S. Natarajan, J. - (1.) THIS appeal has been preferred by the Defendant in Original Suit No. 517 of 1969 on the file of the Court of the Subordinate Judge of Salem, while the memorandum of Cross -objection has been filed by the Plaintiff therein.
(2.) THE suit, out of which this appeal has arisen, was instituted by the Respondent for recovery of a sum of Rs. 29,000 wrongly paid over to the Appellant in discharge of a forged demand draft presented for conversion by it on behalf of an alleged customer of it. The learned Subordinate Judge sustained the case of the Respondent, but however, found contributory negligence in the Respondent as well and hence he disallowed a sum of Rs. 4,000 and decreed the suit for the balance of Rs. 25,000. The appeal is directed against the decree for Rs. 25,000 while the memorandum of cross -objections is directed against the disallowance of a sum of Rs. 4,000.
(3.) THE Respondent's suit came to be filed in the following circumstances, On 6th June, 1969 one Shanthilal Manilal Desai (hereinafter referred to as S. M. Desai, opened a current account with the Indian Bank Limited, Main Office, Salem (hereinafter referred to as the Appellant -Bank). On 12th June, 1969 one Mohamed Hussain obtained a demand draft for Rs. 20 from the Branch at Singanallur of the Catholic Syrian Bank (hereinafter referred to as the Respondent -Bank). The draft was drawn on the branch office of the same Bank at Coachin in favour of Messrs. Desai and Co. This draft was, however, altered by means of clever forgery to make it appear that it was a draft for Rs. 29,000 -drawn on the Salem branch of the Respondent -Bank in favour of S. M. Desai. The forged draft was presented at the main office, at Salem, of the Appellant -Bank on 13th June, 1969 by the above said S. M. Desai for being credited to his account. Acting as banker for the said S. M. Desai, the Appellant -Bank sent the draft on the very same day to the Respondent -Bank for clearance. The said Bank unsuspectingly paid the draft amount of Rs. 29,000 to the Salem Branch of the Appellant's -bank by means of a cheque on the State Bank in due course. However on 14th June, 1969, the Salem Branch office of the Respondent -Bank came to know from its Singanallur branch that the Singanallur branch had issued a draft only for a sum of Rs. 20 and that too, drawn in favour of one Desai and Co. and payable by the branch office at Cochin and no draft for a sum of Rs. 29,000 had been issued At once, the Respondent -Bank at Salem got in touch with the Agent of the Salem Branch of the Appellant -Bank and informed him of the fraud that had been committed. But, unfortunately, by then, the Appellant -Bank had already paid a large part of the draft amount to its customer Desai under a self cheque. The Respondent then came forward with the suit against the Appellant for recovery of a sum of Rs. 29,000 on the ground that the Appellant had been negligent while opening a current account in the name of Desai and by reasons of its negligence and want of good faith, the forged draft had come to be wrongly converted. The Respondent also claimed interest at 6 per cent per annum on the sum of Rs. 29,000.;