 2 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 for high value clearing on 05.06.2007 to the defendant by the plaintiff through their bankers namely Oriental Bank of commerce, Nehru Place, New Delhi. Payment was withheld by the defendant on the pretext of this draft being forged.
d) It is averred that the payment was withheld by the defendant on the pretext that this draft is being forged. Subsequently, defendant sent a letter dated 07.06.2007 to AGM, Oriental bank of commerce with which the plaintiff has an account and through which the aforesaid draft was sent for collection. In this letter, it was stated that the concerned branch had reported that one of their DD pad of 50 leaves was missing and DD in question has been issued from this pad.
e) It is averred that plaintiff served a notice dated 11.06.2007 to the defendant bank demanding the amount of Rs. 8,86,000/ i.e. the face value of the draft. The defendant bank sent the reply dated 25.06.2007 through its lawyer stating that the defendant bank has lodged an FIR with PS Dwarka for missing of the said pad containing DD forms.
f) It is averred that, lateron, it transpired that on 16.06.2007 the defendant lodged FIR No. 539 with PS Dwarka, New Delhi. Perusal of the said FIR shows that defendant bank has tried to cook up a story that demand draft book bearing Sl. No. 191701 to 19175 was missing. It Page No. 3 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 is submitted that 12 demand draft issued out of the said book totalling to the amount of Rs. 47,61,90/ had been cashed by the defendant even thereafter, a draft bearing No. 230731 dated 08.06.2007 for Rs. 4,95,000/ was honoured by the defendant bank.
g) It is submitted that the plaintiff had supplied 12 number of Sony IBM Laptop along with accessories, bill amount for which came to Rs. 8,86,000/. Demand draft in question bearing No. 191717 was given to the plaintiff in payment of the same. It is averred that since the defendant did not pay the amount of Rs. 8,86,000/ represented by this draft and it had been made to part with the goods on the strength of this draft, plaintiff has lodged an FIR No. 553 with PS Kalkaji under Section 420 IPC on 06.06.2007.
h) It has been averred that before accepting this bank draft plaintiff made a phone call to the defendant to verify about the genuineness of the draft, which was made on the phone number mentioned on the draft itself and it was confirmed by the defendant that the draft in question had, in fact, been issued by it.
i) It is averred that plaintiff received a phone call from PS Dwarka to the effect that one of the laptops purchased from the plaintiff, in payment of which the said demand draft was given to the plaintiff, had been recovered by the police Page No. 4 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 of PS Dwarka. It is averred that on inquiry Sh. Vipul Jain, Director of plaintiff learnt that one Pawan Kumar Gupta had been arrested by the police of PS Dwarka and one laptop make Lenovo was recovered from him.
j) It is averred that from facts revealed so far it has come out clearly that the story, being put only by the defendant to deny payment of the demand draft in question to the plaintiff is merely a fabrication and a ruse put to avoid their liability. It is averred that demand draft in question has been issued by the defendant on 02.06.2007 and the same was presented to it for payment on 05.06.2007. There is no complaint of any theft in the Pochanpur Branch nor any FIR lodged by it. Even no public notice has been issued by the defendant bank that 50 demand draft forms having been lost and missing from their branch. It is averred that the defendant bank has lodged an FIR No. 539 dated 16.06.2007 at PS Dwarka under Section 380 IPC for the loss of the DD book containing forms bearing Sl. No.191701 to 191750 and there is no allegation of forgery, cheating or any such thing.
k) It is submitted that due to this incident, the father of the plaintiff (who is directly associated with the business of the plaintiff company) suffered a serious heart attack and was admitted in hospital for seven days and has incurred a heavy expenses in Max hospital, which also affected the business of the plaintiff. Hence, the present suit.
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3. After filing of the suit, summons for settlement of issues were issued to the defendant. Pursuant to service of summons, the defendant tendered its appearance.
4. Written statement was filed on behalf of the defendant wherein it is submitted that the DD in question on which the claim is being made in the suit was presented with the defendant bank on 05.06.2007 in high value clearing through the Oriental Bnak of Commerce. It is submitted that the officials of the Central Account Office who have to process the said DD found following discrepancies :
a) Pochanpur Branch is a Central Banking Solution (CBS) branch but the serial number put on the alleged DD is a non CBS,
b) Branch Stamp has incorrect phone number,
c) Instead of CAO, DD is written as payable at service Branch and B/C of CAO is written as 9910.
