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Bishal Chand Jain v. Chattur Sen
Concise Analytical Summary of the Opinion (R. Prasad, J.) — First Appeal No. 397 of 1954
Factual and Procedural Background
This is the plaintiff's first appeal from the judgment and decree dated 5 July 1954 by the Civil Judge, Saharanpur, in Original Suit No. 109 of 1950. The appeal (First Appeal No. 397 of 1954) had been connected with another appeal (First Appeal No. 298 of 1954) by a defendant, but that other appeal was dismissed following a compromise between those appellants and the plaintiffs. Before addressing the merits, the Court disposed of a preliminary constitutional objection raised by the plaintiff's counsel challenging whether the High Court was properly constituted after the elevation of the Chief Justice (Hon'ble Mr. Justice V. Bhargava) to the Supreme Court and the subsequent appointment under Article 223 of the Constitution of a judge (Hon'ble Nasirullah Beg, J.) to perform the duties of Chief Justice.
Legal Issues Presented
- Whether the High Court was properly constituted for the purpose of hearing the appeal after the office of Chief Justice fell vacant — specifically, whether an appointment under Article 223 constitutes an appointment to the office of Chief Justice and requires the appointee to take the oath prescribed in Article 219/Third Schedule.
- Whether an acting appointment under Article 223 (or the use of language in Article 223 and the marginal note) results in an appointment to the office of Chief Justice or merely appoints a Judge to perform the duties of that office while the office remains vacant.
- Whether Article 216's statement that a High Court shall consist of a Chief Justice and other Judges means that a vacancy in the office of Chief Justice renders the High Court not properly constituted.
- On the merits, whether the plaintiff is entitled to recover the whole loss (as claimed) from defendant no. 1 (Chattar Sen) and defendant no. 5 (Kedar Nath), or whether liability is limited to the cash securities deposited by those defendants.
- Whether defendants nos. 2 and 3 (Om Prakash and Som Prakash) remained sureties for defendant no. 1 for his appointment and liabilities at Agra, or whether their suretyship related only to an earlier Saharanpur appointment.
- Whether there was adequate evidence of a conspiracy between defendants 1, 5 and 8 to fix liability on that basis.
Arguments of the Parties
Appellant's (Plaintiff's) Arguments
- Pandit Gopi Nath Kunzru, for the plaintiff-appellant, raised a preliminary objection that the Court was not properly constituted after the Chief Justice's elevation. He argued (a) that the senior-most judge (Hon'ble Nasirullah Beg, J.) had been appointed acting Chief Justice but had not taken the oath prescribed for a Chief Justice, and therefore the Court could not be deemed properly constituted; and (b) in the alternative, that if the appointment under Article 223 did not amount to appointment to the office of Chief Justice, there was effectively no Chief Justice of the Court and thus the Court was not properly constituted.
- On the substantive merits the plaintiff argued (as per the plaint) that defendant no. 1 (Chattar Sen) and defendant no. 5 (Kedar Nath) together (and with others) caused the disappearance of Rs. 40,000 and that various contractual clauses and acts of negligence and conspiracy made the defendants liable to the plaintiff for the full loss; the plaintiff sought recovery of the full claimed sum from defendants 1 and 5 and also sought to extend liability to defendants 2 and 3 as sureties.
Defendants' Arguments
- With respect to the constitutional objection: the defendants (respondent side) maintained the validity of the notification under Article 223 appointing a judge to perform the duties of the Chief Justice and the competence of the Court to hear the appeal.
- Substantively, defendants 2 and 3 argued that their security bonds (dated 29 August 1948) related to the appointment of defendant no. 1 to the Saharanpur post (Rationing Department) and that they did not stand as sureties for any fresh appointment at Agra; also the plaintiff's own pleadings (paragraph 5) supported the view that defendant no. 1 was appointed afresh at Agra rather than being simply transferred.
- Defendants contested conspiracy allegations and contended there was insufficient evidence to hold various defendants (including defendant no. 1) liable for the whole loss beyond any deposited cash security.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Emperor v. Sohrai Koeri, AIR 1938 Patna 550 | Addressed objection to the validity of the constitution of a High Court where the office of Chief Justice was vacant; recognised that vacancy can exist and the court may continue to act; distinguished vacancy from abolition of office. | The Court relied on this decision by analogy to support the conclusion that vacancy in the office of Chief Justice does not render the High Court improperly constituted and that a temporary arrangement for performance of duties is permissible. |
Court's Reasoning and Analysis
The Court divided its analysis into two main parts: (A) the preliminary constitutional objection about the Court's composition; and (B) the substantive appeal on liability and quantum.
A. Constitutional / Preliminary Objection
- The Court examined Article 223 of the Constitution (and its marginal note "Appointment of acting Chief Justice") which authorises the President to appoint one or another judge of the High Court to perform the duties of the Chief Justice when that office is vacant or the Chief Justice is unable to perform duties.
- The Court interpreted Article 223 as providing for appointment of a Judge to perform the duties of the Chief Justice during a vacancy rather than an appointment to the office of Chief Justice itself. It reasoned that if the Article 223 appointment filled the office, the contingency that necessitated Article 223 would disappear; hence Article 223 cannot be taken to create the substantive office-holder of Chief Justice.
- The Court distinguished the language of Article 223 from the form of oath required under Article 219 and Form No. 8 of the Third Schedule. Form No. 8 is for persons appointed "to be a Judge of a High Court" or "Chief Justice", and the Court held that only a person actually appointed to that office can take that form of oath. Because an Article 223 appointment is not an appointment to the office, the appointee need not (and could not properly) make the Article 219/Third Schedule oath as if appointed Chief Justice.
