P L D 1969 Supreme Court 301 (PLP)

SAJJAD AHMAD, J.‑--This appeal, by special leave, arises out of a money suit bearing the following material facts. On the 12th of July 1951, the plaintiff‑appellant firm Mer wanjee Bomanjee Dalal & Sons, which is now represented by the Official Assignee, Karachi, as the Court Receiver, brought a suit for recovery of Rs. 2,00,007/9/9 against the defendant‑respondent 'Suleman Ahmad & Ismail Ahmad Aditiyanwala, in the Chief Court of Sind. On the 14th of July 1951, the plaintiff obtained an ex parse order of attachment before judgment of the defendant's money to the tune of Rs. 1,00,x'00 lying in the Current Account of the Lloyds Bank, Karachi, the contesting respondent herein and described here after as the Bank. A prohibitory injunction under Order XXXVIII, rule 5 of the Civil Procedure Code, was also served on the Bank not to pay the attached amount to the defendant. This was followed by a consent order on the 27th of August 1951, to the effect that if the defendant gave security to the satisfaction of the Nazir of the Court for payment of the amount under attachment, the prohibitory injunction will stand discharged. Later, on a clarification sought by the Bank, with regard to the real name of the account‑holder, the Court directed that the money account which stood in the name of the defendant Ismail Aditiyanwala, had been attached. The plaintiff's suit was decreed on 29‑11‑

55. However, when the execution of the decree was taken out on 3‑12‑55, a curious event came to light which had happened to the utter ignorance of the plaintiff decree‑holder. On the 3rd of December, 1954, the Bank had received a forged letter purporting to be from the Court and bearing its seal and the signatures of Mr. M. S. Bhutto, the Nazir of the Court, to the following effect:‑ "To The Garnishee above‑named. Whereas the defendant above‑named (i.e., Ismail Aditiyan wala) has furnished security in this Court to the extent of the amount lying with the garnishee which is Rs. 1,00,000 the Court has, therefore, raised interim attachment dated the 14th of July 1951, and the interim injunction dated 8thx January 1952. You, the garnishee, above‑named, are hereby informed that the monies of the defendant in your hands standing in the account styled "Ismail Aditiyanwala" may be paid to him or any one else on his behalf and cash cheques drawn on that account in your Bank; and that all the prohibitory orders are withdrawn hereby. Given under my hand and Seal of the Court, this first day of December 1954. By order (Sd.) M. S. Bhutto Nazir." On receipt of this letter the Bank informed the defendant that the Court had withdrawn the prohibitory injunction. The defendant in turn asked that the money be remitted to him by cheque which was duly sent on the 9th of December 1954, covering the total amount of his credit balance of Rupees one lac. In pursuance of the execution application a notice was issued to the Bank to deposit in Court the defendant's money which had been attached. I he Bank pleaded on the basis of the letter of the Court reproduced above, that it had already paid the amount to, the defendant. The plaintiff‑decree‑holder thereafter moved an, application to the Court, submitting that the aforesaid letter Exh. 2/2 was a forgery and that the payment by the Bank in compliance thereof was made at its own risk. In the proceedings that followed, evidence on affidavits was furnished by some officer of the Bank, explaining the circumstances in which the payment was made to Muhammad Ismail. Mr. Bhutto, the Nazir of the Court, also filed an affidavit, denying his signatures on the letter allegedly issued from the Court. The Official Assignee also filed an affidavit, contending that the letter was a complete forgery. A learned Single Judge of the High Court of West Pakistan at Karachi, held that the aforesaid letter was a complete forgery which did not absolve the Bank of its liability to deposit the attached amount as a garnishee. The Bank filed an appeal under the Letters Patent which was accepted by a Division Bench of the High Court which reversed the order of the learned Single Judge and held that as the Bank had acted in a bona fide manner under the order of the Court which prima facie was genuine bearing its seal, although in actual fact it was not so, it was protected from making the payment over again for the second time. Leave was granted by this Court on the 24th of August 1964, to consider the question whether the garnishee Bank did legally enjoy the protection that has been acceded to it by the judgment of the High Court. Before entering on a discussion of this matter, another point may be conveniently disposed of here which Mr. Md. Fazlur Rahman, the learned counsel for the Bank, has urged before us to support the judgment of the letters Patent Bench, which was urged in the Courts below also, but was decided against him. His contention is that the Current Account of the respon dent Ismail which was maintained by the appellant‑Bank, was not a debt which could be attached as a property under section 60 of the Civil Procedure Code and further that the prohibitory order was of no effect, as, until it was received, no demand had been made on the Bank by the account‑holder for its payment to make it a recoverable debt. This contention which represents two facts of the same argument, is manifestly untenable. It is well‑settled that as between the Bank and its constituents the current credit balance of the latter is a debt payable as such although no demand is made for its payment. In any case, as held in Rogers v. Whitelay (1892 A C 118), the service of a garnishee order by the Court constitutes a demand by operation of law and ties up the whole credit balance in the