5. It is submitted that for the above said reasons, the above said bank draft is forged and returned the same to the collecting bank. Thereafter, the bank has taken steps to verify the facts relating to the DD in question and its issuance. The pochanpur branch made discreet inquiry and found that the DD pad containing 50 DD leaves bearing No. MDBG 191701 to 191750 is missing from their stocks. Therefore, matter was put to the Rigional Office situated at Bhagwan Dass Road, Delhi and informed the concerned department of the bank at Head Office to take appropriate steps on 07.06.2007. The head office, in turn instructed the regional office/Pochanpur branch to Page No. 6 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 lodge a complaint with police and accordingly the complaint was lodged.
6. It is submitted that based on the complaint, FIR No. 539 of 2007 PS Dwarka u/s 380 IPC was got registered. The DD in question was neither issued by the defendant bank nor by its official nor the alleged DD is a DD in the eyes of law as the same is fake and fabricated. The plaintiff could not have delivered the goods before reciept of the money in haste, when the DD could have been presented in High Value Clearing and take the payment and especially when he was dealing totally with a new unknown person. The plaintiff never delivered any goods as alleged in the plaint thus did not suffered any such loss which he has claimed. The plaintiff being a businessman had waited a long in order to make out a claim whicih he never had and must have done so under advise of some vested interests. Plaintiff has not filed any invoice/bills to show that the goods items/computers were sold to the person as averred in the plaint. Police have arrested 10 accused during the course of investigtion which the defendant came to know from the status report of the case Fir No. 539 of 2007 obtained from police.
7. It is submitted that the plaintiff was careless not to observe that the said DD serial number in this computerisation days is given by computer and not manually. The plaintiff's claim to have got the issuance of DD verified at the telephone number goes to show that the plaintiff failed to observe that the telephone number did not belong to the area where the branch Page No. 7 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 is situated. The telephone number as mentioned on the said draft i.e. 01164120177 is not the number of the Branch and hence, the question as to the confirmation of issuance of the draft by the bank did not arise. The suit is liable to be dismissed for nonjoinder of the parties. The present suit may be dismissed being barred by limitation.
8. Plaintiffs have filed replication to the written statement of the defendant, thereby, denying all the allegations and has reiterated its allegations leveled in the plaint.
9. On the basis of pleadings of the parties, following issues were framed vide order dated 12.12.2011 : Issues
1. Whether the draft dated 2nd June, 2007 for Rs. 8,86,000/ in favour of the plaintiff is a forged document, as alleged in the written statement ? OPD
2. Whether the suit is bad for nonjoinder of the accused in FIR No. 539/2007, as alleged in the written statement ? OPD
3. Whether the plaintiff is entitled to recover the amount of the draft from the defendant ? OPP
4. Whether the plaintiff is entitled to damages from the defendant and if so, to what amount ?OPP
5. Whether the plaintiff is entitled to the interest and if so, what rate and amount ? OPP Page No. 8 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020
10. Thereafter, the matter was listed for recording of plaintiff's evidence. In support of its case, the Sh. Vipul Jain got examined himself as PW1, who has deposed on affidavit Ex.PW1/A and reiterated the contents of the plaint which are not reproduced for the sake of brevity and relied upon following documents :
1. Correct copy of the bank draft No. 191717 dated 02.06.2007 is exhibited as Ex. PW1/1,
2. The notice dated 11.06.2007 served on the defendant bank demanding the amount is Ex. PW1/2,
3. Courier receipt through which notice was sent is Ex.
PW1/3,
4. Office copy of the courier receipt POD is Ex. PW1/4,
5. Reply of the legal notice dated 25.06.2007 is Ex. PW1/5,
6. Correct copy of the FIR No. 539/2007 of PS Dwarka is Ex.
PW1/6,
7. Correct copy of the FIR No. 553/2007 of PS Dwarka is Ex.
PW1/7,
8. Office copy of the notice dated 01.01.2010 is Ex. PW1/8,
9. Copies of the complaint dated 05.06.2007 and 06.06.2007 are exhibited as Ex. PW1/9 & Ex. PW1/10 respectively.
11. Defendant also lead evidence however, no documents have been placed on record along with affidavit. However, the relevant portion of the testimony of these Dws will be adverted to, lateron.
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12. I have heard the arguments advanced by Sh.
Randhir Jain, Advocate Ld. Counsel for the plaintiff and Ms. Anju Jain, Advocate Ld. Counsel for the defendant and have perused the oral and documetnary evidence lead on record.
