P L D 1965 (W (PLP)

6. Before dealing with the above issues it would be useful to re‑state the position of the shares clearly. The total number of shares which, according to the plaintiff, were delivered to the defendant‑firm, are (1) 4,900 of Karnaphuli Paper Mills, (2) 300 of Burewala Textile Mills and (3) 3,000 of Adamji Jute Mills. Out of these after the disputes had started and as a result of correspondence by the lawyer of the plaintiff the following shares were returned by the defendant No. 1 to Mr. Hassan Ali A. Rehman, the plaintiff's Advocate. 3,100 Karnaphuli Paper Mills, 2,200 of Adamji Jute Mills, and 150 of Burewala Textile Mills. It would thus be seen that the balance of the shares for the value of which the present suit has been filed were 1,800 of Karnaphuli, 800 of Adamji and 150 of Burewala Textile Mills. It may be stated that out of the 1,800 shares of Karnaphuli 1,300 which had been sold to Kasmani, D. W. 4, and for which he had not paid, have been recovered and are lying in Court. There is no claim of the defendants or anyone else in respect of these 1,300 shares, So these shares would be handed over to the plaintiff and her claim in suit would be proportionately reduced. With regard, then to the remaining 500 shares of Karnaphuli, 800 of Adamji and 150 of Burewala Textile Mills, the position as emerged from the evidence is as follows : Of the 500 shares of Karnaphuli 300 were sold to Yunus Panwala, D. W.

7. The balance of 200 shares are not traceable. Out of 800 shares of Adamji 500 were sold to Muhammad Ali Panjwani, D. W.

8. The remaining 300 shares are not traceable. Lastly of the 300 shares of Burewala we have seen that 150 shares were returned by the defendant No. 1 to the plaintiff's Advocate. The remaining 150 of these were sold to Zakaria A. Ghani, D. W.

6. It is the case of the defendants 1 and 2 that the sale of 300 shares of Karnaphuh to Yunus Panwala, of 500 of Adamji to Muhammad Ali Panjwani and 150 of Burewala to Z. A. Ghani was effected by Ayub either in the name of Salim Trading Co. or his own, and this was not within the scope of his authority and, therefore, they are not liable to the plaintiff in respect of these shares. It is also the case of the defendants 1 and 2 that they are not responsible for the untraced shares of Karnaphuli and of Adamji as described above.

7. Out of the shares returned by the defendants to the plaintiff through her Advocate it is the case of the defendants that 3,100 shares of Karnaphuli had been recovered by the defendant No. 2 from Ayub. Another 75 shares of Burewala were also so recovered. The remaining 75 shares of Burewala had been sold by Ayub in the name of the firm to Muhammad Ali Panjwani D. W. 8; 2,000 of Adamji were sold to Kasmani in the name of the firm and the remaining 200 shares of Adamji were sold to Panjwani in the name of the firm. The sale proceeds or the 'Badla' money of these shares which were sold in the name of the firm had been deposited by Ayub in the bank in the account of the firm and these shares were accordingly recovered by the firm and money was refunded to the purchasers under the direction of the Stock Exchange and it was thus that these shares were returned to the plaintiff:

8. There is a considerable amount of oral and documentary evidence in this case and the record has become quite bulky, but in my opinion the decision of the case falls within a fairly short ambit. In a nut‑shell the case put up on behalf of the defendants 1 and 2 is that the shares of the three companies which are the subject‑matter of the suit were not delivered to the firm; that it was not the duty of the firm to have the transfer form verified from the company; that the delivery of these shares to Ayub was under some private arrangement between the plaintiff and Ayub. In the alternative it was urged that even if these shares are found to have been delivered to the firm the transfer of them by sale or on 'Badla' by Ayub in the name of Salim Trading Company or in any other name except that of the firm is not the responsibility of the defendants. It is pointed out that under the rules of the Karachi Stock Exchange Ayub, though he was the authorised agent of the firm and was doing business of buying and selling of shares on behalf of the firm, yet he was expressly prohibited by rule 14(a) of the Karachi Stock Exchange from making any bargain in his own name or in any name other than that of his employer that is the defendant No.

