Madras High Court
United Bank Of India vs Central Scientific Supplies Company ... on 24 September, 1998
Equivalent citations: (1998)IIIMLJ728, AIR 1999 MADRAS 1, (1998) 3 MAD LJ 728
JUDGMENT N.V. Balasubramanian, J.
1. The above second appeal has been preferred against the judgment and decree of the learned XI Additional Judge, City Civil Court, Chennai in A.S.No. 240 of 1985 dated 5-9-1985.
2. The first defendant in O.S.No. 1614 of 1980 on the file of the City Civil Court, Chcnnai is the appellant herein. The said suit was filed by the plaintiff, the first respondent herein and the second respondent in this appeal is the second defendant in the suit.
3. The plaintiff has filed the suit for recovery of a sum of Rs. 20,900/- with interest from the date of the institution of the suit till the date of payment. The case set out in the plaint was as follows:-- The plaintiff is a Public Limited Company having its Head Office at No. 29, Stringers Street, Chennai-1. The plaintiff was having a current account with the second defendant, viz., Indian Bank, Tainbaram Branch. The plaintiff, in the normal course of its business, issued a cheque crossed 'Account Payee only' on the second defendant bank and the cheque was dated 17-10-1979 for a sum of Rs. 2,061.93 favouring M/s. Praful Shah & Bros., Bombay (bearing No. 767CP. 904887). According to the plaintiff, the cheque was made out for a sum of Rs. 2,061.93 written in both figures and words, and there was no scope for any imerlineation or alteration. The plaintiff has stated that the plaintiff sent the cheque by recorded delivery bearing receipt No. 117 dated 17-10-1979 at Tambaram Post Office and it was the normal course of the business. The plaintiff subsequently found that a sum of Rs. 20,061.93 was debited to its account by the'second defendant and it was found on enquiry that the cheque had been presented to the appellant/first defendant bank for a sum of Rs. 20,061.93 and that the said amount had been paid by the second defendant bank on 27-10-1979. The plaintiff gave a police complaint and the police, on investigation, found that there were alterations in the cheque from the sum of Rs. 2061.93 to Rs. 20,061.93 and the alterations have been made both in figures and words. It was also found that an account was opened in the name of M/s. Praful Shah & Bros, with the appellant/first defendant bank on 25-10-1979 giving the address as No. 162A, Ashok Nagar. Madras and it was also found that the introducing party was a non-existent firm and the address given was also false and cut of the amount credited in his account, the amounts were withdrawn by presenting the cheques for Rs. 17,000/-, Rs. 1739/- and Rs. 1100/-. According to the plaintiff, the cheque in question was stolen during the course of transit, and the sums were also altered for the collection of the sums mentioned in the plaint. The case of the plaintiff was that both the banks were negligent and they have not exercised normal diligence and care in the collection of the cheque amount and payment of the amount. The plaintiff has also stated that there was suspicious circumstance in the opening of the new account and the quick and hurried withdrawal of the major part of the cheque amount would clearly show that the banks were negligent and have not exercised normal diligence and care in opening of the new account. The plaintiff has stated that the defendants were bound to make good the loss sustained by the plaintiff on account of the negligence and want of care of the defendants.
4. The first defendant, the appellant herein has filed a written statement and according to the first defendant, the plaintiff has admitted in the letter dated 22-11-1979 that a cheque was issued by the plaintiff favouring M/s. Praful Shah & Bros., Bombay for a sum of Rs. 20,061.93 only. The first defendant denied the allegations made against them. The case of the first defendant was that the account was opened in the name of M/s. Praful Shah & Bros, after making enquiries and after complying with all formalities for the purpose of opening of the account. It was pleaded that the account was opened after getting proper introduction from an erstwhile account holder of the first defendant bank which was in accordance with the principles of banking and in the course of their banking business. It was also stated that the signature in the cheque presented by the account holder tallied with the specimen signature obtained at the time of opening of the account and there was no room of suspicion either at the time of the opening of the account oral the time of forwarding the, cheque for collection of the amount or at the time of payment of the amount to the account holder. It was also stated that once the amount was credited, the first defendant bank was bound to make payment for the cheques tendered by the account holder and there was no negligence on the part of the first defendant bank in making the payment to the account holder. The averment that the first defendant acted in a negligent manner was denied and the first defendant had no knowledge about the alleged fraud committed by the account holder in tampering with the cheque,
5. The second defendant Tiled a separate written statement stating that the cheque in dispute was presented for payment on 27-10-1979 through clearing house by the first defendant. The second defendant after exercising due diligence honoured the cheque and no alteration or interlineation was visible to the naked eye. According to the second defendant, the alteration was not at all patent and the cheque did not appear to have been altered. It was further pleaded that there was no negligence on the part of the second defendant.
6. The trial Court, on the basis of the pleadings and documents, particularly the report given by the Document Expert attached to the Tamil Nadu Forensic Laboratory in which he had recorded a finding that some of the words and figures in the cheque in question were erased and alterations were made from the sum of Rs. 2,061.93 to Rs. 20,061.93 and the alterations said to have been made were apparent and visible only to the persons like experts, has recorded a finding that there was no explanation by D.W. 1 who was examined on behalf of the appellant/first defendant for not asking the bogus party for proper introduction by a person holding account with the first defendant bank. The account was opened on 25-10-1979 and the introducing party was not present in the bank to introduce the bogus party, M/s. Praful Shah & Bors. It was also found that D.W. 1 had admitted that when the fraud committed was discovered, the introducing party told him that he did not introduce the bogus party to the first defendant bank and did not sign the application form for opening the account as introducing party. It was also found that the signature of the introducing party differed from the signature in Ex. B-5. Therefore, the trial Court found that D.W. I had admitted that the signature of the introducing party differed from the signature found in Ex. B-5. The trial Court found that the conduct of the party in opening the account and drawing the entire sum from the account should have raised suspicion in the minds of the officials of the first defendant bank. The trial Court placed reliance on the judgment reported in the case of Indian Bank Ltd. v. Catholic Syrian Bank, and held that the first defendant was negligent in not suspecting the conduct of the bogus party and the second defendant was not liable to pay the loss caused to the plaintiff. The trial Court held that the first defendant was liable to make good the loss of Rs. 20,061.93 sustained by the plaintiff and decreed the suit as against the first defendant.
7. The appellant/first defendant preferred an appeal before the XI Additional Judge, City Civil Court at Chennai. The first appellate Court confirmed the findings of the trial Court and held that the first defendant-bank was negligent when the account was opened by the bogus party in the name of Praful Shah & Bros, and recorded a finding that there was no proper introduction for the bogus party opening the new account. The first appellate Court upheld the findings of the trial Court and dismissed the appeal preferred by the appellant.
8. The following three questions of law have been framed at the time of admission of the second appeal for consideration by this Court:--
1. Whether the Courts below are right in holding that the provisions of Section 131 of the Negotiable Instruments Act will not apply to the facts of this case?
2. Whether the judgments of the Courts below are vitiated for their failure to consider the effect of Ex. B-13 which is a clinching document against the plaintiff? And
3. Whether the Courts below arc right in foisting the liability on the collecting bank after holding that the paying bank was not liable?
