Bank not liable for forged fixed deposit receipts issued by secretary acting beyond authority. Estoppel does not apply.

The court held that the bank was not liable for the fraudulent acts of its secretary as he acted outside the scope of his authority. The fixed deposit receipts issued by the secretary were found to be forged and therefore null and void, not binding on the bank. The doctrine of estoppel does not apply to cases involving forgery, and the bank was not estopped from denying the validity of the receipts. The court set aside the previous judgment and decree, awarding interest only on the genuine fixed deposit and dismissing the suit without costs.

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Issues Involved:
1. Liability of the bank for fraudulent acts of its secretary.
2. Validity of fixed deposit receipts issued by the secretary.
3. Applicability of the doctrine of estoppel in cases involving forgery.

Issue-wise Detailed Analysis:

1. Liability of the Bank for Fraudulent Acts of its Secretary:
The primary issue in this case is whether the bank is liable for the fraudulent acts of its secretary. The petitioner, a co-operative bank, contended that it is not liable for the unauthorized and fraudulent acts committed by its secretary, especially in the absence of negligence on the part of the bank. The court examined relevant bye-laws of the bank which stipulated that receipts for deposits from non-members must be executed by at least four members of the board of directors, including the president. Since the respondent was a non-member, the secretary did not have the authority to issue fixed deposit receipts to her. The court concluded that the secretary was acting outside the scope of his authority and employment, and thus, the bank was not liable for his fraudulent actions.

2. Validity of Fixed Deposit Receipts Issued by the Secretary:
The court found that the fixed deposit receipts in question, bearing Nos. 1293 and 1192, were not genuine. The secretary had forged the signatures of the directors on these receipts. According to the bye-laws, the secretary was not authorized to issue such receipts to non-members. The court held that the forged receipts were null and void, and thus, not binding on the bank. The court cited precedents such as *Ruben v. Great Fingall Consolidated* and *Kreditbank Cassel v. Schenkers Ltd.*, which established that forged documents are simply nullities and do not bind the company or bank.

3. Applicability of the Doctrine of Estoppel in Cases Involving Forgery:
The respondent argued that the secretary had the authority to receive fixed deposits and that every act done by him in the course of his employment would bind the bank. The court, however, noted that the doctrine of estoppel does not apply to cases involving forgery. The court referenced *Ruben v. Great Fingall Consolidated* and *South London Greyhound Race Course Ltd. v. Wake*, which held that the doctrine of estoppel does not extend to forged instruments, as they are null and void. The court concluded that the fraudulent acts of the secretary did not bind the bank, and the bank was not estopped from denying the validity of the fixed deposit receipts.

Conclusion:
The court set aside the judgment and decree of the learned district munsif, declaring that the plaintiff is entitled to interest only on the fixed deposit of Rs. 1,000 as found in the account books of the bank under the heading F.D. No. 1293 dated 24th January, 1955. The suit was otherwise dismissed, and no costs were awarded.

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