NOORUL ARFIN, J.--This judgment will decide two suits, that is, Suit No, 24 of 1965 and Suit No, 58 of 1965. In Suit No, 24 of 1965, there is only one plaintiff, namely, Karachi Road Transport Corporation Ltd. which is successor-in-interest of a Corporation known as Karachi Road Transport Corporation (hereinafter referred to as the Corporation) which was established under the Karachi Road Transport Corporation Ordinance (XXI of 1959). In Suit No, 58 of 1965, there are two plaintiffs namely, the Karachi Road Transport Corporation set up under the said Ordinance, and its successors-in- interest, the Karachi Road Transport Corporation Ltd. a Limited Company incorporated under the Companies Act, 1913 (hereinafter referred to as the Company). The defendants in both the suits are Fazal Brothers Ltd. Clearing and Forwarding Agents, and Habib Bank Ltd. a banking company. In addition to these parties, two more parties have been joined in both the suits as third parties under Chapter IX of the Sind Chief Court Rules (O.S.) and these parties are the Sind Provincial Co- operative Bank Ltd. and the National Co-operative Bank Ltd. Suit No, 24 of 1965 is for Rs, 62,256.57 and Suit No, 58 of 1965 is for Rs, 46,646.57.
2. The material facts are these: The Karachi Road Transport Corporation operated a Road Transport Service in Karachi. Messrs Fazal Brothers Ltd., the defendant No, 1, acted as Clearing and Forwarding Agents of this Company and Habib Bank Ltd. were the Company's bankers. On 24th November 1961, the Company gave instructions (Exh. 13/11) in Suit No, 24 of 1965, to Habib Bank Ltd. to issue a Pay Order for Rs, 51,728.57 in favour of the "Collector of Customs through Messrs Fazal Brothers Ltd." The "Company issued its own cheque for this amount (Exh. 13/10) in favour of the Bank who, accordingly issued a Pay Order, Exh. 13/21, on 25-11-61 in terms of the Company's instructions in Exh. 13/11. Likewise, in Snit No, 58 of 1965, the Company issued instructions on 15th December 1961 (Exh. 12/1) to issue another Pay Order of Rs, 37,964.57 in favour of the "Collector of Customs through Messrs Fazal Brothers Ltd.", for which payment the Company gave its own cheque, Exh. 12, of the like amount to the Bank and, accordingly the Bank issued the Pay Order in terms of these instructions on 28th December 1961, which Pay Order is Exh. 12/2. Both the Pay Orders were paid to the National Co-operative Bank Ltd. The Pay Orders do not contain endorsements either of the Collector of Customs or of Messrs Fazal Brothers Ltd., but there are endorsements of the National Co-operative Bank Ltd. and the Sind Provincial Co-operative Bank Ltd. The endorsement of the National Co- operative Bank Ltd. is in this way-- "Payees a/c will be credited on realization.
Please pay to Sind Provincial Co-operative Bank Ltd. for the National Co-operative Bank Ltd. (Sd). Accountant."
The endorsements of the Sind Provincial Co-operative Bank Ltd., are in this way:-- "Collecting Banks Endorsement Guaranteed.
For Sind Provincial Co-operative Bank Ltd. (Sd.) Accountant."
It is the agreed position that these amounts were not paid to the Collector of Customs. It appears that the Habib Bank Ltd. paid the amounts of the two Pay Orders to the Sind Provincial Co- operative Bank Ltd., who in their turn, paid these amounts to the National Co-operative Bank Ltd.
Sometime in May 1964, according to the plaintiffs, the Collector of Customs stopped clearance of the plaintiffs' goods for nonpayment of these amounts and it was then that the plaintiffs learnt that the Pay Orders had not been paid to the Collector of the Customs at all. Before any legal action could be taken the Karachi Road Transport Corporation Ordinance (XXI of 1959) was repealed by the Karachi Road Transport Corporation (Repeal) Ordinance, 1964 (West Pakistan Ordinance XXIV of 1964), which was promulgated on 7th December 1964, and which came into effect on 17th December 1964, by the West Pakistan Government Notification No, Leg. 3(24,64, issued on 14th December 1964. Under this Repealing Ordinance, the Limited Company was intended to be incorporated and was in fact incorporated under the Companies Act, 1913. Section 4 of the Repealing Ordinance provided that with affect from the appointed dated (that is, 17th of December 1964), the Corporation shall stand dissolved and all property belonging to the Corporation, and all its assets, liabilities, rights and obligations shall stand transferred to and devolve upon the said Company. Under section 5(1) of the Repealing Ordinance, all agreements and contracts entered into or executed by or on behalf of the Corporation were provided to continue to be enforceable as if such agreements and contracts were entered by and on behalf of the Company. Under subsection (2) of this section all suits and other legal proceedings to which the Corporation was a party were provided to be deemed to be suits and proceedings by or against the Company and it was further provided that the Company shall, as from the appointed day, be and shall be deemed to be substituted as party to such suits and other legal proceedings in place of the Corporation.