13. My issuewise findings are as under :
Issue Nos. 1,3,4 & 514. These issues are overlapping each other and, therefore, disposed of by this common order.
15. PW1 admitted that one Sh. Bashir had approached for purchase of nine computers amounting to Rs. 8,86,000/ and the delivery was to be affected at his residence at the instance of Sh. Rakesh who had accompanied Sh. Bashit Ahmad initially. He admitted that he had mentioned the name of Sh. Rakesh Chaudhary in the complaint filed by him. PW1 was not aware as to how many persons were arrested pursuant to the FIR lodged on the basis of his complaint. He also do not remember whether any of such persons name has been mentioned in the plaint or not. PW1 volunteered that he has received a telephonic call from police who informed that one Sh. Pawan Kumar Gupta has been arrested on the basis of fact that he is in custody of certain equipments supplied by Sh. Bashir Ahmad. On being questioned that whether Sh. Bashir Ahmad and Sh. Rakesh Chaudhary has played fraud, PW1 submitted that as they were carrying the bank draft therefore, there was no reason to suspect them. PW1 admitted that Sh. Bashir Ahmad, Page No. 10 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 Sh. Rakesh Chaudhary and Pawan Kumar Gupta are not arrayed as party in the present suit and he cannot explain the reason for their nonimpleadment as it was the decision of his counsel. He denied having any collusion with Sh. Bashir Ahmad, Sh. Rakesh Chaudhary and Sh. Pawan Kumar Gupta, had stolen the bank draft and trying to cheat the bank.
16. Witness has admitted that he has not placed on record the copy of the status report filed in respect of his complaint. PW1 has shown his ignorance whether any person was arrested pursuant to his complaint or not. PW1 admitted that the phone number as mentioned in the DD in question was that of the defendant bank and he had inquired on said number and the defendant bank had confirmed the validity and genuineness of the said DD. PW1 denied that his claim for loss of business of Rs. 50,00,000/ is fraudulent one and submitted that as he could not able to utilize and recycle the amount of Rs. 8,86,000/, therefore, he has sought damages. PW1 admitted that Sh. Bashir himself told him that he was running a hotel in Kashmir. PW1 admitted that he was informed by the bank on phone that the draft is prepared from within the CC account being operated from their branch. Witness denied having knowledge that a person having business in Kashmir cannot maintain his CC account in Delhi. PW1 has denied the suggestion that the bank draft is forged and fabricated and the telephone number mentioned therein is also forged. PW1 has denied the suggestion that the defendant bank has rightly refused to honour the DD in question.
Page No. 11 of 27CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020
17. Plaintiff has also examined one Sh. Gopender Kumar Jain as PW2, who admitted his holding in the plaintiff company is 7% out of the total 25,000/ shares. He deposed that the dealing of the plaintiff with its purchaser was somewhere in June 2007. PW2 deposed that he do not remember the exact date of demand draft of any purchaser being unpaid.
18. Plaintiff has also examined Sh. Abhijit Singh Branch Head, Pochanpur Branch Syndicate Bank who was called upon to produce the record with respect to DD nos. 191701 to 191750 during the year 2007. PW3 has deposed that as per the available records, only three demand draft out of these 50 demand drafts could be traced. Two DD nos. 191702 and 191704 amounting to Rs. 46,000/ and Rs. 42,000/ were honoured from the Ludhiana Branch of the Bank, whereas the DD in question was handed over to Kalkaji Police station. The computer generated record bearing seal of the bank is Ex. PW3/A along with photographs of two demand drafts No. 191702 and 191704.
19. Plaintiff has also got examined ASI Samunder Singh who has brought on record photocopy of the entire case diary of case FIR No. 539/2007 and same is Ex. PW4/A.
20. Plaintiff has also got examined one HC Shelendra Kumar who has proved on record the original FIR bearing No. 553/2007 at PS Kalkaji under Section 420 IPC as Ex. PW5/A. Page No. 12 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 He has also proved on record the copy of the complaint Ex. PW5/B. PW5 has also proved on record copy of the list of witnesses is Ex. PW5/C. Copy of the list of accused persons are exhibited as Ex. PW5/D. Copy of the index and case diary is Ex. PW5/E. Thereafter, plaintiffs evidence was closed.
