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TMI Blog1992 (12) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... agle Industrial Estate, Thana. The defendant-respondent, M/s. Automotive Engineering Company, is a partnership firm and the said partnership firm opened a current account with the same branch of the plaintiff-Bank. One firm named M/s. Imperial Tube and Hardware Mart opened an account with the Union Bank of India Ltd., Thana Branch on May 26, 1967. The said account was represented by its proprietor, Mr. B.M. Shah.. The said Mr. Shah presented a cheque being Exhibit 54 to the Union Bank of India Ltd., Thana Branch, for crediting the amount in his account in the said bank. Such cheque bore the date May 29, 1967 and was issued in the name of Imperial Tube and Hardware Mart and the amount under the cheque was ₹ 6,500/-. The said cheque was sent to the clearing house by the Union Bank of India Ltd. and on presentation of the said cheque for payment the plaintiff-Bank passed the cheque for ₹ 6,500/- and debited the said amount to the account of the defendant. At the time of debiting the amount, the defendant firm had a credit of ₹ 20,000/- in its account with the plaintiff-Bank. In the first week of June, 1967, the plaintiff-Bank forwarded statement of account to the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt dismissed the said suit with costs. 3. The appellant-Bank thereafter preferred Civil Appeal No. 363 of 1970 in the Court of Additional Joint Judge, Thana. The learned Additional District Judge, however, accepting the case of the appellant-Bank held that on a visual inspection of the cheque in question (Exhibit 54) no abnormal features so as to direct the attention of the bank as to suspect the genuineness of the cheque, could be found. But the learned Additional District Judge was of the view that if the cheque was scrutinised with the help of the ultraviolet ray lamp, the forgery on the cheque could have been detected. The Additional District Judge was of the view that the Branch at Thana was just on the out-skirt of the metropolitan city of Bombay where forgery was very rampant and the amount being heavy, the bank ought to have been more careful and sincere the defendant was available on phone, the bank should have taken such caution in contacting the defendant for proper verification before making payment. The learned Additional District Judge was of the view that the bank was under an obligation to exercise ordinary prudence and skill and visual inspection of the cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the payment of such cheque must pay the cheque when duly required to do so, and in default of such payment, must compensate the drawer for any loss or damage caused by such default. Section 89: Payment of instrument on which alteration is not apparent, where a promissory note, bill of exchange or cheque has been materially altered but does not appear to have been so altered, or where a cheque is presented for payment which does not at the time of presentation appear to be crossed or to have had a crossing which has been obliterated,. payment thereof by a person or banker liable to pay and paying the same according to the apparent tenor thereof at the time of payment and otherwise in due course, shall discharge such person or banker from all liability thereon, and such payment shall not be questioned by reason of the instrument having been altered or the cheque crossed. 6. The learned Counsel for the appellant has strenuously contended that it has been held by the learned Additional District Judge specifically that on visual inspection, no infirmity could be detected on the cheque in question (Exhibit 54). Referring to Section 89 of the Negotiable Instruments Act, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has referred to a decision of the Privy Council made in the case of Commissioners of Taxation v. English, Scottish and Australian Bank Limited A.I.R. 1920 PC 88. It has been held in the said decision that negligence is a question of fact and each case must be decided on its own merits. The standard of care of a banker in collecting cheques is not that of an individual invited to purchase or cash such cheques for it is no part of the business or ordinary practice of individuals to cash cheques, while it is the business and ordinary practice of a bank to collect cheques. It has also been held in the said decision that to lay down that no cheque should be collected without a thorough enquiry as to the history of the cheque would render banking business impossible and that the fact of a cheque being paid into the account, the next day after the amount was opened being in no way unusual was not such as to put the bank on enquiry and there was no negligence on the part of the bank in collecting that cheque. Relying on the said decision, learned Counsel for the appellant has contended that the agent of the bank has deposed to the effect that he had verified signature of the defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s subjected to advance technology for further scrutiny as to its genuineness, the bank should be held liable for negligence and the protection under Section 10 and Section 89 of the Negotiable Instruments Act is not available to the bank. He has, therefore, contended that the appeal should be allowed by this Court and the judgment and decree of the High Court affirming those of the lower appellate court and the trial court should be set aside and the suit should be decreed. 9. The learned Counsel for the respondent, however, disputed the contentions made on behalf of the appellant and it has been contended by the learned Counsel that the negligence attributable to a banker must depend on the facts and circumstances of each case. In the instant case, the trial court has come to the finding that even on a closer scrutiny without the aid of the ultraviolet ray lamp, some infirmity could have been noticed particularly with reference to the number of the month. The amount under the cheque was quite heavy and in such circumstances the banker was under a legal obligation to exercise further scrutiny before passing the same. It is an admitted position that the cost of ultraviolet ray la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down to cover each case of negligence of a banker and the question of negligence requires to be decided in the facts and circumstances in each case, it does not appear to us that the appellant bank can be held to be guilty of negligence simply because an ultraviolet ray lamp was not kept in the branch and the cheque in question was not subjected under the ultraviolet ray lamp. It has not been established in evidence that invariably the other branches of the appellant bank or the other commercial banks had been following a practice of scrutinising each and every cheque under the ultraviolet ray lamp or there was any prevalent practice to scrutinise cheques involving a particular amount under such lamp by way of extra precaution. In such circumstances, it cannot be contended as a correct legal proposition that the bank, in order to get absolved from the liability of negligence, was under an obligation to verify the cheque for further scrutiny under advanced technology or for that matter under ultraviolet ray lamp apart from visual scrutiny. The cost of the ultraviolet ray lamp was only nominal and it might have been desirable to keep such lamp in the branch in question to take aid i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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