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TMI Blog1977 (12) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. The forgery of the said cheque along with two other cheques were the subject-matter of a criminal proceeding and in that proceeding one Prodyot Kumar Ghosh and another were convicted. On Feb. 22, 1957, the plaintiff, after making necessary enquiry, came to know that the said cheques were forged and the amounts covered by them were obtained by fraud on the plaintiff who paid the same by mistake. Thereafter, on March 4, 1957, the plaintiff made a payment of ₹ 14,800 being the total amount covered by the aforesaid three cheques including the cheque in question to its said constituent, the Metal Alloy Co. on demand being made therefor. It was claimed by the plaintiff that the defendants Nos. 1 and 2 were liable for the amount covered by the cheque in question, that is, ₹ 5,200 paid by the plaintiff as aforesaid. Accordingly, the plaintiff prayed for the recovery of the said sum of ₹ 5,200 from the defendants. 3. The suit was contested by both the defendants. The case of the defendant No. 1 was that certain persons alleging themselves to be the representatives of the Metal Alloy Co. Pvt. Ltd., of Asansol came to the defendant's show room on Jan. 13, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less when it allowed encashment of the cheque in question. One M. K. Sen, the Director and Manager of the Metal Alloy Co. had the authority to operate the bank account on behalf of the company. The cheque in question purported to bear his signature. It appears from the report of the police officer who investigated the matter that at the first sight of the forged cheques It was very difficult for the said M. K. Sen to deny that he signed the same. The evidence on record supports the finding of the learned Judge that the forgery was so accurate that it was not possible even to a trained eye to detect the same. In these circumstances, it is difficult to hold that the plaintiff bank had acted carelessly or negligently. The encashment was made by the plaintiff bank on the mistaken belief that the cheque was a genuine one. The defendant Union Bank had nothing to do with the question as to whether the cheque was genuine or forged. In due course of business it presented the cheque to the plaintiff bank for collection and after the cheque was encashed intimation was given by it to its constituent, namely, the defendant No. 1, end the latter, in its turn, sold goods to the persons who came w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here money is paid to another under the influence of a mistake, that is, upon the supposition that a specific fact is true, which would entitle the other to the money, but which fact is untrue, and the money would not have been paid if it had been known to the payer that the fact was untrue, an action will lie to recover it back, and it is against conscience to retain it; though a demand may be necessary in those cases In which the party receiving may have been ignorant of the mistake. The position that a person so paying is precluded from recovering by laches, in not availing himself of the means of knowledge in his power, seems, from the cases cited, to have been founded on the dictum of Mr. Justice Bayley, in the case of Milneg v. Duncan and with all respect to that authority, I do not think it can be sustained in point of law. If, indeed, the money is intentionally paid, without reference to the truth or falsehood of the fact, the plaintiff meaning to waive all Inquiry into it, and that the person receiving shall have the money at all events, whether the fact be true or false, the latter is certainly entitled to retain It; but if it is paid under the impression of the truth of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payee had done nothing more than to expend the money on his own purposes, that would afford no defence, for the payee had suffered no real detriment. The Lord Chancellor referred to and relied on, amongst others, the case of Kleinwort v. Dunlop Rubber Co., (1908) 97 LT 263, where Lord Loreburn said, It is indisputable that if money is paid under a mistake of fact and is re-demanded from the person who received it before his position has been altered to his disadvantage, the money must be repaid in whatever character it was received. 10. Thus it appears that under the English law there is no scope for the application of the doctrine of estoppel to the rule laid down in Kelly v. Solari, (1841) 9 M W 54 which, though applied in some cases and by Viscount Cave, L. C., the House of Lords, in R. E. Jones Ltd. v. Waring and Gillow Ltd., 1926 AC 670 (supra) disapprove such application. In India, the law in this regard is to be found in Section 72 of the Indian Contract Act, Section 72 is as follows: A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return It. Section 72 is simple in its term and there is no indication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by the doctrine of equity in order to render it intelligible. 12. The question before us, therefore, is whether Section 72 should be read as subject to the doctrine of estoppel or as observed by Coutts Troter, J. it should be construed on the basis of the doctrine of equitable restitution notwithstanding the conduct of the parties. The English law as settled in the above House of Lords' case in R. E. Jones Ltd. v. Waring And Gillow Ltd., 1926 AC 670 (su-pra) excludes the application of the doctrine of estoppel in such oases, although previous to that case, the doctrine was applied in other cases. In our view, there is a difference between the English law and the Indian law as enacted by Section 72 of the Indian Contract Act. The difference has been indirectly pointed out by the Privy Council in Shiba Prasad Singh v. Srish Chandra, 76 Ind App 244 : (AIR 1949 PC 297). In that case, Lord Reid approved the interpretation of Section 72 as made by Sen J. in Jagdish Prosad v. Produce Exchange Corporation, AIR 1946 Cal 245 and observed : It may be well to add that their Lordships' judgment does not imply that every sum paid under mistake is recoverable no matter what t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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