3. The plaintiffs made demands on the Habib Bank Ltd. for re-imbursement of the amounts of the two Pay Orders and upon the Bank's refusal to do so filed the two suits which are before me. Suit No, 24 of 1965 was filed on 24th November 1964 and Suit No, 58 of 1965 was filed on 19-12-1964.
4. In their written statements the Habib Bank Ltd. contended that the payment of the two Pay Orders had been made strictly in accordance with the plaintiff's instructions and, therefore the payment had discharged the Bank of its obligations. Messrs Fazal Brothers Ltd. took the stand that they had collected the amount of the Pay Orders and repaid these amounts to the plaintiffs themselves, though they did not maintain this stand in the evidence of Mr. Fazlur Rahman, who came as a witness for Messrs Fazal Brothers, Ltd. and took a different stand that is, that the amount of these two Pay Orders had been appropriated by these defendants towards their dues which were payable to them by the plaintiffs, and that the plaintiffs still owed money to Messrs Fazal Brothers Ltd. The Sind Provincial Co-operative Bank Ltd. and the National Co-operative Bank Ltd. have been joined as third parties as aforesaid at the instance of Habib Bank Ltd. as this Bank claimed to be indemnified by these two parties in case it was held that payment of the two Pay Orders was not made in due course. The Sind Provincial Co-operative Bank Ltd., in their written statement, took the stand that they were not liable to indemnify the Habib Bank Ltd. as they were only a collecting Bank and after the collection of the amount of the Pay Orders had paid these amounts to the National Co-operative Bank Ltd. The National Co-operative Bank Ltd., took the defence that the proceeds of the two Pay Orders had been credited to the account of Messrs Fazal Brothers Ltd., and, therefore, this Bank was not liable at all to indemnify the Habib Bank Ltd , or any other party.
4. A common set of issues were framed in both the suits, but when the suits came up before me for arguments on 11-8.1970, the Advocates of the plaintiffs, defendant No, 1 and defendants No, 2 (the third parties being called absent) requested that the issues be re-cast and by consent the following issues were framed on this date in both the suits:-- (1)Are the suits barred by limitation?
(2)Was payment of the two Pay Orders, namely, Exh. 12/2 and 13/21 by the defendant No, 2 against the instructions of the plaintiffs or is it valid payment? If so what is the effect?
(3)Whether Suit No, 58 of 1965 was filed competently and whether any defect in respect of the suit was cured by addition of plaintiff No, 2 in that suit on 16-12-1966? If so, what is the effect?
(4)Whether defendants No, I were entitled to receive the amount of these two Pay Orders and appropriate the same towards their own remuneration? If so, what is the effect?
(5)Are the defendants No, 2 entitled to be indemnified by defendant No, 1 and by the third parties, namely, the National Co-operative Bank Ltd., and the Sind Provincial Co-operative Bank Ltd.
(6)Relief.
