Sivasubramaniam, J - (1.) THE unsuccessful defendant in O.S.No. 3807 of 1977 on the file of the IV Additional Judge, City Civil Court, Madras, is the appellant in this regular appeal. THE respondent herein was the plaintiff in the said suit which was filed for recovery of a sum of Rs. 47,882.96.
(2.) THE material allegations in the plaint are as follows: One B.K. Shetty purchased a draft for Rs.20/- bearing Rs. 581439 dated 27.3.1974 from the Ambur Branch of the Indian Bank, the plaintiff. One B.Ramaswami had purchased another draft for Rs.30/- bearing Rs.726112 dated 2.4.1974 from the Vaniyambadi Branch of the Indian Bank. One S.Ramanathan who has got an account with the South Tambaram Branch of the defendant Bank, namely, Vysya Bank Ltd., appears to have got into possession of these two drafts and these two drafts were materially altered. THE name of the payee, the amount, the name of the branch on which the drafts were issued were all altered. Though the drafts were purchased for payment by the Salem Main Branch of the plaintiff Bank, the name of the Branch was altered as Harbour Branch and the amount were altered as Rs.15,000/- and Rs.21,000/-respectively. THE name of the payee was altered as S.Ramanathan. THEse two drafts were put in the account of S.Ramanathan which he had with the defendant Bank. THEse two drafts were presented for collection in the clearing house and they were paid with an endorsement that they were paid without advice pending receipt of the usual protection advice from the issuing branch. Later, on, the Harbour branch was informed by the Vaniampadi Branch by their letter dated 8.6.1976 that they did not issue any demand draft for Rs.21,000/- So also the Ambur branch informed that they did not issue any draft for Rs.-15,000/- A complaint was given to the Crime Branch of the North Beach Police Station and the payee could not be traced as it was reported that he was dead. But for the endorsement made by the South Mambalam Branch of the defendant Bank, payments would not have been made for these two demand drafts by the plaintiff Bank. THE plaintiff supposes that S.Ramanathan, the customer of the defendant Bank, is a bogus person who has no permanent address. THE defendant Bank acted with gross negligence in the matter of opening an account in the name of Ramanathan without proper introduction or making proper enquiries. THE immediate withdrawal of substantially the whole amount covered by the two drafts ought to have raised suspicion in the minds of the persons who dealt with the drafts when they were remitted with the defendant bank. So, the defendant is not entitled to the protection under Sec.131-A of the Negotiable Instruments Act. Hence, the plaintiff has filed the suit for recovery of the total sum of Rs.36,000 covered by the two drafts together with interest of Rs.11,882.96 all totalling to Rs.47,882.96. The appellant defendant resisted the suit and filed a written statement raising the following contentions: On the basis of the allegations made in the plaint, an inference is fairly possible that the drafts were in fact issued for the sums of Rs.15,000/- and Rs.21,000/- respectively in favour of a genuine person bearing the name of S.Ramanathan. For over 10 weeks, the plaintiff Bank failed to intimate the defendant casting any doubt on the genuineness of the drafts. So, it is likely that something must have happened at the plaintiff's Bank branches at Ambur and Vaniambadi in respect of the alleged alterations. The plaintiff acted negligently and without reasonable care and caution in having made the payment without the protection advice from the issuing Bank. Since, it is alleged by the plaintiff-Bank themselves that the alterations of the name of the payee, the amount and the name of the drawee Bank were not visible to the naked eyes and they are not capable of arousing any suspicion, there cannot be any justification for the defendant Bank to suspect that its customer was not a true owner, of the drafts or that the drafts were not genuine. The T.Nagar branch of the defendant Bank was opened on 18.3.1974. Thiru S.Ramanathan opened the Current Account on 21.3.1974 by making a cash deposit. A week later, he deposited the draft for Rs.15,000/- for collection and the amount was withdrawn by 4 different cheques. The second draft for Rs.21,000/-was deposited on 3.4.1974 and a major portion of the amount was withdrawn in 4 different cheques and there was a balance of Rs.1,310/- in the account. Since the account was opened with cash, there was nothing suspicious about the manner in which the account