Full Judgment Text
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PETITIONER:
BANK OF MAHARASHTRA
Vs.
RESPONDENT:
RICE SHIPPING & TRANSPORT CO. PVT. LIMITED & ANR.
DATE OF JUDGMENT16/02/1995
BENCH:
AGRAWAL, S.C. (J)
BENCH:
AGRAWAL, S.C. (J)
FAIZAN UDDIN (J)
CITATION:
1995 AIR 1368 1995 SCC (3) 257
JT 1995 (3) 175 1995 SCALE (1)785
ACT:
HEADNOTE:
JUDGMENT:
S.C. AGRAWAL, J.:
1. Leave granted.
2. We have heard learned counsel for the parties.
3.Bank of Maharashtra, hereinafter referred to as the
appellant-bank, is a nationalised bank having a branch
providing banking facilities at Nariman Point at Bombay.
Race Shipping and Transport Co. Pvt. Limited, respondent
No. 1 therein, has been operating Current Account No. 318 at
the said branch of the appellant bank. As per the mandate
of respondent No. 1 the said account is to be operated
jointly by G.L. Bhatia and Ashok Chattopadhyay, the Managing
Director of respondent No. 1. One bearer cheque bearing No.
425395 dated August 26, 1992 for a sum of Rs. 1,95,000/- was
drawn on the appellant-bank. The said cheque was encashed
at the said branch of the appellant-bank on August 26, 1992
and the amount of Rs. 95,000/- was debited to the account of
respondent No. 1. The case of the appellant-bank is that the
said amount was paid to one Jadhav, whose signatures were
appended at the back of the cheque, and who was an employee
of respondent No. 1. The said cheque admittedly contains the
signature of G.L. Bhatia. The other signature purports to
be of Ashok Chattopadhyay, the Managing Director of
respondent No. 1. The said signature is on the face of the
cheque as well as on the back. Respondent No. 1 claims that
the said signature is not of Ashok Chattopadhyay and the
same is forged. This fact was brought to the notice of the
appellant-bank by respondent No. 1 on September 3, 1992.
Thereupon the appellant-bank lodged a First Information Re-
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port with regard to the alleged forgery, as claimed by
respondent No. 1, at Police Station at Cuffe Parade, Bombay
on September 4, 1993 and the matter is being investigated by
the police. It is not disputed that the said cheque is from
the Cheque Book issued to respondent No. 1 by the appellant-
bank. Respondent No. 1 claimed reimbursement of the said
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sum of Rs. 95.000/- from the appellant-bank on the basis
that the signature of Ashok Chattopadhyay on the cheque was
forged and thus the appellant-bank was liable to reimburse
the said amount paid by the appellant-bank from the account
of respondent No. 1 against the said cheque. The said claim
of respondent No. 1 was contested by the appellant-bank on
the ground that the question whether the signature of Ashok
Chattopadhyay on the said cheque was forged was still under
investigation and till the said signature is found to be
forged there was proper mandate for payment on the basis of
the said cheque. Thereupon the respondent on April 21, 1993
filed a Writ Petition (Writ Petition No. 1245 of 1993) in
the Bombay High Court wherein it has been prayed as under:
"(a) Writ of mandamus or a Writ or Order or
direction in the nature of mandamus under
Article 226 of the Constitution directing the
Petitioner bank to reverse the debit entry
dated 26.8.1992 for Rs. 95,000/- in their
Current A/C No. 318 or direct the petitioner
Bank to make payment of the respondent No. 1
Company herein of a sum of Rs. 95,000/- with
interest thereon at the rate of 18% from the
date of the said amount had been withdrawn
from the account.
(b) to direct the Petitioner herein to
credit a sum of Rs. 95,000/- in the
current,account No. 318 during the pendency of
the Writ Petition on the respondent no. 1
herein furnishing an indemnity for the same."
