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TMI Blog1977 (8) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... 00. Further, they are also held liable to pay. ₹ 2.835 as interest on these ₹ 18,000. The decree was in favor of the plaintiff. (3) plaintiff Durga Devi wanted to keep ₹ 18,000 in fixed deposit in the State Bank of India. She, Therefore, issued a crossed cheque No. 821064 for ₹ 18.000.00 in favor of the State Bank of India on her Savings Bank Account No. 683 with the Jangpura Branch of the Punjab National Bank. Certain procedural difficulties stood in the way of State Bank of India in issuing the fixed deposit receipt to the plaintiff. S. P. Madan, Therefore, undertook to get over the procedural difficulties. He was, Therefore, entrusted with the cheque by the plaintiff. Madan had an account with the National and Grindlays Bank. He filled in the pay-in-slip and gave the cheque to the National and Grindlays Bank for the collection of the money from the Punjab National Bank and for deposit of the same into his own account at the National and Grindlays Bank. The cheque which was given by him to the National and Grindlaya Bank was, however, materially altered by the substitution of the words "Shri Salya Pal Madan" in place of the words "The State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the same. Since the defendants had no personal knowledge in whose favor the cheque was originally drawn up and as it is obvious from even a cursory reading of the cheque that it was drawn up in favor of the State Bank of India, this fact had been proved beyond doubt. (6) It is also undisputed that the cheque as presented to the two banks purported to be in favor of Shri Satya Pal Madan and that it was given to the National and Grindlays Bank by him. The forgery and the overwriting is, Therefore, proved to have been done while the cheque was in the custody of Madan. He was, Therefore, responsible in law for the consequence of the forgery and overwriting. (7) The Punjab National Bank would have been protected from liability if it had paid these ₹ 18,000 to the National and Grindlays Bank as "payment in due course" which means, under section, 10 of the Negotiable Instruments Act, "payment in accordance with the apparent tenor of the instrument in good faith and without negligence". It is true that section 3(22) of the General Clauses Act, 1897 says that "a thing shall be deemed to be done in "good faith" where it is in fact done honestly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the said bank. No appeal has been filed by the said bank against that part of the decree which operates against it. The staff of the said bank also must have colluded with Madan and acted against the interests of the said bank before the altered and the forged cheque submitted by Madan was accepted for collection in the name of 'the said bank and forwarded to the Punjab National Bank. (9) Section 87 of the Negotiable Instruments Act states the effect of material alteration of a negotiable instrument which includes a cheque. It makes the cheque void as against anyone who is a party thereto and who does not consent to it. The forgery and the material alteration of the cheque, Therefore, made it void against the plaintiff. The payment of the cheque did not, Therefore, bind the plaintiff. The Punjab National Bank also could have refused to make payment of the cheque as it had become void against the said bank, also. (10) The liability of the Punjab National Bank to the plaintiff arises out of a breach of contract. For, the Punjab National Bank owed a duty of care to the plaintiff in dealing with a cheque drawn upon it by the plaintiff. Since the bank is in breach of the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So much of time. energy and money of the banks and the customers is wasted in finding out such a litigation to the benefit of no one. It is a public scandal that the litigation like the present one should have at all been necessitated by the willful refusal of the banks to acknowledge liability to a customer like the plaintiff, the justice of whose claim must have been immediately apparent to the bank. No one who sees the cheque dated 8-6-1967 can fail to perceive 'that it has been forged and materially altered. And yet the officials of the bank and the so-called handwriting experts come into the witness-box and make bold to say that the forgery and the material alterations were not immediately apparent to the view. This is degrading to the dignity of those who come into the witness-box to say such patent falsehoods. This also brings the respectable banks into disrepute. In our view, it is totally unnecessary for the banks to eschew can dour and fairness in such matters. On the contrary. like the Government, the banks should also set up an example of fair dealing with their customers. Just as the Government does not deny liability if it is convinced that the claim against it i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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