Kerala High Court
M/S. Minar Textile Industries Ltd vs Vijaya Bank on 13 June, 2025
Author: Sathish Ninan
Bench: Sathish Ninan
2025:KER:41684
C. R.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
FRIDAY, THE 13TH DAY OF JUNE 2025 / 23RD JYAISHTA, 1947
RFA NO. 401 OF 2015
AGAINST THE JUDGMENT DATED 31.01.2025 IN OS NO.483 OF 2012 OF
I ADDITIONAL SUB COURT, KOZHIKODE
-----
APPELLANT/4th PLAINTIFF:
R.RAMESH,
AGED 59 YEARS,
S/O.K.BALARAMAN, RESIDINGA AT A7, PEEKAY APARTMENTS,
TALI, CHALAPURAM PO. CALICUT, 673 002.
BY ADVS.
SHRI.BIJU ABRAHAM
SRI.B.G.BHASKAR
RESPONDENTS/DEFENDANT & PLAINTIFFS 1 TO 3:
*1 VIJAYA BANK,
ITS HEAD OFFICE AT BUILDING NO.41/2, M.G.ROAD,
BANGLORE- 560 001, (AND A BRANCH AT CHALAPURAM,
CALICUT, REPRESENTED BY ITS GENERAL MANAGER, HAVING HIS
OFFICE AT THE SAME ADDRESS, ADDRESS FOR SERVICE ON THE
PARTIES IS THE SAME).
2 V.K.MOHAMMAD RASHEED, AGED 62 YEARS, SO.V.K.MOHAMMED,
RESIDING AT "WHITE HOUSE", PANICKER ROAD, NADAKKAVU,
CALICUT 673 011.
2025:KER:41684
RFA NO. 401 OF 2015 -2-
3 V.K.MOHAMMED ASHARAF,
AGED 55 YEARS,
S/O.V.K.MOHAMMED, VEEKAY HOUSE, NEAR KADAVU RESPORT,
AZHINJILAM PO, MALAPPURAM.
4 V.K.ZAKEER HUSSAIN, SO.V.K.MOHAMMED,
AGED 49 YEARS,
23/1942, V.K.MANZION, THIRUVANNUR ROAD, KALLAI POST,
CALICUT 673 003.
*[THE NAME OF THE 1ST RESPONDENT IS CORRECTED AS "BANK OF BARODA"
INSTEAD OF "VIJAYA BANK" VIDE ORDER DATED 17.03.2025 IN IA
NO.1/2025 IN RFA NO.401/2015]
BY ADV SMT.LATHA ANAND,SC, VIJAYA BANK
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.06.2025, ALONG WITH RFA.399/2015, 402/2015 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:41684
C. R.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
FRIDAY, THE 13TH DAY OF JUNE 2025 / 23RD JYAISHTA, 1947
RFA NO. 399 OF 2015
AGAINST THE JUDGMENT DATED 31.01.2015 IN OS NO.480 OF 2012 OF
I ADDITIONAL SUB COURT, KOZHIKODE
-----
APPELLANTS/PLAINTIFFS 1 TO 3:
1 M/S. MINAR TEXTILE INDUSTRIES LTD.,
REGISTERED COMPANY, ITS REG.OFFICE AT BUILDING
NO.19/2026, 4TH FLOOR, INDUS AVENUE, KALLAI ROAD,
KOZHIKODE, RPE.BY ITS AUTHORIZED SIGNATORY K.M.KUNHI,
AGED 72 YEARS,S/O.ABDULLA.
2 M/S. VEEKAY TEA CO (P) LTD.,
ITS REG.OFFICE AT BUILDING NO.19/2026, 4TH FLOOR, INDUS
AVENUE, KALLI ROAD, KOZHIKODE REP. BY ITS AUTHORISED
SIGNATORY V.K.MOHAMMED RASHEED.
3 M/S. TRIO PROPERTY DEVELOPERS (P) LTD.,
REG. COMPANY WITH ITS OFFICE AT BUILDING NO.19/2026,4TH
FLOOR, INDUS AVENUE, KALLAI ROAD, KOZHIKODE, REP.BY ITS
AUTHORISED SIGNATORY V.K.MOHAMMED ASHARAF.
