1990 PLP 686 (CLC)

(1) Whether the plaintiff has to his credit with the defendant bank the amount claimed in the suit? (2) Whether the plaintiffs or any of them has withdrawn any amount from the said account? If so, is the balance left to his credit only Rs.42,020.93? (3) Relief?

5. The plaintiffs have examined P.W.1 Mohammad Younus as Ex.

4. He has repeated the contents of the plaint. The defendants have examined their officer Mohammd Naseer Khan as, Ex.4/1. He has produced all the documents relevant to this‑ case as Exs.8 to

48. Ghulam Abbas Jafri Handwriting Expert has been examined on the orders of the Court as Ex.48. He has produced his report as Ex.48/1. Reasons for his opinion are Ex.48/2 and the comparison chart as Ex.48/3.

6. The dispute in this case is centred around 5 cheques described as follows:‑

1. Cheque Ex. 34 dated 23‑12‑1978 for Rs.23,500

2. Cheque Ex.35 dated 21‑12‑1978 for Rs.21,000

3. Cheque Ex.36 dated 20‑12‑1978 for Rs.24,000

4. Cheque Ex.37 dated 19‑12‑1979 for 20,000

5. Cheque Ex.38 dated 24‑12‑1978 for Rs.23,500 Total: Rs.1,12,000 The contention of the defendants is that by these cheques the plaintiff had drawn the above amount from their account.

7. Each of these cheques is purported to have been signed by Mohammad Younus plaintiff N6.3 at 2 places. The plaintiffs have denied that these cheques bear the signatures of Mohammad Younus. They have also denied that these cheques were issued by plaintiff No.3 from their cheque book or that they have received the said amount. The plaintiffs have also challenged that these cheques are from a cheque book which was issued to the plaintiffs. The contention of the defendant is that it was issued on a letter Ex.39. By this letter it was requested that a fresh cheque book be issued per bearer whose specimen signature was given in the letter and attested. This letter purports to bear the signature of the plaintiff No.3 Mohammad Younus at 2 places and the specimen signature purports to be of one Fayyaz. Plaintiffs have denied that they had issued any such letter or had asked for any such fresh cheque book. They have also denied the signatures of plaintiff No.3.on this letter. They have denied that Fayyaz was their man or that these signatures were attested by them. The defendants further contend that on the receipt of this letter they had given a loose requisitionslip to the bearer of the letter who presented it to the bank bearing the signatures and purporting to be of plaintiff No.3. This requisition slip is Ex.40. The plaintiffs have denied to have signed this requisition slip as well. It is contended by defendant bank that they issued letter Ex.41 to the plaintiff No.1 by ordinary post to confirm as to whether they had received the fresh cheque book but they did not receive any reply. The plaintiffs denied to have received this letter.

8. In view of denial of the plaintiffs that these cheques were signed by plaintiff No.3 and in view of the admitted position that these cheques were not from the initial cheque book issued to the plaintiffs, it becomes necessary to ascertain whether the fresh cheque book was issued at the request of the plaintiffs and delivered to them or not. The letter through which the fresh cheque book is asked for is denied to have been signed by the plaintiffs. They also denied that it bears the signatures of plaintiff No.3. They also denied that Fayyaz was their messenger or was even known to them. Under these circumstances the point for determination will be as to whether the signatures on .these 5 cheques and the letter requesting for issuance of the cheque book as well as the loose requisition slip are proved to be of the plaintiff No.3 or not. Plaintiff No.3 Mohammad Younus has put himself in the witness box and denied all these signatures on oath. As against this defendant's witness Mohammad Naseer Khan has stated on oath that all these cheques have been signed by Mohammad Younus. He has also claimed to have experience of comparing signatures of the clients on the cheques with the specimen signatures cards of the bank. He has, however not stated in very clear terms that the signatures of the plaintiff No.3 on the cheques were compared by him with the signatures card available with the bank nor has he stated that the signatures of the plaintiff No.3.resemble the disputed signatures.

9. It is also not stated anywhere by this witness in his deposition on oath that the letter, informing that the initial cheque book was lost and requesting that a fresh cheque book may be issued, as well as the loose requisition slip, bear the signatures of the plaintiff or that those signatures resembled the signatures of the plaintiff No.3.

