P L D 1958 (W (PLP)

Issue No.

3. This is a purely factul issue and the facts to which it relates form the basis of the suit. On 8‑12‑53, Jalalud?din, an officer of the defendant, described himself to be the Branch Manager and as such lodged a written report at Thana Kotwali, Lahore against the former officer in charge of the Branch, Muhammad Usman in which he stated : ?These Railway Receipts were received in December 1951, by Muhammad Usman who was the Accountant in charge of the Kashmiri Bazar Branch of the Bank but he did not make any entry with respect to any of the Railway Receipts in the books of the Bank. He handed over these Railway Receipts to M. Aslam who got the goods released from the Railway at Lahore on or about the 22nd day of December, 1951. Whatever amount Muhammad Usman received from the Railway Receipts from M. Aslam was neither deposited in the Bank nor paid to Haji Muhammad Shafi nor did Muhammad Usman make any entry regarding the transaction in any book of the Bank and cleverly concealed the whole fraud when Haji Muhammad Shafi threatened legal proceeding the matter was referred, to Muhammad Usman who had been absent from Office. He denied the allegation of Muhammad Shafi but as it now appears he has been writing letters to Ha ji Muhammad Shafi promising to pay the amount to him. The Bank has been for a considerable (time) trying to obtain original letters of Muhammad Usman from Haji Muhammad Shafi but has only been able to obtain copies from him which are attached herewith and which disclose that Muhammad Usman embezzled the amount of each Railway Receipt mentioned above. I request that a case be registered against him and be investigated for taking legal steps against him and his associates.? There is nothing on the record of this case to disclose the result of this report, but there are documents which answer the descrip?tion of the letters mentioned in the report. They are Exhs. 5 to

10. The first three letters are by Muhammad Usman on the printed office stationery of the Branch and bear the stamp of the Branch which describes the writer as follows :‑ For Australasia Bank Ltd. Muhammad Usman ? ????????? ???Sub‑Manager ?????? Kashmiri Bazar, Lahore.??? Exh. 5 reads as follows :‑ "Your letters were shown to the party. They have admitted their mistake. Today they have deposited amount of sonic Railway Receipts, which you will receive shortly. They have promised to take delivery of the remaining Railway Receipts soon." Exh. 6 says :‑ "I am in receipt of your letter dated 14‑3‑

52. The party has certainly started depositing money in the account but I am pressing them that all the amount should be sent. As I am now personally responsible you should keep assured." Exh. 7 is an acknowledgement and an undertaking. It reads as follows :‑ ?Your six Railway Receipts Nos???..in the name of Malik Muhammad Aslam a/o Ghulam Dastgir???.were received in this Bank???which this Bank had given to Malil: Muhammad Aslam without (receiving) payment at its own responsibility. This Bank undertakes to pay the entire amount if the party fails to pay it up to the 15th of July, 1952 . . . . . On 16‑4‑52 the plaintiff sent a legal notice, Exh. 8, to the defendant and Exh. 10 is the reply to it signed by Muhammad Usman as the Branch Manager, and contains the following reassurance : "We write to inform you that the said party agreed to allow us to clear payment till 15th July 1952, and this was given in writing. In view of this position it is not understood why this has been found to resort to legal measure. ??????????? "As per agreement we have a time limit up to 15th July 1952, to settle this matter, but for your information we would like to inform you that we are doing our best to clear this matter as early as possible." The above documents fully establish the statement of the plaintiff that he sent railway receipts to the defendant with instructions to collect Rs. 14,684 against their delivery to Muhammad Aslam, and they were received by Muhammad Usman as the Branch Manager. The plaintiff has further supported, this fact by producing copies of his letters Exh. 16 to 21 in which instructions regarding each of the six Railway Receipts for collecting specified amounts are contained. The letters are addressed to " The Manager" of the defendant. The issue is therefore decided in favour of the plaintiff. Issues No. 4 and S.‑These issues relate to the legal con?sequence of the above mentioned facts. The contention of the counsel of the defendant is that Muhammad Usman who was in charge of the Branch at the time is personally responsible to the plaintiff and not the Bank. He has advanced three reasons to support this contention. Firstly, the letters written by the plaintiff were addressed to "The Manager" and not to the defen?dant. Secondly, the procedure prescribed by the Bank has not been followed by the officer in charge. Thirdly, the books of the Bank show that neither the letters of the plaintiff nor the Railway Receipts nor any money was received by the Bank. It is a pity that the Bank was driven to the necessity of relying on such arguments in order to resist a claim. The letters of the plaintiff were addressed to "The Manager" and not to "Muhammad Usman". The form of address adopted by the plaintiff is a recognised one and letters written to Banks are addressed to their Managers or Agents. This is because they are of the chief executive