9. Mr. S. Jaishree, the learned counsel for the appellant submitted that the plaintiff had not Come with clean hands and the plice report was not marked as a document. The plaintiff has not established the loss sustained by it and if really the loss has caused to the plaintiff, the plaintiff should establish the same. The learned counsel for the appellant submitted that both the Courts erred in granting the decree as prayed for by the plaintiff against the first defendant when the plaintiff had not established the loss alleged to have been sustained by the plaintiff. Further, it was submitted that both the Courts erred in omitting to consider Ex. B-13, the letter written by the plaintiff to the appellant dated 22-11-1979 wherein the plaintiff had admitted that it had issued a cheque for a sum of Rs. 20,061.93 on the Indian Bank, Tambaram favouring M/s. Praful Shah & Bros., Bombay, and therefore, it was contended, when the plaintiffitself had admitted that (hey had issued a cheque for Rs. 20,061.93, it could not be pleaded that there was a loss incurred by the plaintiff. The learned counsel for the appellant also submitted that the plaintiff was equally responsible for the loss caused by sending the cheque by recorded delivery when the cheque was required to be sent by registered post with acknowledgment due. The learned counsel for the appellant also pleaded that the facts are nol clear as to whether the cheque had actually reached M/s. Praful Shah & Bros., Bombay or whether it was stolen during the transit. Further, it was submitted that at the time of opening of the account in the name of M/s. Praful Shah & Bros., the appellant bank has taken all necessary precaution in obtaining a reference from an erstwhile account holder of the bank and after having satisfied that there was proper introduction, the account was opened in the name of M/s. Praful Shah & Bros., and there were no suspicious circumstances surrounding the opening of the account or equally at the lime when the payments were made by the appellant bank. The learned counsel for the appellant further submitted that the Indian Bank, Tambaram, being the paying bank should have taken more care to see whether the cheque was valid because when a cheque is cleared for payment, the collecting bank has to necessarily pay the amount and the appellant bank performed its duty without any negligence.
10. The counsel for the first respondent/ plaintiff submitted that the finding of both the Courts that the appellant-bank was negligent al the time of opening of the account in the name of M/s. Praful Shah & Bros., is a pure finding of fact. The learned counsel for the first respondent submitted that the close proximity of events between the opening of the account and drawing of the amount within 13 days in the name of a stranger should have aroused suspicion in the minds of the appellant bank and according to the learned counsel for the first respondent, the cheque was examined by an expert who found that there were interlineations and the alteration was not visible to the naked eye. Learned counsel submitted that the expert opinion is clear that the cheque was altered for Rs. 20.061.93 which was not visible to the naked eye and in the light of the expert's evidence, the contention of the learned counsel for the appellant that the cheque was issued only for Rs. 20,061.93 is not acceptable. He would also contend that the appellant bank Was responsible for opening the account in a suspicious circumstance by a wrong introduction of a non-existing party and the loss was caused to the plaintiff by the appellant bank in opening the account and facilitating the customer who was a bogus customer to realise the cheque. He also submitted that the decision rendered in the case reported in the ease of Indian Bank Ltd. v. Catholic Syrian Bank, would squarely apply to the facts of this case and the finding of both the Courts that the appellant bank was negligent at the time of opening of the account is not challenged and that is so, the mere omission to consider Ex. B-13 is not a material circumstance to alter the final conclusion of the Court. It is further submitted that the appellant bank has not chosen to examine the person who opened the account and some other officer was examined to explain the circumstances as to how the account was opened and he also admitted that there was variation in the signature of the introducing party, It is also submitted that the appellant bank was negligent in opening the new account which facilitated the new customer to operate the account withdrawing almost the entire amount credited to the account.
11. Learned counsel for the second respondent, viz., the Indian Bank, Tambaram would submit that both the Courts found that there were alterations in the cheque and the said alterations were not visible to the naked eye. Learned counsel submitted that the second defendant-bank has to deal with a number of cheques during the course of a day and it passed the cheque for payment as the alterations were not apparent and visible and therefore, the second respondent bank had not acted in the negligent manner.
12. I have carefully considered the rival submissions of the parties, it is not disputed that the plaintiff is the owner of the cheque in question, the value of which is claimed by the plaintiff in the suit, and the collection of the cheque was made by the appellant bank. It is the case of the plaintiff that the benefit of the collection has not gone to the plaintiff. It was a clear case of the plaintiff that the money covered in the cheque did not reach the drawee. In these circumstances, the question of onus to prove the good faith and absence of diligence is on the appellant bank, the collecting bank as contended by the learned counsel lor the first respondent.
