Civil court jurisdiction and forged cheque liability: statutory dispute limits were not expanded, and bank liability remained despite alleged negligence.

Section 48(1) of the Bihar and Orissa Co-operative Societies Act, 1935 was construed as excluding only the disputes expressly enumerated for reference to the Registrar; the Explanation clarified the breadth of a "dispute" but did not enlarge the statutory categories to cover every controversy between a society and a non-member. Civil court jurisdiction therefore remained available. On the forged cheque issue, payment made on an instrument carrying a forged signature lacked any valid customer mandate, so alleged customer negligence outside the immediate transaction did not defeat the society's claim. Liability was treated as resting with the bank, and the society's claim was not barred by contributory negligence.

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Issues: (i) Whether a civil court's jurisdiction was barred under Section 48(1) read with Section 57 of the Bihar and Orissa Co-operative Societies Act, 1935 in respect of the dispute between the society and the bank. (ii) Whether the society's alleged negligence defeated its claim against the bank for payment made on a forged cheque.

Issue (i): Whether a civil court's jurisdiction was barred under Section 48(1) read with Section 57 of the Bihar and Orissa Co-operative Societies Act, 1935 in respect of the dispute between the society and the bank.

Analysis: Section 48(1) specified the classes of disputes that had to be referred to the Registrar, and the scheme of the provision showed that only the enumerated categories were excluded from civil court jurisdiction. The Explanation was meant to remove ambiguity and to clarify that a claim could still be a dispute even when the debt was admitted and only liability or mode of enforcement was in issue. It was not intended to enlarge the main provision so as to bring every dispute between a registered society and a non-member within the Registrar's jurisdiction. The amendment introducing non-members into the Explanation did not add a new head of disputes beyond clauses (a) to (e).

Conclusion: The civil court's jurisdiction was not barred, and the suit was entertainable by the civil court.

Issue (ii): Whether the society's alleged negligence defeated its claim against the bank for payment made on a forged cheque.

Analysis: The cheque in question carried a forged signature, so there was no genuine mandate by the customer authorising payment. In such a case, negligence attributed to the customer in matters not forming part of the immediate transaction could not operate as a defence for the banker. The loss was attributable to the bank's own negligence and the fraud of its employees, while the society was found not to have been negligent in the manner alleged. The principle applicable to a genuine cheque altered by forgery did not assist the bank where the instrument itself was not validly authorised.

Conclusion: The society's claim was not defeated by any contributory negligence, and liability remained with the bank.

Final Conclusion: The appeal succeeded, the High Court's view on jurisdiction was rejected, and the decree in favour of the plaintiffs was restored, with no decree against the respondent against whom relief was not sought.

Ratio Decidendi: The Explanation to Section 48(1) of the Bihar and Orissa Co-operative Societies Act, 1935 cannot be construed to enlarge the statutory categories of disputes referred to the Registrar, and a banker cannot rely on a customer's alleged negligence where payment is made on a cheque carrying a forged signature and therefore lacking any valid mandate.

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