1. That being so, it was pointed out that Ayub, who had fraudulently sold these shares or given in 'Badla', had not acted within the scope of his authority and, therefore, the firm was not liable in this respect. With regard to the untraced shares it is the case of the defendants that either they were not delivered or if they were delivered to Ayub that was done under some private arrangement between him and the plaintiff and, therefore, they are not liable to account for them.

9. The first question, therefore, is whether the said shares, namely 3,000 of Adamji, 4,900 of Karnaphuh and 300 shares of Burewala Textile Mills were either delivered to the defendants or had otherwise remained with them and were held on behalf of the plaintiff. The case of the plaintiff in the amended plaint is that 3,000 shares of Adamji were delivered to the defendants by the plaintiff through her husband on 8‑7‑57 and in respect of the 4,900 shares of Karnaphuli and 300 of Burewala, blank transfer forms duly signed were delivered to the defendants on 15th July 1957. The case of the plaintiff is that the share certificates of these shares which had been bought through the defendants had remained with them, and therefore all that was necessary to obtain verification was to deliver the blank transfer forms bearing the signature of the plaintiff Mst. Hanifa Bai. The purpose of delivering these shares or the blank forms was to have the signature of Mst. Hanifa Bai verified by the company so that when it was found necessary to sell them it could be done so without any hitch. Mr. Arif, the learned Advocate for the defendants who argued the case with great industry, strenuously urged before me that none of these shares had been delivered to the firm or to the defendant No. 2. 1 may make it clear that it is the case of the defendants that the concern under the name of the defendant No. 1 was a proprietary business of defendant No. 2 and that there was no partnership between the defendant No. 2 on the one hand and Nos. 3 and 4 on the other with regard to the business carried on in the name of the firm. I have accepted this contention and I will give my reasons for it under the relevant issues. The defendants themselves have frequently used the expression 'firm' in the correspondence and in the evidence and this refers to defendant No.

1. Some confusion arises from the fact that the defendant No. 1 bears the name of the defendant No.

2. It would therefore he right to say that the defendant No. 2 was doing the business of stock‑broker under the name of Messrs Muhammad Siddiq‑Abdul Sattar and this was considered by the defendant No. 2 as a firm though in fact it was a or proprietary concern. The office of this firm was at No. 29, Karachi Stock Exchange Ltd. and all correspondence and contracts and receipts, etc. in respect of the share business were carried on in this name and on the said address. The defendant No. 2 had also another office which was that of a family partnership concern and which goes by the name of Haji Abdul Sattar‑Haji Dawood & Sons and is situated in another premises on the McLeod Road. The reference in this judgment to the firm of Muhammad Siddiq‑Abdul Sattar (defendant No. 1) should therefore be read in the light of what has been said above.

10. On the question whether the said shares were delivered to the defendants there is the evidence of Abdullah, the husband of the plaintiff, P. W. 1, of Wali Muhammad P. W. 2, of Hanifa Bai P. W. 3 and of Ayub P. W. 4, and then there is the physical fact that most of these shares have been accounted for either having been sold in the name of the firm or found in the office of the firm or with Ayub or sold by Ayub, the accredited agent of the firm, in the name of Salim Trading Company. However, the contention of Mr. Arif was that these shares were not delivered to the defendant No. 2 personally as alleged by Abdullah, nor any of them had been allowed to remain with the firm, and that if any shares were delivered to Ayub that was done under a private arrangement between the plaintiff or her husband on the one hand and Ayub on the other and that if anything happened to these shares that would not be the responsibility of the defendants. He pointed out some discrepancy in evidence in respect of the delivery of these shares because in the first instance it was said that all these shares had been delivered to the firm, but at another instance it was said that only 3,000 shares of Adamj were delivered and the remaining had been allowed to remain with the firm from the time of their purchase and only signed blank forms were delivered in that respect. Reference was also made to the discrepancy between the evidence of Abdullah and Hanifa Bai in this respect. I am, however, of the opinion that the question whether these shares were delivered in the hand of the defendant No. 2 personally or were delivered in the office of the firm or to Ayub as the representative of the firm, does not make any difference to the plaintiff's case unless, of course, it is found that the delivery of these shares or their remaining with the firm was under some private arrangement between the plaintiff Hanifa Bai or her husband Abdullah on the one hand and Ayub on the other. The question also whether it was strictly the duty of the firm to have the signatures verified is also not of much significance. Admittedly, all these shares were bought by Abdullah for his wife Hanifa Bai from the firm. A very great deal of cross examination of Abdullah was directed on this point, but it was admitted by Muhammad Siddiq himself that all these shares were bought by Abdullah from the firm and this was also admitted in the written statement. There is evidence, which I believe, that at least some share‑brokers do get the signature on the transfer forms verified for their clients. There is also evidence that previously such verification had been done in respect of other shares which the plaintiff had bought from the defendant‑firm and that this verification had been effected through the firm. There is also evidence that the share scripts had been either left or given to the firm in connection with the verification of the signature in the blank forms. Therefore, the question whether the share certificates were strictly required to be sent to the company for the purpose of verification of the signature of the owner is not of any consequence for the purposes of this case. It is also easy to understand that the firm would be anxious to get things done in connection with the shares which had been purchased from them or through them and it must not be forgotton that Abdullah who was buying all his wife's shares from the firm would be an important client and so kept pleased. Therefore the receipt of the scripts and the signed blank forms for the purpose of verification would be in the normal course of the business of the firm.

