Valmiki J. Mehta, J.

1. The challenge by means of this Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 is to the impugned judgment dated 29.1.2002 which has dismissed the suit of the Appellant/Plaintiff qua the Respondent No. 1 herein. The suit was filed for recovery of amounts of two cheques which were collected by the Respondent No. 1 for its customer/Respondent No. 2/Defendant No. 2/Sh. Kumar Shekhar. It was found subsequently that the signatures on these two cheques of the customer of the Appellant/Plaintiff were forged by the Respondent No. 2/Defendant No. 2.

2. The facts of the case are that the Defendant No. 3/Respondent No. 3, M/s. Ramji Lal Ram Saroop had an account with the Appellant/Plaintiff. The Respondent No. 2/Defendant No. 2 wrongly obtained two cheques bearing numbers 338587 and 338595 of the Respondent No. 3/Defendant No. 3 and presented it for collection by filling the amounts of Rs. 44,438/- and Rs. 48,682/- respectively. When this fraud was discovered by the customer of the Appellant, i.e. Defendant No. 3, the Appellant was forced to make payment of these amounts to its customer inasmuch as a forged cheque is no mandate to pay in the eyes of the law. After paying the amount its customer, the Appellant/Plaintiff raised the appropriate demand on the Respondent No. 1, which refused to pay the amount, resulting in filing of the subject suit.

3. The only issue relevant to the disposal of the present appeal is as to whether the Respondent No. 1 was guilty in opening and operating the account of its customer/Defendant No. 2/Respondent No. 2. If there is no negligence in opening the account or in operating the account then the Respondent No. 1 will not be liable, however, in case of negligence in opening the account or operating of the account, the Respondent No. 1 would be liable.

4. The only basis by which the Respondent No. 1 opened the account of its customer Sh. K. Shekhar/Defendant No. 2/Respondent No. 2 was a letter dated 12.11.1992 allegedly issued by M/s. Punjab National Bank, G.T. Road Branch, Ghaziabad, UP. This letter has been exhibited in the Trial Court as Ex.DW1/P6. Learned Counsel for the Appellant/Plaintiff argued that there was quite clearly negligence of the Respondent No. 1 in opening and operating of the account of the Respondent No. 2/Defendant No. 2 on account of the following factors:

i) The letter exhibited as Ex.DW1/P6 was not addressed to the Respondent No. 1 and also was not a letter, as per its contents for authorization to open a bank account.

ii) It is argued further that even assuming that this letter can be taken as an introduction for opening of an account in a bank, yet, the Respondent No. 1 was bound to have made follow up inquiries as to the genuineness of this letter, and admittedly, nothing has been filed on record to show that there was a confirmation taken in writing from Punjab National Bank, G.T. Road Branch, Ghaziabad, UP as to the authenticity of this letter.

iii) There was negligence in operating the account because firstly, the account was opened on 13.11.1992 with a cash deposit of Rs. 6,000/-. Secondly, the first cheque credited in the account was the forged cheque of a substantial amount Rs. 44,438/- and which amount was withdrawn in one go by withdrawing a cash of Rs. 45,000/- within three days on 17.11.1992. Thirdly, it is argued that even the second cheque was deposited immediately thereafter on 20.11.1992 and more or less the entire amount of this cheque was again withdrawn on 23.11.1992 i.e. by withdrawing a cash amount of Rs. 47,000/-. It was therefore concluded that opening of the account by cash deposit, immediate deposit in the account of a large amount disproportionate to the amount by which the account was opened, withdrawal of the entire amount of the first cheque deposited, again deposit of a cheque of a large amount within 3 days thereafter and withdrawing of the amount of even of this second cheque immediately on the said