21. Defendant has examined Sh. Arun Kumar, Chief Manager of the defendant bank as DW1 who has deposed that he cannot tell the exact date when DD No. 191717 dated 02.06.2007 was presented with the service branch. He admitted that in its affidavit, it is mentioned that DD No. 191717 was presented with service branch on 05.06.2007, which is mentioned as per the information received from the service branch. He also did not remember the date of his visit to the service branch. DW1 has denied that whenever any cheque or demand draft is presented the same is either honoured or returned immediately on receipt of the same. DW1 testified that bank for the purpose of verification has to take recourse to its procedure which takes a reasonable time.
22. DW1 has deposed that defendant bank came to know that the DD bok containing leaves from 191701 to 191750 has been lost/misplaced, however, he was not aware about the fact that when this fact came to the knowledge of the defendant bank. Witness testified that he did not know who has given the complaint to the police for registration of FIR however, in the year 2007 one Sh. N.S. Shastri was Dy. General Manager at Regional Office.
Page No. 13 of 27CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020
23. DW1 was not aware whether thirteen demand drafts were honored by the defendant bank even prior to 05.06.2007 or after the said date. DW1 has admitted that the defendant bank has not filed on record the proceedings initiated by the defendant bank regarding 13 demand drafts. DW1 has also shown his ignorance regarding registration of any FIR against the plaintiff for presentation of demand draft. DW1 has denied having not got lodged complaint by the bank against the plaintiff as the defendant bank was aware that the said demand draft was issued by the bank officials. He has denied the suggestion that DD No. 191717 was issued in favour of the plaintiff by the officers of Pochanpur Branch of defendant bank.
24. DW1 denied having knowledge of the fact that plaintiff has served a notice on defendant bank on 11.06.2007 or the defendant bank had replied the same through its counsel on 25.06.2007. He deposed that he had not passed any draft out of concerned draft book on 08.06.2007. DW1 has shown his ignorance whether drafts A, B and C filed alongwith Ex.PW3/A have been passed by the bank. DW1 denied having any knowledge regarding honouring of these drafts. DW1 has shown his ignorance regarding the fact that 12 drafts out of allegedly missing drafts had been honoured by the bank.
25. Chief Manager of the plaintiff bank, DW1 has admitted that the alleged DD on the basis of which claim of plaitniff is based is forged and fabricated in as much as an FIR has been lodged by defendant.
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26. DW2 Sh. Chandra Kishore Sharma has deposed that the draft in question was presented for clearing in the bank on 07.06.2007, however, he was not aware whether draft was presented for clearing in the bank on 05.06.2007. DW2 has deposed that a communication was made by Syndicate Bank to the bank of plaintiff i.e. OBC to the effect that draft in question is not in order. Witness admitted that no such communication is on record. DW2 admitted that he was handling the draft in question when it was presented with bank for clearing. He depsed that when the draft in question was not found in order, he had returned the same alongwith "dishonour memo" to that effect to the presenting bank. Witness admitted that copy of "dishonour memo" has not been filed along with the written statement. DW2 deposed that during his tenure with the said branch of Syndicate Bank, no FIR to his knowledge was registered against the plaintiff for presenting a forged draft apart from letter Ex. P1.
27. Witness has deposed that the discrepancies, which he found in the draft were mentioned by him on Ex. DW2/PX and not on the draft. DW2 has shown his ignorance about the fact that the said draft in question is in the custody of defendant bank. Witness admitted that he is dealing with matter relating to draft in question. He deposed that he did not remember whether the branch officers told him that draft book containing leaves from 191701 to 191750 had been stolen from branch on 05.06.2007. Witness deposed that he had never interacted with Page No. 15 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 Sh. N.S. Shastri about the draft in question who is no more in service of defendant bank.
28. DW2 testified that in June 2007, when the alleged DD was presented, he was posted as Sr. Manager in Central Accounts Office (CAO). He deposed that the said alleged DD was processed and following discrepancies were found in the said demand draft.
a) Pochanpur Branch is a Central Banking Solution (CBS) branch but the serial number put on the alleged DD is a non CBS,
b) Branch Stamp has incorrect phone number,
c) Instead of CAO, DD is writen as payable at service Branch and B/C of CAO is written as 9910.