10. On the signatures having been disputed and in view of the contest with respect to those signatures the Court ordered that these disputed signatures be examined by a Handwriting Expert. Accordingly Ghulam Abbas Jafri A.I: G. P Karachi was called upon to examine and compare all these disputed signatures with the admitted as well as specimen signatures of the plaintiff No.3. He submitted his report. He has also been examined as a witness. He has stated in his report as well as deposition that all the disputed signatures were referred to him for being compared with the admitted and specimen signatures, of the plaintiff No.3. From examination and comparison of the abovementioned disputed signatures and specimen and routine signatures of the plaintiff No‑3 it was revealed that independent characteristics of the disputed signatures are not in agreement with those of the specimen and routine signatures of plaintiff Mohammad Yousuf Hence in his opinion the disputed signatures of Mohammad Younus were forged. He has also given his detailed reasons alongwith his report. The report is Ex. 48/1 and the reasons are 48/2. He has also given comparison chart of the enlarged, disputed and specimen signatures of plaintiff Mohammad Yousuf, which is Ex.48/3. The expert was subjected to a searching, rather fishing cross‑examination by the defence counsel, but without any success. His cross -examination on the contrary revealed the accuracy, skill and depth of the examination. I have therefore decided to place reliance on the, evidence of the expert.

11. Admittedly these cheques did not come from the initial cheque book issued to the plaintiff. 1t is also an admitted position that these cheques came from the fresh cheque book which was issued an a letter brought to the bank by a person who was not known to anybody in the bank. It is also admitted position that the letter requiring confirmation of having received fresh cheque book was not replied by the plaintiff. It therefore became necessary to see as to whether this letter was issued with proper care. A perusal of this letter shows that it was issued on 19‑12‑1978 while the fresh cheque book was issued from the bank on the same day. A minute examination of this letter shows that there is overwriting on the date of issue of letter. 1t is admitted by defendant that this letter was sent by ordinary post and no reply in confirmation of this letter was received from plaintiffs. It is said that human beings can speak lie but the circumstances do not speak lie. An important circumstance in this case is that the withdrawals after supply of fresh cheque book are in quick succession. The fresh cheque book was issued on 19‑12‑1978 and all the 5 withdrawals were made between 19‑12‑1978 and 24‑12‑1978. It is the practice of the banks that whenever cheque of a large amount is presented, they first obtain confirmation/instructions from their clients. It was also the duty of the defendant to have become conscious when the cheques of such big amount were being successively presented after issue of the fresh cheque book and that also within a period of 5 days as much as Rs.1,12,000 were withdrawn from an account, balance in which was Rs.1,49,450.09 only on the date when the fresh cheque book was issued. It is admitted by D.W. Mohammad Naser that only one withdrawal in a week is to be allowed from a Saving Bank Account. When he realized that the plaintiffs' account was a Saving Bank Account he made an improvement by saying that plaintiffs' account was a Special Saving Bank Account and that two withdrawals in a week are allowed from Special Saving Bank Account. This improvement does not help the defendant because in this case as many as 5 withdrawals have been made in 5 days. D.W. Mohammad Naseer has made inconsistent statements, about the officials who were posted in the bank during the relevant period and has tried to say that none of them except peon Javed was in service of the bank. Later on he had to admit that each and every one of those officials was in service of the bank though some of them were promoted and posted in other cities of Pakistan or other countries while 2 of them were still in Karachi. The bank has examined none of the officials who dealt with the issuance of fresh chequebook and the encashment of the cheque. Their deliberate suppression by the bank is also not free from doubt. It is admitted that whenever such a complaint is made to the bank an enquiry is held and a report is submitted to the higher officers. In this case no such enquiry is shown to have been held. If such an enquiry was held the same has been suppressed. Neither the holding of such enquiry has been alleged nor the findings or report of the enquiry have been disclosed. There is overwriting on the date of issuance of the letter requiring confirmation of receipt of fresh cheque book which was not denied by Mohammad Naseer when it was brought to his notice. He did not offer any explanation for the said overwriting. This circumstance is also very material. It is also admitted that there is a practice in the defendant bank of sending monthly statement to its clients and alongwith that monthly statement all the cheques which are debited to their account are also sent. 1t is admitted by D.W. Mohammad Naseer that the disputed cheques were not sent to the plaintiffs alongwith monthly statment of accounts. It is also noted that the letter for issuance of the fresh cheque book and the loose requisition slip was presented in the bank on 19‑12‑1978 while the fresh cheque book was made ready before the presentation of the requisition letter and the requisition slip i.e. on 18‑12‑1978, which reflects the mala fides of the defendant bank. From these circumstances it appears that a mischief was played whereby afresh cheque book was obtained for plaintiffs' account. On the strength of that fresh cheque book Rs. 1,12,000 have been withdrawn from the account of the plaintiffs. It is now to be seen as to who can be held liable for this mischief. It was not necessary for the plaintiffs to have obtained a fresh cheque book if they themselves wanted to cheat the bank nor was it necessary for them to have done it in such short span of time. Hence the deposition of the plaintiff on oath denying the disputed signatures, corroborated by the examination and comparison of the disputed signatures by the Handwriting Expert revealing that the disputed signatures were forged and supported by the circumstances mentioned above would lead to the conclusion that these cheques were not issued by the plaintiffs and the amount of Rs. 1,12,000 was not withdrawn by plaintiffs from the defendant Bank. All these facts and B circumstances show that the officers of the defendant bank had violated the rules and practice of the bank and had acted in a very negligent and careless manner and had rather behaved in a suspicious manner which it is clear that the bank had not done its duty as required under the law and rules to safeguard the interest of the plaintiffs and thereby an amount or Rs.1,12,000 was withdrawn from his account either by any official of the Bank or by some other culprit with the connivance or complicity of the officials of the defendant bank.