- The Court drew an analogy to Article 60 (regarding oath for person acting as President) where the Constitution expressly prescribes an oath covering both the office and persons discharging its functions. From this it concluded that where the Constitution intends to require an oath for an acting functionary it does so expressly; Article 219 contains no such express provision for a person merely appointed to perform duties under Article 223.
- It considered Article 216 (that every High Court shall consist of a Chief Justice and other Judges) and concluded this article describes the constitution of a High Court as a structural provision; it does not mean that a temporary vacancy in the office of Chief Justice negates the constitution of the Court. The Court observed that vacancy must be distinguished from abolition of office; to accept the opposite would produce absurd consequences (e.g., the Court becoming improperly constituted whenever the Chief Justice was temporarily absent).
- The Court relied on historical precedent — Emperor v. Sohrai Koeri — and on analogous statutory language in the Government of India Act, 1935 (sections referred to in that case) to further support the view that a vacancy does not invalidate the High Court's constitution.
- On these bases the Court overruled the preliminary objection and proceeded to decide the appeal on merits.
B. Merits — Liability and Quantum
- Facts summarised: The plaintiff was treasurer of Hindustan Commercial Bank (Agra Branch). Defendant no. 1 (Chattar Sen) was cashier in charge at Saharanpur and later appointed cashier in charge at Agra by the plaintiff. Defendant no. 5 (Kedar Nath) and defendant no. 8 (Gaya Shanker) were members of cash staff; various persons stood as sureties (defendants 2–4, 6–7, 9).
- The plaintiff alleged a shortage of Rs. 40,000 arising on 28 December 1949 after a withdrawal for which cash was brought from Imperial Bank and handed over to Kedar Nath; the Bank realised Rs. 40,000 from the plaintiff and the plaintiff sued to recover the loss from cash staff and their sureties.
- Claims against defendant no. 1 were based on clauses of the agreement dated 9 September 1949 (Ex. 3), notably clause (2) (liability of cashier-in-charge if it is not possible to identify the responsible staff member), clause (7) (responsibility where cashier-in-charge's report about financial status of employee/sureties is incorrect), and clause (3) (obligation to obey instructions and discharge duties diligently).
- The Court analysed clause (2) and found it inapplicable because the plaintiff's own case was that the money disappeared from the lawful custody of Kedar Nath (defendant no. 5); as a result it could be determined which staff member had custody and clause (2)'s contingency (inability to identify the responsible member) did not arise.
- Clause (7) was similarly found not to apply because evidence showed the plaintiff (through the Manager Motilal Razdan and the plaintiff himself) had satisfied himself as to the financial status of defendant no. 5 and the sureties (defendants 6 and 7) when the appointment was made; enquiries were jointly made and plaintiff could not be deemed to have relied solely on defendant no. 1's representations.
- On clause (3) and the allegation of gross negligence: the Court found on evidence that defendant no. 1 handed over the duplicate key of the cash box (as part of a bunch of keys) to the Manager V. Puri before proceeding on leave; instructions and practice required duplicate keys to be lodged and kept in safe custody inside a double lock. The duplicate key was subsequently recovered from the Manager's almirah after the incident. The Court concluded that defendant no. 1 acted contrary to standing instructions and without due diligence in handing over the duplicate key and not ensuring it remained in safe custody. This conduct constituted gross negligence and a breach of clause (3), attracting liability.
- On quantum for defendant no. 1: the Court rejected the lower court's reasoning that defendant no. 1's liability was limited to the amount of his deposited cash security (Rs. 1,000). Interpreting the agreement's terms, the Court held that defendant no. 1's liability extends to the whole loss caused by his breach of obligation; hence he was liable for the full amount claimed (subject to amounts already satisfied by compromises with other defendants).
- Defendants 2 and 3: the Court accepted their argument (supported by plaintiff's own evidence) that defendant no. 1's Saharanpur employment ended on 10 September 1949 and that his appointment at Agra was a fresh appointment from 14 September 1949; thus the security bonds given by defendants 2 and 3 related to the earlier Saharanpur appointment and did not render them liable for liabilities arising out of the Agra appointment. The Court therefore held plaintiff not entitled to decree against defendants 2 and 3.
- Defendant no. 5 (Kedar Nath): the Court found the disappearance of money occurred while it was in his lawful custody. It concluded that it was his duty not to leave the cash box in the manner he did (leaving it in charge of the Manager while asked to bring items, failing to take precautions such as counting and entrusting properly). Therefore, defendant no. 5 was liable for the entire loss; the Court rejected a limitation of liability to the deposited cash security for defendant no. 5 as well.
- Defendant no. 4 (surety for defendant no. 1 at Agra) had been held liable by the lower court, but the plaintiff compromised with defendant no. 4 (and the heirs) and took Rs. 5,000 satisfaction; similarly a compromise with defendant no. 6 resulted in Rs. 8,500 satisfaction. No appeal was filed on behalf of defendant no. 7; the decree against him was confirmed.
- After accounting for the sums already recovered by compromise (Rs. 5,000 from heirs of defendant no. 4 and Rs. 8,500 from defendant no. 6), the Court calculated the remaining claim satisfiable as Rs. 81,500.
