J. LADIES BEAUTY v. STATE BANK OF INDIA,ahmedabad — 1983 DIGILAW 90 (GUJ)

S. A. SHAH, J. ( 1 ) THE applicant is the original plaintiff-partnership firm doing business of Ladies Hosiery at Ahmedabad. They had a bank account with the respondent No. 1 Bank namely State Bank of India which was current account and which was converted into cash-credit account on 7-7-1972. It is the case of the applicant that the applicant issued five cheques prior to 7-7-72 out of which three cheques which were encashed were properly encashed but the remaining two cheques issued to one Bombay firm were tampered with and have been encashed not by the payee though the same were payees account cheques and respondent Bank has made the payment of those payees cheques negligently and carelessly to some third party. The applicant-petitioner therefore gave notice to the Bank to reimburse the applicant-petitioner to that extent. ( 2 ) THE plaintiff stated that one cheque dt. 30-6-72 was for Rs. 1596 and the second cheque dt. 22-7-72 was for the amount of Rs. 479 The Bank having failed to reimburse the plaintiff the plaintiff filed a Summary suit No. 2009/75 claiming Rs. 2075-75 as principal amount of these two cheques and Rs. 747. 00 as interest in all Rs. 2822 ps. ( 3 ) THE trial court has granted unconditional leave to defend to the bank. The main contention of the bank was that they were not negligent and therefore the plaintiff was not entitled to have any reimbursement. The Small Causes Court Ahmedabad recorded the evidence of both the parties and after hearing the arguments dismissed the suit with costs on 18-1-1979. ( 4 ) BEING aggrieved by the judgment and decree of the Small Causes Court the plaintiff filed an Appeal being New Trial Application No. 12179 before the Appellate Bench of the Small Causes Court. The Appellate Bench by its judgment dt. 9-11-1979 dismissed the New Trial Application with costs and being aggrieved by the judgment and decree passed by the Appellate Bench the plaintiff has filed this Revision Application before this court. The Appellate Bench by its judgment dt. 9-11-1979 dismissed the New Trial Application with costs and being aggrieved by the judgment and decree passed by the Appellate Bench the plaintiff has filed this Revision Application before this court. ( 5 ) MISS Bhavnani makes the following submissions: (i) that both the suit cheques bear the endorsement of payees account and therefore the bank cannot make payment of these cheques to the bearer of the cheques; (ii) that the cheques bear the date of issue as 30 and 22-7-72 respectively and somebody has tried to interfere with this endorsement and date and has tried to rub out with some material and thereafter has placed a rubber stamp and has rewritten 7/07/1972 by rubber stamp. These tampering with the payees account endorsement and date are visible by naked eye even today and therefore the bank was totally negligent in making the payment of such cheques to the bearer of cheques without making any inquiry; and (iii) that across the printed word order a line with ink has been drawn and the word order has been scored out and the word bearer has been added and the alleged signature of the partner of the plaintiff has been made to show that said erasure is uthentica. However the specimen signature as given to the bank is specimen signature for the partnership with partnership stamp affixed whereas this new signature does not bear the partnership rubber stamp over the signature and therefore the bank was not justified in treating the cheques as bearer cheques; (iv) that the evidence given by the bank officers cannot be considered of any value in the face of the documents (cheques) and the presumption arising from the documents cannot be rebutted by such oral evidence without any technical support. ( 6 ) I will deal with the submissions of Miss Bhavnani in the same order in which they are stated. A bare look to the cheques exhibits 34 and 35 show that there is an endorsement of payees account on the left hand top corner of both the cheques which today also are readable. The bank officers have been examined to explain this endorsement. The defence witness No. 1 Dilipkumar Jaswantlal Chokshi who was working on cash credit counter on Tilak Road Branch was the first person to scrutinise the cheques. The bank officers have been examined to explain this endorsement. The defence witness No. 1 Dilipkumar Jaswantlal Chokshi who was working on cash credit counter on Tilak Road Branch was the first person to scrutinise the cheques. He has stated that when the Cheques were presented before him there were no apparent signs as it appears now as well as of cross were not visible at the time of presentation on 8-7-72. He therefore gave token for payment. He has admitted that these cheques were in their possession till the same are produced in the Court. In cross-examination he says as under:today I can read at the top of the cheque date with ink. It is 30-6-72; even at the other corner of the lines of cross are also visible. There are some writing. I am shown ex. 35. Today I see that there ink written date 22-7-72 and the cross line with some writing. The other officer whose name is Laxmanbhai Sukhrambhai Vaghhani who was serving at Tilak Road Branch Ahmedabad was the passing officer is examined lay the defence. He says that I verified the cheques. At that time the erasures of signature dates and cross-writings were not visible on that day. In cross-examination he says that I send cheque for the second time on 10-7-72 at that time these sign written erasures were visible on both the cheques. On 10-7-72 I could readdates. ( 7 ) THE next witness examined by the Bank is Bipinchandra Chandubhai Amin the Branch Manager of Tilak Road Branch Ahmedabad a very responsible officer. He stated in his examination- in-chief that the erasures in date in writing of the cheques were not visible when it were presented before me. In cross-examination he states as under:again on Monday I got it out. On that these erasures were slightly visible but were not so clear as it appears today. He has further stated in cross-examination that It is true that on Monday after seeing these cheques I felt that these cheques are wrongly paid. Thereafter feeling of wrong payment I am to prefer to my head office at Bhadra. I send these cheques with remarks to the head office. I could not recollect what remarks I made on it. I do not recollect whether I had received any reply or not. Thereafter feeling of wrong payment I am to prefer to my head office at Bhadra. I send these cheques with remarks to the head office. I could not recollect what remarks I made on it. I do not recollect whether I had received any reply or not. Miss Bhavnani therefore submitted that according to the deposition of the Branch Manager Shri Bipinchandra the erasures were clear to him on the date when he gave evidence. Not only that but on the next Monday i. e. on 10-7-72 the Branch Manager felt