IMPORTANT POINT
When an improper payment is made by bank or banker having been misled by negligence or other fault on party of drawer, then banker can set up such negligence as defence to secure protection under Section 85 of Negotiable Instruments Act.

R.V. More, J.—The petitioner, by filing the aforesaid petition takes exception to the common judgment and order dated 20.11.1997 passed by Appellate Bench of Small Causes Court, Bombay, in the full Court Application Nos. 111/1996, 112/1996, 113/1996 and 114/1996 thereby reversing the judgment and decree passed by the trial Court in Summary Suit Nos.109/2166/1988, 2110/2167/1988, 2111/2168/1988 and 2112/2169/1988 respectively. The brief facts giving rise to the present petition are as follows:

2. The petitioner is a partnership Firm carrying on the business of Pharmaceuticals Machinery and Fabrication work. In the year 1978, the petitioner Firm had opened an account with the respondent Bank at Worli Branch. The petitioner’s account was operated by partners namely Amrutlal Chaturlal Panchal and brother Babulal Chaturlal Panchal. Usually, Amrutlal Panchal used to sign the cheques and in his absence, Babulal Panchal used to sign it. The respondent Bank issued to the petitioner cheque book with 50 leaves bearing Nos. 288451 to 288500. Out of these cheques, 4 cheques bearing Nos. 288478, 288479, 288496 and 288497 were stolen between 15.3.1985 and 26.4.1985. The petitioner got knowledge regarding the theft of these cheques in the month of January, 1986. After verification, the petitioner found that that the said cheques were not issued to any party. The petitioner, after enquiry with the Bank Officers, gathered the knowledge that the said cheques were bearer cheques and the same were drawn in favour one Ali Khan and Raj Kumar. It was the case of the petitioner that none of the partners of the Firm has signed the cheques and the Firm has no dealings with the parties by name Ali Khan and Raj Kumar. The signatures made on the said cheques are forged one and the respondent Bank, without verifying the same, made payment to the bearer of the cheques. The petitioner, thereafter, made police complaint. The petitioner also preferred complaint to the Reserve Bank of India. The amount under the above said forged cheques was to the extent of Rs. 31,000 (Rs. Thirty One Thousand Only). According to the petitioner they suffered loss because of gross negligence on the part of the respondent Bank and hence filed the above said four Summary suits for recovery of damages.

3. The respondent Bank contested the claim of the petitioner by filing written statement. The respondent contended that four cheques in question were presented on the counter of the Bank on 26.4.1985 and 27.4.1985 for payment and the said cheques were paid by respondent Bank according to the apparent tenor of the instrument in good faith after verifying the contents of the cheques and signatures thereon, which tallied with the specimen signatures of one of the partners of the Firm namely Amrutlal Panchal and the respondent Bank specifically denied that they have committed gross negligence in discharging their duties while clearing the cheques in question.

4. All the four summary suits came to be disposed of by the learned Small Causes Court, by common judgment dated 15.10.1996 and the same were decreed. The respondent Bank was directed to pay to the petitioner an amount of Rs. 31,000 (Rs. Thirty One Thousand Only) as claimed in the suit with interest at the rate of 6% p.a. The respondent Bank being aggrieved, preferred four Full Court applications, which came to be disposed of by the Appellate Bench of the Small Causes Court by the order impugned in the petition. By this order the judgment and order passed by the learned trial Judge in Summary Suits came to be reversed and the Summary Suits were dismissed.

5. Having heard learned counsel for the respective parties and having gone through the judgments by the Courts below, I am of the considered view that no interference is required in the impugned order in my jurisdiction under Article 227 of the Constitution of India.

6. The petitioner claimed loss and damages against the respondent Bank or the ground that the respondent Ba