BY ADVS.
SHRI.BIJU ABRAHAM
SRI.B.G.BHASKAR
2025:KER:41684
RFA NO. 399 OF 2015 -2-
RESPONDENT/DEFENDANT 4TH PLAINTIFF:
*1 VIJAYA BANK,
ITS HEAD OFFICE AT BUILDING NO.41/2,
M.G.ROAD,BANGALORE-560 001 (AND A BRANCH AT CHALAPURAM,
CALICUT, REPRESENTED BY ITS GENERAL MANAGER, HAVING HIS
OFFICE AT THE SAME ADDRESS, ADDRESS FOR SERVICE ON THE
PARTIES IS THE SAME.)
2 V.K. MOHAMMED RASHEED,
AGED 62 YEARS, S/O.V.K.MOHAMED RESIDING AT "WHITE
HOUSE",PANICKER ROAD, NADAKKAVU, CALICUT -670 011.
*[THE NAME OF THE 1ST RESPONDENT IS CORRECTED AS "BANK OF BARODA"
INSTEAD OF "VIJAYA BANK" VIDE ORDER DATED 17.03.2025 IN IA
NO.1/2025 IN RFA NO.399/2015]
BY ADV SMT.LATHA ANAND,SC, VIJAYA BANK
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.06.2025, ALONG WITH RFA.401/2015 AND CONNECTED CASES, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:41684
C. R.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
FRIDAY, THE 13TH DAY OF JUNE 2025 / 23RD JYAISHTA, 1947
RFA NO. 402 OF 2015
AGAINST THE JUDGMENT DATED 31.01.2015 IN OS NO.479 OF 2012 OF I
ADDITIONAL SUB COURT,KOZHIKODE
-----
APPELLANTS/PLAINTIFFS:
1 M/S. VEEKAY TEA CO.(P) LTD.,
ITS REG. OFFICE AT BUILDING NO.19/2026 4TH FLOOR,
INDUS AVENUE, KALLI ROAD, KOZHIKODE REP. BY ITS
AUTHORIZED SIGNATORY MS.SABIRA RASHEED, AGED 55 YEARS,
D/O.MOHAMED KUTTY.
2 MS. TRIO PROPERTY DEVELOPERS (P) LTD
REG. COMPANY WITH ITS OFFICE AT BUILDING NO.19/2026,
4TH FLOOR, INDUS AVENUE, KALLAI ROAD, KOZHIKODE,
REP. BY ITS AUTHORIZED SIGNATORY, V.K.MOHAMMED ASHARAF,
AGED 55 YEARS, S/O.MOHAMED KUTTY.
BY ADVS.
SHRI.BIJU ABRAHAM
SRI.B.G.BHASKAR
RESPONDENT/DEFENDANT:
* VIJAYA BANK,
ITS HEAD OFFICE AT BUILDING NO.41/2, M.G.ROAD,
BANGLORE-560 001, (AND A BRANCH AT CHALAPURAM, CALICUT,
REPRESENTED BY ITS GENERAL MANAGER, HAVING HIS OFFICE
AT THE SAME ADDRESS, ADDRESS FOR SERVICE ON THE PARTIES
IS THE SAME)
2025:KER:41684
RFA NO. 402 OF 2015 -2-
*[THE NAME OF THE 1ST RESPONDENT IS CORRECTED AS "BANK OF BARODA"
INSTEAD OF "VIJAYA BANK" VIDE ORDER DATED 17.03.2025 IN IA
NO.1/2025 IN RFA NO.399/2015]
BY ADV SMT.LATHA ANAND,SC, VIJAYA BANK
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.06.2025, ALONG WITH RFA.401/2015 AND CONNECTED CASES, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:41684
C. R.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
FRIDAY, THE 13TH DAY OF JUNE 2025 / 23RD JYAISHTA, 1947
RFA NO. 404 OF 2015
AGAINST THE JUDGMENT DATED 31.01.2015 IN OS NO.482 OF 2012 OF
I ADDITIONAL SUB COURT, KOZHIKODE
-----
APPELLANTS/PLAINTIFFS 1 TO 3:
1 M/S. ARJ RUBBER PLANTATIONS,
REG. COMPANY WITH ITS OFFICE AT BUILDING NO.19/2026,
4TH FLOOR, INDUS AVENUE, KALLAI ROAD, KOZHIKODE REP.
