S. R. BANNURMATH, J. ( 1 ) THIS appeal is filed by the defendants challenging the judgment and decree dated 25/3/2006 in O. S. 225/03 on the file of learned Principal Civil Judge, Hubli. ( 2 ) THOUGH the matter was posted for orders to consider I. A. II/06 filed by the respondent for withdrawal of money deposited by appellants in this court, since the trial Court records of the case are available and as per the request of both the sides, the dispute being within narrow compass and as paper books are already filed, the main appeal itself it taken up for consideration and being disposed of by this judgment. ( 3 ) THE brief facts giving rise to the present appeal are as follows:-The respondent/plaintiff is a Co-operative Bank, carrying on co-operative banking business at Hubli. It entered into a memorandum of Understanding (herein after referred to as MOU)with the defendant Banks represented by defendant No. 4 Branch with an intention to facilitate the clients for transactions. ( 4 ) UNDER the Memorandum of Understanding coupled with the subsequent instructions, the Plaintiff-bank opened a current account with 4th defendant and accordingly, the defendant-bank has supplied cheque leaves to the plaintiff for operating the account. In order to facilitate the defendant-bank to honour the cheques, it was required by the plaintiff-bank to maintain a cash balance of Rs. 35 lakhs. ( 5 ) ACCORDING to the plaintiff, it issued a cheque bearing number 108900, dated 2-6-2003 for a sum of Rs. 700/- drawn in the favour of M/s. Loyal trading Company, Mumbai, on the instructions of one Sunil of Hubli, who obtained the same by filing a requisite application and paid a sum of Rs. 700/ -. As per the plaintiffs case, the said cheque was presented by the holder-M/s. Loyal Trading Company, Mumbai, to it's banker. The Bombay Mercantile co-operative Bank Ltd. , Jogeshwari Branch Mumbai for collection. It is stated that even though the said cheque was not punched as is required, the defendant-bank without verifying the genuineness, correctness of the cheque have passed the cheque on 4-6-2003 and paid a sum of Rs. 7,50,000/-instead of Rs. The Bombay Mercantile co-operative Bank Ltd. , Jogeshwari Branch Mumbai for collection. It is stated that even though the said cheque was not punched as is required, the defendant-bank without verifying the genuineness, correctness of the cheque have passed the cheque on 4-6-2003 and paid a sum of Rs. 7,50,000/-instead of Rs. 700/- and credited the proceeds to the account of holder of m/s. Loyal Trading Company, Mumbai in the Bombay Mercantile Cooperative Bank Ltd. ( 6 ) IT is the case of the plaintiff - Bank that because of the negligence and not exercising the minimum required care of not returning the cheque as the same was not punched, and by making the payment of huge sum of rs. 7,50,000/- instead of Rs. 700/- for which the cheque was issued, the defendant/banks have caused loss to the plaintiff/bank by deducting this amount from the account of the plaintiff. ( 7 ) IT is alleged that in spite of legal notice issued by the plaintiff to make good the loss caused by the defendants, as the same is not complied, the plaintiff is forced to file the present suit for recovery of the amount paid in excess of the cheque along with interest and cost. ( 8 ) THE defendant No. 4 contested the case by filing its written statement, which was adopted by the other defendants inter alia denying the factual position as stated by the plaintiff and stated that the case of the plaintiff that though it issued the cheque in question for a sum of rs. 700/-, the defendant made payment of Rs. 7,50,000/- without properly verifying as to the genuineness of the cheque is false. It is stated that the cheque in question was in fact issued for a sum of Rs. 7,50,000/- and as there was nothing to suspect; the genuineness, the defendant has honoured the same. It is submitted that punching of the cheque leaf on the corresponding number in the box provided is not a condition precedent to honour the cheque, but it is only a preventive measure to be taken by the drawer bank to prevent the fraud or forgery like altering the amount originally mentioned. It is submitted that punching of the cheque leaf on the corresponding number in the box provided is not a condition precedent to honour the cheque, but it is only a preventive measure to be taken by the drawer bank to prevent the fraud or forgery like altering the amount originally