officers within their jurisdiction. Practically all documents, except a few which are by law required to be in some other form, drafted by the solicitors and advisers of Banks which are kept ready by the Banks for use are addressed like this. The letters written by the plaintiff were properly addressed to the defendant. It is apparently., true that the procedure prescribed by the Bank was not followed in the Branch but then it is a matter of sorrow for the Bank and the rights of the plaintiff cannot be adversely affected by it. The witnesses produced by the defendant have stated that books of the defen?dant do not contain entries showing the receipt of the documents sent by the plaintiff letters written by the Manager on behalf of the defendant and the receipt of any money. It is apparently so, but the plaintiff has nothing to do with this. May be that Muhammad Usman was unadvisedly trusted by the defendant to the extent of appointing him the man in charge of the affairs of the Branch and may be that one of the results of this trust was that the books of the Bank were not properly maintained. The report lodged on behalf of the defendant, Exh. 30, shows that according to the defendant Muhammad Usman played a fraud. The books which must have been at least partly the instruments of the fraud alleged by the defendant, have been set up by it as a defence little realising that they cannot in the least be helpful to it. The defendant is liable for damages suffered by the plaintiff. The question of the quantum of damages is simple in this case. The plaintiff was to receive Rs. 14,684 as the proceeds of the Railway Receipts and he has not received any money towards the payment of this amount. The market price of ' the goods despatched by him has been questioned. This is irrelevant because he could demand any price from the customer whether lower or higher than the market price. The question of correct price could possibly be a relevant dispute between the seller and C the purchaser but not between the seller and the agent who had only to collect the stated price or return the documents and claim commission for its services. The defendant's counsel has relied on Manchubhai Navalchand v. John H. Tod and another (I L R 30 Bom. 633) in which the learned Judges held that the quantum of damages in a case when any agent has in breach of his duty sold goods of his principal below the limit placed upon them by the principal, is the loss sustained by the principal and if he has sustained no loss he can only ask for nominal damages. They observed :‑ " In the case of articles of common merchandise, the state of the market subsequent to the sale would afford the criterion by which to fix the loss." "The damages would be the expenses of the sale and of the re‑purchase." These remarks do not apply to the present case because an agency for selling goods is on a different footing from an agency to collect the proceeds of bills or other documents. In this business the agent does not strike a bargain. He performs a mechanical act and earns remuneration for it. This branch of; banking business flourishes on the trustworthiness of the agency for carrying out the instructions strictly. The plaintiff has however proved the price to be correct by producing Exhs. 22 to 27 and oral evidence. There is no rebuttal of this evidence. The defendant is liable to pay Rs. 14,684 as damages to the Issue No. 6.‑The counsel of the defendant has advanced no argument against the liability of we defendant to pay interest except that he pointed out that the claim was for damages. Damages, no doubt, but they are clamed for depriving the defendant of specified cash amounts and arise out of a business transaction. The defendant as a Bank earns interest on every 6 bit of money that it can use for this purpose and the plaintiff would have earned profit if his claim was honoured when it was made. Interest on a claim of damages in the circumstances of this case is a proper liability. Issue No. 2.‑The plaintiff's counsel has argued this issue with the feeling of a fight at the last ditch. His contention.; is that the plaintiff's instructions, according to the covering letters with which the Railway Receipts were sent, were that the proceeds should be collected and remitted by drafts. This duty involved no act to be performed at Karachi and the function of the defendant would have concluded on posting the drafts at Lahore of the required amounts. This was, according to the counsel of the defendant, genuinely the intention of the parties. Counsel has also contended that the plaintiff's case in reality is that the defendant committed acts of negligence or misconduct at Lahore and therefore the cause of action arose entirely at Lahore and not at all at Karachi. He has relied on F. O. Gordhandas Kalidas v. F. O. Dowlatram Kanvalal (22 S L R 43), in which the following observations were made "The relations between the parties were not those of buyer and seller but of principal and agent There was no contract to deliver the goods ordered at Karachi, and the course of business referred to above clearly indicates that all that the defendants had to do with regard to goods ordered by the plaintiffs was to purchase them and hand them over to the Railway for transmission to the plaintiffs. It must be re?membered that as the parties were principal and agent, goods purchased by the defendants in pursuance of an