current account of the party in respect of whom the order is made irrespective of the relative amounts of the judgment and the balance. We agree with the Courts below that the amount deposited with the Bank in the current account of the respondent was rightly attached as a debt and the prohibitory injunction issued on the Bank was perfectly valid. It may also be mentioned here that the appellant had not taken any objection to the attachment order or the prohibitory injunction when they were issued. In fact, as already stated above, the appellant had, at one stage, sought a clarification of the name of the account‑holder whose account was attached, in token of its readiness to comply with the orders. On the question of the extent of protection enjoyed by Banks and commercial concerns in relation to their responsibility for parting with money on the faith of the Court documents which .ex facie are genuine bearing the authenticity of the Court's Seal and conforming to all the other forms, the learned Single Judge has held that the good faith of the Bank is immaterial. If a forged document has been honoured by the Bank and the money paid to its beneficiary, it does not constitute a lawful discharge and the Bank is liable to pay to the true owner. Mr. Brohi, the learned counsel for the appellants, has pursued the same line of thought to argue forcefully that the forged document is a nullity which cannot furnish a foundation, or a cover for an action however innocent it may be, to the prejudice of any innocent person who may be wronged thereby. Alternatively, he has argued that there are certain features in the: present transaction which should have put the respondent Bank on an inquiry as to the genuineness of the Court's letter to save itself from being defrauded. If it has not done so, it must suffer. The learned Judges of the Letters Patent Bench, in their approach to the case, seem to have been very greatly influenced by the sanctity of the judicial seal and the great weight attached to the judicial processes in the English law and the American Jurisprudence. They have been led, in the formulation of their conclusions, by what may be regarded as expedients of public policy. Drawing their inspiration from section 57(6) of the Evidence Act which lays down that a Court should take judicial notice of the seals of all the Courts and from section 56 of the same Act which provides that no fact of which judicial notice can be taken, need be proved and by reference to illustration (e) of section 114 of the Act which says that there is a presumption of regular performance in favour of all official acts, the learned Judges of the Letters Patent Bench have accepted their total effect to be "that a strong initial presumption of genuineness exists in favour of a document which purports to bear the seal of the Court and signature of an officer of the Court, although then presumption is rebuttable. It can be dislodged but the burden for doing so is on him who seeks to do so. This means that nobody is expected to look upon a document which on the face` of it appears to duly bear the seal of the Court and the signature of an officer of the Court with suspicion and to act on his doubts unless he first reasonably assures himself of fair chances of disproving the presumption of its genuineness. This expectation serves as foundation of the public confidence which enables its members to readily obey judicial orders as well as the steel rails on which the processes of judicial administration smoothly move. It is neither wise nor legally supportable that this. expectation be weakened or destroyed". At another place they have observed "The law virtually says: trust the seal and the signature; therefore, he cannot begin with distrust unless there are circumstances or signs on the face of the document to excite genuine suspicion . . . . . Additionally, we are very reluctant to encourage a situation in which the recipients of the orders of the Court would be justified to hesitate and delay their obedience on imaginary doubts and for no apparently good reason". These are very pious and noble sentiments which appear to have, been grounded on a wishful guarantee at the other end which, unfortunately, is not there that the seals of the Courts and the documents prepared therein are steel‑framed and fool‑proof against forgeries, imitations or interpolations. Cases of ravages committed in the records of the Courts' preparation of forged documents and misuse of seals of the Court are not unknown. The present case itself is an instance in point. The legal presumptions are certainly there as mentioned by the learned Judges of the Division Bench but they relate to seals genuinely axed and to official acts duly performed, but the presumptions cannot be extended to the point that actions done in obedience to orders of the Courts which are found to be bogus, are protected because they bear the appearance of genuine orders. With all respect, it will certainly weaken and not strengthen public confidence in the administration of justice if the impression gains ground that the orders of the Court, whether genuine or faked, are treated at par in their practical utility; and the greater the ingenuity employed in preparing a faked Court document the greater the chances oaf its acceptance as genuine. I may refer here usefully to the judgment of the House of Lords in the case of uben and another v. Fingall Consolidated and others (1906 A C 439=471), in which reliance was placed on the sanctity of a seal of a company that had been fraudulently put on it by the Secretary of the Company on the share certificate issued by the Secretary to the appellants. The certificate also bore the bogus signatures of two of the directors. It was