CEYLON COMMERCIAL BANK VS. CEYLON TOBACCO CO. LTD

CEYLON COMMERCIAL BANK VS.
CEYLON TOBACCO CO. LTD

COURT OF APPEAL
SALAM J.
CA 872/95 (F)
DC 93650/M
JULY 21,2008

Bank - Customer relationship - Cheque forged - liability of the Bank to pay - Bills of Exchange Ordinance Section 24, Section 80 - Breach of duty of care? Conduct of the Bank - customer - account payee cheque -Paying in good faith - without negligence - burden to establish forgery on whom? Evidence Ordinance Section 114.

The Appellant Bank debited the respondent customer's currant with Rs. 5,926,786/- upon the presentation of 8 cheques. The respondent customer maintained that the debit entries made by the bank was wrongful, unlawful and made without authority or mandate of the customer - in as much as the cheques contained forged signatures of the authorized signatories - The Appellant Bank is liable to pay bank the aggregate amount on the cheques with interest.

The Appellant Bank contended that the disputed cheques were duly drawn and issued by or on behalf of the customer and appeared on the face to be so drawn, and that, the cheques were specially crossed with the endorsement "account payee" and the officers

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