Holding and Implications
Holding: The appeal was partly allowed. The Court overruled the preliminary objection regarding the constitution of the Court and on the merits passed a fresh decree in favour of the plaintiff for recovery of Rs. 81,500 against defendant no. 1 (Sri Chattar Sen), defendant no. 5 (Sri Kedar Nath) and defendant no. 7 (Sri Suraj Bhan). The plaintiff's suit against defendant no. 3 was dismissed (defendant no. 2 having died). The decrees or claims against defendants nos. 4 and 6 have been disposed of by compromise and the amounts received by the plaintiff were recorded. Costs were awarded: plaintiff to get costs in proportion to his success from defendants 1 and 5; defendant no. 3 to get his costs from the plaintiff.
Implications:
- Direct effect on the parties: The decree of the trial court is superseded as above — defendants 1 and 5 are held liable for the whole remaining claim (subject to recorded compromises), defendants 2 and 3 are not held liable, and the decree against defendant 7 is confirmed.
- Constitutional interpretation: The Court provided authoritative interpretive guidance within this opinion that an appointment under Article 223 results in a judge being appointed to perform the duties of the Chief Justice while the office remains vacant (and is not an appointment to the office itself), that the Article 219/Third Schedule oath is not required in those circumstances, and that a temporary vacancy in the office of Chief Justice does not render the High Court improperly constituted under Article 216. These points are applied by the Court to overrule the preliminary objection raised in this appeal.
Disposition noted in the opinion: "Appeal partly allowed." The Court entered the decree in supersession of the trial court's decree as detailed above.
R. Prasad, J.:— This is a plaintiff's first appeal against the judgment and decree of Sri Mohammad Tufail Ahmad. I Civil Judge, Saharanpur, dated 5th July 1954 in Original Suit No. 109 of 1950. This first appeal was connected with another First Appeal No. 298 of 1954, which was filed by one of the defendants from the same decree. That first appeal, however, is now no more before us inasmuch as the appellants of that appeal entered into a compromise with the plaintiffs on the basis of which, the appeal was dismissed. The only appeal which is now before us is First Appeal No. 397 of 1954.
2. Pandit Gopi Nath Kunzru, learned counsel for the plaintiff-appellant has argued the appeal before us on behalf of the plaintiff-appellant. Before we deal with the appeal, it is necessary to dispose of a preliminary objection raised by the learned counsel for the appellant himself, to the effect, that this Court is not properly constituted and that the appeal cannot be heard. The two pronged arguments advanced by Pandit Gopi Nath Kunzru, learned counsel for the appellant, is that when the office of Chief Justice of this Court fell vacant as a result of the elevation of Hon'ble Mr. Justice V. Bhargava, the Chief Justice of this Court, to the bench of the Supreme Court, Hon'ble Nasirullah Beg. J., the senior most Judge of this Court was an pointed acting Chief Justice of this Court, but as oath of office has not been taken by him, this Court cannot be deemed to be properly consistuted. In the alternative, it was urged that if the appointment of Hon'ble Nasirullah Beg, J., is not to the office of Chief Justice of this Court, then there is no Chief Justice of this Court at present, and for that reason, this Court is not properly constituted.
3. As a result of his elevation to the Supreme Court, Hon'ble Mr. Justice V. Bhargava took oath of that office on the 8th August 1966, and from that date the office of Chief Justice of this Court fell vacant. On the same date from the newspaper, it appeared that a notification has been made under Article 223 of the Constitution of India to the effect that the duties of the office of Chief Justice of this Court would be performed by Hon'ble Nasirullah Beg, J., the senior most Judge of this Court. Article 223 of the Constitution reads as follows:
“When the office of Chief Justice of a High Court is vacant or when any such Chief Justice is, by reason of absence or otherwise unable to perform the duties of his office, the duties of the office shall be performed by such one or the other Judges of the Court as the President may appoint for the purpose.”
4. The marginal note of the Article consists of the following words:—
“Appointment of acting Chief Justice.”
5. The notification referred to above uses the language used in Article 223 of the Constitution of India and the appointment made is for the purposes of performance of the duties of the office of Chief Justice of this Court. It has been urged that the exercise of powers under Article 223 of the Constitution results in an appointment to the office of Chief Justice. Reliance was placed on the marginal note of the Article also, to show that it is a case of appointment of Chief Justice.
6. Our attention was also invited to Article 224 Clause (2) and it was urged that the appointment made under Article 223 results into the appointment of a Chief Justice, though temporarily Clause (2) of Article 224 provides:
“When any Judge of a High Court other than the Chief Justice is by reason of absence or for any other reason unable to perform the duties of his office or is appointed to act temporarily as Chief Justice, the President may appoint a duly qualified person to act as a Judge of that Court until the permanent Judge has resumed his duties.”
7. We are, however, of the view that Article 223 of the Constitution does not contemplate the appointment of a Chief Justice of a High Court or an appointment to the office of Chief Justice of a High Court. In spite of such appointment being made under Article 223, the office of the Chief Justice remains vacant till a fresh appointment is made to that office. It is on account of the existence of a vacancy in the office of Chief Justice that one or the other Judges of the High Court is appointed by the President for the purpose of performing the duties of the office of Chief Justice. If such appointment is to be held to put an end to the vacancy, then the exigency of such an appointment ceases to exist It, therefore, follows that exercise of powers under Article 223 of the Constitution by the President, does not result in an appointment to the office of Chief Justice and in spite of such appointment, the office of the Chief Justice remains vacant. All that happens is that during the continuance of that vacancy, the duties of that office are to be performed by one or the other Judges of the High Court as the President may appoint for the purpose. The word “temporarily” used in Article 224 clause (2) governs the words “to act”. The language of clause (2) of Article 224, therefore, does not mean that an appointment of a Judge of a High Court to perform the duties of the office of the Chief Justice under Article 223, is the appointment of a temporary Chief Justice.
