Bank Of Ceylon V. Kolonnawa Urban Council

1949 Present : Dias and Windham JJ.

BANK OF CEYLON, Appellant in No. 421, and KOLONNAWA URBAN COUNCIL, Respondent

S. C. 421-432-D. C. Colombo, 16,562 M

Banker and customer-Banker paying forged cheque-On whom does loss fall?- Bills of Exchange Ordinance (Cap. 68), s. 24--Onus-Estoppel.

A banker who pays out money on a cheque bearing the forged signature of a customer cannot charge the amount so paid out to the account of the customer, unless facts or circumstances exist which in law preclude or estop the customer from pleading that his signature was forged.

Where a banker sets up the genuineness of a signature which is alleged by the customer to be forged, the burden of proof is on the banker.

" As between a bank and its customer there is no implied agreement by the latter to take precautions, in the general course of carrying on his business, against forgeries on the part of his servants. Such estoppels will arise if, after knowledge of a forgery, the customer does anything to mislead the bank and the position of the bank is thereby prejudiced."

APPEAL and cross-appeal from a judgment of the District Judge, Colombo

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