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PETITIONER: BANK OF MAHARASHTRA

       Vs.

RESPONDENT: RICE SHIPPING & TRANSPORT CO. PVT. LIMITED & ANR.

DATE OF JUDGMENT16/02/1995

BENCH: AGRAWAL, S.C. (J) BENCH: AGRAWAL, S.C. (J) FAIZAN UDDIN (J)

CITATION:  1995 AIR 1368            1995 SCC  (3) 257  JT 1995 (3)   175        1995 SCALE  (1)785

ACT:

HEADNOTE:

JUDGMENT: S.C. AGRAWAL, J.: 1.   Leave granted. 2.   We have heard learned counsel for the parties. 3.Bank  of  Maharashtra,  hereinafter  referred  to  as  the appellant-bank,  is  a  nationalised bank  having  a  branch providing  banking  facilities at Nariman Point  at  Bombay. Race  Shipping and Transport Co. Pvt.   Limited,  respondent No. 1 therein, has been operating Current Account No. 318 at the  said branch of the appellant bank.  As per the  mandate of  respondent  No.  1 the said account is  to  be  operated jointly by G.L. Bhatia and Ashok Chattopadhyay, the Managing Director of respondent No. 1. One bearer cheque bearing  No. 425395 dated August 26, 1992 for a sum of Rs. 1,95,000/- was drawn  on the appellant-bank.  The said cheque was  encashed at the said branch of the appellant-bank on August 26,  1992 and the amount of Rs. 95,000/- was debited to the account of respondent No. 1. The case of the appellant-bank is that the said  amount was paid to one Jadhav, whose  signatures  were appended at the back of the cheque, and who was an  employee of respondent No. 1. The said cheque admittedly contains the signature  of G.L. Bhatia.  The other signature purports  to be   of  Ashok  Chattopadhyay,  the  Managing  Director   of respondent  No. 1. The said signature is on the face of  the cheque as well as on the back.  Respondent No. 1 claims that the  said  signature is not of Ashok Chattopadhyay  and  the same is forged.  This fact was brought to the notice of  the appellant-bank  by  respondent No. 1 on September  3,  1992. Thereupon the appellant-bank lodged a First Information Re- 177 port  with  regard  to the alleged forgery,  as  claimed  by respondent No. 1, at Police Station at Cuffe Parade,  Bombay on September 4, 1993 and the matter is being investigated by the police.  It is not disputed that the said cheque is from the Cheque Book issued to respondent No. 1 by the appellant- bank.   Respondent No. 1 claimed reimbursement of  the  said

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sum  of  Rs. 95.000/- from the appellant-bank on  the  basis that the signature of Ashok Chattopadhyay on the cheque  was forged  and thus the appellant-bank was liable to  reimburse the said amount paid by the appellant-bank from the  account of respondent No. 1 against the said cheque.  The said claim of  respondent No. 1 was contested by the appellant-bank  on the ground that the question whether the signature of  Ashok Chattopadhyay on the said cheque was forged was still  under investigation  and  till the said signature is found  to  be forged there was proper mandate for payment on the basis  of the said cheque.  Thereupon the respondent on April 21, 1993 filed  a Writ Petition (Writ Petition No. 1245 of  1993)  in the Bombay High Court wherein it has been prayed as under:               "(a)  Writ of mandamus or a Writ or  Order  or               direction  in  the nature  of  mandamus  under               Article 226 of the Constitution directing  the               Petitioner  bank  to reverse the  debit  entry               dated  26.8.1992  for Rs.  95,000/-  in  their               Current  A/C No. 318 or direct the  petitioner               Bank  to make payment of the respondent No.  1               Company  herein of a sum of Rs. 95,000/-  with               interest  thereon at the rate of 18% from  the               date  of  the said amount had  been  withdrawn               from the account.               (b)   to  direct  the  Petitioner  herein   to               credit   a   sum  of  Rs.  95,000/-   in   the               current,account No. 318 during the pendency of               the  Writ  Petition on the respondent  no.   1               herein furnishing an indemnity for the same." 4.   In  the said Writ Petition an affidavit dated  July  6, 1993 of Rajiv V. Pinglay, who is employed as Advance  Ledger Posting Machine Operator with the appellant bank, was  filed on  behalf of appellant bank.  In the said affidavit  it  is stated:               "I  say that the employees of  the  Petitioner               No. 1 company regularly visited the Branch for               the  banking  transactions, and  one  of  such               employees  is  one  Mr. Jadhav.   On  26th  of               August,  1992 a cheque bearing No. 425395  for               Rs.  95,000/-  was presented  for  cash  with-               drawal.   I  thereupon  asked  the  said   Mr.               Jadhav,  who  had come to collect the  pay  in               front  of me, which was duly done by  him.   I               say that I had seen the said Mr. Jadhav on few               other occasions prior to 26th August, 1992.  I               say  that on cheque being signed as  aforesaid               by  the  said Mr. Jadhav, as  per  the  normal               usual  banking practice, I posted  the  cheque               and sent it for further process in  accordance               with the usual practice in that behalf.  I say               that  the aforesaid signature of the said  Mr.               Jadhav  appears  on the copy  of  the  cheque‘               being Exhibit "B" to the petition." 5.   The  said  Writ  Petition was  placed  for  preliminary hearing before a Division Bench of the High Court on July 7, 1993 and the following order was passed on that date :               "P.C. : Rule.  The Respondents arc directed to               credit  sum of Rs.  Ninety Five Thousand  only               in   the  Current  Account  No.  318  of   the               Petitioners forthwith.               The Petitioner through their Counsel               178               gives undertaking to bring back the amount  if               Court so desires.               We have perused all papers and prima facie  we

