VYSYA BANK LIMITED Vs. INDIAN BANK

JUDGEMENT

(1.) THE unsuccessful defendant in O.S.No. 3807 of 1977 on the file of the IV Additional Judge, City Civil Court, Madras, is the appellant in this regular appeal. THE respondent herein was the plaintiff in the said suit which was filed for recovery of a sum of Rs. 47,882.96.

(2.) THE material allegations in the plaint are as follows: One B.K. Shetty purchased a draft for Rs.20/- bearing Rs. 581439 dated 27.3.1974 from the Ambur Branch of the Indian Bank, the plaintiff. One B.Ramaswami had purchased another draft for Rs.30/- bearing Rs.726112 dated 2.4.1974 from the Vaniyambadi Branch of the Indian Bank. One S.Ramanathan who has got an account with the South Tambaram Branch of the defendant Bank, namely, Vysya Bank Ltd., appears to have got into possession of these two drafts and these two drafts were materially altered. THE name of the payee, the amount, the name of the branch on which the drafts were issued were all altered. Though the drafts were purchased for payment by the Salem Main Branch of the plaintiff Bank, the name of the Branch was altered as Harbour Branch and the amount were altered as Rs.15,000/- and Rs.21,000/-respectively. THE name of the payee was altered as S.Ramanathan. THEse two drafts were put in the account of S.Ramanathan which he had with the defendant Bank. THEse two drafts were presented for collection in the clearing house and they were paid with an endorsement that they were paid without advice pending receipt of the usual protection advice from the issuing branch. Later, on, the Harbour branch was informed by the Vaniampadi Branch by their letter dated 8.6.1976 that they did not issue any demand draft for Rs.21,000/- So also the Ambur branch informed that they did not issue any draft for Rs.-15,000/- A complaint was given to the Crime Branch of the North Beach Police Station and the payee could not be traced as it was reported that he was dead. But for the endorsement made by the South Mambalam Branch of the defendant Bank, payments would not have been made for these two demand drafts by the plaintiff Bank. THE plaintiff supposes that S.Ramanathan, the customer of the defendant Bank, is a bogus person who has no permanent address. THE defendant Bank acted with gross negligence in the matter of opening an account in the name of Ramanathan without proper introduction or making proper enquiries. THE immediate withdrawal of substantially the whole amount covered by the two drafts ought to have raised suspicion in the minds of the persons who dealt with the drafts when they were remitted with the defendant bank. So, the defendant is not entitled to the protection under Sec.131-A of the Negotiable Instruments Act. Hence, the plaintiff has filed the suit for recovery of the total sum of Rs.36,000 covered by the two drafts together with interest of Rs.11,882.96 all totalling to Rs.47,882.96.

(3.) EX.A-7 is the first Draft issued by the Ambur Branch of the Indian Bank on 27.3.1974. It was issued originally in the name of one B.K.Shetty for a sum of Rs.20/- and it was addressed to the Salem Main Branch of the Indian Bank. It is now found altered in respect of . the material particulars, excepting the signature of the Office of the issuing Bank. The payee's name has been altered from S.E.Shetty to S.Rarnanathan and the amount was altered as Rs.15,000/- Similarly, instead of Salem Main Branch, it is altered as Harbour Madras. These alterations, according to both the parties, have been done erasing the original writings by a technical process. S.B.Shan-mughain, who was the then Agent of the Bank at Ambur Branch of the Indian Bank, was examined is P.W.1 in the suit. He proved the fact that the Draft was originally issued for a sum of Rs.20/-in the name of one B.K.Shetty and addressed to the Salem Main Branch. He has explained the procedure in detail regarding the issue of Draft in that Bank. According to him, a chalan is prescribed by the Bank in which the name of the person in whose favour the Draft has to be issued, the Branch in which the payment is to be made and other particulars have to be filled up. Then the applicant will present the chalan along with the required amount to the Cashier and thereafter, the chalan will be passed on to the Clerk in the draft section who is expected to verify the particulars furnished in the application Draft. After such verification, the Clerk in the Draft section will prepare a Draft and send it along with the chalan to the officer concerned. After obtaining the signature of the concerned officer, the Draft will be delivered to the applicant. The Bank is maintaining a register in respect of the issue of Drafts wherein necessary particulars are noted in respect of each Draft isued by the Bank. He filed the regiseter EX.A-6 wherein the particulars relating to the Draft EX.A-7 are entered. According to him, except the signature, all other particulars have been altered in the Draft. P.W.4 one R.S. Mani, who is the signatory for the Draft EX.A-7, was the then Accountant of the Ambur Branch of the Indian Bank. He has corroberated the evidence of P.W.1 regarding the procedure for issuing Drafts in their Bank. During the course of his evidence, he has stated that according to the relevant entry in EX.A-6 register, the Draft EX.A-7 was purchased by one Ramu for payment to one B.K.Shety. Therefore, the evidence of P.Ws.1 and 4 proves the fact beyond any doubt that actually the Draft was issued only for Rs.20/- in favour of one B.K.Shetty and the name was subsequently altered as S.Ramanathan and the amount altered as Rs.15,000/-