order from the plaintiffs became the property of the plaintiffs the moment they were purchased and appropriated by the defendants. The defendants were merely bailees thereof till they handed over the goods to the railway, and when they had done so the railway became the bailees of the plaintiffs' goods. The defendants therefore had not to deliver to the plaintiffs at 'Karachi the goods ordered by the plaintiffs and the fact that such goods were ultimately received by the plaintiffs at Karachi cannot give this Court jurisdiction to try the suit". Again, "Another point to be borne in mind in connection with the issue of jurisdiction in this case is that though the suit is ostensibly for rendition of accounts by principals against their agents, the objections of the plaintiffs to the accounts filed by the defendants with their written statement and the issues framed in the suit make it clear that the plaintiffs. do not really contest the account so filed by the defendants but charge the defendants with various acts of negligence and mis?conduct, on their part in the conduct of the agency, and claim damages from them as resulting from such acts of negligence and misconduct. These alleged acts of negligence and mis?conduct all took place at Agra. In such a suit by a principal against his agent the cause of action has been held to arise where the agent committed the alleged acts of negligence and misconduct, vide Tikaram v. Dowlatram, (1924) I L R 46 All. 465 already referred to, Premji v. Tarachand T, (1923) 76 I C 353 a judgment of Rupchand A. J. C. and Chandaji v. the firm of Devji Ladha, (1923) 76 I C 197 a Bench ruling of our Court." Apart from the question whether they are perfectly sound or not, these observations do not apply to the present case. In the present case the plaintiff instructed the defendant as follows :‑ " . . . . . . You should realise from him (Mr. Aslam) Rs. . . . . . only besides the bank commission and send the same to us by draft." The intention of the plaintiff was clear because the officer in charge of the defendant, Muhammad Usman, has repeatedly assured the plaintiff in the letters written by him on behalf of the defendant that the plaintiff would get the money. In Exh. 5 he said, ". . . . they have deposited amount . . . which you will receive . . .". In Exh. 7 he said, "this bank undertakes to pay the entire amount . . ." In the report to the police, Exh. 30, defendant said through Jalaluddin, a successor of Muhammad Usman, "Whatever amount Muhammad Usman .received for the Railway Receipts from Muhammad Aslam was neither deposited in the Bank, nor paid to Haji Muhammad Shafi (Plaintiff) The manner of payment to the plaintiff was through drafts payable at Karachi. The plaintiff wanted to receive money at Karachi by this method. He did not even name the bank on which the drafts were to be drawn. There can be many methods of making such payments. Money can possibly be sent to the payee in the town where he resides with a man or by money order or telegraphic transfers or hundi. It may sometimes be paid by adjustment of account at a specified place and in relation to some specified transaction. Here the specified method was by drafts payable at Karachi. This fact does not alter the fact that it was a part of the transaction that the proceeds should be received by the plaintiff at Karachi. To say that the remitting bank had nothing to do after preparing and sending away a draft is to disregard an important part of the transaction. This part of the transaction should not be confused with the liability of the remitter if a method specified to him by the principal fails due to the break‑down of the system of tran?sportation or insolvency of the paying agency. These are not the problems of jurisdiction: If `A' has to pay money to `B' at Karachi and `B' agrees that it may be paid by a cheque drawn on a Karachi bank or by a bank draft on a bank at Karachi then complications may arise regarding the liability of `A' if the document drawn by him, which is the vehicle of payment, is fraudulently cashed by a third person or the paying bank at Karachi goes into liquidation, but such complications do not alter the fact that the money was payable at Karachi and there?fore the Courts at Karachi would have the jurisdiction to try a suit by `B' for the recovery of the money from `A'. It would be irrelevant to argue that they have no jurisdiction because `A' had not to do anything after putting a chain of activity into motion by sending a draft. Lastly, it is not correct to say that the plaintiff has charged the defendant with misconduct or negligence. In para. 2 of the plaint the plaintiff has made it clear that irrespective of whether the defendant has violated the instructions or observed them it has not remitted the proceeds to him. Apparently the reason for making this statement was that Muhammad Usman had suggested in his letter, Exh. 5, that the fault was not his but of M. Aslam and that the money was likely to be received. The conclusion is that the Courts at Karachi have the jurisdiction to try this suit. Issue No. 7.‑The suit is decreed for Rs. 15,000 and interest at the rate of six per cent per annum on Rs. 14,684 from the date of the institution of the suit till realisation and costs of the suit. AM. ??????????????????????????????????????????????????????????????????????????????????????????????????????????????? Suit decreed.