8. It is true that both in its marginal note and Article 223 the words “appoint” or “appointment” has been used. But from this it does not necessarily follow that the appointment is an appointment to the office of the Chief Justice. In the marginal note, it is clear that the appointment is not of ‘a Chief Justice’ but of ‘an acting Chief Justice’. In the article itself the word “appoint” relates to the appointment of such of the other Judges of that Court as the President may choose for the purpose of performance of the duties of the office of Chief Justice. It is only when the appointment is not an appointment to the office of Chief Justice, that it could be said to be an appointment of one or the other Judges of that Court, for the purpose of performing the duties of the office of Chief Justice. We have, therefore, no hesitation in coming to the conclusion that an appointment of one or the other Judges of the High Court to perform the duties of the office of Chief Justice when that office is vacant, is not the appointment of a Chief Justice to that office. It really results in an arrangement for the performance of the duties of the vacant office of the Chief Justice pending a fresh appointment to the office of Chief Justice.
9. On the assumption that the appointment of a Judge of a High Court to perform the duties of the office of Chief Justice, is an appointment to the office of Chief Justice, it was urged that it is necessary that oath of office or affirmation be taken in the form set out for that purpose in the Third Schedule of the Constitution. Article 219 deals with the subject of oath or affirmation by Judges of High Courts the article reads as follows:
“Every person appointed to be a Judge of a High Court shall, before he enters upon his office, make and subscribe before the Governor of the State, or some person appointed in that behalf by him an oath or affirmation according to the form set out for the purpose in the Third Schedule.”
10. Form No. 8 of the Third Schedule is in the following language:
“Form of oath or affirmatiion to be made by the Judges of a High Court:
I, A.B, having been appointed Chief Justice (or a Judge) of the High Court at (or of)……do swear in the name of God/solemnly affirm that I will bear true faith and the laws”
11. The form of oath thus prescribed is common both for a Chief Justice and a Judge of the High Court. Oath in the above form can be made only by a person who has been appointed Chief Justice or a Judge of a High Court. A person who has not been appointed Chief Justice or a Judge of a High Court, therefore, cannot make oath in the above prescribed form. We have already held that the appointment of a Judge of the High Court to perform the duties of the office of Chief Justice is not the appointment of a Chief Justice. Consequently, a Judge so appointed under Article 223 cannot make oath in the prescribed form. A Judge of this Court, whom the President appoints, for the purpose of performing the duties of the office of Chief Justice on account of that office being vacant, cannot declare that be has been appointed Chief Justice of the High Court. A consideration of the prescribed form of the oath, therefore, also leads to the same conclusion that the appointment of a Judge of a High Court to perform the duties of the office of Chief Justice on account of that office getting vacant, is in fact not an appointment to the office of Chief Justice.
12. Under the Constitution, when it was intended that the person appointed to discharge the function of an office, but not to the office itself, was required to make oath, express provision to that effect has been made. Article 60 of the Constitution requires that every President and every person acting as President or discharging: the functions of the President shall, before entering upon his office, make and subscribe in the presence of the Chief Justice of India or, in his absence, the senior-most Judge of the Supreme Court available, an oath or affirmation in the following form, that is to say—
“I, A.B, do swear in the name of God solemnly affirm that I will faithfully execute the office of President (or discharge the functions of the President) of India and will do the best of my ability preserve, protect and defend the Constitution and the law and that I will devote myself to the service and well-being of the people of India.” The prescribed form in this case covers the case not only of the President but also of a person called upon to discharge the functions of a President. We are, therefore, of the view that it was not necessary for Hon'ble Nasirullah Beg, J. to make and subscribe before the Governor of the State or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
13. The alternative argument of the learned counsel that this Court is not properly constituted in the absence of a duly appointed Chief Justice, is also not acceptable to us. The learned counsel for the appellant has referred to Article 216 of the Constitution which is in the following terms:
“216. Constitution of High Courts: Every High Court shall consist of a Chief Justice and such other Judges as the President may from time to time deem it necessary to ???.”
14. What hits been urged is that in the absence of a Chief Justice, the High Court is not validly constituted as required by Article 216. To our mind, Article 216 contains a provision, which deals with the constitution of High Courts and not with the subject of vacancy in the office of Chief Justice or Judges of the High Court. Because the office of Chief Justice has fallen vacant, it cannot be said that this High Court does not consist of a Chief Justice and other Judges. The High Court continues to consist of a Chief Justice and other Judges in spite of the fact that for the time being, the office of Chief Justice is vacant. If the contentions made by the learned counsel were to be accepted, the result would be, that as soon as the office of Chief Justice of a High Court gets vacant as soon as by reason of his absence or otherwise, the Chief Justice of a High Court ??? to perform the duties of his office, such a High Court would cease to be properly constituted as required by Article 216 of the Constitution. It is not possible to hold that such a result was contemplated.
15. An objection to the validity of the constitution of High Court was taken in the case of Emperor v. Sohrai Koeri, AIR 1938 Patna 550 on similar lines, but it was overruled. What happened in that case was that a criminal reference was heard on the 9th day of the month and judgment was reserved. On the 10th of the same month, news was received of the death of Sir Courtney-Terrel C.J, which took place in England. On the 10th, the learned Advocate for the accused raised the objection, that there being no Chief Justice, the High Court was no I properly constituted and the Bench ceased to have jurisdiction to pronounce judgment in the case. In support of the argument, reference was made to clause 2 of Letters Patent, by which the Patna High Court was created and which provided that I hat Court would consist of a Chief Justice and Six other Judges.