11. Now, in connection with the question which is the subject‑matter of issue No. 1 let us note some of the undisputed facts. The first of these is that these 4,900 shares of Karnaphuli, 300 of Burewala and 3,000 of Adamji Textile Mills were purchased from the defendant No.

1. These were for and in the name of Hanifa Bai though Abdullah, her husband, did the buying. Hanifa Bai is a Memon woman, is not literate and therefore it can be safely said that it was Abdullah who was dealing with the firm on her behalf. He was doing business at Rangoon though he came to Karachi from time to time. The next important fact is that a substantial number of these shares were returned by the defendant No. 1 to the plaintiff. Some of these had been found in the office and some had been sold in the name of the firm and the sale‑proceed of which would be a very large sum of money, was deposited in the bank account of the firm. Even the remaining shares except the small quantity which had not been traced were dealt with by Ayub, the accredited agent of the firm who, as I shall presently show, was managing the affairs of the firm. I, therefore, hold that all these shares were delivered to the firm and that the firm would be responsible to account for them to the plaintiff unless it can be shown, as has been alleged by the defendants, that this was under some private arrangement between Ayub and the plaintiff or her husband Abdullah. In that view of the matter it is of little significance whether these shares were physically handed over to the defendant No. 2 Muhammad Siddiq or were delivered at the office of the firm or were allowed to remain there after they had been bought.

12. I shall now take up issues 2, 3 and 4 together because the questions involved in them are intimately connected with each other. First of all let me consider as to what was the position of Ayub in the firm. Admittedly he was the accredited agent of the firm and was authorised to buy and sell shares on behalf of the firm. But that was not all. The admissions made by Muhammad Siddiq, defendant No. 2, in the criminal case which were put to him while he was giving evidence in this suit makes it quite clear that it was Ayub to whom was left the business of the firm and ix was he who managed it and the defendant No. 2, the proprietor of the firm, did not do very much about this business. In this Court Muhammad Siddiq asserted that he generally sat in the office at the Karachi Stock Exchange, namely the office of the firm and that he used to go there every day. It was put to him whether it was not a fact that he had left the whole business of this office with Ayub, but he denied it. It was then that his statement made by him as a witness in the criminal case filed by him against Ayub for criminal breach of trust was put to him. There he had stated: "My share brokerage business was entirely looked after by the accused Ayub". When he was confronted with this statement Muhammad Siddiq with undue boldness stated that he had not made such a statement. His further statement in the criminal Court "I am not quite conversant with Stock Exchange business and did not attend office regularly" was then put to him and he replied that he did not remember to have made that statement. His next statement, "I have never seen the books of account of Stock Exchange business till the incident in this case", when put to him he replied that he did not remember about it. Lastly, his statement, "I used to visit the office once a month" was put to him and he replied that he may have made this statement but added that in doing so he was guided by the police prosecutor. He was then pressed in cross‑examination and he attempted to get out of his difficult position by saying that when he made the aforesaid statements in the criminal Court he realised that some were incorrect but he did so because the police prosecutor had asked him. This explanation does not do credit to Muhammad Siddiq and I reject it as being untrue. I am satisfied by these admissions of Muhammad Siddiq himself and from other circumstances in the case that Muhammad Siddiq had left the share business which was the business of the firm of Muhammad Siddiq‑Abdul Sattar in the hands of Ayub and it was Ayub who was managing it. If I did not take this view I would have had to accept the contention of Mr. Hasanali that the unauthorised sale of the shares of Hanifa Bai to various persons and the appropriation by the firm of a substantial sum of money being the sale‑proceeds of such shares as were sold in the name of the firm, was with full knowledge of Muhammad Siddiq. He cannot have it both ways. He cannot say on the one hand that for months these shares were being sold in the share market and the proceeds of a substantial part of it was being credited in the account of the firm without his knowing anything about it and on the other that he had not left the business with Ayub and was regularly attending office of the firm where the share brokerage business was carried on. I am inclined to take the more charitable view in favour of Muhammad Siddiq that he himself was not directly concerned with the unauthorised sale of the shares of the plaintiff and that all this selling was done by Ayub who was managing the business of the firm. The question as to the liability of the firm and of Muhammad Siddiq for the acts of Ayub will be dealt with a little later. In view of my conclusion that it was Ayub who was managing the business of the firm does it make any difference whether the shares and the blank forms for the purposes of verification of the signature were handed over to Muhammad Siddid or to Ayub. Even if these shares were brought to the office of the firm and handed over to Ayub it would be a thing in the normal course of the business of the firm and the firm that is the proprietor will be bound to account for these shares.

