Privy Council Court May 1938 Judgments

Secretary of State Vs. Bank of India Ltd.

Court: Privy Council

Lord Wright: This is an appeal from a judgment of the High Court in appeal at Bombay, which affirmed a judgment of Wadia, J., as trial Judge. These judgments rejected the claim of the appellant to be indemnified by the respondents against a liability which he had incurred and been compelled to satisfy under the circumstances of the case which were shortly as follows. A lady named Gangabai was the indorsee and holder of a Government promissory note for Rs. 5000. A broker named Acharya, having possession of the note on the lady's behalf, forged her indorsement to it in his favour and indorsed it for value to the respondents. The respondents acting in good faith applied to the Public Debt Office under the Indian Securities Act, 1920 to have a renewed promissory note payable to them issued in exchange for the note which the respondents gave up in exchange. The lady, becoming aware of the fraud practised by Acharya, and the dealing with her note on the part of the respondents and the appell...