16. Their Lordships of the Patna High Court referred to section 220 of the Government of India Act, 1935, which enacted that every High Court shall consist of a Chief Justice and such other Judges as His Majesty may from time to time deem it necessary to appoint. That Act further provided for the mode of appointment of Judges. Provision for filling up vacancy in the office of Chief Justice and other Judges, was made by section 222 of that Act. The language of section 222 is in pari materia with the language of Article 223 of the Constitution the view taken by that Court was that the contingency of the office of Chief Justice remaining vacant for sometime was expressly recognised and provided for. In the case of vacancy caused by death, it was natural that sometime would necessarily elapse before a new appointment was made. The observation made by that Court was that it would be preposterous to hold that during such interval, there was no properly constituted High Court. The vacancy in any office implies that office exists and the case of vacancy had to lie distinguished from the case of abolition of the office. We are clearly of the view that the preliminary objection must be overruled. We, accordingly, overrule the preliminary objection and proceed to consider the appeal on merits.
17. The relevant facts of the case are that the plaintiff was the treasurer of the Hindustan Commercial Bank, Agra Branch besides other branches; Shri Chattar Sen defendant no. 1 was in plaintiff's service at Saharanpur, where he acted as cashier in the Rationing Department, and defendants Shri Om Prakash, Sri Som Prakash and Sri Debi hand (defendants nos. 2, 3 and 4) respectively) stood sureties for Sri Chattar Sen (defendant no. 1) for the performance of his duties and surety bonds to that effect were executed to them. Sri Kedar Nath (defendant no. 5) was an acting cashier in charge at Agra Branch of the aforesaid Bank before the plaintiff was appointed as treasurer of that branch, while Sri Gava Shanker (defendant no. 8) was working as a cashier at the said branch. Sri Bhawani Shanker (defendant no. 9) was a surety for Sri Gaya Shanker (defendant no. 8).
18. The plaintiff alleged that he took charge of the Agra Branch as treasurer on 14th September 1949 and appointed Sri Chattar Sen (defendant no. 1) as cashier incharge who also took charge as such on the same date, was further alleged that Sri Chattar Sen made misrepresentations regarding the status of Kedar Nath and acted fraudulently regarding the sureties of Sri Kedar Nath. Defendants 1, 6, and 8, i.e to say, Sri Chattar Sen. Sri Kedar Nath and Sri Gaya Shanker were known as cash staff. The cash, bullion, stamps etc. used to remain in the custody of cash staff, who were responsible to indemnify the plaintiff for any loss caused to him on account of acts of omission or commission, negligence, embezzlement and theft.
19. According to the plaintiff's case, defendants 1, 5 and 8 entered into a conspiracy and in furtherance of the common intention, Sri Chattar Sen (defendant no. 1) took leave from 27th to 31st December 1949, handed over charge to Kedar Nath (defendant no. 5) on the 24th December 1949, as the Bank was closed on 25th and 26th December 1949. The Manager of the Bank, Agra Branch, issued a cheque for Rs. 80,000/- on the Imperial Bank, Agra, on 28th December 1949 and sent Sri Gaya Shanker (defendant no. 8) to bring the money from Imperial Bank. Leaving Rs. 20,000/- with the Bank for adjustment the sum of Rs. 60,000/- was brought by Gaya Shanker from the Imperial Bank and was alleged to have been handed over to Sri Kedar Nath (defendant no. 5). On the 28th December 1949, however, it was given out that the cash was short by Rs. 40,000/-. The Bank realised that sum of Rs. 40,000/- from the plaintiff, and, therefore, the plaintiff is entitled to get the same from members of the cash staff and their sureties, that is to say from the defendants to this suit.
20. So far as the liability of defendant no. 1 Chattar Sen is concerned, the plaintiff relied on clauses (2) and (7) of the agreement executed by Sri Chattar Sen on the 9th September 1949 in favour of the plaintiff. It was also alleged that Sri Chattar Sen (defendant no. 1) parted with the duplicate key of the cash box on the 24th December 1949, and this was an act of gross negligence on his part and rendered him liable. Defendants 2 to 4 were liable as sureties of defendant no. 1 It was then alleged that as the money disappeared from the custody of Kedar Nath (defendant no. 5), the said defendant no. 5 ware liable to pay the same. Defendants 6 and 7 were liable as sureties of defendant no. 5, and the source of liability of Sri Gaya Shanker (defendant no. 8) as well as Sri Bhawani Shanker (defendant no. 9) was also disclosed in the plaint, but we are now no more concerned with them.
21. The suit was contested on various grounds by the defendants and ultimately, the trial court passed a decree for recovery of Rs. 1000/- each against defendants nos. 1 and 5 and passed a decree for recovery of Rupees 38,000/- against defendant nos. 4, 6 and 7. Defendants nos. 8 and 9 had already been discharged. The suit was dismissed against defendants 2 and 3.
22. The reliefs that have been claimed by the plaintiff-appellant in appeal are, that the decree for the entire sum be passed against defendants 1 and 5 as well as against defendants 2 and 3. In this appeal, therefore, we are concerned only with the question whether a decree for the recovery of the whole amount should be passed against defendants 1 and 5 and whether the suit should have been decreed against defendants nos. 2 and 3 also. We are no more concerned with the claim of he plaintiff against defendants nos. 8 and 9 as they were exempted by the plaintiff in the court below. We are also been informed that the plaintiff has entered into a compromise with defendant no. 6 Shrimati Anguri Devi before the execution court. No appeal has been preferred in this Court by Sri Suraj Blian (defendant no. 7) nor has any relief been claimed by the appellant in this appeal against him.