mentioned. According to the defendants, as there was prima facie no material like apparent alternation on the face of the cheque, the paying bank need not return the cheque only on the ground of non-punching, as it is a common banking practice that many times instead of punching scoring of or marking the necessary box in the cheque is carried out by the drawer bank and the payee bank also accepts such marking if there is no prima-facie indication of tampering. ( 9 ) ACCORDING to the defendants, there is no negligence on their part, but it is the plaintiff, who is falsely claiming that it has issued the cheque for Rs. 700/- and not for Rs. 7,50,000/- to cover up its own negligence or fraud. According to the defendants, the payment has been made in due course as no alterations whatsoever could be made out from the apparent tenor of the instrument. It is staled that the defendant has passed the cheque bona fide and in good faith, after exercising due care, as no material alteration could he made out in the said instrument either to the naked eye or after thorough verification. ( 10 ) IT is further contended that as per the MOU the plaintiff is required to maintain adequate balance in its current account and only with that condition the defendant-bank has issued the Cheque leaves including one in question payable at par (PAP ). It is stated that the said chequr for rs. 7,50,000/- was drawn in favour of M/s. Loyal Trading Company, Mumbai, which presented the same for collection through it's bank namely The bombay Mercantile Co-operative Bank Ltd. , Jogeshwari Branch, Mumbai. It is this Bank which has sent the cheque for collection and payment through clearings house. It is stated that the said chequr for rs. 7,50,000/- was drawn in favour of M/s. Loyal Trading Company, Mumbai, which presented the same for collection through it's bank namely The bombay Mercantile Co-operative Bank Ltd. , Jogeshwari Branch, Mumbai. It is this Bank which has sent the cheque for collection and payment through clearings house. The defendant No. 1, which is the processing unit, on receipt of the cheque, scanned the same and as the amount mentioned in the words and figure tally and as there was no apparent material alteration, which could be made out on the apparent face of the instrument and since there was enough balance available, the defendant-Bank was bound to honour the instrument. According to the defendants, the cheque was for Rs. 7,50,000/- and since there was no prima facie reason to suspect, it was bound to pay the amount. It is submitted that as the cheque was obtained by Mr. Sunil and the same was presented by M7s. Loyal Trading co. , as well as honoured by Bombay Mercantile Co-operative Bank, it was necessary for the plaintiff/bank to impled the said Mr. Sunii, M/s. Loyal trading Company and Bombay Mercantile Corporative Bank as defendants and since they are not made parties, the present suit should fail for nonjoinder of necessary parties. On these among other grounds it is prayed that suit is liable to be dismissed. ( 11 ) TO substantiate their respective claims the plaintiff examined it's in-Charge General Manager and got marked Ex. P1 to P32. On behalf of the defendants two witnesses were examined and the MOU was marked as Ex. Dl. ( 12 ) THE trial Court on consideration of the pleadings framed following issues: "1. Whether this Court has no jurisdiction to try this suit? 2. Whether the suit is bad for non-joinder of Mr. Sunil and bombay Merchantile Co-operative Bank Ltd. , as necessary parties? 3. Whether the plaintiff further proves that it has issued the cheque bearing No. 108900 dated 2-6-2003 for Rs. 700/- only and it was forged and altered as for Rs. 7,50,000/- as alleged? 4. Whether the plaintiff further proves that the defendant No. 4 branch honoured the said cheque without proper scrutiny against the specific instructions thereof? 5. Whether the plaintiff is entitled lor the relief of decree as prayed for? 6. 700/- only and it was forged and altered as for Rs. 7,50,000/- as alleged? 4. Whether the plaintiff further proves that the defendant No. 4 branch honoured the said cheque without proper scrutiny against the specific instructions thereof? 