Maharashtra Vs. Rice Shipping & Transport
Co. Pvt. Limited & Anr  INSC 135 (16 February 1995)
Agrawal, S.C. (J) Agrawal, S.C. (J) Faizan Uddin (J) S.C. Agrawal,
1995 AIR 1368 1995 SCC (3) 257 JT 1995 (3) 175 1995 SCALE (1)785
have heard learned counsel for the parties.
of Maharashtra, hereinafter referred to as the
appellant-bank, is a nationalised bank having a branch providing banking
facilities at Nariman Point at Bombay.
Shipping and Transport Co. Pvt. Limited, respondent No. 1 therein, has been
operating Current Account No. 318 at the said branch of the appellant bank. As
per the mandate of respondent No. 1 the said account is to be operated jointly
by G.L. Bhatia and Ashok Chattopadhyay, the Managing Director of respondent No.
1. One bearer cheque bearing No. 425395 dated August 26, 1992 for a sum of Rs. 1,95,000/- was drawn on the
appellant-bank. The said cheque was encashed at the said branch of the
appellant-bank on August
26, 1992 and the
amount of Rs. 95,000/- was debited to the account of respondent No. 1. The case
of the appellant-bank is that the said amount was paid to one Jadhav, whose
signatures were appended at the back of the cheque, and who was an employee of
respondent No. 1. The said cheque admittedly contains the signature of G.L.
Bhatia. The other signature purports to be of Ashok Chattopadhyay, the Managing
Director of respondent No. 1. The said signature is on the face of the cheque
as well as on the back. Respondent No. 1 claims that the said signature is not
of Ashok Chattopadhyay and the same is forged. This fact was brought to the
notice of the appellant-bank by respondent No. 1 on September 3, 1992.
the appellant-bank lodged a First Information Re- 177 port with regard to the
alleged forgery, as claimed by respondent No. 1, at Police Station at Cuffe
Parade, Bombay on September 4, 1993 and the matter is being investigated by the police. It is
not disputed that the said cheque is from the Cheque Book issued to respondent
No. 1 by the appellant- bank. Respondent No. 1 claimed reimbursement of the
said sum of Rs. 95.000/- from the appellant-bank on the basis that the
signature of Ashok Chattopadhyay on the cheque was forged and thus the appellant-bank
was liable to reimburse the said amount paid by the appellant-bank from the
account of respondent No. 1 against the said cheque. The said claim of
respondent No. 1 was contested by the appellant-bank on the ground that the
question whether the signature of Ashok Chattopadhyay on the said cheque was
forged was still under investigation and till the said signature is found to be
forged there was proper mandate for payment on the basis of the said cheque.
Thereupon the respondent on April 21, 1993
filed a Writ Petition (Writ Petition No. 1245 of 1993) in the Bombay High Court
wherein it has been prayed as under:
Writ of mandamus or a Writ or Order or direction in the nature of mandamus
under Article 226 of the Constitution directing the Petitioner bank to reverse
the debit entry dated 26.8.1992 for Rs. 95,000/- in their Current A/C No. 318
or direct the petitioner Bank to make payment of the respondent No. 1 Company
herein of a sum of Rs. 95,000/- with interest thereon at the rate of 18% from the
date of the said amount had been withdrawn from the account.
direct the Petitioner herein to credit a sum of Rs. 95,000/- in the current,account
No. 318 during the pendency of the Writ Petition on the respondent no. 1 herein
furnishing an indemnity for the same."
the said Writ Petition an affidavit dated July 6, 1993 of Rajiv V. Pinglay, who is
employed as Advance Ledger Posting Machine Operator with the appellant bank,
was filed on behalf of appellant bank. In the said affidavit it is stated:
say that the employees of the Petitioner No. 1 company regularly visited the
Branch for the banking transactions, and one of such employees is one Mr. Jadhav.
On 26th of August, 1992 a cheque bearing No. 425395 for Rs. 95,000/- was
presented for cash with- drawal. I thereupon asked the said Mr. Jadhav, who had
come to collect the pay in front of me, which was duly done by him. I say that
I had seen the said Mr. Jadhav on few other occasions prior to 26th August,
1992. I say that on cheque being signed as aforesaid by the said Mr. Jadhav, as
per the normal usual banking practice, I posted the cheque and sent it for
further process in accordance with the usual practice in that behalf. I say
that the aforesaid signature of the said Mr. Jadhav appears on the copy of the cheque`
being Exhibit "B" to the petition."
said Writ Petition was placed for preliminary hearing before a Division Bench
of the High Court on July
7, 1993 and the
following order was passed on that date :
: Rule. The Respondents arc directed to credit sum of Rs. Ninety Five Thousand
only in the Current Account No. 318 of the Petitioners forthwith.
Petitioner through their Counsel 178 gives undertaking to bring back the amount
if Court so desires.
have perused all papers and prima facie we are satisfied that the Bank did not
take precautions before making payment of large amount. The fact that cheque
was forged is not in dispute and the complaint filed by the Manager before the
police nowhere claims that payment was made to any employee of the petitioners.
The affidavit filed by R.V.
the cashier appears to be prima facie false and an after-thought. "
accordance with the said order of the High Court the appellant-bank credited a
sum of Rs. 95,000/- to the account of respondent No. 1 on July 9, 1993. From the counter- affidavit of
Capt. Ashok Kumar Aggarwal filed on behalf of respondent No. 1 it appears that
respondent No. 1 has with- drawn a substantial part of the said amount leaving
a balance of about Rs. 6001.65.
