JUDGMENT

S.C. AGRAWAL, J. :—Leave granted.

2. We have heard learned counsel for the parties.

3. Bank of Maharashtra, hereinafter referred to as the appellant-bank, is a nationalised bank having a branch providing banking facilities at Nariman Point at Bombay. Race 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. 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 signatures 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. Thereupon the appellant-bank lodged a First Information Report 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 respondents 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 :

"(a) 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.

(b) to 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."

4. In 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 :

"I say that the employees of the petitioner No.1 company regularly visited the Branch for the banking transaction, and one of such employee is one Mr. Jadhav. On 26th of August, 1992 a cheque bearing No. 425395 for Rs. 95,000/- was presented for cash withdrawal. I thereupon asked the said Mr. Jadhav, who had come to collect the payment, to sign on the reverse of the cheque in front of me, which was duly done by him. I