THE KERALA STATE COOP.MKTG. FEDERATION vs STATE BANK OF INDIA .

The Supreme Court analyzed the applicability of Section 131 of the Negotiable Instruments Act, which protects a banker from liability if they receive payment in good faith and without negligence. The Court held that the 1st Respondent Bank failed to demonstrate good faith and absence of negligence in allowing the opening of an account with minimal funds and permitting a significant withdrawal shortly thereafter. Consequently, the Court reversed the High Court's decision and reinstated the trial Court's decree in favor of the Appellant for the recovery of Rs. 50,000/-.