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             are  satisfied  that  the Bank  did  not  take               precautions  before  making payment  of  large               amount.   The fact that cheque was  forged  is               not in dispute and the complaint filed by  the               Manager before the police nowhere claims  that               payment  was  made  to  any  employee  of  the               petitioners.   The  affidavit  filed  by  R.V.               Pinglay the cashier appears to be prima  facie               false and an after-thought.  " 6.   In accordance with the said order of the High Court the appellant-bank credited a sum of Rs. 95,000/- to the account of  respondent  No. 1 on July 9, 1993.   From  the  counter- affidavit of Capt.  Ashok Kumar Aggarwal filed on behalf  of respondent No. 1 it appears that respondent No. 1 has  with- drawn  a  substantial  part of the  said  amount  leaving  a balance of about Rs. 6001.65. 7.   Feeling aggrieved by the said order of the High  Court, the appellant-bank has filed this appeal. 8.   Shri Rana, the learned counsel for the  appellant-bank, in  the first place, has urged that the dispute between  the parties  relates to the liability of the  appellant-bank  to reimburse  respondent No. 1 the sum of Rs. 95,000/-  debited to  the account of respondent No. 1 on the basis  of  cheque No.  425395 dated August 26, 1992 that was encashed  by  the appellant-bank  which is claimed to be forged in  the  sense that  the  signature of Ashok  Chattopadhyay,  the  Managing Director of respondent No. 1, on the said cheque is  forged. The  learned  counsel has urged that the said  liability  is being fastened on the appellant-bank on the basis of the law governing banking operations and that the proper remedy  for enforcing  the  said liability is to file a civil  suit  and that it is not a matter which can be agitated through a writ petition under Article 226 of the Constitution.  It has also been urged that the matter involves adjudication of disputed questions  of fact inasmuch as the  appellant-bank  disputes that  signature  of  Ashok Chattopadhyay on  the  cheque  is forged.   The  learned counsel for  the  appellant-bank  has submitted that the learned Judges of the High Court were not right in proceeding on the basis that the appellant-bank did not  take precautions before making payment of large  amount and  the fact that cheque was forged is not in  dispute  and that the affidavit filed by R.V. Pinglay appears to be prima facie  false and an after-thought.  It has been pointed  out that   in  the  correspondence  with  respondent  No.1   the appellant-bank  did not accept the contention of  respondent No.1  that one of the signatures of the  joint  signatories, namely,  Ashok  Chattopadhyay,  the  Managing  Director   of respondent  No. 1, was forged and further that the  case  of the  appellant-bank  is that the payment of the  cheque  was made  in  the  ordinary  course of  business  and  that  the procedure for honouring the cheque by the bank officials was correctly  followed  in  the matter  of  encashment  of  the cheque.  The appellant-bank has also denied the  allegations made  by respondent No. 1 that there was collusion  of  bank staff  with  an outside unknown person for  payment  of  the cheque and it was asserted that it was obvious negligence on the part of respondent No. 1 not to keep the Cheque Book  in the proper custody and that the respondent No. 1 was  making false   allegations   against   the   appellant-bank.    The submission of the learned counsel was that various questions that arise in the case can be properly de- 179 termined  only on the basis of evidence that is adduced  and that  such determination cannot be made in a  writ  petition and  it can be more appropriately adjudicated in  a  regular

