X is issued a cheque of Rs. 32000 payable to B or order. The cheque is misplaced and is found by C. C forges B’s signature and endorses it in favour of D, who presents the cheque for payment from the bank, but it is dishonoured.

A forged instrument has no existence in the eyes of law. A title which never came into existence cannot be improved even if it passes into the hands of a holder in due course. C forges B’s signature on a promissory note and transfers the same to D who takes it in good faith for value. D gets no title of the note even though he is a holder in due course. However, D can recover the amount from C.