TMI Blog2018 (10) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... Plain reading of Section 9 do not say so that the Court has to go beyond the holders mind and see the care and caution in such eventuality bill of exchange may lose its efficacy at the whims of the person with whom it is negotiated. The bank as a body corporate for the negligence of its officers, who did not discharge their duties properly cannot be allowed to recover the amount from the holder in due course i.e. the appellant. It is not a case that the draft though was negotiated and the payment was withheld to the appellant on the ground that it was outcome of fraud, but instead the amount was paid by the bank with all smile and thereafter instead of catching hold of their officers who negligently paid the same, the recovery suit was filed to cover up their own wrong from the appellant as also the person namely Ramesh Kumar. Therefore, the bank cannot be allowed to take advantage of their own wrong and pass the bucks to others as the buck stopped at the Bank. The appellant will be protected and enveloped by virtue of Section 9 of the N.I. Act as the Act itself permits payment of the draft to the holder in due course - the appellants are holder in due course and amount r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Branch revealed that the person Ramesh Kumar (defendant NO.1) had received the chasis of the truck had deposited the said draft for purchase of vehicle. 4. It was the further case of the plaintiff branch that information about the missing of the draft book was circulated by the head office of the Punjab National Bank, which too was also informed by the Punjab National Bank, Dhaniyawa Branch to the plaintiff bank of Bilaspur. The plaintiff pleaded that the said drafts were forged and as such were not the legal documents. Consequently, the beneficiary J.M.A. Stores were not entitled to receive the said amount from the Bank. The report was made to the police and eventually a suit was filed by Bank for an amount of ₹ 4,49,853/- from the date of payment on 12.07.1991 till 29.11.1992 and the interest @ 21 % were claimed. So the principal sum of of ₹ 3,49,062/- and interest of ₹ 1,00,791/- was claimed, total amounting to ₹ 4,49,853/- 5. The appellant/defendant herein J.M.A. Stores contended that they were the bona fide holders in due course of the draft as the draft was received in lieu of the delivery made of new diesel truck to the defendant No.1 Ramesh K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the holder in due course, the payment was made to him which is covered by Section 9 of the Negotiable Instruments Act, 1881 (for short the N.I. Act, 1881). It is further contended that it is the pleading of the plaintiff that circular to the effect that the said draft book was stolen was with the Bank which was circulated through the head office, despite that the Bank ignored the same and made the payment for which the supplier of the vehicle the appellant herein cannot be held liable. He further submits that the interpretation made by the Court below that by Section 58 of the N.I. Act cannot be applied as the appellant was holder in due course. Reference is made to the case law of Pranendu Mohan Das Versus Central Bank of India (AIR 1978 Cal 55) and would submit that the payment was made with the apparent tenor of the instrument which was without any doubt as such it cannot be stated that the appellant was not entitled to receive the payment. Further the reliance is placed in the case of Sukanraj Khimraja, a firm of merchants, Bombay and another v. N. Rajagopalan and others {[1989] 1 LW 401}, and submits that there was no knowledge of fact that the said draft was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction. 9. Holder in due course . - Holder in due course means any person who for consideration became the possessor or a promissory note, bill of exchange or cheque if payable to barer or the payee or indorsee thereof, if payable to order, before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. 12. Reading of Section 8 9 of the N.I. Act together and the principles when are translated in the facts of this case would show that the respondent Ramesh Kumar placed a draft with the appellant which was routed through for collection by the bank of appellant namely Allahabad Bank to the Punjab National Bank on whom the draft was drawn. Section 9 of the N.I. Act does not use the word good faith. It provides that the holder should have received the instrument without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. Only, therefore, to defeat the title of a holder for value, the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss further deposed that the said draft was sent for clearance by letter, but the letter was neither produced in the Court nor was brought at the time of evidence. He further deposed that in the draft Ex. P-2 name of respondent No.1, who alleged to have forged the draft namely Ramesh Kumar was not written. Again the witness has deposed that he did not get the draft verified from Dhaniyawa Branch, Patna, Bihar or got the signature examined by any expert. The plaintiff witness, therefore, has advanced the entire case only on the basis of the presumption that the draft was fake as same was alleged to be lost. It is also not clear wherefrom the name of Ramesh Kumar surfaced. It was for the Bank to prove with admissible evidence that the draft was fake. No presumption can be drawn that the signature on the draft were fake or they were not that of any branch official as the witness categorically stated that the signatures on the draft were not got verified from Dhaniyawa Branch of the Punjab National Bank. It is completely vague and suspicious circumstance that as to who received the forged draft as there is no iota of evidence in this regard in the file. Whether the bank officials its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such draft was issued by such Punjab National Bank, Dhaniyawa Branch. It further reported that the said draft was either stolen or lost from the security documents as per Ex- P-3. The plaintiff witness further deposed that from the head office of the Bank in January, 1990 circulars were issued of lost of such draft by Ex. P-4. Perusal of Ex. P-4 dated 01.01.1990 shows that the banks were informed that certain numbers of draft were missing, the alleged draft in this case was 261399, which is tallied with the series of missing security forms. 20. The witness PW-1 further stated that the letter from the Punjab National Bank, Dhaniyawa Branch was received by 02.08.1991 (Ex. P-5). The witness in cross-examination has further deposed that at the time of payment of the draft (Ex. P-2) the circular of the intimation of the lost of security documents was in the bank and Ex. P-3 circular was not brought to anybody's notice and after the draft was paid, the circular was searched and was found. The circumstances, therefore, speaks for itself that it is not clear as to whether officials of the bank despite knowing of the fact allowed the payment. It can be looked into from the other ang ..... X X X X Extracts X X X X X X X X Extracts X X X X
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