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J. Ladies Beauty Vs. State Bank of India, Ahmedabad and anr. - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtGujarat High Court
Decided On
Judge
Reported in[1986]59CompCas20(Guj)
AppellantJ. Ladies Beauty
RespondentState Bank of India, Ahmedabad and anr.
Appellant Advocate M.N. Bhawanani, Adv.
Respondent Advocate G.N. Desai and; S.B. Joshi, Advs.
Excerpt:
.....should be made to bearer - in instant case bank negligent in making payment of concerned two cheques - bank bound to reimburse for said negligence. - - 479.75. the bank having failed to reimburse the plaintiff, the plaintiff filed a summary suit no. he has stated that 'when the cheques were presented before me there was no apparent signs as it appears now as well as of cross were not visible at the time of presentation on july 8, 1972.'he, therefore, gave token for payment .he has admitted that these cheques were in their possession till the same are produced till the same are produced in the court. it also appears that the dates as well as endorsement of payee's account have been tampered with and somebody has tried to rub it with some chemicals, but the said attempt is not..........the plaintiff stated that one cheque dated june 30, 1972, was for rs.1,596 and the second cheque dated july 22, 1972, was for the amount of rs. 479.75. the bank having failed to reimburse the plaintiff, the plaintiff filed a summary suit no. 2009 of 1975 claiming rs. 2,075.75 as principal amount of these two cheques and rs. 747 as interest in all rs. 2,822.75. 3. the trial court has granted unconditional leave to defend to the bank. the main contention of the bank was that they were not negligent and, therefore, the plaintiff was not entitled to have any reimbursement . the small causes court, ahmedabad, recorded the evidence of both the parties, and , after hearing the arguments, dismissed the suit with costs on january 18, 1979. 4. being aggrieved by the judgment and decree of the.....
Judgment:

S.A. Shah, J.

1. The applicant is the original plaintiff-partnership firm doing business of ladies hosiery at Ahmedabad. They had a bank account with respondent No. 1 bank, namely, the State Bank of India, which was a current account and which was converted into cash credit account on July 7, 1972. It is the case of the applicant that the applicant issued five cheques prior to July7, 1972, out of which three cheques, which were encashed, were properly encashed but the remaining two cheques issued to one Bombay firm were tampered with and have been encashed not by the payee, though the same were payee's account cheques and the respondent-bank has made the payment of those payee's cheques negligently and carelessly to some third party. The applicant-petitioner, therefore, gave notice to the bank to reimburse the applicant-petitioner to that extent.

2. The plaintiff stated that one cheque dated June 30, 1972, was for Rs.1,596 and the second cheque dated July 22, 1972, was for the amount of Rs. 479.75. The bank having failed to reimburse the plaintiff, the plaintiff filed a Summary Suit No. 2009 of 1975 claiming Rs. 2,075.75 as principal amount of these two cheques and Rs. 747 as interest in all Rs. 2,822.75.

3. The trial court has granted unconditional leave to defend to the bank. The main contention of the bank was that they were not negligent and, therefore, the plaintiff was not entitled to have any reimbursement . The Small Causes Court, Ahmedabad, recorded the evidence of both the parties, and , after hearing the arguments, dismissed the suit with costs on January 18, 1979.

4. Being aggrieved by the judgment and decree of the Small Causes Court, the plaintiff filed an appeal being New Trial Application No. 12 of 1979, before the Appellate Bench of the Small Causes Court. The Appellate Bench, by its judgment dated November 9, 1979, dismissed the new trial application with costs and being aggrieved by the judgment and decree passed by the Appellate Bench, the plaintiff has filed this revision application before the this court.

