1. This is an appeal by the defendant who happened to be a limited Bank, namely the Bareilly Bank Limited. The plaintiff was a constituent of the Bank and he sued the Bank for the recovery of a large sum of money, to wit, Rs. 19,900/- on account of principal and Rs. 811/- on account of interest etc., totaling a sum of Rs. 20,741/-.
2. The plaintiffs case, in brief, was that on the 13th of September 1944, the plaintiff had deposited with the defendant-Bank a sum of Rs. 19,900/- in cash, and that the deposit was entered in the Bank's books. The plaintiff's case further was that when he deposited the sum of money with the Bank he filled in a voucher and put his signature on that and when the money was accepted by the Bank, the Bank put their acknowledgment on the voucher showing the receipt of the money. The plaintiff further stated that after he had made the deposit aforementioned, the money was credited to his current account which was entered by the Bank in their books to the credit of the plaintiff, that the plaintiff was handed over a cheque book containing 25 cheque forms, and that he acknowledged having received that cheque book by putting his signature on the printed register which was maintained by the Bank under the caption of 'Cheque Issue Register'. The plaintiff went on to allege that when on the 9th of February 1946 he drew a cheque bearing No. 123366 for a sum of Rs. 5900/-, the same was dishonoured by the Bank. The plaintiff says he was told by the Bank that his accounts had already been operated upon and three cheques had already been drawn on it, one for Rs. 2000/- on the 14th of March 1945, another for Rs. 8000/- on the 17th of March 1945, and a third for Rs. 9000/- on the 22nd of March 1945, with the result that there was only a balance of Rs. 4377-76 to his credit.
3. The plaintiff alleged that he could not possibly accept the version of the Bank in regard to the position of his current account and he, therefore, laid claim for the recovery of the money from the Bank. The Bank refused to pay, and, therefore, the plaintiff filed this suit.
4. The Bank took up all kinds of defences, but for the purposes of this appeal we are concerned to notice only the following defences taken up by the Bank, (1) that the money not having been plaintiff's property, even though the plaintiff deposited the money in the current account in the Bank in his own name, he could not recover back the money, (2) that the plaintiff had by fraud withdrawn moneys from his current account totaling Rs. 19,500/-and, therefore, he could not recover from the Bank anything, except the balance of Rs. 4377-76 which lay to his credit in his current account, (3) that the defendant-Bank having acted bona fide and having taken all due precautions In making the payments, it was protected, and (4) that the plaintiff could not recover anything from the Bank even though it was shown that the plaintiff himself had not received the sum of Rs. 19,500/- which had been drawn on the Bank and paid by the Bank in respect of the three cheques drawn in March 1945, referred to above.
5. We should like to state some admitted facts which will help the decision of the questions calling for determination. The first thing that stood admitted between the parties was that it was the plaintiff who deposited the sum of Rs. 19,900/- in the current account with the Bank on the 13th of September 1944. It was also admitted that the plaintiff was issued on the same date a cheque book bearing cheque Nos. 123366 to 123380 and that the plaintiff was made to sign an acknowledgment of the receipt of this cheque book on the Cheque Issue Register maintained by the Bank. It was further admitted between the parties that the three cheques which were drawn on the defendant-Bank in March 1945 totalling a sum of Rs. 19,500/- were not drawn on forms which were included in the cheque book which was issued to the plaintiff, for the cheques which were drawn for the aforementioned total sum bore the following numbers respectively :
DaleNo. of the ChequesAmountIn whose favour14.3.45252922,500/-Ram Dass.17.3.45252948,000/-Ram Dass.22.3.45252979,000/-Ram Dass.
The other thing that Stood admitted between the partieswas that there was no document showing that the plaintifftook any other cheque book than the one which had beenoriginally issued to him.