4. In the said Writ Petition an affidavit dated July 6,
1993 of Rajiv V. Pinglay, who is employed as Advance Ledger
Posting Machine Operator with the appellant bank, was filed
on behalf of appellant bank. In the said affidavit it is
stated:
"I say that the employees of the Petitioner
No. 1 company regularly visited the Branch for
the banking transactions, and one of such
employees is one Mr. Jadhav. On 26th of
August, 1992 a cheque bearing No. 425395 for
Rs. 95,000/- was presented for cash with-
drawal. I thereupon asked the said Mr.
Jadhav, who had come to collect the pay in
front of me, which was duly done by him. I
say that I had seen the said Mr. Jadhav on few
other occasions prior to 26th August, 1992. I
say that on cheque being signed as aforesaid
by the said Mr. Jadhav, as per the normal
usual banking practice, I posted the cheque
and sent it for further process in accordance
with the usual practice in that behalf. I say
that the aforesaid signature of the said Mr.
Jadhav appears on the copy of the cheque‘
being Exhibit "B" to the petition."
5. The said Writ Petition was placed for preliminary
hearing before a Division Bench of the High Court on July 7,
1993 and the following order was passed on that date :
"P.C. : Rule. The Respondents arc directed to
credit sum of Rs. Ninety Five Thousand only
in the Current Account No. 318 of the
Petitioners forthwith.
The Petitioner through their Counsel
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gives undertaking to bring back the amount if
Court so desires.
We have perused all papers and prima facie we
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are satisfied that the Bank did not take
precautions before making payment of large
amount. The fact that cheque was forged is
not in dispute and the complaint filed by the
Manager before the police nowhere claims that
payment was made to any employee of the
petitioners. The affidavit filed by R.V.
Pinglay the cashier appears to be prima facie
false and an after-thought. "
6. In accordance with the said order of the High Court the
appellant-bank credited a sum of Rs. 95,000/- to the account
of respondent No. 1 on July 9, 1993. From the counter-
affidavit of Capt. Ashok Kumar Aggarwal filed on behalf of
respondent No. 1 it appears that respondent No. 1 has with-
drawn a substantial part of the said amount leaving a
balance of about Rs. 6001.65.
7. Feeling aggrieved by the said order of the High Court,
the appellant-bank has filed this appeal.
8. Shri Rana, the learned counsel for the appellant-bank,
in the first place, has urged that the dispute between the
parties relates to the liability of the appellant-bank to
reimburse respondent No. 1 the sum of Rs. 95,000/- debited
to the account of respondent No. 1 on the basis of cheque
No. 425395 dated August 26, 1992 that was encashed by the
appellant-bank which is claimed to be forged in the sense
that the signature of Ashok Chattopadhyay, the Managing
Director of respondent No. 1, on the said cheque is forged.
The learned counsel has urged that the said liability is
being fastened on the appellant-bank on the basis of the law
governing banking operations and that the proper remedy for
enforcing the said liability is to file a civil suit and
that it is not a matter which can be agitated through a writ
petition under Article 226 of the Constitution. It has also
been urged that the matter involves adjudication of disputed
questions of fact inasmuch as the appellant-bank disputes
that signature of Ashok Chattopadhyay on the cheque is
forged. The learned counsel for the appellant-bank has
submitted that the learned Judges of the High Court were not
right in proceeding on the basis that the appellant-bank did
not take precautions before making payment of large amount
and the fact that cheque was forged is not in dispute and
that the affidavit filed by R.V. Pinglay appears to be prima
facie false and an after-thought. It has been pointed out
that in the correspondence with respondent No.1 the
appellant-bank did not accept the contention of respondent
No.1 that one of the signatures of the joint signatories,
namely, Ashok Chattopadhyay, the Managing Director of
respondent No. 1, was forged and further that the case of
the appellant-bank is that the payment of the cheque was
made in the ordinary course of business and that the
procedure for honouring the cheque by the bank officials was
correctly followed in the matter of encashment of the
cheque. The appellant-bank has also denied the allegations
made by respondent No. 1 that there was collusion of bank
staff with an outside unknown person for payment of the
cheque and it was asserted that it was obvious negligence on
the part of respondent No. 1 not to keep the Cheque Book in
the proper custody and that the respondent No. 1 was making
false allegations against the appellant-bank. The
submission of the learned counsel was that various questions
that arise in the case can be properly de-
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termined only on the basis of evidence that is adduced and
that such determination cannot be made in a writ petition
and it can be more appropriately adjudicated in a regular
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civil proceeding.