29. DW2 further deposed that in the normal banking practice local branch generally does not issue drafts and issue pay orders and accordingly, when the DD in question was lodged for processing, suspicion arose about its genuineness. He being Sr. Manager checked the system and had found no corresponding entry of the alleged DD in the system and to counter check, he contacted the concerned Branch Manager, who denied the issuance of the alleged DD and on account of the said reason, bank official found that the said draft was forged and returned the same to the collecting bank i.e. banker of the plaintiff. They took the original DD in their custody and returned the photocopy of the same to the presenting bank with the remarks "DD is fake and fabricated" and further informed the regional Office Bhagwan Dass Road with a request to take appropriate steps in the matter.
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30. In his crossexamination DW2 admitted that Ex. P1 is bearing his signatures (which is a letter to the OBC regarding intimating them that the DD is forged and fabricated). He further deposed that he was himself carrying the draft when it was present for clearing and the same was not found in order and he returned the same along with dishonour memo to the defendant. Thus nothing much has surfaced from the cross examination of DW1 & DW2 to disprove their deposition that the draft no. 191717, which was presented for encashment, was checked by them and was found forged, and therefore, the same was not owned by defendant.
31. It may be noted that there are certain liabilities casted upon Banks with regard to frauds related to negotiable instruments, cheque and other instruments. Whether bank can escape from its liability by establishing that the inaction on the part of the customer in not informing the bank about the irregularities in the account and deliberately withholding such information from the bank constitute negligence and operate as estoppels against the customer from claiming the amount, on the ground of adoption or acquiescence.
32. The relationship between a bank and its customer arose for consideration before the Supreme Court of India in the case Bihta Cooperative Development and Cane Marketing Union Ltd and Anr. vs. Bank of Bihar and Ors., AIR 1967 SC 389 and in the above case, a suit was filed by the Society for illegal withdrawal of Rs. 11000/ from the bank. The suit was Page No. 17 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 decreed by the trial court and affirmed by the High Court. The case then came before the Supreme Court of India. The plea taken by the bank was that if the customer chooses to dispense with the ordinary precautions and permits a forgery to be committed and if owing to the negligence of such precautions, it is put into the power of any dishonest person to increase the amount by forgery, the customer must bear the loss. For this argument, reliance was placed on a decision of House of Lords given in the case of London Joint Stock Bank Ltd v. Macmillan and Arther,1918 AC 777.
33. The Hon'ble Apex Court Supreme Court of India was, however, of the opinion that what was said in Macmillan's case above would not be applicable because the accepted principle of law that if signature on the cheque is genuine; and there is a mandate by the customer to pay then the banker has no obligation but to discharge the liability, but if the signatures on the cheque or at least one of the signature is not genuine, then there is no mandate on the part of customer to pay and there would no question of any negligence on the part of the customer, such as, leaving the cheque book carelessly so that a third party would easily get hold of it would afford no defence to the Bank.
34. The abovesaid ratio was reiterated by Hon'ble Supreme Court in Canara Bank v. Canara Sales Corporation and Ors,1987 AIR 1603 wherein it was held that the relationship between the customer of a bank and the bank is Page No. 18 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 that of a creditor and debtor. When a cheque which presented for encashment contains a forged signature the bank has no authority to make payment against such a cheque. The bank would be acting against law in debiting the customer with the amounts covered by such cheques. When a customer demands payment for the amount covered by such cheques, the bank would be liable to pay the amount to the customer. The bank can escape liability only if it can establish knowledge to the customer of the forgery in the cheques and Inaction for a continuously long period cannot by itself after a satisfactory ground for the bank to escape its liability. There is a duty of the customer to inform the bank of irregularities when he comes to know of them and such a duty will not exist when the customer is unaware of such fraudulent transactions.
35. In case of In Babulal Agarwalla v. State Bank of India, Bikaner and Jaipur, AIR 1989 Cal 92 the Calcutta High Court held that :
"The mandate of the customer to bank to pay the cheque signed by him for the bearer, which is statutorily recognised by Section 85(2) of the Negotiable Instruments Act, ceases as soon as it is proved that the cheque paid by the bank was a forged one because a forged cheque is no cheque issued by the customer. There is no mandate of the customer to the bank to pay on such a forged cheque. Therefore, the protection given to the bank by Section 85 is not available to the bank in respect of a forged cheque. The bank is not liable to debit the said amount of the cheque even if it is found that the customer did not take proper care to keep the cheque or the relevant cheque book in proper custody. It was held that the bank cannot avoid the liability Page No. 19 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 by merely proving that it made payment in due course according to the apparent tenor of the cheque or by verifying the signatures in the cheque with the specimen signature and finding no apparent discrepancy."