13. The question which next arises is whether there was a private arrangement between Ayub on the one hand and the plaintiff' or her husband Abdullah on the other under which these shares were handed over to the former. What that private arrangement could be, has not been attempted to be explained either in the evidence of the defendants or during the arguments. But I suppose by this expression it may have been intended that the dealings between Ayub and Hanifa Bai in respect of these shares were of a private character whereby perhaps Hanifa Bai derived some benefit and that Ayub while indulging in this business was not acting as the agent of the firm. In other words, the sale of these shares by Ayub was with the consent of Hanifa Bai and her husband Abdullah who was acting on her behalf. The oral evidence led on the side of the plaintiff may be said to be interested but there is unimpeachable documentary evidence in this case which thoroughly destroys the aforesaid plea of private arrangement. There are four letters, Exhs. D/21, D/22, D/23 and D/24 written by Abdullah from Rangoon and all these have been produced by the defendants themselves. These have to be read with Exhs. 39/1, 39/3 and 39/5 (the intervening exhibits are the postal covers) which are letters which had been received by Abdullah at Rangoon from the firm of Muhammad Siddiq‑Abdul Sattar. The letters have been written by Ayub on the letterhead of the firm and have been written expressly on behalf of the firm. The first of these in point of time is Exh. 39/1 which is dated 18‑1‑57 and written on behalf of the firm. In this it is stated "our advice is that whatever shares are with you all of them should be got verified so that there should not be any hitch in figure". There are lot of other matters in this letter regarding shares, for instance it is stated: "The object of our doing your work in your absence is that you should not have any difficulty in any share." There are then the rates of certain shares as prevalent in the market at that time. It is signed by Ayub for Muhammad Siddiq Abdul Sattar. The next letter, Exh. D/21, is the reply of Abdullah to Exh. 39/1. In this it is stated he had written‑to Karachi about the handing over of these shares but unfortunately the letter was wrongly delivered and he has now written to Karachi that the shares be handed over. In the body of the letter the form of address is "Seth Muhammad Siddiq‑Abdul Sattar per Bhai Ayub". This letter was written on an aerogram cover and it is important to note that the address on the cover is "Muhammad Siddiq Abdul Sattar, 29 Stock Exchange Building, Karachi." I have dealt with this aspect in some detail because it was argued that these letters were really intended for the benefit of Ayub personally and had nothing to do with the firm. That argument I have rejected as being without any substance.

