' The facts giving rise to this second appeal from the appellate order dated 16-7.70 of the learned Additional District Judge, Peshawar are few and simple and are more or less admitted. In any case since the findings of fact by the two Courts below are binding on this Court in the second appeal I would accept them as correct. These are as under.
2. The firm Messrs Sangeen Khan Abdul Jalil, which is respondent No, 1 herein, was the plaintiff in the suit. It consigned 208 bags of gur to Messrs Khuda-e-Noor and Mauladad who were together impleaded as defendant No, 2 but in the present appeal they have been arrayed as respondents Nos. 2 and 3. The railway receipt was entrusted by defendant No, 1 to Messrs Habib Bank Limited, the appellant which was defendant No, 1 in the suit. Defendant No, 1 was to collect the amount from defendant No, 2 and to pay the same to the plaintiff-firm. Defendant No, I sent the railway receipt to its branch at Quetta. However, since defendant No, 2 was running business at Noshki, a place away from Quetta, and there was no branch of Habib Bank there, the Habib Branch of Quetta entrusted the railway receipt to Quetta Central Urban Industrial Co-Operative Bank Limited, Noshki, which was defendant No, 3 in the suit and has been impleaded as respondent No, 4 in this appeal.
Defendant No, 3 realized the amount from defendant No, 2 which took the delivery of the consignment. Defendant No, 3 prepared a draft for a sum of Rs, 4,403.68 drawn on Punjab Co- operative Bank Limited Karachi, defendant No, 4, which has been impleaded as respondent No, 5 in the present appeal. The amount of the draft was payable to defendant No, 1 and obviously the same was to be paid by that defendant to the plaintiffs-firm. However, it transpired that defendant No, 4 had ceased to exist. The amount of the draft, therefore, could not reach defendant No, 1 which failed to make the payment to the plaintiffs which necessitated the filing of the suit for recovery of the amount from the four defendants.
3. The learned trial Judge passed the decree against defendants Nos. 1 and 3 and from his judgment and decree, the appeal of defendant No, 1 was dismissed. Defendant No, I in the second appeal challenged the findings of the two Courts below that it is also responsible for the payment of the amount to the plaintiffs. It may be noticed that none of the respondents have cared to contest this appeal which has been heard ex parte.
4. Obviously defendant No, 1 was acting as agent of the plaintiffs for the recovery of the amount being the sale price of the gur, the consignment of which was to be delivered to defendant No, 2.
The Quetta Branch of defendant No, 1 is in fact no separate entity than the defendant No, 1 itself. The entrustment of the railway receipt to defendant No, 3 with authority to deliver the goods to defendant No, 2 and realize the amount from them was in fact an appointment of sub-agent.
Ordinarily defendant No, 1 which was the agent of the plaintiffs-firm, could not appoint any sub- agent without an express authority from the plaintiffs-firm. It has been explained by the learned counsel for the plaintiffs that since defendant No, 1 had no branch at Noshki where the goods were to be delivered and from which place the amount was to be recovered, defendant No, 1 had no other course but to act for the plaintiffs through sub-agents. He, therefore, contended that the real default lies with defendant No, 3 which had received the amount and has not so far delivered the same W it and that the decree should have been passed only against defendant No, 3 and not against defendant No, 1.
5. Under section 190 of the Contract Act (IX of 1972) (hereinafter referred to as the Act) an agent cannot lawfully employ another person to perform acts which he has expressly or impliedly undertaken to perform personally. However, there is a rider that a sub-agent can be employed if it is the ordinary custom of trade or the action is justified from the natural of the agency. The learned counsel contends that it is a universally accept banking practice that when a particular bank cannot carry out itself the duties as agent it employs another bank to perform the duties on the bank's behalf as sub-agent. I am also of the view that though the defendant No, I had no express authority to appoint a sub-agent, it was perfectly justified in employing defendant No, 3 as sub- agent according to the ordinary custom of trade. However, it is to be seen whether by employment of sub-agent, the agent does or does not remain responsible to the principal. According to my finding above the appointment of defendant No, 3 as sub-agent was proper on a true construction of section 190 of the Act. second part of section 192 of the Act the agent is responsible to the principal for the acts of the sub-agent. Ordinarily, therefore, defendant No, 1 would be responsible for the acts of defendant No, 3 as well. However, the third part of section 192 ibid provides that when there is fraud or wilful wrong, the sub-agent is responsible to the principal as well. In the present case obviously defendant No, 3 com mitted a wilful wrong, if not fraud, by issuing a draft drawn on defendant No, 4 which was non-existent. Defendant No, 3 is, therefore, also responsible to the principal, namely, the plaintiff-firm.
6. The only question to be determined is whether defendant No, 1, who in the circumstances of the case, is ordinarily responsible to the plaintiff in spite of the responsibility of defendant No, 3 is absolved of its responsibility under any provisions of the Act. In this respect reference may be made t section 195 of the Act which provides inter alia that when a principal select an agent and in making the selection exercise the amount of discretion as man of ordinary prudence would exercise in his own case, he does not remain responsible to the principal for the acts of negligence of the sub-agent s selected. I have already found that the selection of defendant No, 3 as sub agent was well justified in law and on facts of the case. It is also evidence that defendant No, 1 and its branch at Quetta exercised the discretion in a manner in which an ordinary prudent person would exercise in his own case. There was nothing to show that defendant No, 3, which is a legally constituted banking Company, would commit fraud or wilful wrong. In these circumstances, therefore, by virtue of the provisions of section 195 of the Act, defendant No, 1 does not remain responsible to the plaintiffs. Illustration (b) supports this view.
7. In view of my finding above, therefore, I accept this appeal and modify the judgment and decree of the learned Additional District Judge in the manner that a decree for the recovery of the amount is passed in favour of the plaintiffs against defendant No, 3, namely, Quetta Central Urban Industrial Co-operative Bank Limited, Noshki with costs throughout. The suit of the plaintiffs against defendant No, 1 is dismissed but defendant No, 1 shall not be entitled to any cost from the plaintiffs as the said defendant was a necessary patty to the suit. Defendant No, 1 shall also be entitled to recover the costs of the suit and appeals from defendant No,
3. The decree is ex parte.