H’s wife over a period of some months obtained money from H’s bank by forging his signature on cheques which she drew in favor of herself When H discovered the fraud he informed the bank The bank refused to credit his account for the amount wrongly debited against him on the ground that the forged signature appeared quite genuine. Discuss bank ‘s liability.

It is the duty of the banker to be acquainted with the customer’s handwriting and the banker must suffer if payment is made of a cheque on which the customer’s signature is forged. A forged cheque is called a nullity.

A banker who pays a forged cheque is bound to pay  the  amount again to his customer. However, the banker has a remedy against the forger. It is therefore the duty of the customer to inform the banker so that the banker may take an action against the forger. If the customer withholds this information and   in consequence the banker loses the forgery of his signature.

In the light of the provision of law stated above, it is submitted that the banker will be liable to H, unless it is proved that he withheld this information which prevented the banker to recover the forged sum from the wife.

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