BYITS AUTHORIZED SIGNATORY MS.SABIRA RASHEED,
D/O.MOHAMED KUTTY.
2 M/S.VEEKAY TEA CO. (P) LTD. ITS REG. OFFICE AT
BUILDING NO.19/2026, 4TH FLOOR, INDUS AVENUE, KALLI
ROAD, KOZHIKODE REP. BYITS AUTHORIZED SIGNATORY
MS.SABIRA RASHEED, AGED 55 YEARS, D/O.MOHAMED KUTTY.
3 M/S. TRIO PROPERTY DEVELOPERS (P) LTD.,
REG. COMPANY WITH ITS OFFICE AT BUILDING NO.19/2026,
4TH FLOOR, INDUS AVENUE, KALLAI ROAD, KOZHIKODE, REP.
BYITS AUTHORIZED SIGNATORY, MS.MOHAMMED ASHARAF, AGED
55 YEARS, S/O.V.K.MOHAMED.
BY ADVS.
SHRI.BIJU ABRAHAM
SRI.B.G.BHASKAR
2025:KER:41684
RFA NO. 404 OF 2015 -2-
RESPONDENTS/DEFENDANT & 4TH PLAINTIFF:
*1 VIJAYA BANK
ITS HEAD OFFICE AT BUILDING NO.41/2, M.G.ROAD,
BANGLORE- 560 001, (AND A BRANCH AT CHALAPURAM,
CALICUT, REPRESENTED BY ITS GENERAL MANAGER, HAVING HIS
OFFICE AT THE SAME ADDRESS, ADDRESS FOR SERVICE ON THE
PARTIES IS THE SAME)
2 V.K.MOHAMMED RASHEED, AGED 62 YEARS, S/O.V.K.MOHAMMED,
RESIDING AT "WHITE HOUSE", PANICKER ROAD, NADAKKAVU,
CALICUT 673 011.
*[THE NAME OF THE 1ST RESPONDENT IS CORRECTED AS "BANK OF BARODA"
INSTEAD OF "VIJAYA BANK" VIDE ORDER DATED 17.03.2025 IN IA
NO.1/2025 IN RFA NO.404/2015]
BY ADV SMT.LATHA ANAND,SC, VIJAYA BANK
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.06.2025, ALONG WITH RFA.401/2015 AND CONNECTED CASES, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:41684
C. R.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
FRIDAY, THE 13TH DAY OF JUNE 2025 / 23RD JYAISHTA, 1947
RFA NO. 406 OF 2015
AGAINST THE JUDGMENT DATED 31.01.2015 IN OS NO.481 OF 2012 OF
I ADDITIONAL SUB COURT, KOZHIKODE
-----
APPELLANTS/PLAINTIFFS:
1 M/S. ZAKEER INVESTMENT(P) LTD.,
REGISTERED COMPANY,ITS REG.OFFICE AT BUILDING
NO.19/2026,4TH FLOOR,INDUS AVENUE,KALLAI
ROAD,KOZHIKODE,REPRESENTED BY ITS AUTHORISED SIGNATORY,
V.K.ZAKEER HUSSAIN, AGED 49 YEARS,S/O.V.K.MOHAMED.
2 MS TRIO PROPERTY DEVELOPERS (P) LTD.
REG.COMPANY WITH ITS OFFICE AT BUILDING NO.19/2026,4TH
FLOOR,INDUS AVENUE KALLAI ROAD,KOZHIKODE,REPRESENTED BY
ITS ATHORISED SIGNATORY V.K.MOHAMMED ASHARAF,
AGED 55 YEARS, S/O.V.K.MOHAMED.
BY ADVS.
SHRI.BIJU ABRAHAM
SRI.B.G.BHASKAR
RESPONDENT/DEFENDANT:
* VIJAYA BANK
ITS HEAD OFFICE AT BUILDING NO.41/2,M.G.ROAD,
BANGALORE-560 001.(AND A BRANCH AT CHALAPURAM,CALICUT
REPRESENTED BY ITS GENERAL MANAGER,HAVING HIS OFFICE AT
THE SAME ADDRESS,ADDRESS FOR SERVICE ON THE PARTIES IS
THE SAME).
