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KSHITIJ SHAILENDRA
Punjab National Bank – Appellant
Versus
Allen And Alvan Private Ltd. – Respondent
JUDGMENT :
(Kshitij Shailendra, J.)
THE TWO APPEALS
1. These two second appeals arise out of consolidated judgment passed by the trial court and the first appellate court in the following proceedings:-
(ii) Original Suit No.176 of 1991 (M/s Allen and Alvan Private Ltd Vs. Punjab National Bank and two others) giving rise to Civil Appeal No.146 of 2002 (M/s Allen and Alvan Private Ltd Vs. Punjab National Bank and two others).
RESULT OF TRIAL PROCEEDINGS AND THE DECREE DRAWN
2. The trial court dismissed both the civil suits by a consolidated judgment dated 28.08.2002, however, two civil appeals were allowed by the first appellate court by consolidated judgment dated 07.08.2009. The decree impugned in these two appeals is a money decree drawn in favour of the plaintiff-respondent against the defendant-appellant bank.
PLAINT OF THE FIRST SUIT
3. Original Suit No.143 of 1991 (hereinafter referred to as the ‘first suit’) was filed claiming a decree for a sum of Rs.41,986.
The appellate court erred in finding bank negligence without expert evidence on signature comparison, reinstating the trial court's dismissal of the suits.
A dishonored cheque primarily for insufficient funds establishes liability under Section 138, while secondary reasons like signature discrepancies are irrelevant unless intent to defraud is proven.
The bank is liable for encashing cheques with forged signatures if it fails to prove compliance with procedural obligations.
A banker is liable for payment under a forged cheque only if found negligent; good faith and standard banking practices determine liability.
The judgment establishes the strict requirements for protection under the Negotiable Instruments Act, emphasizing the need for good faith, absence of negligence, and due diligence in banking transact....
Issuance of summons without conducting inquiry under Section 202 of the Cr.P.C. is impermissible, making the cognizance under Section 138 of the N.I. Act unsustainable.
A drawer of a cheque may incur liability under Section 138 of the Negotiable Instruments Act unless they can sufficiently rebut the statutory presumptions of consideration and debt.
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