14. The next letter is dated 6‑5‑57 and is addressed to the firm by Abdullah and is sent from Rangoon. In this he has said that he has not received the letter of the firm about the cement and Bawany shares which were going to be issued which letter he had been informed from his wife's brother Wali Muhammad had been sent by the firm to him. He has accordingly asked for the details of those shares which were going to be issued in the market. There is then the letter dated 20th July 1953 from the firm sent to Abdullah at Rangoon, Exh. 39/3, in which it is said that such shares of his which had been entrusted to them (firm) had been forwarded for early transfer. The shares of Valika had been received back and they have been sent to his (Abdullah's) house. But, and this is important, the remaining shares that is of Jute and Cotton acid paper would still take time. The letter then goes on to say that they had asked for signature on the transfer deeds and that this should be noted by him (Abdullah). There is then quoted the market rate of various shares. The next letter is from Abdullah dated 26‑8‑57 in which he has complained of non delivery of his shares, that is the shares purchased for Hanifa Bai. In fact, he has complained to Ayub that this amounts to harassment and if work was done in this careless manner there would be no business between them. Abdullah wrote again in the same strain on 4‑11‑57, Exh. D/24. In this he has complained that no letter has been received and no report of share market has been sent to him. He has then accused Ayub to whom this letter was addressed of being careless and unreliable. He has further said that whatever shares had been sent for verification during the time when he was present at Karachi he had received no information about it. He has expressly mentioned in this letter about the 3,000 shares of Adamji. He has said that none of these shares had been returned to him transferred. He has added that if they were going to sleep like this then he will not get the shares in 2 or 4 years. Some criticism was made of the fact that Exh. D/23 was addressed to Bhai Ayub c/o Muhammad Siddiq‑Abdul Sattar and Exh. D/24 is addressed to Ayub. The suggestion was that these letters were written to Ayub personally. The contents of these letters read with the other letters leaves no doubt that Abdullah was addressing the firm though the name mentioned was of Ayub because it was he from whom the reply was sought and it was he who used to do the correspondence on behalf of the firm. It is important to note that the covers of these two letters have not been produced by the defendants. However, it may be noted that at the end of both these letters Abdullah has asked Ayub to give his Salam to all the employees of the firm by name and also to the proprietors (Seth). Ayub replied on 18th November 1957 on behalf of the firm as per Exh. 39/5. He has noted the fact that Abdullah is displeased but he has asserted that they were ready to carry on his work as quickly as possible and they consider his work to be their own work and that Insha Allah his shares will be received within a few days and will be quickly forwarded to him. Ayub has signed this on behalf of Muhammad Siddiq‑Abdul Sattar. It may be useful to refer here to an admission made by Ilyas, a clerk in the office of the firm who was produced by the defendants and who went all out to support them regardless of the truth. Ilyas admitted in cross‑examination that it was Ayub who used to receive all the posts. He then added that he delivered them to the persons concerned. He was then made to admit that it was Ayub who used to write replies on behalf of the firm and sign them as such. Therefore, it is easy to understand why Abdullah was marking these letters for the attention of Ayub. It may be noted that the last letter of the firm written by Ayub is dated 18th November 1957 and it was on or about the 23rd of November 1957 that Hanifa Bai lodged the complaint to the Karachi Stock Exchange against the firm that her shares were being sold in the market fraudulently and without authority. This complaint is Exh. D.1/1. This complaint is not dated but it was sent either on 22nd or 23rd because on 23rd as per Exh. D. 1/1 the Karachi Stock Exchange has called upon Muhammad Siddiq to send his comments immediately on the said complaint.

15. The aforesaid letters of Abdullah were produced by the defendants themselves. Now, if there was any private arrangement between Abdullah or his wife with Ayub it is impossible to explain why Abdullah was writing these angry letters to Ayub as to why the shares were not being returned after verification and that their work was unreliable and careless. Ayub's replies sent on behalf of the firm is not consistent with any story of any such private arrangement as alleged. By this time a number of shares of the plaintiff had been sold. The inference is inescapable that whatever was being done by Ayub either on his own behalf or on behalf of the firm with regard to the shares Hanifa Bai was without the knowledge of the plaintiff or her husband Abdullah. My finding, therefore, is that there was no private arrangement between Ayub on the one hand and the plaintiff or her husband on the other. It follows from this finding that the shares of the plaintiff which were sold or otherwise transferred by Ayub were not so sold or transferred in collusion with the plaintiff or under any private arrangement with her or her husband.