6. We may here also mention a few other facts which were patent on the face of the record of the case, (1) that the cheque book which was issued to the plaintiff originally, i.e., on the 13th of September 1944 when he opened his current account with the Bank, was produced from the plaintiff's custody, (2) that the requisition slip for requisitioning a fresh cheque book which was contained in the cheque book originally issued to the plaintiff was intact in that cheque book, (3) that the pass-book which the plaintiff had in his custody showed entry of no other transaction, except the first one, namely the cash deposit of Rs. 19,900/- made on the 13th of September 1944, and (4) that there was nothing on the record to show as to how the cheque book from which the aforementioned three disputed cheques happened to be issued or how the cheque book from which these cheques were issued happened to go out of the custody of the Bank or on whose requisition such a cheque book had been issued. The cheque issue Register, however, does show that a cheque book bearing cheque Nos. 25291 to 25300 was issued to Nawal Kishore, and that the same was received by some one who signed himself as Ram Dass. From the Cheque Issue Register the date of issue of this cheque book appears to be March 12, 1945.
7. The parties in this case led some oral evidence as also some documentary evidence. By the evidence which the plaintiff produced, he attempted to prove his case. The evidence which the defendant led was led in an attempt to prove that there was no liability of the Bank in respect of the claim put forward by the plaintiff. The plaintiff while in the witness-box proved a simple case of deposit and gave a lie to the defendant's contention that any money had been drawn by him or en his behalf or with his knowledge from the money which he had deposited in the current account on the 13th of September 1944. The plaintiff made no secret of the fact that the money which he had deposited had been given to him for deposit by his sister. He also clearly stated the reason as to why such a large sum of money had been put by him in current account, which only yielded a small percentage of interest, namely -/8/- percent per annum, while he could earn a much larger amount of Interest if he had put the money in Savings. Bank Account.
The plaintiff also deposed to the fact that when his cheque was dishonoured, he laid a claim to the money from the Bank and when he found that the Bank was not paying his money, he filed the suit The plaintiff was cross-examined at considerable length. But even so it is interesting to notice that some of the most material questions that should have been put to him were not so put. (After discussing the evidence the judgment proceeds.) In short, there was, in our view, not even a scintilla of evidence to further this contention raised on behalf of the Bank to any extent. In this context it is interesting to notice that any document which could have provided some satisfactory material for determining the question in issue between the parties, was not available.
8. We may here shortly recapitulate some of the above noticed category of evidence--to begin; the letter of request for a duplicate cheque book was not forthcoming, the voucher under which the money was Deposited by the plaintiff was not forthcoming, and the specimen signatures which must have been given by the plaintiff at the time when he opened the account were not forthcoming--because the plaintiff strongly denied that the alleged specimen signatures of his produced by the Bank were not his, but had been subsequently interpolated into the Bank's records to support the false case set up by the defendant. The evidence of the plaintiff and Shanti Prasad clearly showed that at the time when the plaintiff opened the account with the Bank, Shanti Prasad had introduced the plaintiff to the Bank by putting his signature on a printed form which was meant to be a letter of request by a constituent desiring to open an account with the Bank. In order to get over this difficulty created by the evidence of the plaintiff as also of Shanti Prasad on this matter, the Bank took up the attitude that there was no practice in this Bank of taking letters from other constituents or other persons by way of Introduction when a customer came to open an account with the Bank. It cannot be denied that it is a common banking practice to have letters of introduction from known customers when any new customer comes to the Bank with a request for opening an account with the Bank. If this loss of the alleged letter of introduction signed by Shanti Prasad introducing Nawal Kishore plaintiff to the Bank had been one isolated fact in relation to this case, then possibly it could not have been given the prominence that it otherwise deserves, but when we remember that the suppression of this alleged letter of introduction was one in a series of relevant and important pieces of documentary evidence, the complexity of the matter changes.
9. On behalf of the Bank, Roshan Lal, the Managing Director came in to give evidence. His evidence really is not of much consequence in determining the materiaf facts in issue in the case, for much of what Roshan Lal stated lay in the realm of hearsay. One important fact, however, which appeared from the testimony of Roshan Lal was the fact that there was a circular by him to all the branches of his Bank to send six-monthly and yearly statements of current accounts of depositors to all depositors. This circumstance will have an important bearing on the case when we go on to determine the cumulative effect of the circumstances appearing from the evidence in relation to the case of the parties. The statement of Roshan Lal further showed that when he examined the records of the Bank after a dispute had arisen between the plaintiff on the one hand and the Bank on the other in regard to the plaintiff's money, he had noticed the cheque book register ledger and he had then seen that two cheque books had been issued to the plaintiff. We shall also see the import of this statement a little later.