5. Miss Bhavnani makes the following submissions : (i) that both the suit cheques bear the endorsement of 'payee's account' and , therefore, the bank cannot make payment of these cheques to the bearer of the cheques; (ii) that the cheques bear the date of issue as June 30, 1972 and July 22, 1972, respectively, and somebody has tried to interfere with this endorsement and date and has tried to rub out with some material and, thereafter, has placed a rubber stamp and has rewritten '7th July, 1972' by rubber stamp. These tamperings with the 'payee's account' endorsement and date are visible to naked eye even today and, therefore, the bank was totally negligent in making the payment of such cheques to the bearer of cheques without making any inquiry; and (iii) that across the printed word 'order' a line with ink has been drawn and the word 'order' has been scored out of the word 'bearer' has been added and the alleged signature of the partner of the plaintiff has been made to show that the said erasure is authentic. However, the specimen signature as given to the bank is specimen signature of the partnership with partnership stamp affixed whereas this new signature does not bear partnership rubber stamp over the signature and, therefore, the bank was not justified in treating the cheques as bearer cheques ; (iv) that the evidence given by the bank officers cannot be considered to be fo any value in the face of the document (cheques) and the presumption arising from the documents cannot be rebutted by such oral evidence without any technical support.

6. I deal with the submissions of Miss Bhavnani in the same order in which they are stated. A bare look at the cheques, Exs.34 and 35, show that there is an endorsement of 'payee's account' on the left hand top corner of both the cheques, which today also are readable. The bank officers have been examined to explain this endorsement. Defence witness No.1, Dilip Kumar Jaswantlal Chokshi, who was working on cash credit counter on Tilak Road Branch, was the first person to scrutinise the cheques. He has stated that 'when the cheques were presented before me there was no apparent signs as it appears now as well as of cross were not visible at the time of presentation on July 8, 1972.' He, therefore, gave token for payment . He has admitted that these cheques were in their possession till the same are produced till the same are produced in the court. In cross-examination he says as under :

'Today I can read at the top of the cheque date with ink. It is 30-6-- 72; even at the other corner of the lines of cross are also visible. There are some writing. I am shown Ex.35. Today I see that there ink written date 22-7-72 and the cross line with some writing.'

7. The other officer whose name is Laxmanbhai Sukhrambhai Vachhani, who was serving at Tilak Road Branch, Ahmedabad, and was the passing officer, is examined by the defence. He says that 'I verified the cheques . At that time the erasures of signature, dates and cross- writings were not visible on that day.' In cross-examination he says that 'I send cheque for the second time on July 10, 1972, at that time these sign written erasures were visible on both the cheques. On July 10, 1972, I could read dates.'

8. The next witness examined by the bank is Bipinchandra Chandubhai Amin, the branch manager of Tilak Road Branch, Ahmedabad, a very responsible officer. He stated in his examination-in-chief that 'the erasures in date in writing of the cheques were not visible when they were presented before me.' In cross-examination he states as under :

'Again on Monday I got it out. On that these erasures were slightly visible but were not so clear as it appears today.'

9. He has further stated in cross-examination that 'it is true that on Monday after seeing these cheques , I felt that these cheques are wrongly paid. Thereafter, feeling of wrong payment I am to refer to my head office at Bandra. I sent these cheques with remarks to the head office. I could not recollect what remarks I made on it. I do not recollect whether I had received any reply or not.' Miss Bhavnani, therefore, submitted that, according to the deposition of the branch m manager, Shri Binpinchandra, the erasures were clear to him on the date when he gave evidence. Not only that but on the next Monday, i.e., on July 10, 1972, the branch manager felt that the payment has been made wrongly and has referred the matter to the head office. All the witnesses have stated that the erasures on the cheques were visible to them on the date of their deposition, but the case of the bank is that the same were not visible when the cheques were presented for payment on July 8, 1972. Miss Bhavnani submitted that if these erasures were visible on the date of the deposition, by no stretch of imagination it can be said that they were not visible on the day when they were presented for payment. It is possible that by lapse of time , the documents and the writings may fade but if is never heard that by passage of time the documents and the writing become clearer. Miss Bhavnani, therefore, stated that there is no escape except to come to the conclusion that the erasures on the cheque were more legible on the date of payment and the bank officers were totally negligent in accepting such documents.