was opened. There was no need or circumstances necessitating any special enquiries to be made about the customer who was duly introduced by another customer of the Branch. Since the first draft was deposited a week later, it cannot be suggested that there was any connection between the opening of the account and the issue of the draft. So, the defendant is entitled to the protection under Section 131-A of the Negotiable Instruments Act. On the pleadings of the parties, the trial Court found as many as six issues and decreed the suit holding that the defendant Bank did not act in good faith and without negligence and so they are not entitled to the protection under Section 131-A of the Negotiable Instruments Act. Aggrieved against this decision, the defendant has filed the above appeal. The following points would arise for consideration in this appeal:1. Whether the defendant Bank has acted in good faith and without negligence and is entitled to protection under section 131-A of the Negotiable Instruments Act. 2. Whether the plaintiff-Bank is guilty of contributory negligance in passing the Drafts for payment?. Point Nos.1 and 2: The plaintiff-Bank has come forward with the present suit for recovery of the suit amount on the basis that the two Drafts Exs.A-7 and A-9, which were issued, by their Ambur Branch and Vaniyambadi Branch respectively for Rs.20/- and Rs.30/- respectively, were tampered and materially altered with Rs.15,000/- and Rs.21,000/- respectively. The said Drafts were originally issued in the name of B.K.Shetty and B.Ramaswamy respectively and they have materially altered the names as S.Rarnanathan. Though an issue was raised by the trial Court as to whether the Demand Drafts are genuine or not and considered elaborately by the trial Court, it is unnecessary for the purpose of the present appeal since both the parties have agreed that the Drafts Ex.A-7 and A-9 have been materially altered. Therefore, it is unnecessary to go into that aspect now . and the short question that has to be decided in this appeal is regarding the liability of the defendant Bank to reimburse the plaintiff-Bank who were made to pay the said sums found in the altered drafts on the basis of the protective endorsement made by the defendant-Bank on behalf of its customer. We shall now deal with the two Drafts Ex.A-7 and A-9 as per the manner in which they were issued and materially altered.
(3.) EX.A-7 is the first Draft issued by the Ambur Branch of the Indian Bank on 27.3.1974. It was issued originally in the name of one B.K.Shetty for a sum of Rs.20/- and it was addressed to the Salem Main Branch of the Indian Bank. It is now found altered in respect of . the material particulars, excepting the signature of the Office of the issuing Bank. The payee's name has been altered from S.E.Shetty to S.Rarnanathan and the amount was altered as Rs.15,000/- Similarly, instead of Salem Main Branch, it is altered as Harbour Madras. These alterations, according to both the parties, have been done erasing the original writings by a technical process. S.B.Shan-mughain, who was the then Agent of the Bank at Ambur Branch of the Indian Bank, was examined is P.W.1 in the suit. He proved the fact that the Draft was originally issued for a sum of Rs.20/-in the name of one B.K.Shetty and addressed to the Salem Main Branch. He has explained the procedure in detail regarding the issue of Draft in that Bank. According to him, a chalan is prescribed by the Bank in which the name of the person in whose favour the Draft has to be issued, the Branch in which the payment is to be made and other particulars have to be filled up. Then the applicant will present the chalan along with the required amount to the Cashier and thereafter, the chalan will be passed on to the Clerk in the draft section who is expected to verify the particulars furnished in the application Draft. After such verification, the Clerk in the Draft section will prepare a Draft and send it along with the chalan to the officer concerned. After obtaining the signature of the concerned officer, the Draft will be delivered to the applicant. The Bank is maintaining a register in respect of the issue of Drafts wherein necessary particulars are noted in respect of each Draft isued by the Bank. He filed the regiseter EX.A-6 wherein the particulars relating to the Draft EX.A-7 are entered. According to him, except the signature, all other particulars have been altered in the Draft. P.W.4 one R.S. Mani, who is the signatory for the Draft EX.A-7, was the then Accountant of the Ambur Branch of the Indian