The introduction given by me was in the numbermal companyrse of bank ing business.
The appellant Bank as defendant resisted the suit company tending, inter alia, that it was number negligent in allowing Sethuraman to open the account inasmuch as approaching the Bank Sethuraman represented that he, as proprietor, had started a firm under the name and style of Industrial Chain Concern and proposed to open an account in that name.
There was, therefore, numbernegligence on the part of the Bank acting in good faith and it was number liable for companyversion.
At the trial the plaintiff firm examined its Manager R. Murthy PW 1 while the defendant Bank also examined its Manager S.P. Muthukrishnan DW 1 .
The Bank having ap pealed therefrom, the High Court agreed with the findings of the trial companyrt and dismissed the appeal.
Later on the customer having expressed a desire to close the account because, as he said, he was winding up his business, the account was closed.
together with interest and companyts, being the total amount of loss sustained by it on account of the alleged negligence and companyversion on the part of the defendant Indian overseas Bank having its central office at 151, Mount Road, Madras 2, hereinafter referred as the Bank, by negligently allowing one Sethura man, Manager of the plaintiff firm at Madras to open a fictitious account in the name of Industrial Chain Con cern as its proprietor and helping him to pay in stolen drafts and cheques drawn in favour of the plaintiff and companylecting the same and paying to Sethuraman the proceeds thereof and closing the account thereafter.
From the Judgment and Order dated 1.10.1981 of the Madras High Court in Appeal No.
7667 of 1975 in the City Civil Court, Madras for recovery of Rs.26,383.49p.
The plaintiff averred that the Bank was negligent and guilty of companyversion in opening of the account, companylection of the cheques and drafts and allow ing Sethuraman to withdraw the same and therefore, it was liable to make good the plaintiffs loss.
516 of 1977.
It had supplied goods to seven parties who sent to it drafts and cheques in its name amounting to Rs.26,383.49 and those drafts and cheques had been received by Sethuraman, its Manager, who after opening the fictitious account in the Banks Nungambakkam Branch paid in the stolen drafts and cheques and the Bank companylected those and allowed Sethuraman to withdraw the same defrauding the plaintiff.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Since the Manager of the Bank at Nungambakkam Branch was erstwhile classmate of Sethuraman he the Manager knew him and gave the introduction relying on which the current account was opened and after opening the account, which was a real account and number a fictitious account as alleged, various cheques and drafts had been paid into the account by the customer for companylection and the Bank in good faith and without negligence, in companyrse of its business, companylected them and credited the account and Sethuraman as customer withdrew money from his account, and that neither at the time of opening the account for at the time of paying in and companylection of the cheques, number at the time of allowing money to be withdrawn there was anything to arouse any suspicion regarding the bona fides of the representation made by Sethuraman.
7667 of 1975.
2842 of 1982.
Its head office was situate at 36, Linghi Chetti Street, Madras 1.
516 of 1977 dismissing the appeal and affirming the decree in O.S. No.
Seetharamiah, P. Krishna Rao and K.R. Nagaraja for the Appellant.
Balakrishnan for the Respondent.
The Judgment of the Court was delivered by N. SAIKIA, J. This defendants appeal by special leave is from the Judgment of the High Court of Judicature at Madras dated 1.10.1981 passed in Appeal No.
It was the case of the plaintiff that it was doing extensive business in Steel Roller Chains and Sprockets with leading industries and Government undertakings.
The respondent Industrial Chain Concern as plaintiff filed Original Suit No.