23. So far as Debi Chand (defendant no. 4) is concerned, he had preferred First Appeal No. 298 of 1954 in this Court against the decision of the trial court, which appeal, as mentioned above, was connected with the instant First Appeal the plaintiff-appellant, however, compromised his differences with Sri Debi Chand (defendant no. 4) or his heirs and legal representatives and therefore, that first appeal has already been disposed of. We are therefore, not concerned in this appeal with the claim of the plaintiff-appellant against Sri Debi Chand (defendant no. 4) or his heirs.
24. So far as the plaintiff's claim against Chattar Sen (defendant no. 1) is concerned, plaintiff relied on paragraphs 2 and 7 of the agreement dated 9th September, 1949, between him and Chattar Sen. The aforesaid document has been marked Ex. 3 in this case. In paragraph 2 of Ex. 8, defendant no. 1 undertook, as cashier incharge to see that each member of the cash department staff did his duty diligently, faithfully honestly and properly in the best interest of the treasurer and the Bank, and also to arrange the work in such a way that, if there was any shortage or loss, he may be in a position to prove which member of the staff was responsible for the same, otherwise the cashier incharge would himself be responsible for such shortage or loss. The plaintiff himself came out with the case that the money in question disappeared from the custody of Kedar Nath (defendant no. 5). Consequently, it cannot be said that it was not possible to say which member of the staff was responsible for the loss. This being so, the defendant no. 1 could not be held liable to make good the loss on the basis of clause (2) of the aforesaid agreement.
25. So far as cl. (7) of the aforesaid agreement is concerned, it proves that the cashier incharge would recommend persons to be employed as cash staff and would report about the financial status of the employee and his sureties after making complete enquiry. The cashier incharge would be responsible and liable to indemnify the treasurer for any shortage or loss caused by any act of commission or neglect on the part of such employee, if the report of the cashier incharge regarding the financial status of such employee or his sureties turned out to be incorrect. From the materials on the record, the court below has rightly come to the conclusion that the plaintiff had fully satisfied himself about the financial status of defendant no. 5 and his sureties through the Manager and trusted servant Motilal Razdan.
26. From the evidence of Motilal Razdan, it appear., that defendant no. 1 took over charge at Agra on 14th September 1949, Kedar Nath (defendant no. 5), would also have been appointed at the same time, had he submitted cash security for Rs. 1000/-, which he had refused to do on the first day. As soon as defendant no. 5 agreed to deposit cash security, he received the appointment. With regard to the financial worth of the sureties of defendant no. 5, namely, defendants nos. 6 and 7, the plaintiff's case was that the defendant no. 1 had made exaggerated statement in that respect. From the evidence, it appears that it was not defendant no. 1 alone who made enquiries with regard to the financial status of the sureties of defendant no. 5, but, that, necessary enquiries were also made by Motilal Razdan.
27. The plaintiff who is a graduate in law as well as Honorary Special Magistrate and treasurer of so many branches of Banks and Government Treasuries, could not be expected to accept defendants 6 and 7 as sureties for defendant no. 5 without satisfying himself that the aforesaid sureties were sufficiently solvent. From the statement of defendant no. 1, it has been established that all the necessary enquiries with regard to the status of the sureties were made, jointly by him and Motilal Razdan. Under such circumstances, it would not be correct to say that the plaintiff had not satisfied himself with the financial status of the sureties of defendant no. 5 before accepting them as sureties.
28. We accept the finding of the court below that the defendant no. 1 could not be held liable on the basis of either clause 2 or clause 7 of the aforesaid agreement.
29. Likewise, we are in agreement with the finding of the court below, that there is no evidence to establish the fact that there was a conspiracy between defendants 1, 5 and 8 as alleged by the plaintiff.
30. It may be recalled that the plaintiff exempted defendant no. 8 from the suit at the trial stage, although according to the plaintiff's case defendant no. 8 was one of the conspirators. There is nothing in the evidence of the plaintiff or that of the Manager Motilal Razdan to support the charge of conspiracy. One of the circumstances that was relied upon on behalf of the plaintiff as proof of the alleged conspiracy was that defendant no. 1 had been recommending that defendants 6 and 7 be accepted as sureties of defendant no. 1, in rather strong terms. This would, however, indicate that from the time that defendant no. 1 look charge at Agra, he had a dishonest intention and was trying to defraud the plaintiff which is not the plaintiff's case. In the absence of any reliable evidence to support the case of conspiracy we agree with the finding of the court below that the defendant no. 1 could not be held to be liable on that basis.
31. The last ground for the liability of defendant no. 1, relied upon by the plaintiff, is the one which is contained in paragraph 12A of the plaint. The plaintiff's contention is that Chattar Sen defendant no. 1 in parting with the duplicate key of the cash box on 24th December 1949, acted with gross negligence on his part and this being so defendant no. 1 was liable to make good the loss on that ground alone.
32. From the statement of defendant no. 1 himself, it appears that when he was proceeding on leave, Sri V. Puri, the then Manager of the Hindustan Commercial Bank at Agra had taken from defendant no. 1 the bunch of the keys of the godown, as the new Manager had come and it was necessary that the stock etc. be shown to him and checked. That bunch of keys, had the duplicate key of the cash box of the Head Cashier also. Defendant no. 1 could not hand over this bunch of keys to defendant no. 5 at the time of handing over charge of his office to him, but defendant no. 1 is said to have told defendant no. 5 that bunch of the key was with Sri V. Puri, and that defendant no. 5 should have it from him from the evidence it appears that this bunch of keys together with duplicate key of the cash box was recovered from the almirah of Sri V. Puri after the incident together with the duplicate key of the cash box. What has been urged on behalf of the plaintiff is that even if he was asked by Sri V. Puri, the Manager to hand over the duplicate key of the cash box along with the bunch of other keys to him, the plaintiff should not have delivered the duplicate key of the cash box to him.