10. Before we go on to consider the circumstances to determine the facts in issue, we should like to decide first, whether the plaintiff's contention that the voucher showing the deposit and the specimen signatures relied upon by the Bank were his or not. There was, we mayat the very outset state, no expert evidence, of a handwriting expert to help our determining the question. The fact, therefore, has to be determined on our view of the signatures that were in controversy on circumstances and also on a comparison of those signatures with the admitted signatures of the plaintiff. In this context we may point out that Mr. Prem Mohan Verma appearing on behalf of the appellant did not contend that there was any similarity discernible between the disputed signatures on the cheque book and the deposit voucher, and the specimen signatures and the signatures of the plaintiff that had been exhibited before the Court below under the plaint' or on the vakalatnama and other similar papers.
But what Mr. Prem Mohan Verma contended was, that the plaintiff had two signatures, one a disguised one and other his normal signature which he has put on the plaint and the vakalatnama etc. There was nothing on the record for this argument of Mr, Verma. But one thing undoubtedly becomes clear on this contention of Mr. Verma and that is that the two signatures had no such similarity as could entitle any body to come to the conclusion that the sets of signatures were made by the same person. Looking at the surrounding circumstances following in the wake of the plaintiff's, deposit of Rs. 19,900/- with the Defendant-Bank, we could arrive at no other conclusion than that the signatures on which the Bank relied as signatures of the plaintiff could not be his. The crucial circumstance in this connection, in our opinion, was the circumstance that the cheques on the strength of which money totalling Rs. 19,500/- has been withdrawn were cheques not from the cheque book originally issued to the plaintiff but were from a cheque book which was, even according to the Bank taken out a second time and on our finding not by the plaintiff. The rules of the Bank required--that was Rule 13 printed in the Pass Book--that any constituent who required another Pass Book could only indent for such a Pass Book on the printed form that was attached to the cheque book which was issued to a constituent. The relevant rule is in these words :
'Applications for new Cheque Book should he made on the printed slip inserted near the end of each Cheque Book. Depositors are particularly requested to tee that all cheque books are received under cover, and to assure themselves of the correctness of the number of cheques contained in each. The Depositors are also advised to keep their cheque books under rock and key and to adopt a Private running number. Only messengers known to the Bank should be sent to receive new cheque books.'
11. The aforequoted rule makes it perfectly clear that if the Bank let another cheque book be issued without the plaintiff having asked for it on the printed slip which was inserted in' his cheque book, then It was for the Bank to satisfy the Court as to how it was that a departure from the rules was permitted by the Bank. There is on behalf of the Bank not a title of evidence on this question. That being the position and further that the alleged letter of request for a second cheque book was missing, it could not be held that the plaintiff ever took a second cheque book from the Bank and once that was held, in our judgment, it was difficult to hold that there could be any justification whatsoever for the Bank to honour the cheques purporting to be that of the plaintiff when those cheques did not bear the numbers which the cheques issued to the plaintiff originally by the Bank bore. In this context, it would be relevant to notice that the ledger account of the plaintiff maintained by the Bank had on the top of that noted the numbers of the cheque forms which had been issued to the plaintiff. An attempt was first made to score it out and subsequently it was erased and underneath was noted the numbers of the cheque forms of the book out of which the spurious cheques were issued and cashed by the Bank. There was no explanation at all as to why this was done or who did it.
The matter to us looked very suspicious indeed. We may also say in this connection that one does not find such erasures, scorings and changes in a ledger account of a Bank. The cheques which were issued and cashed were, it is interesting to note, not in a sequence that is to say the first cheque which was issued on the 14th of March 1945 bore No. 25291, the second cheque which was issued on the 17th of March 1945 bore No. 25294, and the third cheque which was issued on the 22nd of March 1945 bore No. 25297. The cheque book which was alleged to have been issued a second time to the plaintiff contained cheques Nos. 25291 to 25300. There is no explanation as to why cheques which were issued one after the other did not follow the sequence so far as their numbers and so far as sequence in the cheque book was concerned. The fact that the sequence of the cheques was broken when issued, possibly has a tail hanging by it. But we do not think we are called upon to speculate and uncover the tail, for, in our view, It is sufficient for us to say that this was a circumstance which threw doubt on the bona fides of the defendant's case.
