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Issues Involved:
1. Proper signing, verification, and presentation of the plaint. 2. Whether the suit claim is a 'right' under Article 294(b) of the Constitution. 3. Timeliness of the suit. 4. Constitutionality of Article 149 of the Limitation Act. 5. Existence of a contract for supply of ground sheets. 6. Awareness of the defendant-bank about the procedures of the plaintiff's officials. 7. Fraudulent actions by Mahinder Pal Singhal. 8. Criminal conspiracy by Mahinder Pal Singhal and Manak Chand Jain. 9. Theft or removal of inspection notes by Mahinder Pal Singhal. 10. Opening of a current account by Manak Chand Jain under a false name. 11. Ulterior motive behind opening the account. 12. Withdrawals made by Manak Chand Jain. 13. Bank's role as an agent for collection. 14. Representation by the bank for collecting bills. 15. Payment of bills under mistake caused by fraud. 16. Deception of officials into issuing cheques. 17. Bank's fraudulent or otherwise representations. 18. Completeness of fraud particulars. 19. Conversion of cheques by the bank. 20. Property in cheques remaining with the Union of India. 21. Bank's liability to refund. 22. Plaintiff's entitlement to relief. 23. Estoppel from claiming amounts due to negligence. 24. Entitlement to interest. 25. Bank's negligence or breach of duty. 26. Plaintiff's entitlement to the principal amount. Issue-wise Detailed Analysis: Issue No. 1: Proper Signing, Verification, and Presentation of the Plaint The plaint was signed and verified by duly authorized persons under Order 27, Rule 1 of the Code of Civil Procedure. The plaint was presented by counsel for the Union of India, and no serious objections were raised. Therefore, the issue was held in favor of the plaintiff. Issue No. 24: Suit Claim as a 'Right' under Article 294(b) The right claimed by the plaintiff relates to the property and not in personam, and could be succeeded. The right to bring an action for the value of the cheque unlawfully converted and detained is covered by Article 294(b) of the Constitution. This issue was held in favor of the plaintiff. Issue No. 25: Timeliness of the Suit The cause of action arose in January and February 1948, and the suit was instituted in July 1959. Under Article 149 of the Limitation Act of 1908, the period of limitation for suits by the Central Government is 60 years. Thus, the suit was within time. Issue No. 26: Constitutionality of Article 149 of the Limitation Act The Supreme Court has upheld the validity of special provisions for the recovery of the Government's claims, stating that there is a rational basis for treating the Government differently regarding the period of limitation. Therefore, Article 149 does not offend Article 14 of the Constitution. Issue No. 2: Existence of a Contract for Supply of Ground Sheets The acceptance of tender dated October 1, 1945, was proved, and the terms for the supply of ground sheets were established. This issue was held in favor of the plaintiff. Issue No. 3: Awareness of Defendant-Bank about Procedures The defendant was not aware of the specific procedures or duties of the plaintiff's officials as detailed in the plaint, and there was no evidence that the defendant tried to ascertain the same. This issue was held against the plaintiff. Issues No. 4, 5, and 9: Fraudulent Actions and Conspiracy by Mahinder Pal Singhal There was no direct evidence of a criminal conspiracy, but evidence showed that un-cancelled inspection notes were used fraudulently to obtain payment. The issues were held in favor of the plaintiff. Issues No. 6 and 8: Opening of Account by Manak Chand Jain The handwriting expert confirmed that the documents were written by the same person, establishing that Manak Chand Jain masqueraded as R.K. Bhatt and opened the account with an ulterior motive. These issues were held in favor of the plaintiff. Issue No. 11: Withdrawals Made by Manak Chand Jain Evidence showed that the withdrawals from the bank were made by Manak Chand Jain. This issue was held in favor of the plaintiff. Issues No. 10 and 13: Bank's Role as an Agent for Collection The bank acted as an agent for collection on behalf of R.K. Bhatt (Manak Chand Jain) and collected the proceeds of the cheques. These issues were held in favor of the plaintiff. Issues No. 12, 14, 15, and 16: Representation by the Bank and Fraud The defendant represented that it was collecting bills for R.K. Bhatt, but no evidence showed that this representation influenced the officials to issue cheques. These issues were held against the plaintiff. Issue No. 17: Completeness of Fraud Particulars No arguments were addressed on the lack of fraud particulars, and no evidence of fraud by the defendant was led. This issue did not require determination. Issues No. 18, 19, 22, 27, 28, and 29: Conversion of Cheques and Bank's Liability The defendant collected the cheques and credited the proceeds to the account of R.K. Bhatt, who had no title to the cheques. The defendant was guilty of conversion and liable to refund the amount. These issues were held in favor of the plaintiff. Issues No. 7, 20, 21, and 30: Bank's Negligence and Estoppel The bank was negligent in opening the account without making proper inquiries. The plaintiff's negligence in issuing the cheques was the proximate cause of the loss, leading to estoppel by negligence. These issues were held in favor of the defendant. Issue No. 32: Entitlement to Interest Interest is recoverable on money obtained by fraud or conversion, but in this case, the facts did not justify the grant of interest. This issue was held against the plaintiff. Issues No. 23 and 31: Entitlement to Principal Amount Due to estoppel by negligence, the plaintiff was not entitled to claim any amount from the defendant. These issues were held against the plaintiff. Conclusion: The suit was dismissed, and the parties were left to bear their own costs.
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