Syndicate Bank v Thyal Hameed

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE K.ABRAHAM MATHEW** **THURSDAY, THE 12TH DAY OF APRIL 2018 / 22ND CHAITHRA, 1940** **AS.No. 469 of 1999** **AGAINST THE JUDGMENT AND DECREE IN O.S.NO. 70/1996 OF SUBORDINATE COURT, HOSDRUG, DATED 11.03.1999** **----------** ## **APPELLANT(S)/DEFENDANTS 1 & 2 :** **1. SYNDICATE BANK, A BODY CORPORATE CONSTITUTED AND FUNCTIONING UNDER THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKING) ACT, 1970 HAVING ITS REGISTERED OFFICE AT MANIPAL AND BRANCHES AMONG OTHER PLACES AT HOSDURG, KANHANGAD REPRESENTED BY THE BRANCH MANAGER, HOSDURG.** **2. BRANCH MANAGER, SYNDICATE BANK, HOSDURG, KANHANGAD.** **BY ADV.SRI.R.S.KALKURA** ## **RESPONDENT(S)/1ST RESPONDENT/PLAINTIFF/2ND RESPONDENT/3RD DEFENDANT :** **1. THYAL HAMEED, MUSLIM, S/O.THYAL MOHAMED, LAND HOLDER, RESIDING AT MALAPARAMBA, KALLANADU VILLAGE, KASARAGODE TALUK, KALANADU.** *** 2. T.ABDUL REHMAN, S/O.THYAL MOHAMMAD, RESIDING AT BACKEL, PALLIKARA VILLAGE, HOSDURG TALUK, P.O.PALLIKARA (DIED).** *** ADDITIONAL R3 TO R8 IMPLEADED** **3. FATHIMA, W/O.LATE T.ABDUL RAHIMAN, RESIDING AT NIZAM MANZIL, BEKAL PALLIKKARA VILLAGE AND POST, HOSDURG TALUK, KASARAGOD DISTRICT.** **4. FAUSIYA.K., D/O.LATE T.ABDUL RAHIMAN, W/O.P.MOHAMMED ALI, NIZAM MANZIL, BEKAL PALLIKKARA VILLAGE AND POST, HOSDURG TALUK, KASARAGOD DISTRICT.** **5. MUHAMMED RAFEEK, S/O.LATE T.ABDUL RAHIMAN, NIZAM MANZIL, BEKAL PALLIKKARA VILLAGE AND POST, HOSDURG TALUK, KASARAGOD DISTRICT.** **..2/-** **..2..** ## **AS.No. 469 of 1999** ||**6.**|**BAHARUDDEEN,**| |---|---|---| |||**S/O.LATE T.ABDUL RAHIMAN, NIZAM MANZIL,**| |||**BEKAL PALLIKKARA VILLAGE AND POST, HOSDURG TALUK,**| |||**KASARAGOD DISTRICT.**| ||**7.**|**NISAMUDDEEN,**| |||**S/O.LATE T.ABDUL RAHIMAN, NIZAM MANZIL,**| |||**BEKAL PALLIKKARA VILLAGE AND POST, HOSDURG TALUK,**| |||**KASARAGOD DISTRICT.**| ||**8.**|**SUMAYYA.T.A.,**| |||**D/O.LATE T.ABDUL RAHIMAN, NIZAM MANZIL,**| |||**BEKAL PALLIKKARA VILLAGE AND POST, HOSDURG TALUK,**| |||**KASARAGOD DISTRICT.**| |*****|**R2 DIED**|**ADDITIONAL RESPONDENT 3 TO 8 ARE IMPLEADED AS LEGAL**| ||**REPRESENTATIVES OF R2 AS PER ORDER DATED 17.08.2006 IN**|| ||**I.A.NO.1741 OF 2005.**|| ||**R1**|**BY ADV. SRI.SHEJI P.ABRAHAM**| ||**ADDL.R3 TO R8 BY ADVS. SRI.P.M.NEELAKANDAN**|| |||**SRI.SABU GEORGE**| |||**SRI.P.B.KRISHNAN**| |||**SRI.P.B.SUBRAMANYAN**| **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 12-04-2018, ALONG WITH A.S.NO.566 OF 2000, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Msd.** **19.04.2018** ## **K.ABRAHAM MATHEW J.** ---------------------------------------- A.S.Nos. 469 of 1999 & 566 of 2000 ----------------------------------------Dated this the 12[th] day of April, 2018 ## **JUDGMENT** These two appeals arise from the judgment and the decree in O.S.No.70 of 1996 on the file of Subordinate Judge, Hosdurg. The parties are referred to in this judgment as they appear in the plaint. 2. The first respondent in both appeals was the plaintiff. He was doing business in Abudabhi in United Arab Emirates. He maintained an NRE account with the first defendant bank, of which the second defendant was Manager of the Hosdurg branch. The plaintiff used to send money to his account from Abudhabi. He and the third defendant, who is his brother, were staying together in their house at their native place in Hosdurg taluk. On 22.3.1996 he went to the bank, when he realised that money had been withdrawn from his account unauthrorisedly. The enquiry revealed that on 11.8.1985 Rs.6,000/-, on 3.1.1986 Rs.15,000/- on 7.9.1990 Rs.60,000/- on 26.3.1993 Rs.50,000/and on 22.4.1993 Rs.65,000/- was withdrawn from his account. The amounts were withdrawn by the third defendant by forging his signature in the cheque leaves of the cheque book he had kept at their house. The officers of the bank failed to verify the genuineness of the signatures in the cheques. There was lack of negligence on their part. On these allegations the first plaintiff