33. It was not necessary for the defendant no. 1 to hand over the duplicate key of the cash box even for the purpose of enabling the new Manager to check the stock etc., as is said to have been represented to him. One of the keys of the cash box was already in the possession of defendant no. 5, and the new Manager, if he so wanted, could very well have checked the contents of the cash box by making use of that key which was with defendant no. 5. It was the duty of defendant no. 1 to have taken away the duplicate key of the cash box from the bunch of the keys that was handed over to Sri V. Puri. From the compendium of instruction (Ex. 4.P.W. 11 Chapter VI), it is clear that standing instructions were that the duplicate keys should be lodged with the branch in safe custody.
34. Safe custody of the Bank amounted to joint custody of the incharge of the branch and the cashier. It was not disputed in this case that the duplicate key of the cash box was kept in the safe inside double lock. This duplicate key of the cash box could not have gone out of this safe under the double lock, unless defendant no. 1 and the Manager had taken it out jointly. Without the co-operation of defendant no. 1, therefore, this duplicate key of the cash box could not have been taken out of safe custody and Sri V. Puri could not, all by himself, have got access to it. In acting in the manner in which he did, it is clear that the defendant no. 1 was acting contrary to the standing instructions and practice. As a careful and prudent man, it was the duty of defendant no. 1 not to have handed over the duplicate key of the cash box to Sri V. Puri even if Sri Puri wanted to get the same. Defendant no. 1, therefore, ran a great risk in handing over the duplicate key of the cash box to Sri V. Puri. No attempt appears to have been made by defendant no. 1 when he was proceeding on leave, to see that Sri V. Puri returned the bunch of the keys including the key of the cash-box and kept in the safe custody. It is, therefore, clear that the conduct of defendant no. 1 in leaving the duplicate key of the cash box in the possession of Sri V. Puri, was a clear case of gross negligence on his part.
35. The third clause of the agreement Ex. 3 dated 9th September 1949 is in the following terms:
“The cashier in charge shall honestly and faithfully serve the Bank and the Treasurer, and shall in all respects and all occasions diligently, faithfully and without any reserve obey and observe all lawful orders and instructions issued by the Bank or the Treasurer in relation to the due discharge of his duties as cashier in charge.”
36. In view of the conduct of defendant no. 1, in handing over the duplicate key of the cash box, to Sri V. Puri, we have no hesitation in coming to the conclusion that he was acting contrary to instructions issued by the Bank or the treasurer in relation to the due discharge of his duties as cashier incharge and was not acting with due diligence as he had undertaken to do. Defendant no. 1, therefore, must be held liable to make good the loss of the plaintiff on this ground alone.
37. It was, however, urged that the consequence of, acting contrary to the undertaking in clause 3, of the agreement, is not provided for, in that clause. To our mind, however, that consideration is wholly irrelevant. If the defendant no. 1 made the breach of clause 3, he would in law be liable to make good the loss that was caused to the plaintiff on account of such conduct on the part of the defendant no. 1
38. So far as the question of the extent of the liability of defendant no. 1 is concerned, we do not think it possible to agree with the view taken by the court below the view taken by the court below is that the defendant no. 1 became liable for Rupees one thousand only to which extent cash security had been deposited by him. The reasoning accepted by the court below for that finding is wholly erroneous. Perusal of the terms of the agreement makes it abundantly clear that the liability of the defendant no. 1 would be to the extent of the entire loss that would be caused to the plaintiff on account of the breach of the obligation on the part of defendant no. 1. We are, therefore, clearly of the view that the defendant no. 1 is liable to pay up the entire amount claimed by the plaintiff.
39. Next, coming to the question of liability of defendants 2 and 3, namely, Sri Om Prakash and Sri Som Prakash, the case of defendants 2 and 3 is that on the 29th August 1948, when defendant no. 1 applied for appointment to the Government Rationing Department at Saharanpur of which the plaintiff was then the treasurer, they offered themselves as sureties for him for that post. The statement of Motilal Razdan, plaintiff's manager is also to the effect that at the time the defendants 2 and 3 requested the plaintiff to employ defendant no. 1 in the Rationing Department at Saharanpur, they stood sureties only for the post in the Rationing Department. The testimony of Razdan therefore, is against the plaintiff's case to the effect that defendants 2 and 3 stood sureties for the defendant no. 1 for his employment at Agra also. The security bonds executed by Om Prakash are Exs. 4 and 5 respectively, and they are dated 29th August 1948. Both the security bonds are in the same form they recite:
“Whereas I, Om Prakash…. Saharanpur have requested Lala Bishal Chand Jain……to appoint Mr. Chatter Sen….to the post of Head Cashier and in consideration of such an appointment being made. I have agreed to stand surety for him, Mr. Chatter Sen
40. And whereas Mr. Chatter Sen aforesaid has been appointed by Lala Bishal Chand Jain, to the post of Head Cashier at Saharanpur branch of the Treasury Government. Ration Department at my request on the condition that lie shall furnish personal surety beside the deposit of cash security, for the faithful and honest performance of all such duties as may be required of him during his employment with the Bank, Government Treasury, or Ration Department in the capacity of Head Cashier or in any other capacity whatsoever, at Sharanpur branch or at any oilier branch of the Bank, Government Treasury or Ration Department to which he may be transferred from time to time.”