16. The next question is whether the defendants are bound by these sales, and the further question which is most important, i.e. whether the defendants are liable to return the shares or their value to the plaintiff, which have already not been returned to her out of the total number set out in the earlier part of this judgment. I have shown that such of the shares as were sold by Ayub in the name of the firm and the proceeds of which had been deposited in the bank account of the firm have already been returned by the defendants under the directions of the Karachi Stock Exchange. Then there are some shares which had been sold in the name of Salim Trading Co. and some by Ayub in his own name. It was strongly contended by Mr. Hassanali that the defendants are bound by these sales as well. The question, however, is not of much importance in view of the conclusion that I have reached. With regard to the basis of the liability of the defendants 1 and

2. However, having regard to the fact that Ayub was prohibited under rule 14 of the Karachi Stock Exchange Rules from dealing with the shares in any name other than that of the defendant No. 1, I am of the opinion that as far as the question of the sale of these shares is concerned the defendants would be entitled to repudiate it on the ground that this was not within the scope of the authority of Ayub. I have also found that the concern known as Salim Trading Company was not that of the defendants and it was Ayub who had done a little business in that name. The extent of this business was small as would appear from the bank account of this concern, Exh. 30/1‑A. I have reached this conclusion because Ayub himself admitted in cross‑examination that this concern was that of his brother Ismail. This finding, however, does not help the defendants because I am of the opinion that they are still liable to the plaintiff. This brings me to the consideration of the latter part of issue No. 2, namely whether the defendants are liable to return the shares (the remaining shares) or their value. The first part of this issue does not require any specific finding in view of what I have already said on this question.

17. I have shown in paragraph 6 above that after the return of certain shares by the defendants to the plaintiff's Advocate in the year 1959 and in view of the fact that 1,300 shares of Karnaphuli have been deposited in this Court, the unaccounted. for shares are: 500 of Karnaphuli, 800 of Adamji and 150 of Burewala Textile Mills. I have also shown how some of these have been sold and how some others have remained untraced The contention of Mr. Hasanali was that even if it was found that these shares have been dealt with fraudulently by Ayub the defendants would still be bound by, by his action because the sale of these shares fell within the scope of the authority of the agent Ayub. It was urged that if this fraud was committed even for the benefit of the agent himself the defendants would still be liable as principal. Reliance was placed on a judgment of the House of Lords in the case of Lloyd v. Grace Smith & Co. (1912 A C 716), wherein it was held that a principal was liable for the fraud of his agent acting within the scope of his authority where the fraud was committed for the benefit of the principal or for the benefit of the agent. Further reliance was placed upon an Indian decision in the case of D. B. Saha v. Abdul Latif Molla (A I R 1923 Cal. 157). Mr. Arif on the other hand relied upon a judgment of the Lahore High Court in the case of Mst. Ram Kaur v. Raghbir Singh and another (A I R 1920 Lah. 134), but that judgment could only apply to the present case if it had been found that Ayub bad acted in collusion with the plaintiff or her husband. It was held in that case that where an agent acting in collusion with the third party does an act without the consent of his principal and the act is deterimental to the interests of the principal, the latter is not bound by that act. I, however, pointed out to Mr: Arif that in this case the important question was not whether the defendants were bound by any contract of sale which Ayub may have unauthorisedly done in respect of these shares. That question would have more properly arisen if the defendants had claimed these shares or their value from the purchaser to whom Ayub may have unauthorisedly sold these shares. The important question as pointed out to the learned counsel was that if it was found that the shares were delivered to the defendants then they would be clearly in the position of a bailee and would be liable to the plaintiff in respect of these shares if they had been improperly dealt with. Thereupon it was conceded that if it was established that the shares had been delivered to the firm then the defendant No. 2 would be liable to return them. It was however urged by Mr. Arif that even in that case if Ayub had committed a crime in respect of these shares then the defendant No. 2 as principal would not be liable.