held that although the share certificate was in point of form in accordance with the Company's articles of association inasmuch as it bore the seal of the Company and appeared to he signed by two of the directors and countersigned by the Secretary, it was of no avail to the appellants for the registration of their names as owners of the shares because the seal of the Company was fraudulently axed on the share certificate. Lord Loreburn in dealing with the point of sanctity of the seal remarked that "he could have understood a claim on the part of the appellants on that basis if it were incumbent on the company to lock up their seal and guard it as a dangerous beast and if it were culpable carelessness on the part of the directors to commit the care of the seal to their secretary or any other official. But this was not the case. Equally, in the present case, it was not shown that the seal that was affixed on the Court's letter in this case, was legally required to be locked up or had remained in the guarded custody of any functionary of the Court. In my opinion, Mr. Brohi was quite right in his submission that where a protective right is not rooted in law but is claimed in the orbit of public policy, the basic consideration must be the avoidance of harm to the general public and to uphold the right of the innocent. As laid down in the case of Feder v. D Mildmay ((1937) 3 A E L R 402) "the duty of the Courts is to expound and not to expand public policy, and the doctrine should be invoked only in clear cases, in which the harm to the public is substantially incontestable, and does not depend upon the idiosyneratic inferences of a few judicial minds." Undoubtedly, it is highly essential for the smooth administra tion of justice and for the strength of the public confidence therein which is its main pillar and which should be its principal achievement, that the orders of the Courts should command unflinching respect and ready obedience. I do not however consider that the checking up of the genuineness and authenticity of a Court's order involves any disrespect to it, nor does it for that matter, involve any expensive or inconvenient process such as appears to have vexed the minds of the learned Judges of the Letters Patent Bench. In fact, it is in the interest of every Bank and commercial institution itself to set up within itself a trained cell in which such orders as are received from the Courts and the sources of their receipt or delivery are examined and carefully and expeditiously processed to ensure on the one hand the quick implementation of the orders, and, on the other, to defeat any sharp practices that may be indulged in this behalf. I feel constrained to say that in the present case the respondent‑Bank has acted recklessly and unwarily in giving effect to the Court's orders without taking note of certain obvious factors which should have put the Bank on an inquiry, to ascertain about the genuineness of that letter. The first is, as pointed out by Mr. Brohi, that the letter bore the signatures of Mr. M. S. Bhutto with his designation as the Nazir of the Court, although according to rules 30 and 31(3) of the Sind Chief Court Rules with which the Bank should have been quite familiar, as it had been receiving similar orders before, such a letter should have been signed by the Serishtedar and not by the Nazir. Again, the affidavits submitted by the Bank officials to explain the circumstances of payment are non‑committal being completely silent about the details of what really happened, that is to say, how and by whom the letter was brought to the Bank. It is not the Bank's case that the letter in question was received by post. If so, the credentials of the person who brought the letter should have been checked if they were not already known to the Bank. Finally, I have not been able to appreciate the anxiety of the Bank in making the payment to the respondent Ismail soon after it received the order of the Court withdrawing the injunction. Ordinarily, Ismail in whose favour the withdrawal order had been secured from the Court, should have rushed to the Bank to get his money, but the reverse position here posed, is that it is the Bank which, on getting the so‑called withdrawal order, informed Ismail who then made the requisition for the money which was paid to him within two days. Mr. Fazlur Rahman, the learned counsel for the respondent‑Bank, was frank enough to concede that if once any circumstance is discoverable which should have put the Bank on inquiry to ascertain the genuineness of the letter, he was really out of Court. In my view there is no escape from this conclusion. Apart from this, I think this is one of those cases wherein, even if it were assumed that the Bank has acted innocently, there is another innocent party involved in the transaction whose interest has to be put into the balance and safeguarded. In such cases, one that could prevent the loss must suffer. The rule of equity which applies as between the two innocent person in such cases is that the one who could prevent the loss must suffer and not the other who was powerless to do so. (See observation of Lord James of Hereford in Ruben and another v. Fingell Consolidated and others and Paget's Law of Banking, page 366). While the Bank in this case could prevent the loss by a little more care and caution, the appellant who was completely in the dark as to how the transaction went through the Bank could do nothing in the matter. In view of what I have said above, I would accept this appeal, reverse the judgment of the Letters Patent Bench and restore that of the learned Single Judge, with no order as to costs. HAMOODUR RAHMAN, C. J.‑--I entirely agree. ABDUS SATTAR, J.‑--I agree. K. B. A. Appeal accepted.