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civil proceeding. 9.   Shri  P.H., Parekh, the learned counsel  appearing  for the  respondents, has, on the other hand, urged,  that  this appeal  is directed against the interim order only  and  the main Writ Petition is still pending adjudication before  the High  Court and the question of maintainability of the  Writ Petition  would be gone into by the High Court in the  light of  the  objections that are raised by  the  appellant-bank. Shri  Parekh  has, however, urged that in view of  the  fact that  the signature of one of the joint signatories  on  the cheque is forged the appellant-bank is liable top  reimburse respondent No. 1 the sum of Rs. 95,000/- that has been  paid from  the account of respondent No. 1 on the basis  of  said cheque  which  was a nullity.  In support of  his  aforesaid submission Shri Parekh has placed reliance on the  decisions of  this  Court  in  Bihta  Co-operative  Development   Cane Marketing  Union  Ltd. & Anr. v. The Bank of Bihar  &  Ors., (1967) 1 SCR 848 and Canara Bank v. Canara Sales Corporation & Ors., 1987 (2) SCR 1138. 10.Since  the  Writ Petition is still pending  in  the  High Court  and  the  question of  maintainability  of  the  Writ Petition  has yet to be considered we do not propose  to  go into  the  said question.  All that we wish to say  at  this stage  is that the objections that have been raised  by  the appellant-bank against the maintainability of the writ peti- tion are not such that they may be disregarded as lacking in substance.   This  is a factor which has a  bearing  or  the exercise  of  discretion  by die  Court  while  passing  the interim order in the writ petition. 11.  By the interim order the High Court has directed    the appellant-bank to credit a sum     of  Rs. 95,000/-  in  the current account No. 318 of respondent No. 1. The High  Court has recorded that respondent through their counsel had given an undertaking to bring back the amount if the Court so  de- sires.   The  said interim order, in substance,  grants  the relief  which  the respondent would have been given  at  the final  stage  in  the event of  their  writ  petition  being allowed by the High Court. 12.  Time  and again this Court has deprecated the  practice of  granting  interim  orders  which  practically  give  the principal relief sought in the petition for no better reason than  that  a prima facie case has been  made  out,  without being concerned about the balance of convenience, the public interest  and  a  host  of  other  considerations,  [See   : Assistant Collector of Central Excise, West Bengal v. Dunlop India  Ltd  &  Ors., 1985 (1) SCC 260 at p.  265;  State  of Rajasthan  & Ors. v. M/s Swaika Properties & Anr., 1985  (3) SCC 217 at p. 224]. 13.  In  the instant case since there is serious dispute  on facts  it  cannot even be said that a prima facie  case  had been made out for grant of an interim order in favour of the respondents which enables them to have the reimbursement  of the sum of Rs. 95,000/- that was debited to their account in view of the encashment of the cheque in question.  We are of the  view that this was not a case in which the  High  Court while  admitting  the Writ Petition should  have  passed  an interim order giving such a direction.  In the circumstances we are unable to uphold the said interim order 180 14.The  appeal is, therefore, allowed, the  interim  order passed  by  the High Court regarding crediting  the  sum  of Rs.95,000/in the current account No. 318 of the  respondents is   set  aside.   Since  the  appellant-bank  has   already deposited-the said amount of Rs. 95,000/- in the current ac- count of respondents in pursuance of the said directions  of

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the  High  Court it is directed that  the  respondents  will refund the said amount to the appellant-bank within a period of  one month and on their failure to do so the  High  Court will  take  steps to enforce the undertaking that  has  been furnished  by  the  respondents in  pursuance  of  the  said interim  order.  It will be open to the learned counsel  for the parties to request the High Court for an early  disposal of the Writ Petition and the High Court will give due regard to such a request if made.  No order as to costs. 181