12. It was the common case of the parties that when the plaintiff opened his account and received his first cheque book for operating on that account he signed its receipt on the Cheque Issue Register. Surprisingly that particular page which, admittedly bore the plaintiff's signature, is missing from that register. This was, a circumstance which was so odd that the defendant who came to defend the suit with a peculiar equanimity even thought necessary to offer some explanation. But even so the explanation that the defendant offered was worth nothing, for what he said was that this page must have been torn away by some co-conspirators of the plaintiff operating in the Bank as an employee of the Bank or something of that kind. In a Bank all documents bear a particular sanctity and It Is surprising for us to find that the Bank could In this particular case glibly say that a page of an important register maintained by it, namely the Cheque Issue Register, could be torn away by some one so easily as not to be caught or discovered in the act of tearing or responsibility could not be fastened to some one for this act.
Further in this connection, we have to remind ourselves of what Roshan Lal stated in his evidence, namely that he had seen the Cheque Issue Register which showed that two cheque books had been issued to the plaintiff. In our view, Roshan Lal noticed this fact after the controversy between the plaintiff on the one band and the Bank on the other had arisen. Therefore, our surprise is all the greater that Roshan Lal as Managing Director of the Bank should not have taken, any steps to see that documents which were likely to be very material for the Bank should not be tampered with by interested persons. The only explanation which strikes us, and is obvious, for this kind of careless conduct is, that if carehad been taken and all disputed documents had been kept under lock and key available to a few, then this Kind of explanation which is now coming forth on behalf of the Bank would have been completely excluded. After giving this matter a careful consideration, we are unable to agree with the Bank's contention that the cheques on which money had been paid had been drawn by the plaintiff.
13. Another circumstance which goes to support the finding just recorded above by us, was the fact that although the Bank's Managing Director had issued a circular to the effect that the statements of six-monthly and yearly accounts had to be issued to constituents, yet it was not established that any such statement of accountwas sent to the plaintiff. The plaintiff was not even asked in cross-examination as to whether or not he ever received such a statement of his account.
14. The money had been deposited, as we have noticed earlier, on the 13th of September 1944 and the first cheque that was drawn was on the 14th of March 1945, so that a statement of account should have been sent to the plaintiff on the 31st of December 1944 and another statement of account should have gone to him at the end of June 1945. The plaintiff went to the Bank, according to him, to draw his first money from his account on the 9th of February 1946, i.e. after a lapse of eighteen months during which period of accounting, the statement should have shown the three withdrawals by the three spurious, cheques, so that the plaintiff would have known--if his statement of account had been sent to him on the 31st of December 1945--the exact state of his accounts and he would have then been put on his guard. It appears that it was not thought advisable by the servants of the Bank to put the plaintiff on guard early in regard to the state of his accounts, that is to say let him know that his account was being surreptitiously used by someone. It appears that possibly the persons in the Bank who used to utilize the plaintiff's money surreptitiously never expected that the plaintiff would come to ask for his money even in February 1946. Be that as it may, the non-despatch of statements of accounts when there was a direct order in regard to such despatch, was a circumstance that cut very adversely against the defendant's case.
15. Mr. Prem Mohan Verma contended that even if the cheques on which payments were made by the Bank had not been drawn by the plaintiff but the plaintiffs signature had been forged on the cheque even then the Bank was protected, because the Bank must be taken to have paid the money bona fide on the presentation of the cheques at its counter. Before we come to consider the question of the liability of a Bank in respect of payments made by it on forged cheques, we should like to re-iterate at this stage the fact that it was, in our view, exceedingly difficult, on the circumstances which we have already noticed earlier, for the Bank to contend that the payments of the cheques could have been made bona fide or under any really genuine mistaken belief that the cheques had been drawn by the plaintiff.