9. Shri P.H., Parekh, the learned counsel appearing for
the respondents, has, on the other hand, urged, that this
appeal is directed against the interim order only and the
main Writ Petition is still pending adjudication before the
High Court and the question of maintainability of the Writ
Petition would be gone into by the High Court in the light
of the objections that are raised by the appellant-bank.
Shri Parekh has, however, urged that in view of the fact
that the signature of one of the joint signatories on the
cheque is forged the appellant-bank is liable top reimburse
respondent No. 1 the sum of Rs. 95,000/- that has been paid
from the account of respondent No. 1 on the basis of said
cheque which was a nullity. In support of his aforesaid
submission Shri Parekh has placed reliance on the decisions
of this Court in Bihta Co-operative Development Cane
Marketing Union Ltd. & Anr. v. The Bank of Bihar & Ors.,
(1967) 1 SCR 848 and Canara Bank v. Canara Sales Corporation
& Ors., 1987 (2) SCR 1138.
10.Since the Writ Petition is still pending in the High
Court and the question of maintainability of the Writ
Petition has yet to be considered we do not propose to go
into the said question. All that we wish to say at this
stage is that the objections that have been raised by the
appellant-bank against the maintainability of the writ peti-
tion are not such that they may be disregarded as lacking in
substance. This is a factor which has a bearing or the
exercise of discretion by die Court while passing the
interim order in the writ petition.
11. By the interim order the High Court has directed the
appellant-bank to credit a sum of Rs. 95,000/- in the
current account No. 318 of respondent No. 1. The High Court
has recorded that respondent through their counsel had given
an undertaking to bring back the amount if the Court so de-
sires. The said interim order, in substance, grants the
relief which the respondent would have been given at the
final stage in the event of their writ petition being
allowed by the High Court.
12. Time and again this Court has deprecated the practice
of granting interim orders which practically give the
principal relief sought in the petition for no better reason
than that a prima facie case has been made out, without
being concerned about the balance of convenience, the public
interest and a host of other considerations, [See :
Assistant Collector of Central Excise, West Bengal v. Dunlop
India Ltd & Ors., 1985 (1) SCC 260 at p. 265; State of
Rajasthan & Ors. v. M/s Swaika Properties & Anr., 1985 (3)
SCC 217 at p. 224].
13. In the instant case since there is serious dispute on
facts it cannot even be said that a prima facie case had
been made out for grant of an interim order in favour of the
respondents which enables them to have the reimbursement of
the sum of Rs. 95,000/- that was debited to their account in
view of the encashment of the cheque in question. We are of
the view that this was not a case in which the High Court
while admitting the Writ Petition should have passed an
interim order giving such a direction. In the circumstances
we are unable to uphold the said interim order
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14.The appeal is, therefore, allowed, the interim order
passed by the High Court regarding crediting the sum of
Rs.95,000/in the current account No. 318 of the respondents
is set aside. Since the appellant-bank has already
deposited-the said amount of Rs. 95,000/- in the current ac-
count of respondents in pursuance of the said directions of
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the High Court it is directed that the respondents will
refund the said amount to the appellant-bank within a period
of one month and on their failure to do so the High Court
will take steps to enforce the undertaking that has been
furnished by the respondents in pursuance of the said
interim order. It will be open to the learned counsel for
the parties to request the High Court for an early disposal
of the Writ Petition and the High Court will give due regard
to such a request if made. No order as to costs.
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