5. Issue No, 2.--The most material issue is issue No, 2, which raises the question whether the payment of the two Pay Orders, Exhs. 12/2 and 13/21, was made by the Habib Bank Ltd. against the instructions of the plaintiffs, or whether these payments should be treated as invalid payments. It has been noted above that in both the Pay Orders the Payee has been described as "Collector of Customs through Messrs Fazal Brothers Ltd." This is rather an unusual description of the payee. Still, a reasonable meaning has to be given to this description. It is not denied that the ultimate payee was the Collector of Customs, but the payment to the Collector of Customs had to be made through Messrs Fazal Brothers Ltd. Accordingly, Messrs Fazal Brothers Ltd., had no right to receive the moneys under the two Pay Orders except perhaps as agents of the Collector of Customs and this representative capacity should have been indicated in the endorsements on the pay orders, that is, before the Habib Bank Ltd. could make payment of the two pay orders, it should have satisfied itself that the payment was being made to the Collector of Customs, who was admittedly the ultimate payee, or, if payment was being made to Messrs Fazal Brothers Ltd., then the Habib Bank Ltd. should have satisfied itself that Messrs Fazal Brothers Ltd. had the authority of the Collector of Customs to collect payment, in which case Messrs Fazal Brothers should have signed the endorsement on the two pay orders in a representative capacity, that is, as agents of the Collector of Customs. As I have said, the payee's description in the two pay orders is rather unusual and it is very seldom that one comes across such a description of the payee. Such description is sometimes seen in cheques for payments of dividends to the shareholders' bankers, but then, in these cases, the company, which is the drawer of the cheque, as well as the banker who is authorised to collect the amount of the cheque on behalf of its constituent, generally have express authority of the shareholder to issue or receive cheques with such description of the payee. AS will be noted below, no such authority was given by the Collector of Customs either to the plaintiffs or to Habib Bank Ltd., (both as drawer and the drawee of the pay orders). Accordingly, the question of the construction of the words "Collector of Customs" through Messrs Fazal Brothers Ltd. has caused me considerable difficulty. Mr. Sharaf Faridi, however, referred me to an English decision, Slingsby and others v. District Bank Ltd. . In this case, the executors of an estate made out a cheque in favour of a firm of stock brokers, namely, John Prust & Co. for 5000. The cheque was handed over to the solicitors, James Cumberbirch & Potts, one of whose partners, namely, James Cumberbirth, wrote after the payee name these words: "per Cumberbirch & Potts."
James Cumberbirth took the cheque to the Westminster Bank at Manchester, filled in a pay-in-slip and it with his name and paid the cheque into the account of the Pelatine Industrial Finance Company Ltd. of which he was a Chairman and to which he was indebted. The cheque itself had been endorsed with the words "Cumberbirch & Potts". The Westminster Bank accepted the cheque and paid its amount into the account of the aforesaid company. This dispute came before Wright, J. (as he then was) who, assuming that there was no alteration in the cheque and that from the beginning the payee was "John Prust & Co. per Cumberbirch & Potts" raised the question as to what should be the proper form of endorsement in cases where the payee is described in such cases. The learned Judge answered the question in this way: - "It being admittedly the intention that X should receive as agent for A. B., it would seem proper that the intention, indicated on the face of the cheque, should be reiterated in the endorsement. In such cases X can only sign as authorised by A. B., and, if he has the authority of A. B. and can only sign in a representative capacity, his endorsement ought, in principle it seems to me, to make this clear in correspondence with the description cf the payee. That this is the correct endorsement is the opinion stated in a book called Answers on Banking Practice, issued by the Institute of Bankers, the recognised Society of Bankers, and a similar view is reiterated in the number published in December 1930, of the Journal of the December 1930, of the Journal of the Institute of Bankers."
Further, on page 597 of the judgment the learned Judge again stated his opinion as follows :- "But in my judgment it seems clear that, if X has ex facie no right to receive the money except in a representative capacity, his signature should show that he is acting in accordance with that right, and he ought to sign in a representative capacity; he is not authorised to receive the money as his own, or to deal with it except for his principals. That is the intention."
On pages 598 and 599, Wright, J. reiterated his opinion in the following words:-- In the present case Cumber birch had only authority (assuming the alteration) to endorse the cheque in order to carry out his instructions, and could only properly endorse, if he had their authority, on behalf of Prust & Co ; the endorsement he male was therefore with fraudulent intent and without authority and was a forgery."
"Before alteration it was a cheque payable simply to John Prust & Co. and could only be discharged by or under the endorsement of John Prust & Co. After the alteration, if the view put forward on behalf of the defendants were accepted, the endorsemnt 'John Prust & Co.' was not only unnecessary but improper, but on what appears to me to be the true view, discharge was to be by a payment to Cumberbirch & Potts as agents for John Prust & Co., and on an endorsement by Cumberbirch & Potts signing in terms as agents for John Prust & Co."1 The case went to the Court of Appeal, whose judgment is reported as Slingsby and others v. District Bank Ltd. Scrutton L. J., dealing with the evidence of witnesses on banking practice, stated as follows :- " When asked whether, if B endorsed over C., C. would be liable to sue A., they appeared unable to answer. They did agree that the form showed that it was intended that the amount of the cheque should get to A , but through the medium of B. The witnesses were unanimous in their opinion, and when confronted with the opinions published by the Institute of Bankers in their official hand-gook --namely, answers 751, 762, 753 and 754 all they said was that those answers were wrong. I myself should take the view taken by S r John Paget that the proper form of endorseasent should be per pro B., meaning 'I, B., sign A.'s name by his procuration or authority.' Section 91 of the Bills of Exchange Act, 1882, appears to me to show that the signature of any relevant party to the bill, such as a payee or endorsee, should be on the bill, though it may be placed there by an agent who has the relevant party's authority, and the agent should state his auhority, if he wishes to escape personal liability to subsequent endorsees as distinct from liability on warranty." and again on page 559 he stated as follows:-- "The endorsement should have been 'John Prust & Co. per pro Cumberbirch & Potts.' Any attempt to prove a custom failed; the Bankers' Institute opinions show that the custom was not universal; there was no satisfactory evidence that the custom was known to business man outside the banking world, or that it was usual except in the case of dividend warrants paid to banks."