2025:KER:41684
RFA NO. 406 OF 2015 -2-
*[THE NAME OF THE 1ST RESPONDENT IS CORRECTED AS "BANK OF BARODA"
INSTEAD OF "VIJAYA BANK" VIDE ORDER DATED 17.03.2025 IN IA
NO.1/2025 IN RFA NO.404/2015]
BY ADV SMT.LATHA ANAND,SC, VIJAYA BANK
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.06.2025, ALONG WITH RFA.401/2015 AND CONNECTED CASES, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:41684
SATHISH NINAN & C. R.
P. KRISHNA KUMAR, JJ.
= = = = = = = = = = = = = = = = = =
R.F.A. Nos.401, 399, 402, 404 & 406 of 2015
= = = = = = = = = = = = = = = = = =
Dated this the 13th day of June, 2025
J U D G M E N T
Sathish Ninan, J.
The suits for money were dismissed by the trial
court. The plaintiffs are sister concerns. The defendant
in all the suits is a nationalised Bank. The respective
plaintiffs are in appeal.
2. Since the facts and evidence are identical and
the law involved is the same, they are being considered
together and are being disposed of under this common
judgment.
3. For resolution of the issue involved, much
details on the facts are unnecessary. The claims in
these suits are for damages resulted to the plaintiffs
consequent on the alleged negligent encashment of the
plaintiffs' cheques by the defendant Bank. The
plaintiffs had various accounts with the defendant Bank,
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
including, current account, cash credit account, and
savings account. The allegation is that the cheques of
the plaintiffs containing the forged signatures of the
authorised signatory, were negligently encashed by the
Bank. Though a total number of 47 cheques were so
encashed, payments of only 32 cheques have gone to third
parties, resulting in loss to the plaintiffs. The suits
are for realisation of the value of the cheques, the
proceeds of which went to third parties.
4. The defendant denied the allegation of
negligence. It was contended that the cheques were
encashed only after following all the procedural
formalities. It was claimed that the suit is time-
barred. It was further contended that the suit is bad
for non-joinder of necessary parties, on the failure to
implead the employees of the plaintiffs, who committed
the alleged fraud.
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
5. The trial court negatived the plea of limitation
and non-joinder of parties. However, it was held that
there is lack of pleadings with regard to the fraud, and
also that the plaintiffs failed to prove the allegations
levelled. Accordingly, the suit was dismissed.
6. We have heard Sri.B.G.Bhaskar, the learned
counsel for the appellants-plaintiffs and Smt.Latha
Anand, the learned Standing Counsel assisted by Adv.
Vishnu S. for the respondent-Bank.
7. The points that arise for determination are: -
(i) On whom lies the burden of proof regarding the alleged forgery
and the negligent encashment of cheques?
(ii) Has the burden of proof been discharged by the party upon
whom it rests?
(iii) Is the finding of the trial court that the plaintiffs have failed
to prove their cases, sustainable on the materials on record?
8. At the very outset we are to notice that the
suit is founded upon the alleged negligence of the Bank
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
in having encashed the cheques of the plaintiffs which
contained forged signature of their authorised
signatories. The suit is not one alleging fraud against
the defendant. We have mentioned this before proceeding
to consider the pleadings and evidence since, a reading
of the judgment of the trial court indicates that the
Court has proceeded as if the allegation against the
defendant is or includes, fraud.
9. The plaints in the respective suits are almost
identical. The averment is that, the cheques which did
not contain the "true signature" of the authorised
signatory were negligently encashed by the Bank, and the
amounts were paid out to third parties, resulting in
loss to the plaintiffs. The allegation is that the
signatures were forged, and due to the negligence of the
defendant, they failed to notice the same. This resulted
in encashment of the cheques and loss to the plaintiffs.
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
When the plaintiffs allege that the signatures in the
cheque were forged, the initial burden necessarily rests
upon them to prove the same.
