N. Venkanna                                      ---- Petitioner
                       Vs.
Andhra Bank                                      ---- Respondent

Before:- Hon'ble Mr. Justice S.N.Kapoor, Presiding Member, Mr. B.K.Taimni, Member.

Dated:11th January, 2005

PER JUSTICE S.N.KAPOOR, PRESIDING MEMBER:

    The defacto complainant N.Venkanna was operating a Saving Bank Account No. 21162. A cheque book was issued to him but according to him it was lost. The OP/Bank refused to issue him a duplicate cheque book. He withdrew an amount of Rs.150/- from the bank on 21.12.1993 and Rs.80/- on 31.12.1993 by submitting withdrawal form. He issued a cheque for payment to self bearing No. 968266 dated 17.1.1994 for payment of Rs.35,000/- but the cheque was dishonoured for it was alleged that a sum of Rs.34,000/- had already been withdrawn by him on 12.1.1994 by using withdrawal form. The complainant claimed that he had not withdrawn Rs.34,000/- and he was not even present in Hyderabad City on that date. The signatures on the withdrawal form were forged. The complaint was filed through the Dilsukhnagar Consumer Council.

     The OP/Bank resisted the claim on the ground that on presentation of the withdrawal form as well as the pass book, the amount was paid, signatures on the withdrawal form were tallied with his specimen signatures. There was no deficiency in service on the part of the bank.

     During the pendency of the case, the District forum took three specimen signatures of the complainant and obtained opinion of the Director, Forensic Science Laboratory, Govt. of Andhra Pradesh, Hyderabad. According to the opinion of the expert, the admitted signatures and disputed signatures were of two different persons.

     The District Forum allowed the complaint and gave their finding that the complainant was negligent in regard to the loss of the pass book and, therefore, awarded 50% amount of the loss with interest @ 12% p.a. from 12.1.1994 till the date of payment and further compensation of Rs.5,000/- with cost of Rs.500/-.

     The complainant through Dilsukhnagar Consumers Council filed an appeal. On appeal, the State Commission confirmed the view taken by the District forum and dismissed the appeal.

     Feeling aggrieved against the order passed by the State Commission, the present revision petition has been filed.

     Both the fora below have given two findings of facts: (i) the signatures on the withdrawal form dated 12.1.1994 were not that of the petitioner; and (ii) the complainant had also contributed to the negligence in making the payment, by not keeping the pass book in safe custody. It is also evident that though the second cheque book was refused to be issued probably the petitioner found the cheque book and issued a cheque bearing No. 968266 dated 12.1.1994.

     If the withdrawal form is produced along with passbook it would strengthen the prima facie view to a limited extent that the person who is producing the withdrawal form would be the account holder and would be the same and simple resemblance with the original signatures may lead a bank/official to bonafide belief that the person withdrawing the amount, was the account holder himself.

     The question is: Does it absolve a banker from making payment to a wrong person by rushing to clear the payment on the basis of a forged withdrawal form? It is no more in dispute that the withdrawal form was not signed by the complainant in terms of the report of the Director, Forensic Science Laboratory. The fact that the petitioner had not kept his passbook in a safe custody might have contributed to the deficiency in service on the part of the bank official in not meticulously comparing with the signatures of the complainant. One would also not be oblivious about minor changes in signatures which do occur time and again between the signatures of the same person made at different times and the specimen signatures, signature on the withdrawal form and the cheque. It may also be true that to a limited extent the bank could not be held to be guilty of negligence simply because an ultraviolet ray lamp was not kept in the branch and the cheque in question could not be subjected under the ultraviolet ray lamp. Despite this, we feel that the bank official must not rush to clear the payment just on seeing the pass book and, therefore, the District Forum was absolutely right in holding the bank responsible in view of precedents in this regard.

     In Bhagwan Das vs. Creet (1903) 31 Cal.249 it was held: "The bankers obligation is to honour his customers cheque. To that end he is bound to know his customers handwriting. If in any way he is deceived without the instrumentality of his customer, he must himself abide the loss". In the case of L. Pirbhu Dayal vs. Jwala Bank ,AIR 1958 All. 374, the money was paid by the bank on presentation of a forged cheque (withdrawal form as is the case in the present matter), the bank was held liable to pay for the loss suffered.