Both Greer L. J. and Romer L. J. agreed with this opinion. This is one view which can be taken of the intention behind this kind of description of the payee. But am more inclined to take another view. In the instant case, the payment of the pay orders to the Collector of Customs had to be routed through Messrs Fazal Brothers Ltd., who, it would appear, were merely the instrumentality for delivering the pay orders to the Collector of Customs. The proper procedure, in my opinion, would have been for Fazal Brothers Ltd., to endorse the pay orders in this way: "Pay to the Collector of Customs. Fazal Bothers Ltd." and then to deliver the pay orders to the Collector of Customs, who would thus have been enabled to collect the payments under the pay orders in dispute. But whatever view may be taken, that is, whether the view taken in English cases should prevail as to the nature of the endorsement, or my own view, one thing is clear, that without either of such endorsements, the payee bank could not make payment of the pay orders. However, if the view is taken that neither of such an endorsement was necessary then the instruments in question would suffer from uncertainty as to payee, in which case the instruments would be treated as incomplete instrument and the payment thereon would not be treated as payment in due course. Thus, whatever view may be taken, the payment of the two pay orders by Habib Bank Ltd. cannot be treated as payment which would effectively discharge them from their obligations. However, Mr. J. H. Rahimtoola, the learned Advocate for Habib Bank Ltd. contended that several cheques and pay orders in the same form as Exhs. 12/2 and 13/21 had been previously issued to Messrs Fazal Brothers Ltd., and the "payee" was similarly described in accordance with the instructions of the plaintiffs. He referred in this connection to Exhs.
13/6, 13/17, 13/18, 13/19 and 13/20. But, in my opinion, this does not give any assistance to the learned Advocate. As Romer L. J., said in the Appellate decision in Slingsby and others v. District Bank Ltd., referred to above, this kind of evidence does not mean that the Collector of Customs ever held out Fazal Brothers Ltd. as a person holding authority from him to collect the amounts of the pay orders.
Further, again to use the words of Romer L. J., there was no suggestion that Habib Bank Ltd. assumed in fact or ever regarded Fazal Brothers Ltd. as the authorized agents of the Collector of Customs.
6. Another question of importance is, whether Habib Bank Ltd. were at all competent to pay the amounts of the two pay orders without these being properly negotiated through endorsements2 thereon either of the Collector of Customs or of Messrs Fazal Brothers Ltd. It is agreed by the parties that the two pay orders in question are negotiable instruments, and, therefore, are to be governed by the principles laid down in the Negotiable Instruments Act, 1881. It may here be noted that this enactment was amended in 1962 but these amendments are not relevant for the purpose of these suits as the pay orders were issued and paid in 1961. The relevant sections of the unamended Negotiable Instrument Act are sections 8, 14, 47, 4 8 and 78. Section 8 defines the holder of a negotiable instrument as a person entitled in his own name to the possession of a negotiable instrument and to receive or to recover the amount due thereon. Section 14 defines negotiation as follows:-- "When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute that person the holder thereof, the instrument is said to be negotiated."
Under section 47, a negotiable instrument payable to bearer is negotiable by delivery thereof.
