CANARA BANK vs CANARA SALES CORPORATION & ORS.

The Supreme Court held that under Sections 6, 31, 77, 85, and 117 of the Negotiable Instruments Act, 1881, the relationship between a bank and its customer is that of creditor and debtor, emphasizing the element of trust. The Court ruled that the bank's defense of negligence by the customer was insufficient to deny recovery for amounts withdrawn via forged cheques, as the customer was unaware of the fraud until discovered. The appeal was dismissed, affirming the lower court's decree in favor of the respondent-company for the recovery of the amount with interest.