10. In the written statement, the allegation of
negligence was denied. It was also pleaded that all the
procedures and formalities for passing of a cheque were
complied with. However, conspicuously, there is no
denial of the plaint allegation that the cheques did not
contain the true signatures of their signatories. There
is only a vague and general statement that all the
prescribed procedures and formalities were complied with
before the passing of the cheques by the Bank.
11. PW1 is the 4th plaintiff in one of the suits and
is the auditor of the other plaintiffs. In his proof
affidavit he had categorically sworn to that the
signatures on the cheques were forged and that the
defendant was negligent in verifying the same. However,
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
in his cross-examination not even a suggestion is put to
him that the signatures in the cheques in question were
not forged or were not at variance with the signatures
of the respective authorised signatories, much less, a
denial.
12. Thus, we find that the plaintiffs' case that
the signatures in the cheques were not those of their
authorised signatories and were forged, remains
unchallenged.
13. Exts.A1 and A2 are copies of the reports
submitted by the Vigilance Officer of the Bank, on
investigation into the incidents. Exts.A1 and A2 were
obtained by the plaintiffs under the Right to
Information Act. In the written statement, the
contention is that the report was submitted by the
Vigilance Officer without following the procedures
prescribed, and hence it cannot be relied upon. The
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
correctness of the contents of the report etc., are also
denied. The relevant pleading reads thus: -
"..... The document produced along with the plaint is incorrect, inadmissible
and cannot be marked in evidence. The vigilance officer has submitted the
report without following the procedures prescribed under law and therefore
cannot be relied on in deciding the case. The contents in the said report so far
as it is against the defendant if any is strongly denied."
Admittedly, Exts.A1 and A2 are copies of the
investigation reports by the Vigilance officer of the
defendant. The genuineness of Exts.A1 and A2 is not
disputed. The originals of Exts.A1 and A2 are with the
defendant. Exts.A1 and A2 reports were produced by the
plaintiffs along with the respective plaints and form
part of the pleadings.
14. Exts.A1 and A2 reports are to the effect that
the signatures on the relevant cheques, purported to be
that of the authorised signatory, vary with the specimen
signatures available in the Bank, and that in certain
cases, even the specimen signatures were not available
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
in the Bank. The contention of the defendant is that the
officer who prepared the reports did not follow the
procedures prescribed, and therefore, they cannot be
relied upon. What are the procedures that were not
adhered to by the concerned officer, rendering the
documents unreliable or unacceptable, have not been
pleaded or proved.
15. The learned counsel for the Bank would argue
that it was incumbent upon the plaintiffs to have
examined the maker of Exts.A1 and A2. We are unable to
agree with the learned counsel. When the Bank claimed
that what is stated in their reports, which are before
the Court, are not correct and cannot be relied upon, it
was for them to prove the contention. The Bank ought to
have established that the findings and conclusions
arrived at in Exts.A1 and A2 reports are not correct.
The burden was necessarily upon the Bank. No attempt was
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
made to discharge the same.
16. We have already noticed supra that the
plaintiffs' case that the signatures in the cheques were
not those of their authorised signatories remained
unchallenged. Exts.A1 and A2 reports, coupled with the
evidence of PW1, and the finding as above, would prima
facie prove that the Bank had encashed cheques
containing forged signatures of the authorised
signatories of the plaintiffs. The materials available
with the Bank viz. the cheques in question, the specimen
signatures etc. are not produced before the court. Non-
production of the same may not be of much significance
since the Bank itself does not have a contention that
the signatures were not forged. Again, as noticed,
Exts.A1 and A2 speak otherwise. On the above
discussions, we have no hesitation in finding that the
Bank was negligent in having encashed the plaintiffs'
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
cheques with the forged signatures of its authorised
signatories.
17. The Bank has a contention that the forgery was
committed by one of the employees of the plaintiffs, and
the Bank could not be made liable for the same. Such
contention cannot stand in the teeth of the law laid by
the Apex Court on the liability of a Banker on
encashment of a forged cheque. The law has been
elucidated by the Apex Court in Canara Bank v. Canara Sales
Corporation and Ors. [1987 (2) SCC 666]. The Apex Court held thus: -
"When a cheque duly signed by a customer is presented before a bank
with whom he has an account there is a mandate on the bank to pay the
amount covered by the cheque. However, if the signature on the cheque is
not genuine, there is no mandate on the bank to pay. The bank, when it
makes payment on such a cheque, cannot resist the claim of the customer
with the defence of negligence on his part such as leaving the cheque
book carelessly so that third parties would easily get hold of it . This is
because a document in cheque form, on which the customer's name as
drawer is forged, is a mere nullity. The bank can succeed only when it
establishes adoption or estoppel."
