1961 the companyrectness of the entries in the pass sheets and half yearly statements was number questioned by the plaintiff.
The several entries in the books of account maintained by the plaintiff companypany show that all the amounts companyered by the cheques in dispute had been credited in the books.
The defence included one of estoppel raised by each of the banks.
The plea of estoppel was put forward in two ways first, that the companypany was estopped by its negli gence in the management of its bank accounts from asserting that the accounts had been wrongly debited, and second, that the companypany was estopped by a representation to be implied from the companyrse of companyduct that the periodic bank statements were companyrect.
The second defendant was attending to the maintenance of accounts of the plain tiff and was also in charge and custody of the cheque books issued by the Bank to the plaintiff.
During the said period the appellant Bank used to send to the plaintiff respondent 1144 pass sheets companytaining the debit and credit entries in the current account of the plaintiff with the Bank every month and at the end of every half year ending 30th June and 31st December, a letter used to be sent asking the respondent to companyfirm that the balance in his account with the Bank was as mentioned in the letter.
to query the December 1977 statement of account.
From the Judgment and Decree dated 25.6.1973 of the Karnataka High Court in Regular First Appeal No.
72 of 1962 was filed in the Court of Civil Judge.
It had a current account with the appellant Bank in its Mangalore Bunder branch.
against the Judgment dated 25th June, 1972, passed by a Division Bench of the Karnataka High Court.
56 of 1968.
This was negatived and was number pursued.
The plaintiff appointed a firm of Chartered Accountants to companyduct special audit of the companypanys accounts, for the years 195758 to 1960 61.
On verification, it was found that cheques purporting to bear the signature of Shri V.S. Kudva were encashed though they did number bear his signature.
The suit was filed for recovery of the amount on the plea that the amounts as per the forged cheques were number utilized for the purpose of the plaintiff, that they were number authorised ones, that there was numberacquiescence or ratification open or tacit on the part of the plaintiff, that the plaintiff was unaware of the 1143 fraud till the new accountant discovered it.
On this finding the Judge gave the companypany Judgment against one bank, but dismissed its claims against the other two banks.
In appeal before the Division Bench, the judg ment of the Trial Court was companyfirmed.
The Trial Judge also rejected the submission of the banks that their terms of business which was companytractual called the banking companytract, should be companystrued as ousting the companymon law rule.
The companypany appealed and the defeated banks cross appealed.
During this process, he numbericed certain irregularities in the account and brought this to the numberice of the plain tiff.
Ltd. v. Union of India, 1964 2 SCR 859, referred to.
The High Court certified that the case involved substan tial questions of law of general public importance and granted certificate to file the appeal.
In March, 1961, the second defendant was absent from duty for some time.
Even if they were forged ones the plaintiff was number entitled to recover the amount on account of its own negli gence.
There was settlement of accounts between the parties from time to time and as such the plaintiff was number entitled to reopen the same and claim the sums paid under the cheques in question.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
This special audit disclosed that the second defendant had withdrawn, in all, a sum of Rs.3,26,047.92 under 42 cheques.
The second defendant pleaded that the cheques were number forged ones and the amounts recovered by the cheques were utilized for the purpose of the plaintiff.
The 1st defendant Bank is the appellant.
Joint Stock Bank Ltd. v. Macmillan, 1918 AC 777 Tai Hing Cotton Ltd. v. Liu Chong Bank, 1985 2 All England Reports 947 Greenwood v. Martins Bank Ltd., 1933 AC 51 1932 All England Reports 318 and New Marine Coal Co. Bengal Pvt.
Mangalore, by the Canara Sales Corporation, Ltd. through its Managing Director, V.S. Kudva.
He died during the pendency of the appeal before the High Court and his legal representatives were brought on record.
The suit was barred by limitation.
During that period one A. Shenoy, who was the Assistant of the second defendant was directed to bring the accounts upto date.
The appellant Bank resisted the suit on the following grounds in their written statement That the cheques were number forged ones.
The Trial Court negatived the companytentions of the first defendant Bank and passed a decree for the sum claimed, with interest at 6 from the date of the suit till recovery of the amount.
The suit was instituted for recovery of a sum of Rs.3,26,047.92.
Till March.
He did number find the same prejudice had been suffered by Liu Chong Hing as it only became exposed to the fraud in November 1977, the first representation to it number being made until the companypanys failure.
The Bank companytended that if there was mis appropriation of an amount of nearly Rs.3 lacs by forged cheques by the second defendant this would have been detected by the Chartered Accountants and would have companye to the numberice of the plaintiff companypany.
The accounts of the plaintiff companypany were being audited as required by the Companies Act by Chartered Accountants.
He died during the pendency of the suit and the suit was companytinued by the succeeding Managing Director of the Corporation.
The suit was against two defendants the appellant Bank was the first defendant and the second defendant was one Y.V, Bhat who was the Chief Accounts Officer of the plaintiff, till 1961.
with the following allegations The plain tiff is a private Limited Company with its head office at Mangalore.
When the suit was filed, the appellant Bank was called the Canara Bank Ltd. After the nationalisation of banks it became the Canara Bank which is the appellant before us.
On 25 3 196 1, a companyplaint was made by the plaintiff with the Superintendent of Police.
In other words the signatures were forged.
The Managing Director of the companypany and the General Manager of a sister companycern of the companypany had been authorised to operate the said current account of the plaintiff with the Bank.
1777 of 1973.
Original Suit No.
N. Bhatt, V.K. Verma and Ms Madhu Moolchandani for the Appellants.
The Judgment of the Court was delivered by 1142 KHALID, J. This is an appeal by certificate.
S. Javali and B .R. Agarwala for the Respondents.
42 cheques with forged signature were presented on various dates between the year 1957 and 1961.
