The plaintiff must prove that the payment was made under a mistake and that the defendant banks acted negligently to seek recovery under Section 72 of the Indian Contract Act, 1872.

( 1 ) STATE Bank of India has filed this appeal against the judgment and decree dated 7th July, 1976, passed by the learned Additional District Judge, delhi, thereby dismissing the suit filed by the bank for the recovery of Rs. 40,550/- against the United commercial Bank Ltd. and nine others.

( 2 ) CASE of the plaintiff/appellant Bank is that the Land Acquisition Collector, Delhi was maintaining a current account with its Tis Hazari branch since 1959. They had issued a cheque book to the Land Acquisition Collector. On 29th December, 1964, defendant No. l presented a cheque bearing no. OC/16-383576 dated 12. 12. 1964 in the sum of rs. 40,550/--, apparently drawn by the Land Acquisition collector, Delhi in favour of a certain Ram Avtar son of Ram Chander for clearing and the plaintiff made the payment of the said amount to the defendant No. l Bank. However, on or about January 18, 1965 the plaintiff received a communication from the Land Acquisition collector, Delhi, that the cheque leaf bearing the aforesaid cheque No, among others, had been stolen by some one. On enquiry, the plaintiff discovered that the payment of cheque in question taking it to be genuine had been made by mistake to the. first defendant and, therefore, the plaintiff was entitled to recover the amount from the first defendant under the provisions of Section 72 of Indian Contract Act, 1872 or in the alternative from defendant No. 2 if the defendant No. l had paid the amount to defendant No. 2 bank. It was also alleged that the cheque in question was endorsed by the third defendant frauduently in the name of and signing as Ram Avtar pursuant to common design/conspiracy with defendant Nos. 4 to 10 in order to defraud the plaintiff bank.

( 3 ) DEFENDANT No. I Uco Bank contested the suit primarily on the ground that the alleged mistake under which the plaintiff claimed to have made the payment of the cheque in clearing was not elucidated. Defendant No. l denied its liability to pay any amount to the plaintiff and explained that the defendant No. 2 who is a sub-member of clearing presented the cheque in question to defendant No. 1 which in turn presented for clearing after affixing its stamp and as such there was no responsibility of defendant No. i because there was no occasion or means for defendant No. l to find out if the cheque purported to be drawn by the land Acquisition Collector, Delhi, was not a genuine one. In any case the amount of the cheque so collected had been remitted to defendant No. 2. It was denied that the cheque in question was stolen or was not. genuine.

( 4 ) DEFENDANT No. 2 also contested the suit almost, on the identical defence as defendant No. l and denied that the cheque in question was not genuine or there was any negligence or misconduct on the part of the answering defendant in dealing with the account of ram Avtar who had deposited the cheque in question. It was also stated that the defendant was protected under the provisions of law and the plaintiff was not entitled to recover the suit amount by invoking the provisions of Section 72 of the Indian Contract Act. ""

( 5 ) DEFENDANT No. 3 to 10 in their separate written statement refuted the entire allegations of the plaint and denied the allegations of conspiracy or that any attempt was made by them to defraud the plaintiff bank.

( 6 ) ON the pleadings of the parties, the learned trial court framed the following 13 issues;-

1. Whether the plaint has been properly singed and verified by a duly authorised and competent person? 2. whether the suit is within time? 3 whether the Land Acquisition Collector is necessary and proper party? 4 whether the plaintiff is estopped from claiming the suit amount? (Onus objected to) 5 Whether there is a privity of Contract between the plaintiff and defendants 3 to 10, if so, its effect? 6 Whether any fraud has been committed in getting the cheque in question encashed? if so, which of the defendants has committed the same? " 7. whether the che