41. On behalf of the plaintiff it has been urged that defendants 2 and 3 continued to be surties for defendant no. 1 even when he occupied the post of Cashier in the Bank at Agra, inasmuch as transfer of defendant no. 1 to other branches of the Bank. Government Treasury and Rationing Department was contemplated by them in the security bond. On the other hand, the contention on behalf of defendants 2 and 3 is that it is the plaintiff's own case that the employment of defendant No. 1 an Saharanpur came to an end and plaintiff appointed him afresh at Agra. Consequently, it is not a case of continuation of the first appointment by transfer. Paragraph 5 of the plaint contains the following averment:
“That the plaintiff took charge of Agra Branch as Treasurer on 14th September, 1949 and appointed Sri Chatter Sen defendant no. 1 as cashier incharge who also took charge as such on the 14th September, 1949”
42. The language of paragraph 5 of the plaint, therefore, lends support of the contention of defendants 2 and 3. This by itself would not be sufficient to establish such contention of defendants nos. 2 and 3. Bishal Chand plaintiff in the witness box made the following statement:
“Defendant no. 1 was in my service in the Rationing Department upto 10th September, 1949. He had not resigned from this post When I sent him to Agra, he drew his salary as Head Cashier from 14th September 1949. He did not get salary from 10th September, 1949 to 13th September, 1949…. I did not pay him even the expenses for going to Agra.”
43. On such statement of the plaintiff, we must hold that defendant no. 1 was appointed afresh at Agra by the plaintiff and that his posting at Agra was not in continuation of his earlier appointment at Saharanpur. It is important to note that a fresh security bond was taken from defendant no. 4 which related to the appointment of defendant no. 1 at Agra itself. We however, do not agree with the opinion of the court below that defendants nos. 2 and 3 had not understood the contents of the security bond before executing the same. In the view that we have taken, we hold that the plaintiff is not entitled to any decree against defendants 2 and 3.
44. So far as defendant no. 5 is concerned, it is clear from the admitted and proved facts that the money in question disappeared while it was in the lawful custody of Kedar Nath defendant no. 5. Defendant No. 5 cannot escape the liability only on account of the fact that he was asked to retain the amount of 60,000 rupees in the cash box against his wishes that he was asked to go out to bring samosas and do other job, leaving the cash box in the presence of Sri V. Puri inasmuch as it was the duly of defendant no. 5 not to have left the cash box in this manner with Sri V. Puri. At any rate, before he left the place, he should have entrusted the cash by counting the same to Sri V. Puri and should have taken sufficient precaution for its safe custody the court below has rightly taken the view that the lawful custody of the cash must be deemed to be with Kedar Nath defendant no. 5, even during the time lie was absent from the spot and was sent to bring samosas or to do other job by Sri V. Puri. We are in this case not called upon to investigate, whether the cash was removed by Sri V. Puri or by Kedar Nath defendant no. 5 or by both of them jointly. In order to fix the liability of defendant no. 5, it is sufficient to find that the disappearance of the money look place at a time when the money was kept in the custody of defendant no. 5.
45. On the question of the extent of liability of defendant no. 5, court below has again fallen into error in holding that his liability was only to the extent of cash security deposited by him. We have already expressed the view that the perusal of the terms of the agreement did not warrant the conclusion which the court below has arrived at on this question. We are, therefore, of the view that like defendant no. 1, defendant no. 5 also is liable to the whole extent and plaintiff was entitled to a decree against defendant no. 5 also for the entire amount of loss suffered by him.
46. So far as defendant no. 4 is concerned, who stood surety for the defendant no. 1, when he was appointed at Agra, he was rightly held by the court below to be liable to pay up the plaintiff's claim. The plaintiff has, however, as mentioned above compromised his differences with defendant no. 4 and there is no question of plaintiff getting any further decree against him. A compromise has also been entered into between the plaintiff and Shrimati Anguri Devi, defendant no. 6, and the plaintiff would, therefore, be not entitled to a decree against her from this Court.
47. So far as defendant no. 7 is concerned, we have already noted that no appeal has been filed on his behalf in this Court, and therefore, the decree passed by the lower court against him must be confirmed.
48. Our attention has been invited to the compromise entered into between the plaintiff and the heirs of defendant no. 4 as well as between the plaintiff and defendant no. 6. Plaintiff has received satisfaction of his decree to the extent of Rs. 5,000 from the heirs of defendant no. 4 and to the extent of 8,500 from defendant no. 6. Thus the plaintiff's claim to the extent of 8,500 has already been satisfied. The extent of the claim of the plaintiff which still remains to be satisfied, therefore, is Rs. 81,500 only.
49. The appeal partly succeeds. In supersession of the decree passed by the court below, we pass the following decree in favour of the plaintiff.
50. Plaintiff's suit for recovery of Ks. 81,500 is decreed against defendent no. 1 Sri Chatter Sen, defendant no. 5 Sri Kedar Nath and Sri Suiaj Bhan defd. 7.
51. Plaintiff's claim against defendants nos. 4 and 6 has already been disposed of in accordance with the compromise entered into by the plaintiff with them. Plaintiff's suit against defendant 3 is dismissed, defendant no. 2 having already died. Plaintiff shall also gel costs in proportion to his success from defendants 1 and 5 and defendant 3 will get his costs from the plaintiff.
AK/TVN/G.G.M
52. Appeal partly allowed.
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