12. The law on the point is quite clear. A cheque is in the nature of an order from the account‑holder to the Bank directing it to pay the specified amount out of his account. If, therefore, the signature of the account‑holder on a cheque is forged then it is not his order to pay. From this it must follow that any payment C by the bank upon the basis of such a cheque is a payment without authority and would not bind the customer. In a case reported in P L D 1901 (W.P.) Karachi 185 Province of Sind v. Imperial Bank of India, the question of the liability of Bank on payments made by it on forged cheques was considered. 1n that case the cheque which bore the forged signatures of Executive Engineer was got encashed from the Government account. When the Government filed a suit, the bank pleaded negligence of the officers of the Government. The plea was disallowed. It was held by A.S. Farooqui, J. that any payment made by the Bank on the basis of forged cheque is a payment without authority and would not bind the customer. It was further held that a customer is not disentitled from making a claim for reimbursement on the ground of his own negligence or conduct, unless it is established that he adopted the forgery or he was by his own conduct estopped from making a claim against the Bank. The English decisions in the case of London Joint Stock Bank Limited v. Mec. Millal N. Arthor, reported in 1918 A.C. 777 and (1827) 4 Bind 253, Young v. Grot were considered and distinguished on facts in that case. In P L D 1969 Supreme Court 301 (Official Assignee H C W P v. Lyods Bank), where after money deposited in the name of a customer of the Bank was attached and subsequently the Bank received a forged order by the Court saying that the attachment had been raised and it bore all the signs of its being a genuine order of the Court. The Bank therefore paid the money to the customer. A question arose as to whether the Bank was liable in those circumstances for the money attached. 1t was held that 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. The rule of equity which applies as between the two innocent persons in such cases is that the one who could prevent the loss must suffer and not the other who was powerless to do so. While the bank in this case could prevent the loss by 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. Therefore, the Bank was liable for money paid out by it in spite of attachment by Court. Hence the defendant bank is liable to pay this amount to the plaintiffs alongwith the interest which it has agreed with the plaintiffs.

13. I, therefore, decree plaintiffs' suit for a sum of Rs.1,49,451.09. I further direct that the defendant shall pay interest to the plaintiffs at the usual rate at which they are paying it to their other customers on their such account for the entire period. The costs of the suit shall be borne by the defendant. A.A./A‑676/K Suit decreed.