The chief accounts officer of AB Insurance Company, who was in service with the company for

over 15 years, was the custodian of the cheque books. He has forged the signature of the

Managing director on 50 cheques and misappropriated a total amount of Rs.15 lakhs during a

Period of four years. On discovery of the forgery, the company wanted the bank to recredit the

Account with the amount in question. The bank refused to comply with the request and took the

Following defense:

a. Even if the cheque were forged, the company has acquiesced to the payment.

b. The company was stopped from its claim because it had not objected to the payments

Which were brought to its notice through monthly statements and half yearly account.

c. The company was stopped from its claim since it was negligent in entrusting the custody

of the cheque books to the accounts officer leading to contributory negligence.

d. The suit was time barred since the company had not objected to the payment for a period

Of four years.

- In view of the above defense taken by the bank, the company has proceeded against the

Bank and the chief accounts officer and the issue are whether the suit is maintainable.

Q6. Explain the decision pronounced by the Court of Law in each of the decided cases including

Some of the recent cases decided by Supreme Court/High Court.