16. The question of liability of a banker in respect of the account of a constituent which was depleted by spurious cheques was considered in this 'Court in Lala Pirbhu Dayal v. The Jwala Bank : AIR1938All374 , where It was held by Ismail, J. as follows :
'It is the duty of the employees of the Bank to be able to identify the signatures of their customers and if they fail to discharge their duty and thereby suffer loss, there is no reason why the customer should make good that loss.'
The learned Judge further went on to say that the mere fact that a customer was in some way negligent to the extent that he allowed his cheque book to remain unlocked did not absolve the Bank from the responsibility of making good the loss to the constituent.
17. In the case of Pirbhu Dayal : AIR1938All374 , the negligence that was relied upon was that he had left the cheque book, which was utilized in drawing the money from the defendant-Bank, in a position from where forms could be easily stolen from it. In a House of Lord's case of 1855, Bank of Ireland v. Trustees of Evan's Charities, (1855) 5 HLC 389 : 101 RR 218, on which reliance was placed by the learned single Judge in Pirbhu Dayal's case : AIR1938All374 , it was observed that:
'If such negligence could disentitle the plaintiffs, to what extent it is to go? If a man should lose his cheque book or neglect to lock the desk in which it is kept, and a servant or stranger should take it up, it is impossible in our opinion to contend that a banker paying his forged cheque would be entitled to charge his customer with that payment. Would it be contended that if he kept his goods so negligently that a servant took them and sold them, he must be considered as having concurred in the sale, and so be disentitled to sue for their conversion on a demand and refusal? It is clear, we think, that the negligence in the present case, if there be any, is much too remote to affect the transfer itself, and to cause the trustees to be parties to misleading the bank in making the transfer on the forged power of attorney.'
Even on Negligence has pointed out that :
'The banker's obligation is to honour his customer's cheque. To that end he is bound to know his customer's handwriting. If in any way he is deceived without the instrumentality of his customer, he must himself abide the loss.'
18. In this case, as we have noticed, there was absolutely no proof, that the plaintiff was in any way Instrumental in deceiving the Bank. Indeed, it is very difficult on the state of the evidence for us to say that the Bank was ever really deceived by any body, for on all the circumstances of the case, ft appeared that the money had been taken, away by some employees of the Bank rather than some outside agents. But that is not a question on which any decision of ourselves is called for and as we have just said above was not in the nature of a decision but merely as a possible view point put in just opposition to the contention. There was no instrumentality of the plaintiff in defrauding the Bank in this particular case by getting the spurious cheques cashed.
19. In Bhagwan Das v. Creet, ILR 31 Cal 249, a Bench of the Calcutta High Court took a similar view as was taken in Purbhu Dayal's case : AIR1938All374 .
20. In the end Mr. Prem Mohan Verma contended that his client was in a sense put in a jeopardy in respect of a proper defence, because of the fact that many of the employees of the Bank who could have given relevant evidence in the case were undergoing a criminal prosecution in respect of the alleged payments on forged cheques, and that several attempts were made in the Court below to get an adjournment of the case but the Court below did not give sufficiently long adjournments to enable the criminal case to be over. We find from a scrutiny of the record that the Court below did grant some adjournments. We have, however, been unable to see how this fact, that some of the Bank employees who were charged with having forged the cheques were on trial in a criminal Court, could prevent the defendant-Bank from putting up a proper defence of the case. The Bank employees who were being prosecuted could always come and give evidence and it could not be said legitimately that the evidence that they would have given would have gone against the Bank, for they could not possibly have said that they forged the cheques or that they carelessly made payments or that they were instrumental in removing the page from the Cheque Issue Register or that they removed the letter of request of the plaintiff for a second cheque book which had been pasted on some register. Therefore, we were unable to see any force in Mr. Verma's contention that his defence was in any way prejudiced by the fact that certain employees of the Bank were undergoing criminal trial when the civil suit was pending. We have, therefore, seen no reason to think that there was any adequate reason for holding that the defendant was prejudiced in his defence and, therefore, entitled to a re-hearing.
21. For the reasons given above, we have seen no merits in this appeal and it is dismissed with costs.