     In Dawood vs. Firm Pereinan Chetty, AIR 1924 Rang. 264, it was held that the money paid by the bank under a forged cheque could not be debited to the customer merely on the ground that the customer was negligent to this extent that he allowed his cheque book to remain unlocked.

     The Hon'ble Supreme Court in Canara Bank vs. Canara Sales Corporation, AIR 1987 P.1603: (1987) 2 SCC 666, in para 224 observed as under:

"When a cheque duly signed by a customer which is presented for encashment before a bank, it carries a mandate to the bank to pay. However, if the signature on the cheque is not genuine, there is no mandate on the bank to pay. The bank when it makes the payment on such a cheque cannot resist the claim of the customer with the defence of negligence on his part such as leaving the cheque book carelessly so that third parties would easily get hold of it. This is because a document in cheque form, on which the customers name as drawer is forged, is a nullity. The bank can succeed only when it establishes adoption of estoppel."

     It was further observed by the Hon'ble Supreme Court in para 30 as under:

"...In order to sustain a plea of acquiescence, it is necessary to prove that the party against whom the said plea is raised, had remained silent about the matter regarding which the plea of acquiescence is raised, even after knowing the truth of the matter..."

     The Supreme Court also observed in para 44 as under:

"...Nor can inaction for a reasonably long time in not discovering fraud or irregularity be made a defence to defeat a customer in an action for loss..."

     In Canara Bank as many as 42 cheques were found forged on various dates between 1957 to 1961. The Hon'ble Supreme Court rejected the contention based on acquiescence. The trial court rejected the contentions of the bank and passed a decree for the sum claimed, with interest at 6% from the date of the suit till recovery of the amount. In appeal before the Division Bench, the judgement of the trial court was confirmed.

     The judgements referred to herein above were referred to in the case of Citizen Cooperative Bank Ltd. vs. Ritesh Mittal - 2004 CTJ 211 (Jammu & Kashmir High Court) and in that case claim of the complaint was for loss suffered by the complainant by clearing four forged cheque for payment. It was allowed by the State Consumer Disputes Redressal Commission and the bank was directed to pay a sum of Rs.1,52,000/- but with interest @ 6% p.a. only. On appeal by the bank, the High Court of Jammu & Kashmir also confirmed the order holding that the bank was liable to pay.

     In Bihta Cooperative Development & Cane Marketing Union Ltd. vs. Bank of Bihar AIR 1967 SC 389, the Supreme Court had also taken the view earlier and held that what was said in Macmillan and Arther's case (Supra) 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 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 bank to pay and there would be no question of any negligence on the part of the customer, such as leaving the cheque book carelessly so that a third party could easily get hold of it would afford no defence to the bank. This view was filed in Canara Bank (Supra).

     It is not the case of payment collected by an imposter through ATM Card holder where the petitioner had no opportunity to check and compare the signature, as was the case in Smt. Mittalai Saha and Maya Saha vs. ANZ Grindlays Bank - 2004 (1) CPR 128.

     Is such a situation, in view of the aforesaid discussion, the fact that the passbook was misplaced by the complainant, would not be sufficient to say that the petitioner the defacto complainant would not be entitled to get the entire amount of Rs.34,000/- which was undoubtedly paid on the basis of withdrawal form bearing forged signatures. However, seeing the circumstances, it would be proper to award interest only @ 6% p.a. in the peculiar facts and circumstances from 12.1.1994 till the date of payment. However, the question of awarding separate compensation of Rs.5,000/- could not be sustained in the peculiar facts and circumstances. Order to award Rs.5,000/- as compensation is accordingly set aside. The order to pay cost awarded by the District Forum is upheld. Accordingly, the complainant petitioner is entitled to recover Rs.34,000/- with interest @ 6% p.a. w.e.f. 12.1.1994 with cost of Rs.500/-. The respondent Bank is directed to make the payment within a period of six weeks from the date of receipt of this order failing which bank shall be liable to pay interest @ 12% p.a. The revision petition is allowed accordingly.