STATE BANK OF INDIA Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) This suit is for recovery of Rs. 80,605.00 against defendantNo. 1 now (the suit having been withdrawn against defendants 2 to 9 and havingbeen dismissed as such vide order dated 22/4/1988 of this Court). The allegations bythe plaintiff are that the defendant No. 1 Bank (Punjab National Bank) sent a chequefor collection. It was Cheque No. OC/16-383575, dated 10/12/1964 for Rs. 80,605.00purporting to be drawn by Land Acquisition Collector, Delhi, in favour of oneDurlabh Singh, son of Shyam Singh. It was endorsed to the Bank and it boreendorsement of the Punjab National Bank that payee's account has been credited.The plaintiff believed the cheque to be genuine and on 29/12/1964 made payment ofthe cheque to defendant No. 1 (Punjab National Bank), Ajmeri Gate ExtensionBranch, Ajmeri Gate, New Delhi. It is asserted that around 18/1/1965, the plaintiffreceived a letter of that date from Land Acquisition Collector, Delhi, informing thata cheque leaf bearing the aforesaid number of the cheque, among others, had beenstolen by somebody. It was found that the cheque involved in this case was notgenuine. So the assertion is that the plaintiff under mistake that the cheque wasgenuine made payment of the amount of the cheque to defendant No. 1. It is assertedthat the plaintiff is entitled to recover the amount from the defendant No. 1 Bank. Itis urged that defendants had acted fraudulently as somebody had forged thesignature of the Land Acquisition Collector, Delhi, and it was fraudulently drawnin favour of Durlabh Singh. The cause of action is sought from the date of paymentof the cheque. The suit was filed on 11/12/1967.

(2.) The Punjab National Bank, defendant No. 1, has contested the suit urgingthat the plaint does not disclose any cause of action against it. It has been assertedthat plaintiff is the drawee bank who had been keeping account of the LandAcquisition Collector, Delhi, and who had specimen signatures of the Land Acquisition Collector, Delhi. The plaintiff had honoured and encashed the cheque dated10/12/1964 and the plaintiff itself was in a position to check up the genuineness orotherwise of the cheque and was responsible for payment of the cheque and so thereis no cause of action against defedant No. 1 Bank. It is urged that defendant No. 1had no information nor any source to check up the genuineness of the cheque inquestion and so it is not liable for the alleged fraud. It was urged that defendant No.I Bank has already made payment of the amount received by it to its principal. It isasserted that plaintiff itself was negligent in not checking up the alleged forgery inthe cheque and when it cleared and encashed the cheque it cannot blame thecollecting bank. Principal of estoppel is pleaded against the plaintiff. It was urgedthat defendant No. 1 (Punjab National Bank) has only a sum of Rs. 55.00 left out of theamount of the cheque with them and the rest has been paid to its principal aftercollecting the same from the plaintiff-Bank. It is urged that defendant No. 1 cannot be held liable for the amount paid by it to its principal as whose agent it collected thecheque.. even if the cheque is shown to be forged. It has been urged that plaintiff hasno locus standi to sue. It is urged that Land Acquisition Collector, Delhi, alone, beingthe owner of the cheque, could sue for recovery of this money. In any case, it is urgedthat Land Acquisition Collector, Delhi, who maintains current account with theplaintiff-Bank, as also the Union of India and Delhi Administration are necessaryparties or at least proforma parties to the suit. So it is urged that suit is bad for nonjoinder of parties. It is asserted that suit is not filed by a duly authorized person. Itis urged that defendant No. 1 Bank did not receive any amount for itself from theplaintiff-Bank. It was only by way of collection for its principal. The defendant No.I was only collecting agent. It is urged that since the money was withdrawn by thedepositor of the cheque, defendant No. 1 Bank cannot be held responsible for thesame.

(3.) I need not note the pleas raised by defendants 2 to 9 or their legal representatives as the suit has already been withdrawn and dismissed against them aswithdrawn.