bank can escape liability only if it could establish that the client knew of the forgery.
. When a cheque duly signed by a customer is presented before a bank with whom he has an account there is a mandate on the bank to pay the amount covered by the cheque. However. if the signature on the cheque is not genuine. there is no mandate on the bank to pay. The bank. when it makes payment on such a cheque, cannot resist the claim of the customer with the defence of negligence on his part such as leaving the cheque book carelessly so that third parties would easily get hold of it. This is because a document in cheque form. on which the customer's name as drawer is forged. is a mere nullity. [1147B-D]
2. The relationship between the customer of a bank and the bank is that of a creditor and debtor. When a cheque presented for encashment contains a forged signature the bank has no authority to make payment against such a cheque. The bank would be acting against law
https://www.lawweb.in/2012/10/bank-can-escape-liability-only-if-it.html
2. The relationship between the customer of a bank and the bank is that of a creditor and debtor. When a cheque presented for encashment contains a forged signature the bank has no authority to make payment against such a cheque. The bank would be acting against law
https://www.lawweb.in/2012/10/bank-can-escape-liability-only-if-it.html
