Dhanalakshmi Bank Ltd. vs Corporation Bank and Others

T. Ramachandran, J.—This appeal arises from the judgment and decree of the Sub-Court of Kochi, in O.S. No. 178 of 1981.

The appellant was the first defendant in O. S. No. 178 of 1981, before the Additional Sub-Court of Kochi. The suit was filed by the first respondent, which is the Cochin branch of the Corporation Bank for realisation of the amount against a bill of lading endorsed for negotiation in their favour. The facts are that the first defendant which is the Mattancherry branch of the Dhanalakshmi Bank forwarded exhibit A-2, bill of lading drawn by the second defendant-firm by name Regal Fisheries Corporation, Karuvelipady, Cochin-5, on Compafina Bank, Geneva, along with exhibit A-1 letter on April 12, 1979. The purpose was for negotiation of an export bill for U.S. $5,914.80 drawn by the third defendant by name Mohammed Ali, who was the partner of the second defendant-firm under a letter of credit opened by Compafina Bank, Geneva, which was the issuing bank by order of Charco Ltd. The plaintiff negotiated the bill at the rate of 12.30 U.S. $ per Rs. 100. The plaintiff-firm noticed certain discrepancies in the documents at the time of negotiation and it was brought to the notice of the first defendant informing that the payment against the bill was credited with the specific remark "payment under reserve". The credit voucher dated April 12, 1979, was forwarded to the first defendant showing the remark at the top portion of the credit voucher. A copy of the advice given by the Compafina Bank dated April 12, 1979, was also forwarded to the second defendant through the first defendant. There was a direction to get an indemnity letter. Thus, an indemnity letter was obtained from the second defendant represented by its partners in favour of the plaintiff-bank through the first defendant. The indemnity was forwarded to the first defendant with a covering letter dated April 16, 1979, for obtaining signatures of the partners of the second defendant-firm. Thus, alleging that the first defendant was made aware of the discrepancies and that the bill concerned was negotiated and the amount credited to his account only subject to its liability to reimburse the amount with interest in case the foreign bank which is the issuing bank, were not to pay the amount of the bill drawn under the letter of credit. On April 26, 1979, the plaintiff received the telex communication from the Compafina Bank mentioning about the discrepancies in the documents and for further instructions. This was intimated by the plaintiff as per letter dated April 27, 1979, and the first defendant was requested to recall the amount if the same was credited to the second defendant''s account by the first defendant. Later, the plaintiff received a cable from the Compafina Bank regarding the rejection of the documents. That was also intimated to the first defendant by the plaintiff by its letter dated May 11, 1979. Thus, the first defendant was requested to reimburse the amount. A copy of the cable was also sent to the second defendant. The first defendant was further informed that interest will be collected separately at the time of reimbursement of the amount by the first defendant. The plaintiff informed the first defendant on receiving back the documents on May 17, 1979, about its return. Thus, the first defendant was requested to provide sufficient balance amount in the account of the plaintiff so as to enable adjustment of the bill amount, interest and charges. The first defendant was informed that the documents were held at the entire risk and responsibility of the first defendant. As there was no reply another letter was sent on May 30, 1979, and on July 16, 1979. The plaintiff furnished photostat copies of the letter of credit as requested for. Thus, the case of the plaintiffs was that the first defendant was bound and liable to reimburse the amount to the plaintiff-bank with interest. As the first defendant had endorsed the bill drawn by the second defendant in favour of the plaintiff for value, and that the plaintiff was a holder in due course. It was also alleged that defendants Nos. 2 to 5 were liable to indemnify the plaintiff on account of having negotiated the bill notwithstanding the discrepancy. The plaintiff had informed the first defendant that the goods were remaining at the risk of the first defendant and that appropriate steps should be taken for the protection and disposal of the goods or for reimporting of the goods. On April 29, 1980, the first defendant sent to the plaintiff a copy of the letter dated March 13, 1980, to show that the second defendant had received from Gokak Patel Volkart Ltd. conveying the information that the goods concerned will be sold in public auction on June 4, 1980, by their principal. On receipt of the letter with the copy, the plaintiff wrote back to the first defendant to obtain specific instructions from the beneficiary exporters, namely, the second defendant-firm in connection with the auction of the goods for passing on the same to the shipping agents. But no details were furnished. As the plaintiff was giving all information to the first defendant and as the plaintiff negotiated the bill at the instance of the first defendant, it was alleged that it was the duty of the first defendant to inform the second defendant about such information and to see that timely steps were taken by the second defendant especially as the bill concerned was negotiated "under reserve" and that the primary responsibility was that of the first defendant. On May 27, 1980, the plaintiff wrote to the first defendant informing of the receipt of the communication from the shipping agents about the demand for demurrage and other charges and requesting the first defendant to authorise the plaintiff-bank immediately the action to be taken with regard to the auction. Defendants Nos. 1 and 2 did not take any action. Thus, the goods exported under the bill were spoiled completely on account of long storage. Thus, the plaintiff sent a registered notice on October 20, 1980, and a suit notice was sent on the same date to defendants Nos. 2 to 5 and also to Mohammed Ali. Thus, the plaintiff claimed Rs. 48,087.80 with interest at the lending rate applicable from time to time from the defendants jointly and severally.

The first defendant contended before the trial court that the Dhanalakshmi Bank was an unnecessary party and that the plaintiff had no cause of action against the first defendant. The case of the first defendant was that the bank was acting only as a post office between the plaintiff and the second defendant. Thus, the second defendant was the beneficiary under the letter of credit. Thus, the case of the first defendant was that if the plaintiff had suffered any loss the beneficiary alone is responsible. The first defendant denied noticing any discrepancy in the document at the time of negotiation. It was also contended that no discrepancy was informed by the plaintiff to the first defendant. The specific remark "payment made under reserve" was also denied. The forwarding of the credit voucher dated April 12, 1979, was also denied. It was stated that in the letter sent by the plaintiff regarding crediting" of the amount, no discrepancy was mentioned. Thus, according to the first defendant it had acted in good faith without negligence. On April 18, 1979, the amount credited . to its account with the plaintiff-bank was withdrawn. It was also contended that the plaintiff could have noted a lien on the account or advised that the amount should not have been allowed to be withdrawn. It was contended that the plaintiff as the holder in due course of the bill, had to act diligently and with circumspection. It was also contended that the transaction was protected under the E.C.G.C. coverage, and that the plaintiff ought to have preferred a claim before the E.C.G.C. and got the claim duly allowed. Thus, according to the first defendant that suit was not maintainable against it. Defendants Nos. 2 to 5 filed separate written statements taking similar contentions. According to them, the E.C.G.C. was a necessary party to the suit.

After framing necessary issues the lower court examined P.W.-1 and D.W.-1 and marked exhibits A-1 to A-50 and B-1 to B-10. After hearing both sides the lower court considered the matter and held that the plaintiff was the holder in due course and that the first defendant was liable to reimburse the amount of the bill. Thus, the suit was decreed as prayed for with costs. Aggrieved by that judgment and decree this appeal is filed by the first defendant.

Counsel for both sides were heard. According to learned counsel for the appellant, the appellant was not liable and the appellant was not an intermediary agent. According to learned counsel, the first defendant-bank had only forwarded the bill of a customer and the payment was under good faith and negligence was not proved. It was argued that the appellant had not signed any indemnity bond and that the plaintiff could have noted the lien on account. It was further argued that as the plaintiff called for indemnity, the plaintiff was aware of that fact. It was argued that the plaintiff should have rejected the bill. Learned counsel argued that the bill was forwarded for negotiation only because the appellant had no facility for foreign bank discount. It was contended that the plaintiff failed to prove that it was a holder in due course. In view of the provision u/s 131 of the Negotiable Instruments Act it was argued that the plaintiff was not entitled to get any relief. According to learned counsel, the basic duty of the appellant was towards the customer and the bill was forwarded only in the process of collection of the amount. Thus, learned counsel argued that the appellant was entitled to the benefit u/s 131 of the Negotiable Instruments Act. As there was no provision in the letter of credit that the promise of uniform practice is excluded learned counsel argued that the appellant was entitled to the benefit u/s 131 of the Negotiable Instruments Act.

The points arising for consideration are : (1) whether the plaintiff was a holder in due course ; and (2) whether the first defendant was entitled to the benefit u/s 131 of the Negotiable Instruments Act.

Point No. 1.--Defendants Nos. 3 to 5 are the partners of the firm called Regal Fisheries Corporation, Karuvelipady, Cochin-5. They wanted -to export goods to Charco Ltd., Geneva. A letter of credit was drawn by the third defendant as opened by the Compafina Bank, Geneva, which was the issuing bank by the order of Charco Ltd. The second defendant is the partnership-firm and it was a customer of the first defendant-bank. The third defendant gave the export bill in negotiation for 5,914.80 U.S. $. The first defendant endorsed it in favour of the plaintiff, which was the Cochin branch of the Corporation Bank. The plaintiff negotiated the bill at the rate of 12.30 U.S. $ per Rs. 100. The plaintiff noticed certain discrepancies in the documents at the time of negotiation. Immediately, it was brought to the notice of the first defendant. Exhibit A-2 is the bill and it was forwarded by the first defendant as per exhibit A-1 covering letter to the plaintiff on April 12, 1979. When the plaintiff noticed the discrepancies, it was informed to the first defendant as per the original of exhibit A-3 letter on the same day. Exhibit A-4 is the letter of the plaintiff-bank dated April 12, 1979. It shows that the bill was negotiated by the plaintiff-bank. The two discrepancies were specifically noted in exhibit A-4. They were : (1) notify party stated in the letter of credit that it differs in the bill of lading; and (2) letter of credit stipulates cartons to be stored below 18 to 20�C ; whereas the bill of lading states store in refrigeration compartment and no mention as to the temperature. As the goods exported were fish it was perishable unless it is stored properly under specified temperature. Exhibit A-4 is the copy of the letter sent to the Compafina Bank, Geneva, by the plaintiff-bank. Exhibit A-5 is the credit voucher dated April 12, 1979, issued by the plaintiff-bank stating that the payment made was under reserve. The case of the appellant, who was the first defendant was that the appellant-bank was not aware of the discrepancies. The stand taken by learned counsel appearing for the appellant was that the appellant-bank was not an intermediary agent and that it had only forwarded the bill of a customer for the purpose of collection. Thus, it was argued that the appellant-bank was not liable for any defect. Admittedly, the appellant was the holder of the bill and it was endorsed in favour of the plaintiffs. Thus, the first defendant is the endorser. Section 9 of the Negotiable Instruments Act defines the holder in due course as follows :

''"Holder in due course" means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if payable to order, before the amount mentioned in it became payable and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.''

"Negotiable instrument" is defined in Section 13 of the Act and "it means a promissory note, bill of exchange or cheque payable either to order or to bearer". "Negotiation" is defined in Section 14 of the Act stating that when a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute that person the holder thereof, the instrument is said to be negotiated. "Endorsement" is defined in Section 15 of the Act. It states as follows :

"When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the ''indorser''."

Admittedly, the appellant-bank endorsed the bill of lading in favour of the first respondent-bank for negotiation. Thus, the appellant-bank is in the position of an endorser of a negotiable instrument. These facts are not denied. Thus, it is clear that in view of the endorsement in favour of the plaintiff-bank, the plaintiff-bank is the holder in due course of the negotiable instrument, which is the bill in this case. It is futile to contend that the appellant-bank was only a post office and it had only simply forwarded the bill for collection as it had no foreign banking" facilities. It may be that the appellant-bank had no foreign banking facilities. But when the bill of lading is endorsed in favour of the plaintiff-bank, in view of Section 9 of the Negotiable Instruments Act, the plaintiff-bank becomes the holder in due course. It is to be noted that exhibit A-2 was drawn not to advert it against a letter of credit. It is to be noted that the bill was accepted for negotiation subject to the defect. That defect was noted in exhibit A-4, a copy of which is exhibit B-2. Thus, it was clear that the appellant was aware of the defect. The defect was mentioned in exhibit A-5 letter. Both exhibits A-4 and A-5 were of the same date. In view of exhibit A-5 letter, the appellant-bank was given notice of the defect. In view of the discrepancies indemnity was called for. Exhibit A-6 is the letter dated April 16, 1979, informing the necessity of indemnity letter. D.W.-1 admitted the receipt of exhibit A-3 letter. But according to him he did not receive exhibit A-5 letter. It is to be noted that the two banks are within the distance of 100 feet at Mattancherry. Thus, it is futile to contend that exhibit A-5 letter alone was not received by the appellant-bank. In reply to exhibit A-24, suit notice mentioning the correspondence regarding the discrepancy, the appellant sent exhibit A-26 reply notice. But in exhibit A-26, there was no averment that the first respondent-plaintiff was not a holder in due course. The only case in exhibit A-26 was that the first respondent-bank should proceed against the exporter first before proceeding against the appellant-bank. It is to be noted that there was no denial of responsibility in exhibit A-26. Similarly, the noting of the defect as payment under reserve was not denied in exhibit A-26. The various contentions which were taken in the written statement filed in the trial court were not supported by exhibit A-26 reply notice. Anyway for the purpose of this point it is sufficient to hold that the plaintiff was the holder in due course of the bill of lading endorsed by the first defendant-bank.

Point No. 2--According to learned counsel appearing for the appellant, the first defendant was entitled to the benefit u/s 131 of the Negotiable Instruments Act. The non-1iability of the banker receiving payment of a cheque is mentioned in Section 131 of the Act. It states as follows :

"A banker who has, in good faith and without negligence, received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment."

Thus, the two ingredients u/s 131 of the Act are that the banker should act in good faith and that there should be no negligence. Only if these two ingredients exist, the banker can claim benefit u/s 131 of the Act, in case the title to the cheque proves defective. Learned counsel appearing for the first respondent argued in this respect that Section 131 of the Act deals with cheque and that it is not applicable to a bill of lading, which is a bill of exchange. The decision in Anil Kumar Sawhney v. Gulshan Rai [1994] 79 Comp Cas 150 (SC) held that a post-dated cheque remains only a bill of exchange till the date shown on its face and only from that date it becomes a cheque on being "payable on demand". Thus, the difference between a cheque and a bill of exchange is that a cheque is a bill of exchange till the date of the cheque on being payable on demand. In this decision the apex court considered the definition of bill of exchange and cheque mentioned under Sections 5 and 6 of the Act in paragraph 12 of the judgment. Thus, it was held that a cheque is a bill of exchange drawn on a bank by the holder of an account payable on demand. Thus, it was held that a cheque u/s 6 of the Act is also a bill of exchange but it is drawn on a banker and is payable on demand. Thus, the argument of learned counsel appearing for the first respondent that Section 131 of the Act applies to cheques only has no force. The two conditions necessary to attract Section 131 of the Act are that the amount should be received and that the title should be proved. In exhibits A-4 and A-5 the first respondent had mentioned about the defect and the fact that the payment was credited under reserve. Exhibit A-6 is the letter dated April 16, 1979, sent by the first respondent to the appellant stating that the bill was negotiated on April 12, 1979, and that the payment was made under reserve as there were certain discrepancies in the documents. As per exhibit A-6 two copies of the indemnity bond were enclosed to be executed by the party and it was requested to obtain the signature of all the partners of the firm in the indemnity bond. Exhibit A-7 is the indemnity bond executed by the second defendant-firm in favour of the plaintiff dated April 12, 1979. Exhibit A-7 was forwarded by the first respondent to the appellant. Exhibit A-8 is the letter sent by the first respondent dated April 27, 1979, to the appellant enclosing a true copy of the telex message received from the Compafina Bank, Geneva, in connection with the negotiation of the bill of lading. As per exhibit A-8 letter, the appellant was requested to take urgent steps by the second respondent-firm. There was a direction to get the amount credited in the party''s account in suspense and remit the same to the first respondent later. P.W.-1 gave evidence in support of the allegations in the plaint and P.W.-1 proved the documents produced in the case on the side of the plaintiff. Exhibit A-9 is the copy of the letter dated May 11, 1979. This letter was sent by the first respondent to the appellant. As per exhibit A-9, it was informed that due to the discrepancies the documents were rejected. Thus, as per exhibit A-9 letter the first respondent enclosed the true copy of the cable received from the Compafina Bank in respect of the negotiation of the bill. Exhibit A-10 shows that the goods were stored in containers carrying temperature of -18�C. There is a copy of the letter of the first respondent dated May 2, 1979, sent to Compafina Bank mentioning about this storage of the goods carrying temperature of -18�C. The first respondent informed the Compafina Bank that the exporters were directed to contact the importers in connection with other discrepancies noted. Exhibit A-11 is the copy of letter dated May 17, 1979, sent by the first respondent to the appellant. There also the discrepancies noted were mentioned and they were informed to the appellant. There was a request to provide sufficient balance in the account to be provided so as to enable the first respondent to adjust the bill amount together with interest and charges. It was further informed that the telex charges came to 80 US $. It was further informed that the documents were held at the risk and responsibility of the appellant. Even on receipt of exhibit A-11 letter the appellant did not send any reply. Exhibit A-12 is the next letter dated July 16, 1979, sent to the appellant. There also all the details were mentioned and the appellant was requested to reimburse the amount together with interest immediately as the matter was to be reported to the Reserve Bank of India. Exhibit A-13 is the letter sent by the appellant to the first respondent concerning the receipt of the letter dated July 16, 1979. As per exhibit A-13, the appellant only sought for further time. This is a pointer to show that there was no denial of responsibility of the appellant. Then the appellant sent exhibit A-14 letter on August 21, 1979, for furnishing the true copies of the letter of credit and the copy of the indemnity bond executed by the partnership-firm, which was the exporter for taking further steps to get the account regularised from the party which is the Regal Fisheries Corporation Ltd. Thus, as per exhibit A-14 letter the appellant took the responsibility to set right the matters. Exhibit A-15 is the next letter sent by the first respondent to the appellant on September 22, 1979, enclosing photostat copies of the documents mentioned by the appellant. It was also informed that the charges for taking out the photostat copy of the letter of credit will be debited to their account. As there was no further information from the appellant, the first respondent sent the original of exhibit A-16 letter on September 16, 1979. In that letter the first respondent expressed regret for not taking any action by the appellant in spite of repeated requests orally and through letters. It was also reminded that in terms of the Exchange Control Manual, all the bills returned unpaid should be reimbursed and reversed to collection account without any loss of time. It was informed that the appellant had not provided funds nor intimated the first respondent regarding other details called for such as protection of the goods and steps taken by the appellant. It was informed that the first respondent had complied with all the requests of the appellant. Thus, the first respondent called upon the appellant to make payment of the above bill with interest up-to-date within 15 days of the letter. Exhibit A-17 is the letter sent by the appellant on April 29, 1980, forwarding a true copy of the letter of Gokak Patel Volkart Ltd., Cochin-3 addressed to the exporter for information. It is to be noted that the appellant had not taken any grounds in that letter which are mentioned in the written statement. Exhibit A-18 is the copy of the letter mentioned in exhibit A-17. As per exhibit A-18, it was informed that the goods will be sold by public auction on June 4, 1980. Exhibit A-19 is the copy of the letter sent by the first respondent to the appellant requesting the appellant to advise the customer to furnish the details of the steps taken by them to realise and repatriate the outstanding export proceeds to India. Exhibit A-20 was the copy of the letter dated May 17, 1980, by the first respondent in reply to the letter of the appellant dated May 16, 1980. There, it was stated that the customer had not given any concrete suggestions as to how the goods are to be handled and that on the contrary the customer was asking them to settle the bills. Thus, a request was made again to get concrete suggestions from the customer regarding handling of the goods which were going to be auctioned and to forward the same with specific comments. It was also informed that as the matter was most urgent, the information should be given as the auction date was coming closer. As per the original of exhibit A-21 letter the first respondent informed the appellant that communication was received from the shipping agents for payment of demurrage on the goods and that the first respondent had asked them to demand the same from the exporter. It was also informed that in case the demurrage was demanded by the shipping agents, the Reserve Bank of India approval was necessary if the same was higher than 10 per cent. It was further informed that as the goods were held at the disposal of the first respondent, action has to be taken with regard to the auction or destruction of the goods immediately and that the risk and responsibility will be with the appellant. Exhibit A-22 is the letter sent to the first respondent by Gokak Patel Volkart Ltd. informing that the carrier was entitled to recover all charges, expenses, demurrage, etc., incurred after discharge from the merchant. It was informed that the term "merchant" included shipper, receiver, consignee, holder of the bill of lading besides the owner of the cargo. Thus, as the holder of the original bill of lading the carrier is fully entitled to recover from the first respondent all expenses incurred in respect of this cargo at Marseilles by their principal. It was informed that the details of the charges would be furnished on hearing from the principal and that it will be without prejudice to the right of the carrier against the shipper or any other concerned party. Then the first respondent sent the original of exhibit A-23 letter on June 19, 1980, to the appellant forwarding the letter received from Patvolk. As there was no reply from the appellant, the first respondent sent the suit notice, a copy of which is exhibit A-24. In exhibit A-24 all the facts were mentioned by the first respondent and they had mentioned about all their letters sent at several stages of the correspondence. It was specifically mentioned that the payment was made under reserve. In spite of all these, there was no specific denial in the reply notice. Exhibit A-25 is the acknowledgement regarding the suit notice. In exhibit A-26 reply notice, it was only stated that the appellant do not admit all the averments contained in the notice and that the real facts relating to the transactions can be gathered from the correspondence between the Corporation Bank and the appellant. In this context, it is to be noted that there was no specific denial of the risk and responsibility of the appellant in any of the correspondence. On the other hand, in exhibit A-26 reply notice it was directed that the first respondent should proceed against the second respondent exporter for realisation of the amount in the first instance. Thus, it is clear that as per exhibit A-26, the appellant did not deny their risk and responsibility. On the other hand, it was only stated that at the first instance the first respondent should proceed against the exporter. Even though there was no denial in exhibit A-26 reply notice, several contentions are taken in the written statement. The trial court considered all the matters and held that the exporter and the endorser are equally liable for the amount. It is to be noticed that the exporter did not enter the witness box before the trial court. Thus, the appellant is liable as an endorser for the amount claimed. Exhibit A-27 is the copy of notice sent by the first respondent''s advocate to the second defendant and its partners. Exhibits A-28 to A-30 are concerning exhibit A-27 notice. In the light of the documents produced by the plaintiff exhibits B-1 to B-10 produced by the defendants have no relevancy. It is to be noted that D.W.-1 could not give definite evidence regarding the correspondence. According to him, D.W.-1 worked only for one month in the Cochin branch of Dhanalakshmi Bank and then he was transferred. Thus, he had only hear-say knowledge regarding the letter correspondence. Considering all these facts the lower court correctly found that the appellant had joint and several liability along with the other defendants.

Learned counsel appearing for the appellant cited the decision in Indian Overseas Bank Vs. Industrial Chain Concern, to show the liability of the bank towards the customer. It deals with the good faith and stated that there was no negligence by the bank in opening an account in the name of the customer. Learned counsel cited the decision in Barclays Bank Ltd. v. Astley Industrial Trust Ltd. [1970] 1 All ER 719. This decision was concerned with a bill of exchange and cheque and held whether the collecting bank can also be holder for value. It was held that the holder for value of the bill of exchange is not distinguishable from a holder who has given or taken value. Thus, it was held in that decision that the plaintiffs were holders of the five cheques for value. Similarly, in the decision of Forestal Mimosa Ltd. v. Oriental Credit Ltd. [1986] 2 All ER 400, it was held that the confirming bank was responsible for acceptance and payment of the drafts even though the buyers had not accepted the draft. It was held that the terms of the letter of credit were to be construed by reference to the terms of the Uniform Customs and Practice because those terms formed part of the contract and there was no express provision excluding any relevant part of those terms. It was also held that there was no inconsistency between the terms which were incorporated by the Uniform Customs and Practice and those terms appearing on the face of the document itself. The decision cited by learned counsel as in B.K. Holdings (P.) Ltd. Vs. Prem Chand Jute Mills and Others, held that if the transaction is in clear contravention of Sections 13 and 16 of the Securities Contracts (Regulation) Act, 1956, it was open to refuse to register the transfer on the ground that the transaction was illegal. That decision is not applicable to the facts of the present case. Learned counsel cited the decision in M/s. U. Ponnappa Moothan Sons, Palghat Vs. Catholic Syrian Bank Ltd. and others, which stated that in the absence of gross negligence the banker as holder in due course, can maintain an action against the maker of cheques. This decision is only helpful to the first respondent to maintain the suit against all the defendants. Thus, considering the facts and circumstances in this case it is clear that there were no bona fides in the denial of the risk and responsibility of the appellant. Thus, the lower court was correct in decreeing the suit against all the defendants on the principle of joint and several liability. Thus, I do not find any reason to interfere with the judgment and decree of the lower court.

For the above reasons the judgment and decree of the lower court are confirmed and this appeal is dismissed with costs of the first respondent.