that the payment has been made wrongly and has referred the matter to the head office. All the witnesses have stated that the erasures on the cheques were visible to them on the date of their deposition but the case of the bank is that the same were not visible when the cheques were presented for payment on 8-7-72. Miss Bhavnani submitted that if the erasures were visible on the date of the deposition by no stretch of imagination it can be said that they were not visible on the day when they were presented for payment It is possible that by lapse of time the documents and the writings may fade but it is never heard that by passage of time the documents and the writings become clearer Miss Bhavnani therefore stated that there is no escape except to come to the conclusion that the erasures on the cheques were more eligible on the date of payment and the bank officeers were totally negligent in accepting such documents. ( 8 ) I myself have examined both the cheques today i. e. after a period of 10 years from the date of issue. Both the cheques on the face of it look suspicious. The original dates are visible even today and a rubber stamp of 7/07/1972 has been superimposed upon the original date written in ink. ( 8 ) I myself have examined both the cheques today i. e. after a period of 10 years from the date of issue. Both the cheques on the face of it look suspicious. The original dates are visible even today and a rubber stamp of 7/07/1972 has been superimposed upon the original date written in ink. It also appears that the dates as well as endorsement of payees account have been tampered with and somebody has tried to rub it with some chemicals but the said attempt is not hundred percent successful and with the naked eye one can easily read that there was payees account endorsement on the left hand side corner of the cheques Miss Bhavnani is also right when she states that the order cheques have been erased to bearer cheques and that erasure bears the alleged signature of the2partner without a rubber stamp. The specimen signature counter produced at ex. 36 shows that the specimen signature given by the partners is on a rubber stamp for Ladies Beauty partner and between the two lines of that rubber stamp there is the signature of one of the partners and therefore changing from order to bearer must be signed by the partner in the manner in which the specimen signature is given. In any case the attention of the bank is drawn both by this endorsement as well as the tampering with the date and payees account endorsement. If this type of erasures are visible after 10 years the bank cannot successfully prove by oral evidence of the officers of the bank who are trained in this respect to say that the same were not visible at the date when the cheques were presented for payment. According to my opinion the oral deposition of the officers of the bank that these erasures were not visible on the date of presentation of the cheques can not be accepted as true in face of the written documents and especially when all the three officers in terms admit that these erasures were visible on 10-7-72 and were also visible when they gave deposition. The Branch Manager has further admitted that after two days of the payment he felt that payment has been made wrongly and he has referred the matter to his head office. The Branch Manager has further admitted that after two days of the payment he felt that payment has been made wrongly and he has referred the matter to his head office. The bank has not produced the reply of the head office but one thing appears to be amply clear that these erasures and tempering were visible after two days and unless the bank produces such an evidence of some technical expert that one can use some method or chemical by which some writing can temporarily become invisible a mere oral deposition of the interested witnesses of the bank who have passed the cheques cannot be accepted against the documentary evidence of cheques on record. The oral evidence had therefore no evidentiary value and being contrary to the documentary evidence of cheques ought not to have been relied upon by the courts below. ( 9 ) AGAIN the bank has not pleaded the case in the written statement that these erasures were not visible on the date of presentation of the cheques and therefore they had made the payment. The story of the bank as disclosed in their evidence after the plaintiff has completed its evidence which is not specifically pleaded in the written statement cannot be accepted by the court. ( 10 ) NOW therefore the question arises if the bank makes the payment of the cheques which on the face of it appears to be tampered with and a cheque for payees account is converted into a cheque payable to the bearer can the bank be said to be negligent in making the payment. To my opinion when a customer issues cheque payable to payees account he is assured that the bank will not make the payment to anybody except the person in whose favour the cheque has been issued. When such an endorsement is being tampered with the bank is put to an inquiry as to why payment should be made to a bearer. The plaintiff was residing in Ahmedabad. He was granted credit facilities on 7-7-72 and when on the same day the bank is accepting such doubtful cheques it was obligatory upon the officers of the bank to make an inquiry and to ascertain from the drawer (the plaintiff) whether such a cheque is to be accepted or not. The plaintiff was residing in Ahmedabad. He was granted credit facilities on 7-7-72 and when on the same day the bank is accepting such doubtful cheques it was obligatory upon the officers of the bank to make an inquiry and to ascertain from the drawer (the plaintiff) whether such a cheque is to be accepted or not. The bank having failed in its duty to make an inquiry and to clear the cheques which could not have been cleared on Monday two days thereafter according to the evidence of the bank officers I have no doubt that the bank was negligent in accepting these two cheques and make payment to the bearer. The oral deposition of the bank is no evidence in the eye of law and cannot be believed that before two days these erasures were not visible. I therefore hold that the bank was negligent in making the payment of these two cheques and therefore was bound to reimburse the applicant- petitioner. ( 11 ) THAT the claim of the plaintiff being for ascertained amount is entitled to interest at rate of six per cent he is therefore entitled to Rs. 360. 00as interest from 7-7-72 to filing of this suit i. e. 9-6-75. ( 12 ) NO other points were urged by the respondents. ( 13 ) THE result is that the judgment and decree of both the courts below are set aside. The plaintiff is entitled for a decree of Rs. 2435-75 with running interest at the rate of 6% on principal amount of Rs. 2075 from the date of the suit till realisation. Rule is made absolute with costs throughout. Decree be drawn accordingly appeal allowed. .