Under section 48, a negotiable instrument payable to order is negotiable by the holder by endorsement and delivery thereof. Under section 78, payment of a negotiable instrument must, in order to discharge the maker or acceptor, be made to the holder of the instrument. Thus, a holder is one who, in the case of an instrument payable to bearer, takes the instrument by delivery, and in the case of an instrument payable to order, takes the instrument by endorsement of the payee, and, further, payment of the instrument does not discharge the person liable thereon unless payment is made to such holder. Admittedly the two pay orders in dispute were payable to order and, therefore, they could be negotiated by endorsement and the payment could be made validly only either to the payee or to the endorsee. If the payee was the Collector of Customs, then he did not endorse either of the pay orders, so as to authorise Fazal Brothers Ltd., or the Sind Provincial Co- operative Bank Ltd., or the National Co-operative Bank Ltd., to receive payment. If the payee were Fazal Brothers Ltd., then even this party did not endorse either of the pay orders. It has been noted above that the only endorsements on the disputed pay orders are of the National Co-operative Bank Ltd. and the Sind Provincial Co-operative Bank Ltd. There is no endorsement of the Collector of Customs, nor even of Messrs Fazal Brothers Ltd. Accordingly, the payment by Habib Bank Ltd., without endorsements of these two parties to the Sind Provincial Co-operative Bank Ltd. or the National Co-operative Bank Ltd., is not only against the instructions of the plaintiffs but is also invalid. In this connection I would refer to a Division Bench decision of the High Court of Lahore in Frontier Bank Ltd., Lahore v. A. L Rallia Ram and others , in which Kaikaus, J., held that under section 8 it is only the holder who is entitled to the money due on the negotiable instrument and according to section 78 it is the holder only who can give a discharge for the amount and it is he alone who according to section 48 can negotiate. Further, even if it were to be assumed that Fazal Brothers Ltd., were the payees, it has not been proved positively that the amounts of the two pay orders were in fact paid to them. Mr. Fazalur Rehman, who came as witness for this purpose, did not say anything expressly on this point. No witness came for the Sind Provincial Co-operative Bank Ltd. or the National Co-operative Bank Ltd. The first of these two banks in its written statement contended itself by saying that the amount of the pay orders had been collected by and on behalf of the National Co-operative Bank Ltd. and this latter Bank said in its written statement that the amounts had been credited to Fazal Brothers Ltd.'s account. But the question arises whether the National Co-operative Bank Ltd. pail these amounts to Messrs Fazal Brothers Ltd. or appropriated these amounts towards any loan which were payable by Messrs Fazal Brothers Ltd. to this Bank. There is no evidence on this point at all.
7. Mr. J. H. Rahimtoola referred me to some case-law in support of his argument. The first case which he cited is that of Akrokerri (Atlantic) Mines Ltd. v. Economic Bank . But this case is not an authority on the point in dispute before me. It is merely an authority on the question of the Protection of the Collecting Banker. In the case before me, Habib Bank Ltd. cannot be treated as3 4 collecting Bank. The next case referred to by the learned Advocate is Sutters v. Briggs . Again, this case is of no assistance before it merely says that the bankers for collection are holders or endorsees of a negotiable instrument. The next decision relied upon by Mr. J. H. Rehmatoola is of the Allahabad High Court, namely, Lachmi Chand v. Madanlal Khemka , in which it is said that the effect of sections 8 and 78 of the Negotiable Instrument Act is that the person to whom the payment should be made in order to discharge the maker or the acceptor from all liability under the instrument is the holder of the instrument or his accredited agent, such as a banker acting as an agent for collection. But the case is not an authority on the point that the collecting banker, in order to receive payment on the instrument, does not require the endorsement of the payee or the holder. Moreover, in the view of the matter which I have taken, that the payee of the disputed pay orders was in fact the Collector of Customs, it bad to be established that Messrs Fazal Brothers Ltd., or the Sind Provincial Cooperative Bank Ltd or the National Co-operative Bank Ltd. were the accredited agents" of the Collector of Customs.
8.Mr. J. H. Rehmatoola then contended that the plaintiffs were not entitled to bring these suits as they were not parties to the pay orders. He relied on two decisions of the Patna High Court, namely Ghanshyam Das v. Ragho Sahu and Bacha Prasad v. Janki Rai and others . But I think this contention is misconcieved. The present suits are not based on pay orders. The cause of action in these two suits is wrongful payment by Habib Bank Ltd., of the plaintiffs' moneys that is, payment of these moneys to persons who were not entitled thereto. Mr. J. H. Rahimtoola then urged that both Fazal Brothers Ltd. and Habib Bank Ltd. should be treated as co-agents of the plaintiffs, and if so treated, than Habib Bank Ltd. cannot be liable for the wrongful act of Fazal Brothers Ltd.The learned Advocate relied for this proposition on sections 194, 195 and 212 of the Contract Act and on Article 67 of Rowestead on Agency, 13th Edition. But I fail to appreciate how this argument is at all relevant in this case. The question is whether Habib Bank Ltd. paid the plaintiffs' moneys to person or persons who were entitled thereto, or, In other words, whether Habib Bank Ltd. paid the amounts of the disputed pay orders to the holders thereof. The question of Messrs Fazal Brothers Ltd. being co-agents alongwith Habib Bank Ltd. does not arise as far as the dispute between the plaintiffs and Habib Bank Ltd., is concerned, which dispute is one between the banker and its customer. I, therefore, see no force in any of these points, consequently, for the reasons I have discussed in detail, issue No, 2 is decided against the defendants.