5. Whether the plaintiff is entitled lor the relief of decree as prayed for? 6. To what order or the relief the plaintiff is entitled for?" ( 13 ) ON appreciation of the evidence the trial Court by the impugned judgment, decreed the suit. Hence, the present appeal by the defendants. ( 14 ) SRI. Srinivasan learned Senior Advocate appearing for the appellants, taking us through the pleadings of both the parties, entire evidence on record and the impugned judgment, vehimently contended that the judgment and decree of the trial Court is contrary to law and evidence on record; That the trial Court has failed to appreciate the pleadings and the evidence in it's proper perspective; That the entire approach of the trial Court is one-sided and based on no evidence and on the other hand it is based only on surmises and conjectures; That the court below was also in error in not dismissing the suit for non-joinder of necessary parties; That the trial Court has failed to consider that under section 89 of the Negotiable Instrument Act, the defendants have made payment of the cheque for Rs. 7,50,000/- in accordance with the tenor of the instrument which is apparently un-tampered one and when the same is presented for clearance by the collecting bank of the payee and paid by the defendant-bank and as the payment was made in due course and as such, in the absence of any material as to the material alteration of the cheque, the defendants could not have been fastened with liability in question. ( 15 ) ON the other hand the Advocate for the plaintiff argued in support of it's case and the judgment in question. The main contention of the plaintiff is that since under the MOU, whenever a cheque is issued by the plaintiff, it is the duty of the defendant/bank to verify as to whether the cheque is in order and more importantly, whether it is properly punched. The main contention of the plaintiff is that since under the MOU, whenever a cheque is issued by the plaintiff, it is the duty of the defendant/bank to verify as to whether the cheque is in order and more importantly, whether it is properly punched. It is submitted that, admittedly the cheque in question was not at all punched and hence, the defendant/banks ought to have returned the same and in not doing so and on the other hand making payment of Rs. 7,50,000/ for a cheque issued at Rs. 700/- has caused irreparable loss to the plaintiff, which has been considered by the trial Court properly and decreed the suit. As such, in absence of any illegality in appreciation of evidence, the appeal is devoid of merit and the same is liable to be dismissed. ( 16 ) AFTER hearing both sides at length and considering the pleadings, the evidence and the impugned judgment, in our view, the following questions arise for consideration: 1. Whether the trial Court is justified in holding that the plaintiff has proved that it has issued the cheque bearing number 108900 dated 2-6-2003 for a sum of Rs. 700/- only which has been subsequently forged and altered as for Rs. 7,50,000/ -. 2. Whether the Court below is justified in awarding that the defendant No. 4 has honoured the said forged and altered cheque without proper scrutiny and contrary to its own instructions and as such liable to pay the amounts to plaintiff? 3. Whether the Court below was justified in holding that the suit was maintainable even in the absence of necessary parties like mr. Sunil, Bombay Mercantile Co-operative Bank Ltd. , and m/s. Loyal Trading Co. ? ( 17 ) ON perusal of the pleadings and evidence of the plaintiff, it is to be noted that the case of the plaintiff is that, thought it had issued the cheque No. 108900 dated 2-6-2003 for a sum of Rs. 700/- drawn in favour of m7s. Loyal Trading Company, Mumbai, on payment of the said amount by one Mr. Sunil, somehow in transit it has been forged, altered and tampered for a sum of Rs. 7,50,000/ -. This theory is based on the alleged requisite application - Ex. P2 and the necessary entry in the bank record Ex. P13. ( 18 ) WE have carefully considered the said documents. No doubt Ex. Sunil, somehow in transit it has been forged, altered and tampered for a sum of Rs. 7,50,000/ -. This theory is based on the alleged requisite application - Ex. P2 and the necessary entry in the bank record Ex. P13. ( 18 ) WE have carefully considered the said documents. No doubt Ex. P13 - the computer generated statement of account of the plaintiff/bank shows that on 2-6-2003, a cheque for a sum of Rs. 700/- was issued in favour of M/s. Loyal Trading Company, Mumbai. But by that itself, it cannot be assumed to be correct especially when on our careful consideration, we find Ex. P2 itself is suspicious in nature and more importantly, Ex. P. 3 the cheque in question, prima