Feeling aggrieved by the said order of the High Court, the appellant-bank has
filed this appeal.
Rana, the learned counsel for the appellant-bank, in the first place, has urged
that the dispute between the parties relates to the liability of the
appellant-bank to reimburse respondent No. 1 the sum of Rs. 95,000/- debited to
the account of respondent No. 1 on the basis of cheque No. 425395 dated August
26, 1992 that was encashed by the appellant-bank which is claimed to be forged
in the sense that the signature of Ashok Chattopadhyay, the Managing Director
of respondent No. 1, on the said cheque is forged.
learned counsel has urged that the said liability is being fastened on the
appellant-bank on the basis of the law governing banking operations and that
the proper remedy for enforcing the said liability is to file a civil suit and
that it is not a matter which can be agitated through a writ petition under
Article 226 of the Constitution. It has also been urged that the matter involves
adjudication of disputed questions of fact inasmuch as the appellant-bank
disputes that signature of Ashok Chattopadhyay on the cheque is forged. The
learned counsel for the appellant-bank has submitted that the learned Judges of
the High Court were not right in proceeding on the basis that the
appellant-bank did not take precautions before making payment of large amount
and the fact that cheque was forged is not in dispute and that the affidavit
filed by R.V. Pinglay appears to be prima facie false and an after-thought. It
has been pointed out that in the correspondence with respondent No.1 the
appellant-bank did not accept the contention of respondent No.1 that one of the
signatures of the joint signatories, namely, Ashok Chattopadhyay, the Managing
Director of respondent No. 1, was forged and further that the case of the
appellant-bank is that the payment of the cheque was made in the ordinary
course of business and that the procedure for honouring the cheque by the bank
officials was correctly followed in the matter of encashment of the cheque. The
appellant-bank has also denied the allegations made by respondent No. 1 that
there was collusion of bank staff with an outside unknown person for payment of
the cheque and it was asserted that it was obvious negligence on the part of
respondent No. 1 not to keep the Cheque Book in the proper custody and that the
respondent No. 1 was making false allegations against the appellant-bank. The
submission of the learned counsel was that various questions that arise in the
case can be properly de- 179 termined only on the basis of evidence that is
adduced and that such determination cannot be made in a writ petition and it
can be more appropriately adjudicated in a regular civil proceeding.
P.H., Parekh, the learned counsel appearing for the respondents, has, on the
other hand, urged, that this appeal is directed against the interim order only
and the main Writ Petition is still pending adjudication before the High Court
and the question of maintainability of the Writ Petition would be gone into by
the High Court in the light of the objections that are raised by the
has, however, urged that in view of the fact that the signature of one of the
joint signatories on the cheque is forged the appellant-bank is liable top
reimburse respondent No. 1 the sum of Rs. 95,000/- that has been paid from the
account of respondent No. 1 on the basis of said cheque which was a nullity. In
support of his aforesaid submission Shri Parekh has placed reliance on the
decisions of this Court in Bihta Co-operative Development Cane Marketing Union
Ltd. & Anr. v. The Bank of Bihar & Ors., (1967) 1 SCR 848 and Canara
Bank v. Canara Sales Corporation & Ors., 1987 (2) SCR 1138.
the Writ Petition is still pending in the High Court and the question of
maintainability of the Writ Petition has yet to be considered we do not propose
to go into the said question. All that we wish to say at this stage is that the
objections that have been raised by the appellant-bank against the
maintainability of the writ peti- tion are not such that they may be
disregarded as lacking in substance. This is a factor which has a bearing or
the exercise of discretion by die Court while passing the interim order in the
the interim order the High Court has directed the appellant-bank to credit a
sum of Rs. 95,000/- in the current account No. 318 of respondent No. 1. The
High Court has recorded that respondent through their counsel had given an
undertaking to bring back the amount if the Court so de- sires. The said
interim order, in substance, grants the relief which the respondent would have
been given at the final stage in the event of their writ petition being allowed
by the High Court.
Time and again this Court has deprecated the practice of granting interim
orders which practically give the principal relief sought in the petition for
no better reason than that a prima facie case has been made out, without being
concerned about the balance of convenience, the public interest and a host of
other considerations, [See : Assistant Collector of Central Excise, West Bengal
v. Dunlop India Ltd & Ors., 1985 (1) SCC 260 at p. 265; State of Rajasthan
& Ors. v. M/s Swaika Properties & Anr., 1985 (3) SCC 217 at p. 224].
the instant case since there is serious dispute on facts it cannot even be said
that a prima facie case had been made out for grant of an interim order in favour
of the respondents which enables them to have the reimbursement of the sum of Rs.
95,000/- that was debited to their account in view of the encashment of the cheque
in question. We are of the view that this was not a case in which the High
Court while admitting the Writ Petition should have passed an interim order
giving such a direction. In the circumstances we are unable to uphold the said
interim order 180 14.The appeal is, therefore, allowed, the interim order
passed by the High Court regarding crediting the sum of Rs.95,000/in the
current account No. 318 of the respondents is set aside. Since the
appellant-bank has already deposited-the said amount of Rs. 95,000/- in the
current ac- count of respondents in pursuance of the said directions of the
High Court it is directed that the respondents will refund the said amount to
the appellant-bank within a period of one month and on their failure to do so
the High Court will take steps to enforce the undertaking that has been
furnished by the respondents in pursuance of the said interim order. It will be
open to the learned counsel for the parties to request the High Court for an
early disposal of the Writ Petition and the High Court will give due regard to
such a request if made. No order as to costs.