36. It may be noted that the Negotiable Instruments Act, 1881 does not define the expression "(demand) draft". It defines, in Section 6, a negotiable instrument commonly known as "cheque" as "a bill of exchange drawn on a specified banker", such expression also including the electronic image of a truncated cheque and a cheque in the electronic form. The expression "bill of exchange", in turn, is defined, in Section 5, as "an instrument in writing containing an unconditional order, signed by a maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument".
37. The word "draft" is used in the Negotiable Instruments Act in Section 85A (in the context of discharge from liability) in the following terms: "85A. Drafts drawn by one branch of a bank on another payable to order.Where any draft, that is, an order to pay money, drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demand, purports to be indorsed by or on behalf of the payee, the bank is discharged by payment in due course."
38. Section 131A was inserted in Negotiable Instruments Act later so as to extend the provisions contained in Chapter XIV ("Of crossed cheques") to instruments in the nature of a "draft" as defined in Section 85A, "as if the draft were a Page No. 20 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 cheque". Demand Draft, also known as bank draft, and at times described as "Banker‟s cheque" or "pay order", are species of the genre generally known as "cheque". Demand drafts, or bank drafts or banker‟s cheque or pay order, are generally issued by a bank acknowledging receipt of the value and promising to pay the same to the person in whose favour, or to whose order, the money represented by it is to be paid ("payee").
39. It is relevant to mention that Section 7 of Negotiable Instruments Act renders the bank issuing an instrument in the nature of a draft to be the "drawer" and since it is an order to another office of the same bank called upon to pay, the same very bank is also the "drawee" in its respect. In the event of the order in the draft being honoured, the same bank becomes the "acceptor", an expression defined by Section 7 in following terms: "Acceptor.After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the acceptor."
40. It is pertinent to observe that protection under Section 131 of Negotiable Instruments Act, is granted to the banker which reads as under:
131. Nonliability of banker receiving payment of cheque.A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall Page No. 21 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment. xxxxx"
41. A demand draft or a cheque is a bill of exchange payable on demand. In order to secure payment against such instruments, they are commonly presented in the usual course of business by the payee to the drawee bank through the bank where the payee holds an account. The bank which is bound to pay against the instrument is the agent of its drawer. Similarly, the collecting bank which presents the instrument on behalf of its customer acts, for purposes of collection, as an agent of the latter. In addition to it, by virtue of Section 131A, the abovesaid provision contained in Section 131 applies to a case of demand draft as well, "as if the draft were a cheque". Section 131 is a protection meant for a collecting bank. Since the collecting bank generally acts as an agent of its customer, it is not expected to take a direct responsibility for the negotiable instrument deposited with it for presentation to the bank on which it is drawn. Nonetheless, it is expected to be vigilant against forgery or attempts to deceive or defraud.
42. Before proceeding further, I may only state that it is settled law that once a signature on a cheque of a customer of the bank is forged, or a bank draft is forged there is no mandate upon a bank to pay the amount, and the customer on showing Page No. 22 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 the cheque bearing his forged signature, is, entitled to recovery of the amount from the bank, unless the bank shows that there was no negligence in dealing with the subject cheque.
43. The onus to prove issue no. 1 was on the defendant. The defendant has returned the draft with dishonour memo on the ground that the same is forged and the onus is shifted upon the plaintiff to prove that the same is not a forged draft and said draft has been made against the valid payment made to the defendant. Otherwise, PW1 accepted in his testimony that the plaintiff had supplied twelve numbers of Son IBM Laptop along with accessories and for the bill amount of Rs. 8,86,000/ the demand draft in question bearing No. 191717 was given to the plaintiff, which he presented to the banker, but PW1 has not produced any other evidence that how and under what circumstances and by whom the said draft was got prepared from the banker. PW1 has neither produced any document that the said draft was made against consideration nor brought on record any bill/invoice through which goods were sold to the purchaser. In my view it was upon plaintiff to call the person who has given him the draft and examine him as witness to prove that the draft in question was not a forged draft and the said DD itself was made against the consideration given by said person or any other person to the defendant bank which he has failed to produce. PW1 has testified tha he has made a call on landline number but DW1 in his evidence affidavit Ex. DW1/A in Page No. 23 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 para no. 19 has categorically testified that the landline no. 011 64120177 is not the number of the branch of defenadnt bank but no crossexamination has been conducted by counsel for the plaintiff. Therefore, the testiumony of DW1 in this regard has gone unchallenged and unrebutted, as such, it is proved by defendant that the abovesaid telephone number detailed in draft in question did not belong to defendant bank. Resultantly, the contention of the plaintiff that before accepting the draft in question he has verified the contents thereof from the defendant bank on the face of is devoid of force and it can be safely concluded that plaitniff never contacted the branch of defendant on the abovesaid landline number. The defendant bank once recieved draft and found that the same is forged has immediately taken the action and has lodged the FIR with the police station. I do not find force in the contention of Ld. Counsel for the plaintiff that a draft was issued on 04.06.2017, but the complaint was lodged on 16.06.2017, therefore, this delay proves that the said draft is not a forged draft.