facie does not appear to be altered or tampered. ( 19 ) THE perusal of Ex. P. 2 carefully shows that the plaintiff/bank is either negligent, careless or has created this document to support its contention. By mere looking at the requisition shows that it is said to be by one Sunil. Except this name no other particulars like father's name, address, etc. , are available though there is a specific column for it. Moreover even the figure 700/- supposed to be the amount paid by him for issuance of cheque are overwritten. More surprisingly, on the backside of this requisition where there is specific column to enter the exact currency tendered by the applicant, figure mentioned is 2x1000+10=1010 which is not at all the sum mentioned in front side nor is the cheque issued for the said sum. Even the hand writing is worse than that of a primary school boy. As such, we find it hard to accept this document as an evidence to the fact alleged that it is the cheque issued on demand by said Sunil was for rs. 700/- which according to plaintiff was later tampered and made to look like one for Rs. 7,50,000/ -. ( 20 ) NOW coming to the disputed allegedly forged or tampered cheque ex. P. 3 itself, even with careful scrutiny of the same, we do not find any signs of its tampering. 700/- which according to plaintiff was later tampered and made to look like one for Rs. 7,50,000/ -. ( 20 ) NOW coming to the disputed allegedly forged or tampered cheque ex. P. 3 itself, even with careful scrutiny of the same, we do not find any signs of its tampering. ( 21 ) TO understand as to how the cheque is prepared both side Counsel submit that after verification as to for what sum the cheque is to be issued, the concerned bank official writes the name of the person to whom it is to be paid, the exact amount to be paid both in words and figures and signature of the official are put. It is admitted that to ensure that the cheque is not tampered by altering the amount, after writing the figures and words, a special transparent tape is struck on it. It is admitted by both sides that if any one tries to remove this tape to alter or change the amount, the paper itself gets peeled off. One more security measure is that while making these writing/entries, a carbon paper in reverse position is kept below so as to ensure that the mirror impression of whatever is written on the face of the cheque is automatically imprinted on the reverse side of the cheque. ( 22 ) AFTER studying/understanding these safety measures, when we perused the cheque in question, to the naked eyes we could not find any sings of tampering or alterations. The figure 7,50,000/- perfectly tallies with the words "seven lakhs fifty thousands only". There are absolutely no sings of either the transparent tape having been removed or there is any change of figure or words. When we pointed this to the respondents' advocate, he submitted that now a days such tampering is done with some chemicals. In our view, the respondent-plaintiff has not placed any material or experts evidence in this regard either before the trial Court or before this Court and as such, this contention is devoid of merit. Further our finding of the cheque being untampered is fortified by the reverse side mirror image writing because of use of carbon paper. If the case of the plaintiff is accepted that, there is material alteration of the figure and the words 700/- to 7. Further our finding of the cheque being untampered is fortified by the reverse side mirror image writing because of use of carbon paper. If the case of the plaintiff is accepted that, there is material alteration of the figure and the words 700/- to 7. 50,000/- was carried out, there would be some change indicated on the carbon impression on the backside of the cheque. In our view, to the naked eye, the backside carbon impression appears to be clean, that is untampered and as such, the theory put forth by the plaintiff is unacceptable. ( 23 ) ONE more contention raised by the plaintiff to demonstrate the alleged tampering story is based on the incomplete seal of the Bombay mercantile Co-operative Bank Ltd. According to the plaintiff on the cheque the words "ltd" are incomplete indicating that the same has been put after removing the security tape. It is to be noted in this regard that, if that tape was removed, as it is admitted, the same would have peeled the paper below and that is not what has happened as we have already discussed. The only