13. In Bharat Bank Ltd. v. Kishinchand Chellaram, . a Division Bench of this Court held that if any action for conversion and defence is raised under Section 131 of the Negotiable Instruments Act. the primary question for determination would be whether in the matter of realisation of cheque, the collecting bank had acted without negligence, negligence not only at the stage of encashment but also at the prior stages from the stage of receipt of cheque in question, and the question whether the collecting bank had acted negligently at the time of opening of the account would be relevant under Section 131 of the Negotiable Instruments Act. This Court held that if the opening of the account and the deposit of cheque are really part of the same transaction or if the cheque was put into the account so shortly after the opening of the account, it may lead to an inference that the collection was part of the opening of the account; then, the negligence on the part of the bank in the opening of the account must be treated as negligence in the matter of realisation of the cheque as well. Therefore, in each case, the question that has to be examined is as to how far these two stages are so intrinsically connected as to be regarded as a single transaction and it is a question of fact whether there was negligence in opening of the account and whether the two transactions viz., opening of the account and collection of the cheque are intrinsically connected, and the question whether the bank was negligent is also a pure question of fact.
14. In Bapulal Premchand v. The Nath Bank Ltd., (1923) ILR 47 Bombay 236. the Bombay High Court held that the circumstances where such as not 10 arouse any suspicion or if there are no note of warning or alarm in the cheque itself, the bank would not be held to be negligent in collecting the amount of cheque which on the face of it did not arouse any suspicion.
15. In Sanyasilingam v. Exchange Bank of India, AIR 1948 Bom 1. the Bombay High Court again held that where the account of a customer was opened without obtaining a reference and without making proper enquiry and where the manner in which the account was operated leads to some suspicion, it would be held that the bank failed to prove that it is not guilty of negligence in collecting the amount of the cheque.
16. The Kerala High Court in Woodbriar Estate v. Catholic Bank, held that the onus of proving good faith and absence of negligence as contemplated under Section 131 of the Negotiable Instruments Act is on the banker claiming protection under the Act and it is always a question of fact whether the bank was guilty of negligence and whether the collecting banker was negligent in collecting the amount. The same view was reiterated by the Kerala High Court in Central Bank of India v. V. Gopinathan, wherein the learned Judge held that the law in India in this regard appears to be stricter than in England and the protection granted to the bank is not so wide.
17. In Indian Bank v. The Catholic Syrian Bank Ltd.. . a Division Bench of this Court considered on the topic and S. Natarajan, J. (as his Lordship then was) speaking for the Bench held as under (at pages 135-136 of AIR) :
"The view taken in AIR 1920 PC 88 that cheques presented by a customer, though one of short standing, have to be accepted by the bank cannot be adopted in this case, because the opening of the account had been done negligently. Moreover, the circumstances connected with the opening of the account shed light on the question whether there was negligence in collecting the draft (Ex, A. 1). As regarding the ruling in (1954) 1 MLJ 560, it is no doubt true that Desai's account was not opened with Ex. A-1 itself, but the draft had been put into the account so shortly after the opening of the account as to lead to the inference that it forms part of the opening of the account and, consequently, the negligence in the matter of opening the account has to be treated as negligence in the mailer of realisation of the cheque as well. Turning to the collection of the draft itself, it must be remembered that the account was opened on 7-6-1969 with a small sum of Rs. 300/-. The very next day, a sum of Rupees 200/- had been drawn, and only a sum of Rupees 100/- was left as balance in the account. On 13-6-1969, a draft for a considerably large amount, (viz. Rs. 29,000/- was presented for collection. As pointed out in AIR 1920 PC 88, the presentation of this draft for a large sum should have certainly aroused the suspicion of D.Ws. 1 and 3. They have, however, treated the matter very casually and sent the draft for encashment. The paying bank must naturally have thought that the Indian Bank would have opened the account for the customer, on whose behalf the draft was sent for collection after making due enquiries and after satisfied that he was a bona fide customer. It was for the appellant bank to have exercised diligence and used its discretion before sending the draft for collection and in making the payment the very next day after the draft was presented in the bank. If the totality of events that had taken place in quick succession is brone in mind, then the only conclusion to be reached is that the appellant bank had not acted without negligence even though it may have acted in good faith. As pointed out in (1968) 2 All ER 573 at p. 579, 'what the Court has to be is to look at all the circumstances at the time of the acts complained of and to ask itself were those circumstances such as would cause a reasonable banker possessed of such information about his customer as a reasonable banker would possess, to suspect that his customer was not the true owner of the cheque.' "
