Is introducer liable for frauds by account holder?

In a significant judgment the Supreme Court has held that an introducer, without other evidence, could not be held liable for a fraud played on the bank by an account holder. 
 
Earlier, introduction was a necessary and sufficient condition for opening an account. But following this judgment introduction will only be a necessary condition but not sufficient to open an account. As the introducer’s liability is now limited, banks, as part of the ‘know your customer’ norms, will have to conduct stringent background checks on prospective account holders. 
 
Jamshedpur-based Manoranjan Das, a businessman having a current account in Central Bank, had introduced one Loknath Acharya to the bank on May 26, 1972, for the purpose of opening a similar account. 
 
Acharya on October 30, 1972 presented three demand drafts - one for Rs 32,000, second for Rs 78,000 and the third for Rs 90,300. After presenting the demand drafts, he presented a self cheque of Rs 27,000 and withdrew the money. Little later, he presented another cheque of Rs 1,40,000 for withdrawal. 
 
By now the bank manager became suspicious and on verification it was found was out that all the three drafts were forged ones. But, by then the culprit had fled. 
 
The bank filed a complaint with the police accusing Acharya and Das, who had introduced him, to have cheated the bank to the tune of Rs 27,000. And the trauma began for Das. He was embroiled in litigation for 32 years. 
 
Das was convicted by trial court for cheating and awarded a punishment of three years imprisonment. The High Court upheld the conviction but reduced the sentence to six months. 
 
Allowing the appeal filed by Das, the Supreme Court said both the trial court and the High Court committed serious error as Das had introduced Acharya to the bank only for opening an account and “that by itself does not spell out any fraud or cheating.”