10. I myself have examined both the cheques today i.e., after a period of 10 years from the date of issue . Both the cheques, on the face of it, look suspicious. The original dates are visible even today and a rubber stamp of July7, 1972, has been superimposed upon the original date written in ink. It also appears that the dates as well as endorsement of payee's account have been tampered with and somebody has tried to rub it with some chemicals, but the said attempt is not hundred per cent. successful and with a naked eye one can easily read that there was payee's account endorsement on the left hand side corner of the cheques. Miss Bhavani is also right when the she states that the 'order ' cheques have been erased to 'bearer' cheques and that erasure bears the alleged signature of the partner without a rubber stamp. The specimen signature counter produced at Ex.36 shows that the specimen signature given by the partners is on an rubber stamp for Ladies Beauty partner and between the two lines of that rubber stamp, there is a signature of one partners and, therefore, changing from 'order' to 'bearer' must be signed by the partner in the manner in which the specimen signature is given. In any case, the attention of the bank is drawn both by the endorsement as well as the tampering with the date and payee's account endorsement. If this type of erasures are visible after 10 years, the bank cannot successfully prove by oral evidence of the officers of the bank who are trained in this respect to say the same were not visible at the date when the cheques were presented for payment. According to my opinion, the oral deposition of the officers of the bank that these erasures were not visible on the date of presentation of the cheques cannot be accepted as true in face of the written documents and especially when all the three officers in terms admit that these erasures were visible on July 10, 1972, and were also visible when they gave deposition. The branch manager has further admitted that, after two days of the payment, he felt that payment has been made wrongly and he has referred the matter to his head office. The bank has not produced the reply of the head office but one thing appears to be amply clear that these erasures and tamperings were visible after two days and unless the bank produces such an evidence of some technical expert that one can use some method or chemical by which some writing can temporarily become invisible, a mere oral deposition of the interested witnesses of the bank, who have passed the cheques, cannot be accepted against the documentary evidence of cheques on record. The oral evidence had, therefore, no evidentiary value and being contrary to the documentary evidence of cheques, ought not to have been relied upon by the courts below.

11. Again, the bank has not pleaded the case in the written statement that these erasures were not visible on the date of presentation of the cheques and, therefore, they had made the payment. The story of the bank, as disclosed in their evidence, after the plaintiff has completed its evidence, which is not specifically pleaded in the written statement, cannot be accepted by the court.

12. Now therefore, the question arises if the bank makes the payment of the cheques which on the face of it appears to be tampered with and a cheque for payee's account is converted into a cheque payable to the bearer, can the bank said to be negligent in making the payment. In my opinion, when a customer issues a cheque payable to payee's account, he is assured that the bank will not make the payment to anybody except the person in whose favour the cheque has been issued . When such an endorsement is being tampered with, the bank is put on an inquiry as to why payment should be made to the bearer. The plaintiff was residing in Ahmedabad. He was granted credit facilities on July 7, 1972, and when on same day the bank is accepting such doubtful cheques, it was obligatory upon the officers of the bank to make an inquiry and to ascertain from the drawer(plaintiff) whether such a cheque is to be accepted or not. The bank having failed in its duty to make an inquiry and to clear the cheques which would have been cleared on Monday, two days thereafter, according to the evidence of the bank officers, I have no doubt that the bank was negligent in accepting these two cheques and making payment to the bearer. The oral deposition of the bank is no evidence in the eye of law and cannot be believed that before two days, these erasures were not visible. I, therefore, hold that the bank was negligent in making the payment of these two cheques and ,therefore, was bound to reimburse the applicant-petitioner.

13. That the claim of the plaintiff being for ascertained amount, he is entitled to interest at the rate of six per cent. ; he is, therefore, entitled to Rs. 360 as interest from July 7, 1972, to the filing of this suit, i.e., June 9, 1975.

14. No other points were urged by the respondents.

15. The result is that the judgment and decree of both the courts below are set aside . The plaintiff is entitled for a decree of Rs. 2,435.75 with running interest at the rate of 6% on principal amount of Rs.2,075.75 from the date of the suit till realisation. Rule is made absolute with costs throughout . Decree be drawn accordingly.


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