18. The Supreme Court in Indian Overseas Bank v. Industrial Chain Concern 1990 (67) Company Cases 255 laid down the law as under:--
"To enable a bank to avail of the immunity under Section 131 of the Negotiable Instruments Act, 1881, as a collecting banker, he has to bring himself within the conditions formulated by the section. The conditions arc: (a) that the banker should act in good faith and without negligence in receiving a payment, that is, in the process of collection (b) that the banker should receive payment for a customer on behalf of him, (c) that the person for whom the banker acts must be his customer, and (d) that the cheque should be one crossed generally or specially to himself. The receipt of payment contemplated by the section is one from the drawee bank. It is settled law that the onus of bringing himself within the section rests on the banker. As a general rule, a banker before accepting a customer, must take reasonable care to satisfy himself that the person in question is of good reputation; and if he fails to do so, he will run the risk of forfeiting the protection given by Section 131 of the Act, but 'reasonable care' will depend on the facts and circumstances of the case. The test of negligence for the purpose of Section 131 of the Act is whether the transaction of paying in any given cheque coupled with the circumstances antecedent and present are so out of the ordinary that they ought to arouse doubts in the banker's mind and cause him to make inquiries. Disregard to the bank's own regulations may be evidence of negligence. While dealing with a customer for collecting a cheque, there is no contractual relation between the collecting banker and the true owner. The duty is implied by law. A conduct beneficial to the customer at the expense of the true owner, when the bank acts in good faith and without negligence is no breach of that duty."
19. In the light of the above decisions, it is necessary to consider whether the appellant bank is liable. There is no dispute that the plaintiff is the owner of the cheque in question and the cheque has been sent for collection through the appellant bank. The question that arises is whether the appellant bank was negligent in permitting the opening of the account in the name of M/s. Praful Shah & Bros. and allowing the operation of the account. Both the Courts have found that the appellant bank was negligent in opening the account. The evidence is clear that the account was opened without proper introduction. The appellant bank has not examined its employee, one Varadhachari, the Officer who permitted the opening of the account in the name of M/s. Praful Shah & Bros. Another officer of the appellant bank, by name, Seetharaman wa,s examined as D.W.I and he has deposed that the introducing party was one P. C. Seth who did not come to the bank to introduce M/s. Praful Shah & Bros, but put his signature in the introduction form. It was also found by both the Courts that P. C. Seth was not having any current account at the time of the opening of the account in the name of M/s. Praful Shah & Bros. The appellant bank has not explained the reason for not asking the party viz., M/s. Praful Shah & Bros. for proper introduction by a person who was holding an account in the appellant bank on the date of opening of the account. It is also in evidence that P. C. Seth the introducing party had told D.W. 1 that he did not introduce the party to open the account in the appellant bank, and he did not sign the original introduction form. That apart, D.W. 1 has admitted that there is variation between the signatures of P. C. Seth found in Ex. B-5 and in the introduction form. The Courts therefore came to the conclusion that the appellant hank was negligent in accepting the signature of P. C. Seth in the introduction form and there is a clear admission by the witness examined on behalf of the appellant bank that the signatures of P. C. Seth differ. The contention of the learned counsel for the appellant that it is not the practice of the bank to insist on the presence of the introducing party at the lime of the opening of the account is not acceptable. Apart from there being no evidence on this aspect, as regards normal banking practice adopted by the appellant bank, the appellant bank should have contacted P. C. Seth, the introducing party either by phone or by some other means and ascertained from him whether he has introduced any party in the name of M/s. Praful Shah & Bros. The following observations of the Division Bench of this Court in Indian Bank (Ltd) v. Catholic Syrian Bank, 1980 TLNJ 23 are relevant in this context :--
"We are therefore not in the least persuaded by the argument of the appellant's counsel that S. M. Desai had been introduced by a respectable customer of the Bank and Desai's credentials had been tested by D.W.3 before he was permitted to open an account. No doubt, we agree that a banker should not play the role of a master detective and subject a prospective customer to a gruelling examination about his status, credit-worthiness, business experience etc. before permitting him to open an account, but even so, when a man from a different part of the country wants to open a bank account for the first time in his life and when he is introduced by a casual acquaintance of his, even though the introducer may be known to the Agent, we would still, righlly, expect the banker to make more enquiries than usual to test the credentials of the prospective customer before allowing him to open an account."