44. In my view, being the public sector bank it took some time to lodge the complaint as the matter has to be referred to various authorities. Even otherwise, the delay in lodging the FIR will not make a forged draft to a genuine draft. As stated above, for this plaitniff was required to prove that the same was issued against the valid consideration amount paid by the person who got the said draft prepared. I also did not find any force in the contention of Ld. Counsel for the plaintiff that the draft is not forged and fabricated. In the same manner, I did Page No. 24 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 not find any force in the contention of plaintiff, that defendant has encashed some of the drafts prepared out of the 50 drafts contained in the book were encashed, therefore, the draft in question is genuine in as much as, it is the case of defendant that those drafts were also forged and draft in question was of "high value clearing" and various discrepancies which he found in the draft were mentioned by him on Ex. DW2/PX
45. From the above discussion it can be safely conceded that plaintiff failed to prove that the draft in question was genuine one, therefore, issue no. 1 is decided in favour of defendant and against the plaitniff. In view of the same, all other issues are also decided in favour of the defendant and against the plaintiff.Issue No. 2
46. The onus to prove this this issue was on the defendant.
As defendant have taken the objection in the written statement that suit is bad for nonjoinder of the accused in FIR No. 509/2007 as defendant. DW1 in his testimony lead through affidavit Ex. DW1/A has deposed that the alleged DD, on which the claim is being made was presented to the defendant bank on 05.06.2007 in high value clearing through Oriental Bank of Commerce. The DD was inquired and verified and it was found that DD pad containing 50 leaves bearing No. MDBG 191701 to Page No. 25 of 27 CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 191750 was missing. Therefore, mater was put to the Regional Office situated at Bhagwan Dass Road, Delhi, and then, on the instructions of the Regional Office, a complaint was loded and accordingly FIR No. 539 of 2007 PS Dwarka under Section 380 IPC was got registered.
47. Plaintiff has not denied that defendant has lodged the FIR against the unknown persons regarding theft of the demand drafts, rather, plaintiff has itself proved the same through testimony of PW4 ASI Samunder Singh. Once, it is proved that defendant is claiming the DD in question, which was presented to them by the plaintiff bank is forged. In my view, since the plaintiff, as per his averment/testimony has taken the said draft against the sale of the goods, therefore, his entitlement to claim the amount of said draft become against the person to whom he has sold the goods, which may include the accused persons of FIR No. 539 of 2007. The claim of the plaintiff to the suit amount cannot be adjudicated upon without them, as those person had purchased the goods from the plaintiff and given the forged DD. Hence, in my view, they were necessary parties, therefore, this suit is bad for nonjoinder of necessary parties. Defendant has proved that neither the collecting bank i.e. Oriental Bank of Commerce; banker of plaintiff nor the purchaser of goods have been impleaded parties despite being they are necessary parties. In view of abovesaid facts, issue no. 2 is decided in favour of the defendant and against the plaintiff.Page No. 26 of 27
CS No. 229/2016 M/s Unique Infoways Pvt. Ltd. v. Syndicate Bank DOD : 20.01.2020 Relief
48. In view of my findings on the issues aforementioned, the suit filed by the plaintiff is accordingly dismissed.
No order as to costs.
Decree sheet be prepared accordingly.
File be consigned to record room.Digitally signed
VIJAY by VIJAY KUMAR Announced in the open court on KUMAR DAHIYA Date: 20th Day of January 2020. DAHIYA 2020.01.25 13:18:34 +0530 (V.K. DAHIYA) ADDL.DISTRICT JUDGE01 (SOUTH WEST) DWARKA DISTRICT COURTS: NEW DELHI. Page No. 27 of 27