The main legal point established in the judgment is that a bank's negligence in opening an account and allowing withdrawal of substantial sums within days of opening the account can lead to the bank's liability for the losses suffered by the account holder.

JUDGMENT

Mini Pushkarna, J. The present Regular First Appeal has been filed under Section 96 read with Section 151 of the Code of Civil Procedure, 1908 (CPC) against the judgment and decree dated 23.05.2014 passed in Suit bearing CS No. 267/2014 (Old Suit No. 179/05) passed by the Court of Additional District Judge (ADJ)- 17 (Central), Tis Harazi Courts. By way of the impugned judgment and decree, the ld. Trial Court has decreed the suit for recovery filed on behalf of respondent No.1. The appellant along with respondent No.2 herein has been held to be jointly and severally liable to pay an amount of Rs.6,03,083/- as principal amount, along with interest @12% per annum from the date of filing of the suit by respondent No.1 till the date of realisation of the decretal amount.

2. The facts in brief that emerge from the pleadings are that the respondent No.1 filed a suit for recovery against the appellant bank and respondent No.2. The suit was filed by respondent No.1 on the premise that the respondent No.1 suffered huge monetary losses on account of gross negligence on the part of the appellant bank in opening the bank account of respondent No.2 in the fictitious name of respondent No.1, by not verifying the background of respondent No.2; and further failing to scrutinise the supporting documents submitted by respondent No.2 at the time of submission of account opening form to the appellant bank.

3. As per the plaint, respondent No.1 is a proprietorship firm and has been doing trading business since long, dealing in food grains and pulses etc. through Sh. Ramanand Jain as the proprietor of the said proprietorship firm.

4. M/s Pawan Kumar Mukesh Kumar having its office at Kolkata sent a cheque bearing No.000073 dated 14.09.2004 drawn on Hongkong and Shanghai Banking Corporation in favour of respondent No.1 firm for an amount of Rs.5,06,420/-, in discharge of its financial liability. M/s SP Rai and Company also sent two drafts bearing Nos. 979923 and 979924, both dated 14.09.2004 for an amount of Rs.48,000/- and Rs.47,663/- respectively in the name of respondent No.1 firm, issued by State Bank of India, in discharge of its financial liability towards respondent No.1 firm.

5. The aforesaid cheques and demand drafts were sent from Kolkata to the office of respondent No.1 in Delhi through a courier agency, namely, Vayu Courier Service. However, in transit to Delhi, the said instruments were stolen along with other parcels from the custody of Vayu Courier. The matter was reported at Police Station Lahori Gate by way of registration of First Information Report (FIR) dated 16.09.2004 under Sections 379/411/420/468/471/120-B of Indian Penal Code, 1860 (IPC).

6. During the course of investigation, it was found that one of the accused in the FIR, i.e., respondent No.2 herein, had opened a fake bank account on 17.09.2004 in the name of M/s Ganpati Traders acting as a sole proprietor of the firm. He deposited the two stolen demand drafts and Rs.5,000/- cash on the same date. Thereafter, the respondent No.2 submitted the stolen cheque on 20.09.2004. On the next day, i.e., 21.09.2004 he withdrew Rs.3.5 Lakhs and subsequently on 24.09.2004, he withdrew Rs.2.5 Lakhs by giving two self cheques.

7. Upon discovery of the aforesaid facts during the course of its investigation, the police arrived at the appellant bank and seized the self cheques and account opening form of respondent No.2. Subsequently, on gaining knowledge of the aforesaid facts, respondent No.1 herein sent a legal notice dated 30.11.2004 to the appellant bank for recovery of its losses claiming that respondent No.2 was assisted by one of the employees of the bank, Mr. Ashish Goyal to open the account, which shows collusion. Further, the bank had accepted fake or forged documents without an introducer, which showed the negligence of the bank. However, by its reply dated 22.12.2004, the appellant Bank claimed that it had opened the account as per Reserve Bank of India (RBI) norm