Here, the appellant bank had not made any enquiry at all to test the credentials of the person before opening the account and the evidence let in on behalf of the appellant bank also establishes that the credentials of the party were not tested by the appellants bank before permitting the party to open the account in the name of M/s. Praful Shah & Bros. The finding as regards the negligence is a pure question of fact and in the second appeal.
it is not possible to reappreciate the evidence and when this Court finds that the finding as regards negligence is based on evidence, the finding as regards negligence of the appellant bank to open the account in the name of M/s. Praful Shah & Bros, has to be sustained.
20. The next question that arises is whether the opening of the account in the name of M/s. Praful Shah & Bros, and the operation of the account cannot be regarded as parr of single transaction. Here also, both the Courts found that the account was opened on 25-10-1979 and a sum of Rs. 50GA was deposited and on 26-10-1979 another sum of Rs. 500/- was deposited and on the same date of cheque for Rs. 20,061.93 was presented for clearance. On 27-10-1979, a sum of Rs. 650/- was withdrawn from the account in question and on 30-10-1979, the sums of Rs. 1739/-, Rs. 17,000/- and Rs. 1100/- were with drawn leaving a small balance of Rs. 573.93 to remain in the account. That apart, the address given is No. 162/A, Ashok Nagar, Madras 83, and there is no mention about the name of the street if any or sector of Ashok Nagar. The way in which the account was operated and the amounis were withdrawn should have aroused suspicion in the minds of the appellant bank. In my view, the facts clearly show that the acts of the appellant bank in permitting the account to be opened and operation of the account are parts of one transaction. Further, the question as to whether these two stages can be regarded as so intrinsically connected or construed to be one transaction is a question of fact as observed by this Court in Bharat Bank Ltd. v. Kishinchand Chellaram, and both the Courts found on evidence that the appellant bank was negligent in the matter of opening of the account and deposit of the cheque and also withdrawal of the amount by way of cheques, and they form part of a single scheme and since the finding that both form part of the same transaction was arrived at on evidence, the Court accepts the finding. Therefore I am inclined to uphold the finding of both the Courts that the appellant bank was negligent at the time when the account was opened in the name of M/s. Praful Shah & Bros, and I also hold that the operation of the said account opened in the name of the said firm was so intrinsically connected with the opening of the account and they form part of the same transaction and the appellant bank was negligent both at the time of the opening of the account and at the time of the operation of the account as both the transactions arc single transaction.
21. I also hold that the plaintiff has established the loss it had suffered. Both the Courts, on the basis of the evidence, came to the conclusion that the cheque was issued for a sum of Rs. 2061.93 and when the plaintiff found that a sum of Rs. 20061.93 was debited to in its account, the plaintiff wrote a letter to M/s. Praful Shah & Bros., Bombay, Ex. A-8 demanding the return of Rs. 18,000/-. M/s. Praful Shah & Bros.. Bombay in Ex. A-9 has stated that they have not received the cheque for a sum of Rs. 20,061.93 and requested the plaintiff to make enquiry about the same. Then, a complaint was lodged before the police. Ex. A-10 is the copy of the complaint lodged by the plaintiff to the Deputy Commissioner of Police (Crimes), Madras, and the banks were also informed in Ex. A-11. Both the Courts, on the basis of said documentary evidence came to the conclusion that the plaintiff has sustained a loss of Rs. 20061.93 and hence, it is not possible (b accept the contention of the learned counsel for the appellant bank that the plaintiff has not proved that it sustained a loss of Rs. 20061.93.