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
In Canara Bank case (supra), the Apex Court had referred to
its earlier judgment in Bihta Co-operative Development Cane marketing
Union Ltd. & Ors. v. The Bank of Bihar & Ors. (AIR 1967 SC 389) wherein, the
negligence of the customer was set up as a defence by
the Banker. Therein it was held,
"If the signatures on the cheque or at least one of the signatures are or is not
genuine, there is no mandate on the bank to pay and the question of any
negligence on the part of the customer, such as leaving the cheque book
carelessly so that a third party could easily get hold of it would afford no
defence to the bank".
In Canara Bank case (supra) the Apex Court held: -
"..... For negligence to constitute an estoppel it is necessary to imply the
existence of some duty which the party against whom estoppel is alleged
owes to the other party. There is a duty of sorts on the part of the
customer to inform the bank of the irregularities when he comes to know
of it. But by mere negligence one cannot presume that there has been a
breach of duty by the customer to the bank. The customer should not by
his conduct facilitate payment of money on forged cheques. In the absence
of such circumstances, mere negligence will not prevent a customer from
successfully suing the bank for recovery of the amount."
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
Further: -
"..... Whenever a cheque purporting to be by a customer is presented
before a bank it carries a mandate to the bank to pay. If a cheque is
forged there is no such mandate. The bank can escape liability only if it
can establish knowledge to the customer of the forgery in the cheques....."
18. The incidents in relation to the cheques in
question occurred within a period of three months. As
soon as it was detected by the plaintiffs, steps were
taken. It could not be established, nor was it attempted
to prove, that the plaintiffs had knowledge of the
forgery prior to its encashment. Hence it can only be
concluded that the Bank is liable for having effected
payment of the forged cheques.
19. The learned counsel for the Bank would next
draw our attention to paragraph 6 of the plaint in
O.S.481/2012 and contend that, as stated therein, part
of the amounts withdrawn under the forged cheques were
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
paid into the account of the first plaintiff Company
therein. How much was the amount that was so brought
back into the account has not been mentioned, and the
suit is instituted for the amounts covered under all the
cheques. There could not be such a blanket claim, it is
argued.
20. The contention has no force. The plaint
specifically states that the suit has been filed only in
respect of the amounts that were "paid out", causing
loss to the plaintiffs. Though altogether 47 cheques
with forged signatures were encashed, payments of only
32 cheques have gone out to third parties. There is no
claim for the amounts brought into the account of the
plaintiffs. The claim is only for the amounts lost.
Thus, the said argument also fails.
RFA Nos.401, 399, 402, 404 &
406 of 2015
2025:KER:41684
21. As was noticed earlier, the trial court has
gone on an entirely different tangent, both on the plea
of the plaintiffs and also on the burden of proof. On
the foregoing discussions, we find that the trial court
judgment is liable to be interfered with. The plaintiffs
are entitled for a decree, as sought.
22. With regard to the rate of interest, the
plaintiffs have claimed 9% interest till the date of
suit and at the same rate till realisation. Considering
the rate of interest prevalent in banking transactions,
we are of the opinion that the rate of interest from the
date of suit could be fixed at 6%.
Resultantly, the appeals are allowed. The decree
and judgment of the trial court are set aside. The suits
will stand decreed allowing the plaintiffs to realise
the amounts claimed in the plaints, with interest at the
RFA Nos.401, 399, 402, 404 &
406 of 2015
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rate of 6% per annum from the date of suit till
recovery. The plaintiffs-appellants shall be entitled
for costs throughout.
Sd/-
SATHISH NINAN
JUDGE
Sd/-
P. KRISHNA KUMAR
JUDGE
kns/-
//True Copy//
P.S. To Judge
