7 he petitioners were share-holders in the United Vegetable and Ghee Mills, Faisalabad, the Management of which was taken over by the (Government on the promulgation of Ordinance XIX of 1973. The shares of the petitioners were also acquired. They were, however, given Industrial Bonds (hereinafter called the Bonds) in accordance with section 14 of the said Ordinance read with paragraph 3 of its Schedule and rule 8 of the Rules framed under it. The value of the Bonds in the case of petitioner No. 1 is Rs. 10,84,900 whereas it is Rs. 94,300 in case of every other petitioner.
2. On 2nd February 1978, the petitioners requested the State Bank of Pakistan at Lahore (hereinafter called the Bank) for the issuance of pay orders of the accrued interest. According to the instructions of the petitioners these Bonds were to be sent back under a registered postal cover.
The Bank complied with the instructions but the Bonds were delivered not to any cf the petitioners but to somebody who affixed a rubber stamp of the United Cotton Mills. It is, however, admitted that the postal cover had been sent to the address furnished by petitioner No. 1.
3. As the Post Office allegedly did not convey those bonds to the petitioners they made a representation to the Bank vide letter dated 15thFebruary 1978. They also requested for the issuance of duplicate bonds and the interest pay orders.
4. The Bank examined the question and vide its letter dated 21st February 1978, inquired from the Postmaster General, Savings, Lahore, about the delivery of the postal cover containing the Bonds and the interest pay orders. Two further letters for the same purpose were also sent on 30th March 1978, and 4th May 1978, but all in vain. It appears that the postal authorities/the Bank failed to recover the postal cover from the recipient. A complaint was, therefore, filed before the Magistrate under section 68 of Post Office Act. No duplicate Bonds, however, have been issued to the petitioners so far and hence this petition. The Bank denied that the Bonds are a 'Government security'.
5. In its report, however, it admitted the facts as given above but stated that for a 'Government Security' as defined in the Securities Act, 1920 (Act X of 1920)
"Duplicate Bonds cannot be issued at this stage but in due course after observing certain formalities under the existing rules. Further the bonds in question have not been lost but the same have been misdelivered by the Postal authorities to Messrs United Cotton Mills, Faisalabad, which is a known fact."
The above requirement is provided in section 10 of the Act X of 1920 in respect of a 'Government Security' which has been lost, stolen or destroyed either wholly or in part. The Bank has further stated that the payment, of the Bonds and the interest-pay-orders cannot be made, to any other person as it has stopped payment in its books as well as in the Karachi office.
6. The question whether the Bonds are a 'Government Security' or not requires to be considered first. Section 2 of Act X of 1920 defines 'Government Security' as under :- "Government Security' means promissory notes (including treasury bills) stock certificates, bearer bonds and all other securities issued by the Central Government or by any Provincial Government in respect of any loan contracted either before or after the passing of this Act, but does not include a currency note."
7. Undoubtedly, the Bonds issued to the petitioners are neither promissory notes nor stock certificates. They are bonds but not 'bearer bonds' because names of petitioners are inscribed thereon. They are, however, transferable by the holder. Is it then a security issued by the Central Government in respect of any loan contracted by it? The contention of the learned counsel for the petitioners was that the Central Government did incur a loan by operation of law but did not contract it.
8. 'Loan' according to Wharton's Law Lexicon is anything lent o given to another on condition of return or payment. This lending or giving on condition of return or payment could be by operation of law Similar definition was approved by their Lordships of the Supreme Court in Ocean Industries Limited and another v. Industrial Development Bank (1) P I. D 1966 SC 738). The word 'contract' means, to draw together, to incur, to become subject of. An undertaking, etc. According to Webster's Third N.-w International Dictionary the word 'contract' inter alia means, to bring on oneself, acquire usually involuntarily, incur, to draw together or nearer. It is, therefore, not correct to say that contracting a loan only means getting a loan under a contract or mutual consent or agreement. The word `contract' as discussed above, does not necessarily have a legal connotation only and one may, therefore, incur, undertake or bring upon itself a loan by way of a statutory act or by operation of law. In Jewanali Charlya v. Rameshwar Lai Agarwala (1) AIR 1967 SC 1118), the Supreme Court of India held that the word `loan' as defined in section 2(f ) for purposes of Behar Money-Lenders (Regulation of Transactions) Act, 1939, includes not only an . Actually advance of money and kind but a transaction on bond which bears a transaction of past advance of money, I.e. An act which is renewable as a past advance of money.
9. The Privy Council in Banslon v. Shiver (2) AIR 1946 P C 145) held that if a man finds money for another and expends it on other on behalf and in accordance with his request he is lending it although he never physically transfers it to the borrower. This may be true even where some of money is due to the lender himself for his services. It is not necessary in such a case to constitute a loan that money should be handed over to the borrower and by him returned to the lender as its reward for such services. The same result is arrived at if the parties by their course of dealing have shown an intention that the monies payable by the debtor should be provided or found by the creditor and treated as having been advanced by him. I am, therefore, of the view that the Government did contract a loan even though the shares of the petitioners were acquired not with the consent of the petitioner but by the compelling power of law.
