V. S. DESHPANDE, J.

( 1 ) THIS is a blatant case of fraud practised on banks by their officials to the prejudice of the banks as well as the customer or the drawer of a cheque. The liability of the banks to the customer was never in doubt. But the further question how banks should deal with the bank officials who defraud both the banks and their customers also deserves to be considered.

( 2 ) THE appeal is by the Punjab National Bank which was Defendant 1 in the suit filed by Durga Devi, Respondent 1 herein. Respondents 2 and 3. the National and Grindlays Bank Limited and Shri Satya Pal Madan were Defendants 2 and 3 in the suit. A decree for Rs. 18,000 against the National and Grindlays Bank has been passed but the said Bank has not appealed against it. The Punjab National Bank and S. P. Madan have been held to be jointly and severally liable with the National and Grindlays Bank to pay these Rs, 18,000. Further, they are also held liable to pay. Rs. 2. 835 as interest on these Rs. 18,000. The decree was in favour of the plaintiff.

( 3 ) PLAINTIFF Durga Devi wanted to keep Rs. 18,000 in fixed deposit in the State Bank of India. She, therefore, issued a crossed cheque No. 821064 for

Click Here to Read the rest of this document