prayed for recovery of Rs.2,52,503.23 paise with interest at 6% per annum. In their joint written statement defendants 1 and 2 denied the allegation that there was negligence on the part of the officers of the bank. They asserted that they had 'prima facie' verified the genuineness of the signatures in the cheques. A.S.Nos. 469 of 1999 & 566 of 2000 2 They denied the allegation that the plaintiff came to know about the withdrawals only on 22.3.1996. They prayed for dismissal of the suit. In his written statement the third defendant denied that he forged the signatures of the plaintiff in the cheque leaves and withdrew the amounts mentioned in the plaint. He prayed for dismissal of the suit. After the trial the learned Sub Judge entered a finding that there was no evidence to prove that the withdrawals made on 11.8.1985 and 3.1.1986 were made using forged cheques; but there was evidence to prove that the other withdrawals were made by the third defendant using forged cheques. Accordingly, she passed a decree directing all the defendants to pay Rs.2,18,147/- with interest at 6% per annum from the date of the suit till realisation. The decree is challenged by the first and second defendants in A.S.No.469 of 1999 and by the third defendant in A.S.No.566 of 2000. 3. The following points arise for consideration in these appeals. 1. Whether the suit was barred by the law of limitation? 2. Whether the withdrawals of 7.9.1990, 26.3.1993 and 22.4.1993 were made using forged cheques ? 3. Was it the third defendant who forged the signatures of the plaintiff? 4. Whether the decree of the lower court is liable to be set aside? Point No.1 4. The controversial of withdrawals were made on 7.9.1990, 26.3.1993 and 22.4.1993. the suit was filed on 1.7.1996, more than three years after the last withdrawal. In the plaint it is alleged that the plaintiff came to know about the withdrawal on the basis of forged cheques only on 22.3.1996. If he has not A.S.Nos. 469 of 1999 & 566 of 2000 3 proved this allegation, the suit was liable to be dismissed as it was filed beyond three years from the date on which the cause of action alleged in the plaint arose. 5. The definite case of the plaintiff, who was examined as PW1, is that he came to know about the unathorised withdrawal only on 22.3.1996 when he visited the bank. It is an admitted fact that on 20.6.1995 he complained to the bank that he had lost his cheque book and pass book and that he gave instructions to stop payment in respect of the cheque leaves contained in the lost cheque book. On the same day he was issued a new passbook and a new cheque book. Still he would like the court to believe that he did not even check up the passbook to ascertain whether there was any unauthorised withdrawal using the lost cheque leaves. This is unbelievable. 6. The entry with regard to the instruction to stop payment given by the plaintiff is seen recorded in the account book maintained by the bank, a copy of which was marked Ext B5 without objection. The instruction was recorded on the date on which he reported loss of the passbook and cheque book. The number of the cheque in respect of which the instruction was given is shown as 926050. If the plaintiff had lost the cheque book, where did he get the number of the cheque leaf. The fact that he gave the number to the bank definitely proves that he had the cheque book with him. The information given to him by the bank that he had lost the cheque book and pass book was false. He suppressed the truth from the bank. 7. In the appeal the bank produced the original stop memo given to it by the plaintiff along with an application to receive it. This was objected to by the ## A.S.Nos. 469 of 1999 & 566 of 2000 4 learned counsel. So the application was dismissed. 