18. Bailment is defined by section 148 of the Contract Act as the delivery of goods by one person to another for some purpose upon a contract that they shall when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. I have found that these shares as alleged in the plaint were delivered to the firm and that the defendant No. 1 is liable to account for them. The question then is whether in so far as some of these shares were sold away by Ayub in the name of Salim Trading Co. or in his own name, or have become untraceable the defendants are absolved of their liability as a bailee for that return of these shares or their value. Section 160 of the Contract Act lays down that it is the duty of the bailee to return, or deliver the bailed goods according to the bailer's directions. In the present case there were repeated directions by Abdullah for the return of these shares as has been shown above. These shares were delivered to the defendants in the ordinary course of business and when Abdullah who was acting on behalf of his wife, the plaintiff, demanded that these shares be returned it was the duty of the defendants 1 and 2 to comply with that direction. But Mr. Arif for the defendants contends that inasmuch as Ayub had dealt with these shares unauthorisedly and had either sold them or otherwise dealt with them on his own account the plaintiff cannot enforce her claim against the defendants. The question which then arises is that even if the assertion of fact is admitted can the defendants escape liability towards the plaintiff of whose goods they were the bailees. Upon the assumption that Ayub had misappropriated these unreturned or untraced shares or had sold them on his own account I am of the opinion in the circumstances of this case and having regard to the nature of the defendants business that they would still be liable to account to the plaintiff in respect of those shares. Section 151 of the Contract Act reads :‑-- "151.‑In all cases of bailment the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value as the goods bailed." This section abolishes the distinction in the amount of care required of various kinds of bailees. According to it the bailee is bound to act as a man of ordinary prudence, but what is more important is that the standards of care required of him must be of a prudent man under similar circumstances and with reference to goods of the same bulk, quality and value. Now, in the present case the firm dealt in share. Defendant No. 2, according to himself, was the sole proprietor of this concern. He was a member of the Karachi Stock Exchange, by virtue of which he was authorised to act as a stock‑broker. In the course of this business people entrust their shares and securities with the stock‑brokers. In the course of their business they handle very large sums of money of their clients, Muhammad Siddiq defendant No. 2, himself stated in his evidence that his share business when the market was at its best went up to the extent of 2 to 3 lacs in a month. The clients who come to their stock‑brokers place a great deal of trust and reliance in them. They entrust their shares or leave them with the stock brokers for various purposes such as sale, effecting of transfer, verification of signature and so on. The stock‑broker's business then is somewhat like the business of a banker. The clients naturally. when they entrust their shares and valuable stock to the stock‑brokers they do so upon the faith that their valuable property will remain safe with the stock‑brokers. They are also entitled to expect that the stock‑broker will act with skill, prudence and care which is required of a prudent man in such a business. When the clients go to the stock‑broker they put their faith upon him or his firm and they do not think that they are dealing with the employees. The whole business of the stock exchange depends upon a great deal of trust. In the present case the plaintiff or her husband had bought all these shares which are the subject‑matter of the suit and many more from this firm, so when they entrusted the shares in question to the firm they were relying upon the firm and not upon Ayub. Ayub was an employee on a salary of Rs. 200 a month. These shares would not have been handed over to him without so much as a receipt. Abdullah handed over these shares to the firm because he relied upon the credit of the firm and not that of an individual employee. Now, the defendant No. 2 on his own showing is the sole proprietor of this firm but what was his conduct with regard to this business. On his own admissions which have been quoted earlier, he did not know very much about the stock exchange business, did not come to the office more than once in a month, had never seen the account books of the firm and had entirely left the business of the firm to Ayub. Can it be said that this conduct is that of a prudent man in the circumstances of this business having regard to the bulk, quantity, and value of the shares of the plaintiff and such others which necessarily came to be dealt with by the firm? I am clearly of the opinion that the defendant No. 2 was grossly negligent upon his own admission and, therefore, it does not lie in his mouth to say that Ayub sold away some of these shares or otherwise dealt with them and that this was not within the scope of his authority and that he had been guilty of fraud and for that reason he or the firm was not liable to the plaintiff. A bailee is even liable to the bailor in respect of the goods bailed even when the goods suffered from the negligence of the servant of the bailee even though the negligent act took place while the servant was dealing with the articles for his own purpose. (See Bowstead Agency, A 12th Edition, page 231). The case relied upon for this observation is Central Motors (Glasgow) Ltd. v. Cessnock Garages (1925 A C 796). But the present case having regard to the nature of the business is upon a much higher footing. I do not think that it is open to a stock‑broker who has the custody of his client's shares and security to turn round and tell him when the demand for them that he is not liable because some of his agents have run away with the shares or have clandestinely sold them. If the stock brokers are under such an impression they would be well advised to disabuse themselves of this idea. I am also surprised to note that some of the members of the stock exchange have given evidence in this case on behalf of the defendants and have glibly acknowledged that they bought certain shares from Ayub in the name of Salim Trading Company though they knew that Ayub being the accredited agent of the defendant was not authorised to sell any shares in any name other than that of the firm. All these sales and Badla transactions were going on in the office of the firm and if the defendant No. 2 Muhammad Siddiq did not come to know of it the only finding possible is that he was grossly negligent in respect of the business of the firm and he cannot be heard to say that he is not answerable to his clients such as the plaintiff, because the loss has occurred due to the mischief of an employee or employees of the firm. I say employees because the criminal case which he had instituted was against two employees, namely Ayub and Abdul Karim, the latter died in the course of the trial and the former was discharged by the order of the Magistrate dated 21‑1‑59.