22. Learned counsel for the appellant placed strong reliance on Ex. B-13 and according to her, both the Courts have failed to consider the effect of Ex. B-13. Ex. B-13 is a letter written by the plaintiff to the appellant bank on 22-11 -1979 and in that letter, the plaintiff has stated, 'in the ordinary course of business, our Tambaram branch issued a cheque for Rs. 20061.95 on the Indian Bank. Tarnbaram favouring M/s. Praful Shah & Bros., 78/80, Babu Genu Road, Fort, Bombay 400 002.' The letter also states that the party purported to be living in Ashok Nagar fraudulently opened an account with the appellant bank in the name of M/s. Praful Shah & Bros., Hardware Merchants, 162-A, Ashok Nagar, Madras-600 085 and that party utilised the said account for paying in the cheque of the plaintiff and getting encashment of the cheque. It is also stated that there is no firm in existence at No. 162A, Ashok Nagar, Madras, and the cheque never reached the party in Bombay. The plaintiff also reiterated that the said account was a fraudulent one. The above letter has to be read as a whole. The mention of Rs. 20061.95 in that letter, in my view, does not assume much importance when this Court has upheld the finding of both the Courts that the appellant bank was negligent in opening of the account in the name of M/s. Praful Shah & Bros., 162 A, Ashok Nagar. Madras.
23. Secondly, the Courts found that Ex. A-3 cheque and Ex. A-15, the report of the Tamil Nadu Forensic Science Laboratory, Madras, and the document Ex. A-16 indicate how the figures and the words were altered in the cheque in question. The report of the Tamil Nadu Forensic Science Laboratory indicates that the cheque has been altered both in figures and in words. The photo-copy of the cheque Ex. A-16 and the report Ex. A-15 indicate how the words and figures in the cheque were erased by chemical process and how the figures and words were altered. Both the Courts have accepted the cheque was altered from Rs. 2061.93 to Rs. 20061.93 and in my view, the finding that the cheque was altered is a pure finding of fact based on evidence. Therefore, Ex. B-13 does not assume importance and the learned counsel for the appellant has not drawn the attention of this Court to the fact whether the plaintiff was cross-examined with reference to Ex. B-13. Therefore, when the appellant bank has not elicited any answer during the course of cross-examination of the plaintiff with reference to Ex. B-13, it is not permissible to rely on Ex. B-13 and contend that the cheque was issued by the plaintiff for a sum of Rs. 20061.93. As already observed, when the appellant bank was negligent, the amounts withdrawn do not assume much importance, as the plaintiff has suffered loss to that extent by the acts of the appellant in negligently opening of the account in the name of M/s. Praful Shah & Bros., No. 162A, Ashok Nagar, Madras, and in permitting a party to operate the account to encash an altered cheque.
24. Learned counsel for the appellant also submitted that the plaintiff has not established the loss suffered by it. As I have already held, both the Courts have found on the basis of evidence that the plaintiff has established the loss. Though the Bombay party was not examined, on the basis of the letter exchanged between the parties and on the basis of the expert's opinion.
both the Court have come to the conclusion that there were alterations in the cheque both in figures and in words and the amount as altered was debited in the account of the plaintiff.
25. Learned counsel for the appellant also submitted that the plaintiff was equally responsible us the cheque was sent by the plaintiff through recorded delivery instead of sending the same through registered post. I am unable to entertain such submission of the learned counsel for the appellant as no such plea of contributory negligence was raised in the pleadings and there is no evidence on that aspect. Further, the appellant bank is a public sector undertaking, and when both the Courts have found that the appellant bank was negligent, it would not be proper for the public sector bank to plead contributory negligence when it acted negligently initially at the lime of the opening of the account in the name of M/s. Praful Shah & Bros., Madras. That apart, the Courts have taken note of the fact that the cheque was despatched through recorded delivery and granted the reduced rate of interest instead of normal rate of interest to be awarded in the case of money decree.
26. In so far as the second respondent is concerned, both the Courts have found that the alterations made in the cheque in question were not visible to the naked eye and the second respondent bank was not negligent and it had acted in good faith when it passed the cheque in question for payment. In my view, the above finding is a pure finding of fact and this Court accepts the finding.
27. Hence. I hold that the plaintiff had established the loss and the appellant bank acted negligently both at the time of opening of the account and at the time of payment of the cheque in question and the Courts below were right in decreeing the suit as against the appellant bank. I do not find any good reason to interfere with the judgment and decree of the first appellate Court and I confirm the same. Accordingly, the second appeal is dismissed. However, there will be no order as to costs.