Bank. He has corroberated the evidence of P.W.1 regarding the procedure for issuing Drafts in their Bank. During the course of his evidence, he has stated that according to the relevant entry in EX.A-6 register, the Draft EX.A-7 was purchased by one Ramu for payment to one B.K.Shety. Therefore, the evidence of P.Ws.1 and 4 proves the fact beyond any doubt that actually the Draft was issued only for Rs.20/- in favour of one B.K.Shetty and the name was subsequently altered as S.Ramanathan and the amount altered as Rs.15,000/- As regards the Draft Ex.A9 dated 2.4.1974 it was issued by Vaniambady Branch of the Indian Bank to one B. Ramaswami for a sum of Rs.30/- The original writing of the figure Rs.30/-and the name of the payee B. Ramaswami and the payee Bank as Salem Main Branch have been altered. In respect of this Draft. P.W.3 by name Noordein, who was the Officer of the Vaniambadi Branch at the relevant time, has been examined. He has spoken about the procedure for the issue of a Draft in his Branch, as spoken to by P.Ws.1 and 4. He proved the register Ex.A-8 and the relevant entry found therein as Ex.A-8(a). According to him, the Draft was originally purchased by one Ranganathan in favour of Ramaswami as per the entry found in Ex.A-8(a). As already noticed earlier, there is no dispute between the parties regarding the alteration of the Drafts Ex.A-7 and A-9, and it is nobody's case that the said Drafts are genuine as they stand now. However, the Drafts were sent to the Forensic Expert for his examination and report. One K.Ramakrishnan, a document expert has been examined as P.VV.6 in this case. He is attached to the Tamil Nadu Forensic Science Laboratory, Madras. In his evidence, he has given details about his examination of these documents in detail. According to him, his Office received Ex.A-16 along with the disputed Drafts Ex.A-7 and A- 9. He has examined the disputed writings in Ex.A-7 and A-9 with a magnification lens and also with special light. He has also stated that he examined the documents under microscope using various lights and also under violet light. He has taken enlargements of the photographs which are marked as Ex.A-20 and A-21, and has submitted report marked as Ex.A- 17. He is of the opinion that an attempt has been made to chemically erase the original writing in these Drafts. He gave a definite opinion to the effect that the ink used for the two writings is different. According to him, the present writing was written with a ball point pen, while the original writing was written with an ordinary pen. However, it was elicited from him that he was not asked to examine whether the original writer could have written the substituted writing. It is also in evidence that no other documents ware given to him for examination or comparison. He was cross-examined at length as to the manner of the eraser by chemical process and the method adopted by him for finding out the tampering of the Drafts. He stated that' he did not do any chemical fuming. According to the learned counsel for the appellant, only if a chemical fuming is done, the original writing as well as the present writing will be visible. P.W.6 has given a categorical opinion by stating that since the photographs taken in respect of both the drafts furnished all materials to find out the original writing, he did not fume the documents. According to him, depending on the nature of fuming in some cases the writing will fade away and in some cases it will not. Ultimatelly, he gave the opinion in re-examination stating that depending on the chemicals used, erasere and the ink used for writing, the original writing will become visible after the lapse of a period ranging from one day to many years. On the basis of this opinion, both the parties proceeded on the basis that the original writing, which was admitedly erased by using chemicals, started becoming visible after a lapse of time and till then for naked eyes of all the employees of the Banks in this case, the original writing would not have been visible and only the altered writings would have been visible. So, the evidence of this witness has established the fact that originally the two Drafts were issued only for Rs.20/- and Rs.50/- respectively in the names of B.K.Shetty and B.Ramaswami and they have been materially altered in the name of one S.Ramanathan and the amounts have been altered as Rs.15,000/- and Rs.21,000/- respectively. It is also not in dispute that the plaintiff Bank has paid these amounts on the basis of the altered Drafts with the protective endorsement of the defendant-Bank. ;