explanation offered by the appellant is that since the security tape is made of plastic, any ink on it would be erased and this is exactly why the words "ltd" is incomplete. On careful scrutiny of the cheque, we find this is the only acceptable explanation. ( 24 ) THE next contention of the plaintiff to demonstrate that there is a negligence on the part of defendants in accepting the cheque is to the effect that as per the instructions of defendant-bank, while issuing the cheque there should be punching in the boxes provided and if the same is not carried out, the cheque was not to be honoured. It is submitted that at ex. P. 3 did not have any such punch marks, the defendants ought to have returned the cheque to the plaintiff and instead of doing the same, by honouring it and by making payment, the defendants have caused loss to the plaintiff-bank. In this regard it is to be noted that PW1, the manager of plaintiff-bank himself has admitted in the evidence that "there is no condition to punch the cheque. In Ex. P8 nowhere it is mentioned that punching is mandatory. In this regard it is to be noted that PW1, the manager of plaintiff-bank himself has admitted in the evidence that "there is no condition to punch the cheque. In Ex. P8 nowhere it is mentioned that punching is mandatory. " On the face of such clear admission, it is not necessary to even consider this aspect. Moreover as seen from the other cheque leaves made available by the plaintiff itself, instead of punching the box, the practice appears to be only putting tick mark in the box. As such, we hold that the plaintiff cannot take advantage of its own doing. ( 25 ) HENCE, we hold question Nos. 1 and 2 in favour of the defendants and against the plaintiff. As such, consideration of question No. 3 is academic. In this regard, it is also to be noted that though the cheque was obtained by one Mr. Sunil, a mysterious person, in favour of the M/s. Loyal trading Company, Mumbai, whose company is Bombay Merchantile Cooperative bank Ltd. , Jogeshwari Branch, Mumbai, it is this bank who sent the cheque for collection to defendant No. 4. Even if for the sake of argument, the case of the plaintiff is accepted that there is tampering, it is possible at the hands of either the person, who took the cheque i. e. , Mr. Sunil or when it was with M/s. Loyal Trading Company. Mumbai, or also when it v/as with Bombay Mercantile Co-operative Bank Ltd. , Jogeshwari branch, Mumbai. As such, these were the necessary parties to the present suit. In the absence of these parties, the trial Court could not have decided the case on hand. In our view, the trial Court has not at all considered this aspect and has erroneously held that these persons are the banks and are not the necessary parties. We find that in the absence of these necessary parties, the present suit was also not maintainable one. ( 26 ) ON careful scrutiny of the entire evidence, the points raised by both the sides, we find that the trial Court without considering these aspects carefully, is carried away and has decreed the suit only on surmises and conjectures. As the impugned judgment and decree, in our view, are unsustainable and hence liable to be interfered with. ( 26 ) ON careful scrutiny of the entire evidence, the points raised by both the sides, we find that the trial Court without considering these aspects carefully, is carried away and has decreed the suit only on surmises and conjectures. As the impugned judgment and decree, in our view, are unsustainable and hence liable to be interfered with. ( 27 ) AT this stage it is to be noted the learned Advocate for the plaintiff submitted that after the present incident there is similar attempt by someone else to tamper the cheque in the same manner almost using the technique but that cheque is luckily returned by the payee bank. Considering this we feel that there is consorted effort at the plaintiff-Bank to defraud. Except giving a police complaint, the plaintiff-Bank has not taken any steps in this regard. This bank is a Co-operative Bank and as such, we feel it necessary to direct the COD to make investigation especially with the bank employees without whose collusion, such act cannot take place. ( 28 ) IN the result and for the reasons stated above, we allow the appeal and set aside the judgment and decree, dated 25-3-2006 passed by the principal Civil Judge (Sr. Dn), Hubli, in O. S. 225/2003 and dismissed the suit of the respondent/plaintiff with costs.