IMPORTANT POINT
The appellate court erred in finding bank negligence without expert evidence on signature comparison, reinstating the trial court's dismissal of the suits.

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:-

(i) Original Suit No.143 of 1991 (M/s Allen and Alvan Private Ltd Vs. Punjab National Bank and two others) giving rise to Civil Appeal No.147 of 2002 (M/s Allen and Alvan Private Ltd Vs. Punjab National Bank and two others); and

(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.41,986.25 along with 24% interest per annum stating that the plaintiff, being a private company through Devinder Jit Singh Vadara (hereinafter referred to as the ‘Managing Director/M.D.’) was having current account No.4869 with the defendant-bank and a cheque bearing No. PYC 883200 dated 05.02.1988 covering a sum of Rs.24,410.60 had been wrongly cleared by the bank. Signatures of the Managing Director on the cheque were stated to be forged with a statement that an employee of the company, namely, Indrapal, in conspiracy with the bank officials, was instrumental in such clearance. A first information report was lodged by the Managing Director of the Company against Indrapal in July, 1988, later on, matter was transferred to the Crime Branch, Meerut. Negligence of the bank in clearing the cheque without comparing the signatures of the drawer was pleaded and the suit was instituted based upon a notice dated 19.08.1990 sent by registered post with a further statement that since limitation concerning the aforesaid cheque was going to expire, the suit was filed. In paragraph no. 4 of the plaint, fraudulent encashment of six more cheques was pleaded with a statement that the plaintiff reserved its rights to subsequently claim the amount of the said cheques together with interest.

PARTIES, INITIAL AND SUBSEQUENTLY IMPLEADED AND THE SECOND SUIT

4. The first suit was filed initially only against the bank. Later on, the aforesaid employee of the bank, namely, Indrapal, and the payee of the cheque, namely ‘Investment Corporation’ were impleaded as defendants no.2 and 3 sometime in the year 1995. In the meantime, another suit being Original Suit No.176 of 1991 (hereinafter referred to as the ‘second suit’) was instituted by the plaintiff-company, that too, initially only against the bank and, later on, the employee Indrapal and two payees, namely, ‘Ayodhya Investment Syndicate’ and ‘Investment Corporation’ were respectively impleaded as defendants no.2, 3 and 4 in the year 1995. The second suit was in respect of following six cheques: