Tarini Charan Nandi vs Ajit Kumar Kundu

G.K. Mitter, J.—This is a suit by Tarini Charan Nandi for recovery of a sum of Rs. 4,767-8 as against two Defendants. The cause of action against the first Defendant, Ajit Kumar Kundu, arose out of the following facts. The Plaintiff is a stock-broker and a member of the Calcutta Stock Exchange Association, Ltd. On August 29, 1945, the Plaintiff sold and delivered one hundred shares of the East India Coal Co., Ltd., to Kundu at the rate of Rs. 47-6 as per share and received a cheque for the price of the said shares on August 31, 1945, amounting to Rs. 4,767-8 as. including the stamp of the value of Rs. 30 affixed to the transfer deed. The said cheque, according to the Plaintiff, was deposited on August 31, 1945 with the Plaintiff''s bankers, the Allahabad Bank, Ltd., the Defendant No. 2 in this suit, for collection and credit of the proceeds. The Defendant bank, according to the Plaintiff, wrongfully failed and neglected to present the cheque for payment to the Calcutta National Bank and/or to collect the same. Unfortunately for the Plaintiff, he did not discover the fact that the cheque had not been credited to his account until nearly three years had elapsed since the date of deposit of the cheque with his bankers. In August, 1948, the Plaintiff, on discovering the above fact, got in touch with the bank. The bank made certain investigations but nothing came out of it and neither the bank nor the Defendant Kundu was willing to pay the Plaintiff the sum of Rs. 4,767-8 as. Hence this suit.

The writ of summons was attempted to be served on Ajit Kumar Kundu at P14, Bentinck Street, Calcutta. Kundu was not found in spite of diligent efforts in that behalf and the writ of summons was ultimately served on him by affixing a copy of the same on the outer door of the said premises. Kundu has not appeared herein or taken any steps to defend the suit. The Defendant bank put in a written statement not admitting that the cheque was deposited with the bank as alleged and further denying that the Plaintiff did not discover the non-deposit of the cheque till August, 1948, as alleged. By para. 6 of the written statement the Defendant bank contended that-

Since 31st of August, 1945, the Plaintiff has repeatedly seen and/or has had the opportunity to see and has acknowledged as correct the Defendant''s statement of the Plaintiff''s account with the Defendant and must in the premises be deemed at all material times to have been aware that the amount of the said alleged cheque had not been credited to his account.

The contention made in para. 7 of the written statement is that by reason of the above conduct of the Plaintiff, he must be taken to have waived his rights, if any, against the Defendant bank. When the suit came up for hearing in July, 1953, counsel appearing for the bank wanted to raise an issue as to estoppel. It was pointed out to him that on the pleadings such an issue could not be raised and that if he wanted to do so, he must amend his pleadings. Leave was given to the Defendant to amend the written statement and the written statement has since been amended by putting in para. 7(a) which reads as follows:

The Defendant bank states that it is the practice of the bank to send to its customers periodical statements of account and to have such account signed by the customers when the account is overdrawn. This practice was followed in the case of the Plaintiff who ought to have given but did not give timely information to the bank that the alleged cheque for Rs. 4,767-8 as., though received by the bank, was not credited to his account as alleged. On the other hand, the Plaintiff admitted and acknowledged in writing signed by the Plaintiff on May 19, 1947, October 16, 1947 and October 16, 1948, that the Plaintiff had examined his said account and that there were debit balance in his said account in the sums of Rs. 789-9-6, Rs. 786-8 as. and Rs. 767-12-6 pies as on March 31, 1947, September 30, 1947 and March 31, 1948, respectively. The Plaintiff thus by his declarations, acts or omissions as aforesaid intentionally caused or permitted the Defendant bank to believe at all material times that the account of the Plaintiff was in order and that all cheques sent by the Plaintiff to the Defendant bank for collection and credit were duly collected and credited or accounted for. Acting on the said belief the Defendant altered its position to its prejudice and accordingly treated the Plaintiff as a debtor to the bank at the material times and took no steps to protect itself or to retrieve its position until it was too late. In the premises, the Defendant submits that the Plaintiff has ratified the non-credited of the said alleged cheque and/or is estopped from making or proving the allegations made in paras. 3, 4, 5 and 7 of the plaint.

The issues which were settled are as follows:

Was the cheque for Rs. 4,767-8 as sent by the Plaintiff to Defendant No. 2 on August 31, 1945, for collection and credit ?

Is the Defendant No. 2 under any liability to pay the said sum of Rs. 4,767-8 as. to the Plaintiff ?

Is the Plaintiff estopped or precluded from claiming they said sum of Rs. 4,767-8 as. from the Defendant No. 2 by reason of facts pleaded in para. 7(a) of the written statement ?

Has the Plaintiff waived his claim by reason of the facts pleaded in paras. 6 and 7 of the written statement?

A brief of documents and correspondence was put in, marked ex C. All the documents therein are admitted except the counterfoil of the paying-in-slip for the cheque for Rs. 4,767-8 as. Letters which passed between the parties prior to the institution of the suit are very few in number. The first one is dated August 9, 1948, addressed by the Plaintiff in his firm name of Nandi and Co. to the manager, Allahabad Bank, Ltd., pointing out that a cheque for Rs. 4,767-8 as. was deposited in the Plaintiff''s account on August 31, 1945, for which the Plaintiff was holding the counterfoil of the paying-in-slip. As the cheque had not been credited to the Plaintiff''s account, the Plaintiff was requesting the manager to look into the matter inasmuch as there was no entry in the passbook relating to it. On August 16, 1948, the Plaintiff wrote another letter to the manager of the bank enclosing the counterfoil of the paying-in-slip. On the same day the bank replied to the Plaintiff''s letter by asking for full particulars of the cheque for Rs. 4,767-8 as. The bank also wrote a letter to the Calcutta National Bank, Ltd., enquiring about the name of the party to whom the cheque for Rs. 4,767-8 as. drawn by Ajit Kumar Kundu had been paid. The Plaintiff addressed a further letter to the bank on August 20 on this subject. On August 25, the bank wrote to the Plaintiff saying that enquiries had been made at the Calcutta National Bank, Ltd., revealing that no cheque favouring the Plaintiff for Rs. 4,767-8 as. had been paid from Ajit Kumar Kundu''s account with the said bank. On August 23, 1948, the Plaintiff sent a letter through his solicitors Messrs. Fox and Mondal to Ajit Kumar Kundu setting out the relevant facts and calling upon Kundu to pay the Plaintiff the sum due to the Plaintiff.

The paying-in-slip which is the most vital document in this case is ex. A. It shows that a cheque on some bank other than the Allahabad Bank, Ltd., was put into the account of Nandi and Co. on August 31, 1945. It bears the stamp of the Allahabad Bank, Ltd., with some pencil writing across the stamp. Inasmuch as the bank did not admit the deposit of the cheque, the Plaintiff was obliged to call various witnesses for the purpose of showing that a cheque had been received from Ajit Kumar Kundu and deposited with the Allahabad Bank, Ltd., on August 31, 1945. The first witness on behalf of the Plaintiff was one Kashinath Pal. He was an assistant stock-broker employed by Nandi and Co. in the year 1945. Since 1949 he has not been working for the Plaintiff. In his examination-in-chief he said that Ajit Kumar Kundu was a client of Nandi and Co. and that he (the witness) had occasion to collect various cheques from Ajit Kumar Kundu from time to time in the year 1945. Shown the paying-in-slip he said that he had delivered one hundred shares to Ajit Kumar Kindu and received a cheque as the price of the said shares. The cheque was taken by him personally to the bank and deposited there. The paying-in-slip was filled up by him and the counterfoil was in his handwriting. In answer to Q. 9 he said that he personally approached the ledger clerk and asked for a paying-in-slip. When he got the slip, he entered the details of the cheque thereon and deposited the cheque to the counter where cheque was received. Thereafter he got the counterfoil of the paying-in-slip duly stamped and signed. He said that he was present when the paying-in-slip was stamped. A large number of questions were put to him in cross-examination but in my opinion nothing came out to shake his credit. He stated that his ordinary duties were to deliver the shares in the market, to collect cheques and deposit them with the bank. He said that besides himself, one Ganga Babu, Balai Babu, a darwan of the name of Harihar and Tarini Babu''s son were engaged in the share-broking business. The Plaintiff, according to this witness, had no cashier. Both Balai Babu and Ganga Babu who were witnesses in this case were part-time employees. He deposed that he had to go to the bank and Tarini Babu, meaning the Plaintiff, also used to go to the bank very often. He knew that the Plaintiff had an overdraft account with the Allahabad Bank, Ltd. He said that the office of the Plaintiff was situate at 9, Royal Exchange Place, close to the Stock Exchange hall and that the premises where the Allahabad Bank used to carry on business was also situated very close to the Stock Exchange hall. In answer to Q. 62 he said that he had a large number of clients and he used to collect cheques from them and it was his primary duty to see that the amounts were duly deposited with the bank. In answer to Q. 75 he said that the shares had been delivered to Ajit Kundu on August 29, 1945, but he did not get the cheque till the 31st. He gave the date of delivery of the shares by looking at the bill which was also exhibited. He said that he received the cheque on the morning of August 31, 1945, between 9 and 10 at the residence of Ajit Kumar Kundu. He took this cheque with him to the Stock Exchange hall where he got the endorsement of the Plaintiff on the back of it and then went across to the bank to deposit it. He said that he had kept the paying-in-slip in his pocket and forgot to hand it over to the persons who were employed by the Plaintiff for writing out the books of account until some days afterwards. In answer to Q. 121 he said that when he was going to change his dress he found the counterfoil lying in his pocket and he then put it in the right place. In answer to Qs. 122 and 123 he said that by right place he meant the place where the paying-in-slip should have been attached to the book of paying-in-slips. Looking at the reverse of the paying-in-slip he said that there was an entry in the handwriting of Balai Babu and another entry in pencil in the handwriting of the witness Ganga Babu. The entry in ink reads "N. 618-4767/8." According to the witness this indicates the bill mark and the "amount of the bill. The pencil writing reads: "100 East India Coal".

The next witness was Balai Chand Auddy. He said that in 1945 he used to maintain the bill register and files and other necessary papers in the office of Tarini Babu at his residence. In answer to Q. 14 he said that payment in respect of the bill against Ajit Kumar Kundu was received on August 31, 1945. In cross-examination he said that he used to attend at the residence of the Plaintiff at 2P, Shankar Ghose Lane, and that he never went to his office near the Stock Exchange.

The third witness was one Ganga Charan Basak who also used to work as a part-time assistant accountant under the Plaintiff in the year 1945. He said that he used to write the cash book himself. In answer to Q. 11 the witness said:

When I was preparing the books of account on account of income tax return of the income tax year 1946-47 in course of the preparation for the closing of that account, at that time I was verifying the bank passbook, the paying-in-slips and the cash book and while I was doing this, I found that other entries and other paying-in-slips tallied with the entries in the cash book with the entry in the passbook, but there was no corresponding entry either in the cash book or the bank passbook in respect of this paying-in-slip (meaning ex. A).

He stated that he brought this to the notice of the Plaintiff whereupon enquiries were instituted.

The next witness was the Plaintiff himself, Tarini Charan Nandy. He said that he started dealing with the Allahabad Bank, Ltd., in the year 1910 and that from the year 1918 he had two accounts with the said bank, one in his personal name and the other in the name of Nundy and Co., i.e., in the name and style in which he carried on his stock-broking business. He corroborated the testimony given by the previous witnesses and said that as soon as the mistake was discovered he went to the bank to find out why the cheque had not been credited in the usual way. In answer to Q. 57 he said that some time after the institution of the suit he lost sight of Ajit Kumar Kundu. This witness, too, was cross-examined at some length like the other witnesses and it was attempted to be shown that the method of keeping the books in his office was not regular and that it was really the negligent way of keeping the books which accounted for the delay in discovering this mistake. It was further suggested to this witness that he used to go to the bank every day to ascertain his bank balance. The Plaintiff admitted having gone to the bank very frequently but he said that it was not for the purpose of ascertaining his credit with the bank which he could easily do from the passbook. The passbook, according to the Plaintiff, was written up fairly frequently, i.e., at least once a week. He was shown the three confirmation slips which he had signed in the years 1947 and 1948. The confirmation slips are all in the same language and read as follows:

We have examined our account with the Allahabad Bank, Ltd., Calcutta, and confirm that the balance of Rs. * * * * is correct.

The three slips contain the figures giving the liability of the Plaintiff to the bank in respect of his overdraft account on the dates mentioned and the dates respectively are March 31, 1947, September 30, 1947 and March 31, 1948, so that the earliest date is nearly one year and eight months after the deposit of the cheque which is the subject-matter of this suit. It was also suggested to him that the passbook used to be written up everyday and taken delivery of by himself or his employees every evening, sometimes as late as 11 at night. This the witness did not accept but said that the passbook used to be written up fairly frequently. He was asked as to whether he was in the habit of looking at the passbook and into his other books of account. His answer was that he certainly did use to look into his passbook. The two books containing the paying-in-slips which were used by the Plaintiff in August, 1945, for the purpose of depositing his cheques in the Allahabad Bank, Ltd., were also exhibited in this case. From these it appears that quite a large number of cheques used to be deposited with the bank practically every day. Although the Plaintiff used these books, it was not unusual for him or his employees to use loose paying-in-slips also for the purpose of depositing cheques and quite a number of loose paying-in-slips are to be found in these two books, attached by means of pins. The passbook was also exhibited in this case. In that book under date August 31, 1945, are to be found three credit entries, the first one amounting to Rs. 46,770-10 as., the second one Rs. 11,831-4 as. and the third Rs. 8,700. The details of these amounts, that is to say, how these sums were made up will not appear from the passbook but they can be gathered from the counterfoils of the paying-in-slips. These counterfoils in their turn do not show the names of the persons who drew the cheques or the names of the banks on which the cheques were drawn but only show the amounts of the cheques. In the same passbook under date August 31, 1945, are to be found the details of the outgoings, that is to say, the numbers of the cheques drawn by Nundy and Co. as also the amount of the cheques so drawn. Looking at the passbook itself one could not say whether the proceeds of any particular cheque which had been deposited with the bank on August 31, 1945, had been credited or not. In order to find that out, one would have to compare the passbook with the paying-in-slip books which in their turn were not complete inasmuch as it was not unusual for the Plaintiff to use loose paying-in-slips. On behalf of the bank two witnesses were examined. The first was Sitaram Malaviya. This gentleman has been in the employ of the Allahabad Bank since the year 1919 and is at present in charge of the overdraft department of the bank. He said Tarini Babu or some of his representatives was in the habit of going to the bank every day and that Tarini Babu himself used to go to the bank very regularly. The passbook, according to this witness, used to be sent up every morning, to be written up and used to be sent back to the Plaintiff every evening. Tarini Babu, according to this witness, used to enquire about his balance, about the various cheques which were put in in course of the day and used also to go to the security department to enquire about the securities. He stated that it was the practice of the bank to send confirmation slips to its customers showing whether they were in credit or in debit and whenever any confirmation slip was received by the bank signed by the constituent it was passed on to the ledger account of that particular constituent. He said that he had taken out the three confirmation slips which have been exhibited in this case and no other confirmation slips, especially those for the year 1945-1946, could be found. The procedure prevailing in the bank for the purpose of receiving cheques for collection and credit is given by this witness in answer to Qs. 113 and 114 put to him. According to this witness when a party comes with a cheque, he fills up a paying-in-slip or he brings a paying-in-slip book properly filled up and hands over the book or the slip along with the cheque to the receiving cashier. The cashier compares the paying-in-slip with the cheque to satisfy himself that the details are given correctly and then he initials the counterfoil putting a rubber stamp on it and hands over the slip or the book to the party. Thereafter the assistant receiving cashier puts away the cheque in a wooden cabinet which has a number of pigeon holes. When several cheques are collected, they are taken out by some peon to the clearing department. The second witness on behalf of the bank was Sitaram Mehra. He corroborated the practice above referred to and said that in the year 1945 he was working in the cash department. Looking at the two books of paying-in-slips he stated that many of these slips bore his initials. When he was shown ex. A he said that he was sure that the writing in pencil over the stamp of the Allahabad Bank, Ltd., was not his and he could not say whether the slip was initialled by anybody employed by the bank at that time. I myself examined the two paying-in-slip books carefully and to me there seemed to be no difference between the initials to be found on ex. A and those to be found on a large number of the paying-in-slips in the two books which were exhibited. In my opinion the paying-in-slip, ex. A, contains the initials of Sitaram Mehra, whatever he may say to the contrary.

The two issues of law which counsel for the bank raised are those of waiver and estoppel. The plea of waiver as set out in the written statement and mentioned already is to be found in paras. 6 and 7 of the written statement. It was argued that the Plaintiff must, in the circumstances of the case, be held to have actual knowledge of the fact that the cheque for Rs. 4,767-8 as. was not credited to his account or to be deemed to have had constructive knowledge of the same. It is true that the Plaintiff had the opportunity to check up whether credit was being given to him for all the deposits made by him. But I believe the testimony of the Plaintiff and his witnesses to the effect that the mistake was not detected until the month of August, 1948. The Plaintiff''s books of accounts were certainly not kept in the way an astute man of business would do. They were not audited, neither was there any regular checking. Even the persons who were in charge of the books of accounts were only part-time employees. But that does not conclude the matter. The question is whether from the circumstances of this case and the facts which have come to light it should be held that the Plaintiff has waived his right to point out the non-realisation of the cheque and to seek to recover his dues from the bank. Waiver, as is well-known, is a matter of agreement, express or implied. As was observed by Lord Russell in delivering the judgment of Dawson''s Bank, Ltd. v. Nippon Menkwa Kabushiki Kaisha (1935) L.R. 62 IndAp 100, 109:

Waiver is contractual and may constitute a cause of action ; it is an agreement to release or not to assert a right.

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There is no such thing as estoppel by waiver.

As Chitty puts it in his treatise on the Law of Contracts, 20th Ed., p. 384:

Waiver is nothing unless it amounts to a release. It is by a release or something equivalent only that an equitable demand can be given away. A mere waiver signifies nothing more than an expression of intention ; intention not to insist upon the right, which in equity will not without consideration bar the right any more than at law accord without satisfaction would be a plea. Waiver may be deduced from acquiescence or again may be implied. * * * *

The party affected must, of course, be aware of his right. There can be no condonation of a wrong which a man does not believe was committed on him just as there can be no waiver of the right to take objection to procedure on the part of one who did not know he was entitled to do so.

In order, therefore, to hold that the Plaintiff must be deemed to have waived his rights I must come to the conclusion that the Plaintiff was aware of his right. If there was no checking of the books done by the Plaintiff or his assistants until the month of August, 1948, and I have no reason to disbelieve their evidence, I cannot hold that the Plaintiff became aware of his right until August, 1948. Immediately he became aware of it he protested and, therefore, in my opinion, the question of waiver does not arise.

The question of estoppel, however, presents a matter of some difficulty. It was contended on behalf of the bank that the Plaintiff having had opportunity of scrutinizing his account and having as a matter of fact looked into his bank passbooks and further by having signed the confirmation slips sent by the bank in the year 1947-48 must be taken to have examined the account as mentioned in the confirmation slips and so must be taken to be bound by the declarations, contained therein. Acts or omissions on which reliance is placed can be divided into two classes, (i) acts, viz., checking the bank passbook and confirming the statement of accounts sent by the bank and (ii) omissions, i.e., failure or neglect to inform the bank after having had opportunity of checking the correctness of the accounts and at the time when the confirmation slips were sent and to inform the bank about the incorrectness thereof.

Taking the case of the confirmation slips first, in my opinion, the bank cannot rely upon these inasmuch as they are not of the relevant period at all. As I have already said, the earliest of the confirmation slips is dated May 31, 1947, and relates to the accounts ending on March 31, 1947. It is true that by the language used in the confirmation slips the Plaintiff states that he had examined his account with the Allahabad Bank, Ltd. and confirmed that the balance in debit as appearing on the confirmation slips was correctly stated. But such a confirmation slip even couched in the language in which it appears, to my mind, does not bind the Plaintiff in respect of all his previous transactions with the bank. The Plaintiff has had an account with the Allahabad Bank, Ltd., from the year 1910 and it seems absurd to suggest that every time the Plaintiff stated "We have "examined our account"-he meant to convey that be had examined his account with the bank commencing from the year 1910. The Defendant bank was in the habit of sending these confirmation slips twice a year and, therefore, taking the case of the Defendant bank at its highest the Plaintiff could only be said to be confirming the accounts for the last six months immediately preceding the date of the confirmation slip and the earliest of the confirmation slips being dated May, 1947, the Plaintiff was only confirming the statement of account commencing from October, 1946. As regards the effect of the passbook entries the position in law still seems to be unsettled. According to Halsbury''s Laws of England, 3rd Ed. vol. II, p. 209:

Entries in the passbook to the credit of the customer are, when the book is delivered to him, prima facie evidence against the banker ; when the book is returned by the customer without objection, entries to his debit are prima facie evidence against him.

Mr. Sen appearing on behalf of the bank contended that this shows that the debit entries in the bank passbook are to be treated as evidence against the Plaintiff; but, in my opinion, the proper way to look at the entries in the bank passbook under date August 31, 1945, is to treat the instance as one of the absence of a credit entry. Commenting on the effect of a balance being struck in the passbook, the same learned author goes on to state:

Where a periodical or other balance has been struck in the passbook, and the passbook is returned by the customer without comment, this has been treated as constituting evidence of a stated and settled account. Elsewhere the matter has been regarded as one still requiring evidence of implied contract between banker and customer.

In this case, however, there is no plea of any staled or settled account. As will appear from the notes at the bottom of p. 210, vol. II, of Halsbury''s Laws of England, 3rd Ed., two divergent, views have been taken about the duty of a customer to inform the banker about the correctness or otherwise of the items appearing in the passbook. There are some observations of Lord Halsbury in the case of Bank of England v. Vaglions Bros. [1891] A.C. 107, 116 which would seem to suggest that a customer was bound to know the contents of his own passbook, probably thereby implying that the customer was under some obligation to point out any inaccuracies in the passbook to the banker but in the judgment of the Court of Appeal Vaglions Bros. v. Bank of England (1889) 23 Q.B.D. 243, there occurs the following observations of Bowen, L.J., at p. 263:

There was no evidence to show what, as between a customer and his banker, is the implied contract as to the settlement of account by such a dealing with the passbook or that having regard to the ordinary course of dealing between a banker and his customers, the Plaintiff had done anything which can be considered a neglect of his duty to the bank or negligence on his part.

The observations of Easher, M.R., in Chatterton v. London and County Bank Millers newspaper of Nov. 3, 1890, P. 394 are given in the said footnote of p. 210 of vol. II of Halsbury''s Laws of England, reading:

He, the customer, is not bound to look at it. You must not put a burden on people the law never placed on them ; you are putting on them the burden of saying: "look through the passbook".

In the case of Kapitigala Rubber Estates, Ltd. v. National Bank of India Ltd. [1909] 2 K.B. 1010 : 100 L.T.R. 516, Bray, J., refers to the observations of Bowen, L.J., in Vaglion''s case quoted above and goes on to add that the dictum in Leather Manufacturers Bank v. Morgan 117 U.S. Reports 96 : U.S. SCR 29 (LE.) 819, to the effect that the sending on the passbook when produced amounted to a settled and stated account, has never been acknowledged by any Court or Judge in England as correctly stating the English Law. The judgment in Kapitigala Rubber Estates, Ltd. v. National Bank of India, Ltd. (supra) was followed by Channel, J., in the case of Walker and Anr. v. Manchester and Liverpool District Banking Co., Ltd. (1913) 108 L.T.R. 728, where the learned Judge observes:

The authorities are rather against the contention that there is a duty on the part of the customer to examine his passbook.

Mr. Sen relied on the American case mentioned above as also on certain observations made in several judgments which are summarised in Paget''s Law of Banking, 5th Ed., at pp. 344 to 362. The relevant facts in the Leather Manufacturers'' case were that the bank was in the habit of sending up the passbook from time to time to its customers along with vouchers in the shape of cheques drawn by the customer so that the customer had an opportunity of comparing the cheques with the entries in the passbook. On these facts it was held in the Leather Manufacturers'' case:

It does not seem to be unreasonable in view of the course of business and the custom of banks to surrender their vouchers on the periodical writing up of the accounts of depositors, to exact from the latter some attention to the account when it is made up, or to hold that the negligent omission of all examination may, when injury has resulted to the bank, which it would not have suffered if such examination had been made and the bank had received timely notice of objections, preclude the depositor from afterwards questioning its correctness.

It was further observed at page 820:

If the Plaintiff knew of the mistake, or if they had that notice of it which consists in the knowledge of facts which, by the exercise of due care and diligence, will disclose it, they failed in their duty; and adoption of the check and ratification of the payment will be implied. They cannot now require the Defendant to correct a mistake to its injury, from which it might have protected itself but for the negligence of the Plaintiffs.

It is quite clear from the judgment of the Judicial Committee in the (1937) L.R. 65 I.A. 75 (Privy Council) , that the principle of estoppel rests upon a duty If there was no duty cast upon the customer to scrutinise a bank passbook as soon as received and to inform the banker about any inaccuracies therein, negligence on the part of the customer to inform the bank of inaccuracies in the passbook cannot result in estoppel. Estoppel of this kind is described as estoppel by negligence or by conduct or by representation or by holding out of ostensible authority. Here the estoppel relied upon by the Defendant is one of conduct or representation. Lord Wright in delivering the judgment of the Judicial Committee in the case of the Mercantile Bank of India, Ltd. v. Central Bank of India. Ltd. (Supra) makes it perfectly clear that there could be no case of estoppel by conduct or representation unless there was a duty to inform. In the case of Greenwood v. Martin''s Bank [1933] A.C. 51, 57, Lord Tomlin observed:

Mere silence cannot amount to a representation but when there is a duty to disclose, deliberate silence may become significant and amount to a representation.

The existence of a duty on the part of the customer of a bank to disclose to it his knowledge of the forgery of a cheque as the one in question in Greenwood''s case was admitted. The facts of Greenwood''s case were shortly as follows: Greenwood''s wife had forged certain cheques and cashed them from Martin''s Bank. Greenwood, although he was at all material times aware of this fact and although he intended from time to time to inform the bank thereof, in fact, never did so until after the death of his wife as a result of suicide. It was held that as Greenwood had kept silent even after knowledge acquired about the forgery of the cheques, he was precluded from taking that point up again with the bankers.

On the facts of the present case I hold that there has been no delay on the part of the Plaintiff to inform the bank about the correct state of affairs once he came to know of it. i cannot find any substance in the contention of the bank that any such delay has greatly prejudiced the bank. Even after the mistake was pointed out, the bank did not take any steps to find out Kundu, much less to proceed to get Kundu to pay up his just debts. There is no allegation here that the bank could not contact Kundu when it was apprised of the mistake or that Kundu had become insolvent or that his condition had become such that it was impossible to recover the money from him. Nor can I see how by allowing the Plaintiff''s account to remain in debit during the years 1947 and 1948 the bank had acted to its prejudice. The bank had collected interest from the Plaintiff which it was not entitled to. It had failed to give the Plaintiff credit for the amount which it should have done in the year 1945.

There is no allegation in the plaint that the passbook of the Plaintiff used to be entered up regularly and sent to the Plaintiff for checking up. There is no averment that the entries in the passbook made from time to time amounted to settlement of accounts. There is no proof that statements of accounts were sent to the Plaintiff in the year 1945 nor is any confirmation of the state of account in the year 1945 forthcoming. There is no evidence that the course of business between the Plaintiff and the Defendant showed that there was a duty on the Plaintiff to inform the bank of any mistakes in his account. No custom or practice of the kind mentioned in the American judgment in the Leather Manufacturers'' case has been pleaded or proved in this case. Even in England it seems that the Courts have not gone to the length of holding that there is a duty cast on the customer to examine his passbook whenever it is sent to him and to inform the bank of the irregularities therein. In the absence of such duty clearly, in my opinion, there can be no question of estoppel. I, therefore, answer the issues raised as follows:

(1) The cheque for Rs. 4,767-8 as. was sent by the Plaintiff to the Defendant No. 2 on August 31, 1945, as alleged in the plaint.

(2) The Defendant No. 2 was under a liability to pay the sum of Rs. 4,767-8 as. to the Plaintiff.

(3) The Plaintiff is not estopped or precluded from claiming the said sum from the Defendant bank.

(4) The Plaintiff has not waived his claim by reason of facts pleaded in paras. 6 and 7 of the written statement as against the bank.

There will, therefore, be a decree against the Allahabad Bank, Ltd., for Rs. 4,767-8 as with interest on judgment at six per cent. and costs. There will also be a decree against the Defendant Ajit Kumar Kundu for a like amount with interest and costs. Certified for two counsel.