10. The contention of the learned counsel for the petitioners that the Bonds were share-certificates and that his clients are entitled to the issuance of duplicate certificates is also not correct, according to section 5(1)(b)(i) read with section 14 of the Hydroginated Vegetable Oil Industry (Control and Development) Act, 1973. The amount of compensation of the shares acquired had been worked out in accordance with paragraph 1 of the Schedule attached to the said Act. The mode of payment is given in paragraph 3 of the Schedule which reads as under : "The compensation payable in accordance with the principles indicated above shall be paid by the Federal Government in cash or in the form of Government Industrial Bonds redeemable at any time at the option of the Federal Government carrying a rate of interest one per cent. Above the bank rate notified by the State Bank of Pakistan from time to time. The Bonds shall be transferable or be eligible for hypothecation but only in accordance with such rules as may be made by the Federal Government in this behalf."
The above resume will show that the petitioners did hold no share certificates after their acquisition and that the Government had contracted a loan with interest on the security of bonds.
11. It was next contended that the position taken by the Bank, that it will have to observe certain time consuming formalities before the duplicate bonds can be issued, is against law and amounts to refusing to act in accordance with law. According to the learned counsel, the case of the petitioners was fully covered by section 21 of Act X of 1920 and, therefore, the Bank ought to have immediately issued the duplicate bonds on being furnished with an indemnity. It is stated that the petitioners were fully prepared to do that and, therefore, there should not have been any delay at all. Section 21 reads as under : "21. Notwithstanding anything in sections 10, 12, 13 and 15, the prescribed authority may in any case arising under any of those sections :
(i) issue a duplicate or renewed security or convert, consolidate or sub-divide a security or securities upon the applicant giving the prescribed indemnity against the claims of all persons claiming under the original security or under the security or securities so renewed, converted, consolidated or sub-divided, as the case may be ; or
(ii) refuse to issue a duplicate or renewed security or to convert, consolidate or sub-divide a security or securities unless such indemnity is given."
12. Raja Muhammad Anwar, the learned counsel for the Bank submitted that the Bank would not have refused to issue duplicate bonds if it was proved to its satisfaction that the bonds were a Government security which had been lost or stolen. According to the learned counsel, the Bank had only wanted to comply with the provisions of section 10 as the Bonds had only been misdelivered and not lost or stolen. In his view, section 21 was not even applicable and so there was no question of the issuance of duplicate bonds on furnishing an indemnity bond. The Bank has admitted that the bonds were received by a person other than the petitioners. The justice of the claim of the petitioners is also not denied. The petitioners are also prepared to pay the prescribed fee for the duplicate certificates. The only question that falls for determination, therefore, is whether the misdelivery of the bonds in the circumstances of this case, amounts to their loss, theft or destruction as provided in section 10 of Act X of 1920.
13. It has been recently held by the Supreme Court in the Income-tax Officer, Mardan v. Messrs Sanaullah Khan & Co. (1) PLD 1976 SC 790that the Post Office, according to rule 18 is the agent of the sender. The registered cover had been received not by the petitioners or their agent but by some one else, misrepresenting to the agent of the Bank that he was either the addressee or that he was receiving the cover to be handed over to the addressee. A complaint under section 68 of the Post Office Act has also been filed at the instance of the Bank or the Postal authority but no recovery or return of the bonds has been effected.
14. There can thus be no dispute about the fact that the bonds have been lost by the agent of the Bank. It is also admitted by the Bank that the payment of the bonds or the interest thereon has been stopped. No loss, therefore, could accrue to the Government. The Bank could also give a public notice to protect the Government interest. It, however, could not refuse to act under section 21 of the Act X of 1920. The Bank in that situation should have issued duplicate bonds in accordance with the provisions of section 21.
15. It may also be shown that the bonds were stolen by the recipient. Section 378, P. P. C. Which defines theft reads as under "378.-Whoever, intending to take dishonestly any movable property out of the possession of any person without that person's consent, moves that property in order to such taking, is said to commit theft."
The admitted facts of the case are that the bonds were sent to the address of the petitioner No. 1 as directed by him. However, whosoever receive the bonds did not sign the receipt but axed a rubber stamp of "Unite ' Cotton Mills". He, therefore, took them from the possession of Postman deceitfully and hence, without his free consent. He did not deliver it to B the addressee and it have not been returned to .Any one though a criminal case has also been registered. This clearly means that the delivery was obtained dishonestly. The question of fraudulent and dishonest intention I a question of fact but as every one is presumed to intend the natural consequences of his act, the Court may presume dishonest intention from the C act of the accused causing wrongful loss to the owner in order to convict him for theft, as held in Sheodent Singh and another v. State of Bihar (1) AIR 1961 Pat. 362). In this case also, wrongful loss has been caused to the petitioners, the Bank and Postal authority as well. It was held in K. N. Mehra v. State of Rajasthan (2) AIR 1957 SC 369) that taking away an aircraft for an unauthorised flight deprived the owner/Government of the aircraft temporarily and earned it loss by unlawful means and it thus amounted to theft. In another case, it was held that receipt of luggage mentioned in the luggage ticket, issued to a passenger by the Railway, by some one who had no right, amounted to taking consent of the Railway clerk to deliver by misrepresentation and so it was theft in the eye of law. Reference be made to Parshottam Mahade P v. State (3) AIR 1963 Bom. 74.
15. In view of the above discussion, the bonds were lost or stolen and, therefore, fully covered by section 21. The Bank in that situation, ought to have issued the duplicate if the petitioners were prepared to executeindemnity bonds in favour of the Bank. The Bank is, therefore, directed t do the needful but there will be no order as to costs.