8. It is also relevant to note that more than two months after the plaintiff was issued a new passbook and a new cheque book he withdrew an amount of Rs.70,000/-. It is very difficult to believe that even on that date he did not come to know about the alleged unauthorised withdrawals from his account. The suit was filed about seven months thereafter. The allegation of the plaintiff that he came to know about the withdrawal of amounts using forged cheque leaves only on 22.3.1996 is false. The suit was barred by law of limitation. The point is found in favour of the appellant. ## 9. Point Nos.2 and 3 Exts X2 to X4 are the cheques allegedly containing forged signatures of the plaintiff. It is the third defendant who allegedly forged the signatures. These cheques were sent for an expert opinion along with admitted signatures. Ext C1 is the report of the expert. After examining disputed signatures and the admitted signatures he came to the conclusion that the disputed signatures are probably forged signatures. In the writings obtained from third defendant also were set for comparison with the disputed signatures. The expert is of the view that the third defendant probably committed the forgery. Having regard to the facts of the case I agree with the trial court that the disputed signatures are not genuine and they were forged by the third defendant. ## 10. In **Canara Bank v Canara Sales Corporation and others(AIR** **1987 SC 1603)** it was held that if a cheque forged one there is no mandate for the bank to pay the amount. But the bank can escape liability if it can establish that the customer had the knowledge of the forgery. If the bank is A.S.Nos. 469 of 1999 & 566 of 2000 5 able to satisfy the court either an express condition in the contract with its customer or an unequivocal ratification it will not be possible the bank to save the liability. 11. The plaintiff and the defendant are brothers. Before a controversy arose they had done business in a foreign country for 18 years and they had live together in their family property. In the absence of the plaintiff the third defendant was looking after his affairs as admitted by the plaintiff in the witness box (PW1). There was love and trust between them. In an unequivocal terms the plaintiff (PW1) admitted in the cross-examination that the amount sent to the account maintained with the defendant bank was the money earned from their joint business. He immediately added that but the cheque book and passbook in his name. But they were in the custody of the third defendant. 12. Between 1985 and 1996 there were only a few deposits. Rs.1000/was the only amount withdrawn by the plaintiff. He obtained duplicate passbook and new cheque book on 20.6.1995 as he reported to the bank that the passbook and the cheque book which had been issued to him were lost. It is unbelievable that he did not go through the passbook to ascertain whether there was an unauthorised withdrawal. No man of ordinary prudence would fail to ascertain it. He withdraws Rs.70,000/- from the account after a few months. The passbook showing the balance amount was in his custody. Still he did not go through the passbook before a cheque was drawn which is unbelievable. 13. The facts of the case indicate that there was a clear understanding between the plaintiff and the third defendant that the latter could draw cheques and withdraw amounts from the account maintained in the name of A.S.Nos. 469 of 1999 & 566 of 2000 6 the former. In fact he allowed the third defendant to do so. He is actually a party to the forgery committed by the third defendant. He cannot be heard to comply that the bank caused him loss by paying the amount covered by forged cheques. 14. In view of my finding that the suit was barred by the law of limitation and the plaintiff was a party to the forgery committed by the third defendant it is only to be held that the plaintiff is not entitled to relief prayed for. The decree of the lower court is liable to be set aside. In the result, these appeals are allowed. The decree of the trial court is set aside and the suit is dismissed. The parties will suffer their costs. Sd/- ## **K.ABRAHAM MATHEW** ## **JUDGE** cms