19. It may be pointed out that it was on 23rd November 1957 that the Karachi Stock Exchange by its letter, Exh. D/1, wrote to Muhammad Siddiq‑Abdul Sattar asking for his comment immediately on the complaint of Hanifa Bai, Exh. D 1/1, which she had made to the Stock Exchange in respect of all the shares which were entrusted to the firm. No reply was received from Muhammad Siddiq and a reminder had to be sent to him by the Karachi Stock Exchange on 26th November 1957 as per Exh. D/2, and it was on 27‑11‑57 that he sent a reply Exh. D/3. In this reply it has been said that defalcations had been committed in his office by his servants and the records maintained by them was not helpful in ascertaining what the correct position was with regard to the business they supported to transact. This reply would show that either Muhammad Siddiq knew nothing of what was going on in his office or that he was trying to gain time to make out a defence. The stand taken in this suit was not indicated until a laywer's notice was sent to Muhammad Siddiq on 21st December 1957, Exh. D/4, to which his lawyer's reply was sent on 22nd January 1958, Exh. D/7. Be that as it may, from what I have said above my finding is that the defendant No. 2 is liable to the plaintiff in respect of the remaining shares as described above.

20. The next issue to be dealt with is Issue No.‑5 upon the question whether the defendants 3 and 4 are partners of the defendant No.

2. There is no evidence of such partnership except some oral evidence led on behalf of the plaintiff. It is true that Abdul Majid, defendant No. 3, was also a member of the Karachi Stock Exchange but from the evidence of the Secretary of the Exchange it is clear that Muhammad Siddiq‑Abdul Sattar is not registered with the Karachi Stock Exchange as a firm. 1, therefore, hold that the so‑called firm of Muhammad Siddiq Abdul Sattar described as the defendant No, 1 is the proprietary concern of the defendant No. 2,

21. Issue No. 6 relates to the question of the value and other benefits of the unrecovered shares of the plaintiff. In the plaint Karnaphuli shares are valued at Rs. 18‑10‑0 per share. Adamji Jute at Rs. I9‑2‑0 per share and Burewala Textile at Rs. 241‑8‑0 per share. The number of the shares are set out in para. 6 of the plaint but from the first item of 1,800 shares of Karnaphuli 1,300 must be taken out of account because those have been deposited in the Court. These shall be handed over to the plaintiff. Muhammad Siddiq in the course of his evidence produced a market report of the Karachi Stock Exchange dated 24th November 1957 in which the market rate of these shares are very much less than what has been claimed in the plaint. However, it must be remembered that this suit was instituted on 28th October 1959. The plaintiff was entitled to claim the return of her shares or of their value as it prevailed on the date of the suit. I, therefore, hold that the plaintiff is entitled to claim the value upon the rate set out in the plaint. Upon that rate the value of 500 shares of Karnaphuli Paper Mills at the rate of Rs. 18‑10‑0 per share would amount to Rs. 9,312‑8‑0, of 800 shares of Adamji Jute at the rate of Rs. 19‑2‑0 per share the value would be Rs. 15,300 as claimed, and of 150 shares of Burewala Textile Mills at the rate of Rs. 241‑8‑0 per share would amount to Rs. 36,

227. The total claim of the plaintiff with regard to these shares thus comes to Rs. 60,839‑8‑

0. The plaintiff has also claimed the benefits arising out of these shares such as dividend, bonus, etc. but no evidence in respect of that has been led. An affidavit was filed at the stage of the argument but I cannot accept this as sufficient evidence for granting a decree. I accordingly decree the plaintiff's claim for Rs. 60,839‑8‑0 with interest at 4% from the date of the suit until the date of the decree and further interest at 6% from the date of the decree until payment. The plaintiff shall also have the proportionate costs. K.B.A. Suit decreed.