9. Issues Nos, 1 and 3.--The next point which requires consideration arises under issues Nos, 1 and 3, which raise the question whether the two suits or either of them is barred by limitation. It is admitted that Suit No, 24 of 1965 is in time, having been filed on 24th November 1964, before the dissolution of the Karachi Road Transport Corporation, and by virtue of section 5(2) of West Pakistan Ordinance XXIV of 1964 the suit should be deemed to have been instituted by the limited company, namely, the Karachi Road Transport Corporation Ltd. The real contention between the parties on this point is with regard to Suit No, 58 of 1965. This suit was filed on 19th December 19.4, by the Karachi Road Transport Corporation as the plaintiffs, but this Corporation already stood dissolved on 17th December 1964, by reason of the promulgation of the Karachi Road Transport Corporation (Repeal) Ordinance (West Pakistan Ordinance XXIV of 1961) under Notification No, Leg.
3(24)/64, dated 14th December 1964, referred to above. Thus, it is contended by Mr. J. H. Rahimtoola that this suit was filed by a party which did not exist and the mistake was corrected on 15-12-1966, when the Court made the order permitting amendment in the title of the suit so as to being the Karachi Road Transport Corporation Ltd. on record as the plaintiffs. But, in my opinion, this point carries no force. It is proved in evidence that the wrongful payment of the two pay orders was discovered by the plaintiffs sometime in May 1964 (see P. W. 1 Ghulam Sarwar Exh. 14). The proper article of the Limitation Act applicable in this case is Article 90, which provides three years for a suit by a principle against an agent for negligence or misconduct, the period to be calculated when the5 6 7 8 neglect or misconduct becomes known to the plaintiff. As Bankers of the Plaintiffs, Habib Bank Ltd. were the plaintiffs' agents. Their negligence in making payment of the two pay orders to persons other than the holders thereof became known to the plaintiff in May 1964. Even if it were to be held that Suit No, 58 of 1965 should be deemed to have been filed on 15-12-1966, when the Court allowed amendment in the title of the suit so as to bring the Karachi Road Transport Corporation Ltd. on record as plaintiffs, then also this suit would be within time under this article. Moreover, in my opinion. the original description of the plaintiffs in Suit No, 58 of 1965. as Karachi Road Transpor Corporation is merely a misdescription. The addition of Karachi Road Transport Corporation Ltd. as plaintiff on 15-12-196 would not amount to bringing a new party to the suit. The amendment permitted by the Court on this date was merely for the purpose of correcting the mis-description and not for bringing entirely a new party to the suit.
Mr. Sharaf Faridi cited many cases in support of this view. The first case is of Dacca High Court.
Rivers Steam Navigation Co. Ltd. and others v. District Council and others . The next case is that of Purushortam Umedbhai & Co. v. Manila! & Sons where the suit was brought in the name of a foreign firm to which Order XXX, C. P. C. was not applicable, but the partners of the firm were allowed by substituted for the firm on the ground that it was a case of misdescription. This view is in accord with the decisions of the various High Courts before Partition. Thus, in Mst. Suga Kuer v. Firm Brijrai Ramniwas and others a suit was wrongly instituted in the name of the firm but the plaint was allowed to be amended as the mistake was treated as mere misdescription. In L. N. Chettyar Firm v. M. P. R. M. Firm , the suit was wrongly filed in the name of a firm, which was in fact a proprietory concern, but the Appellate Court ordered substitution of the names of proprietor for the name of the firm even at the Appellate stage on the ground that the mistake was one of misdescription. Similar view was taken in two Sind cases, namely, Dipchand Doulatram v. Firm of Parmanand Chimandas and Karachi Municipality v. Naraindas H. Mirchandani . But, for my part, the rule which is really applicable to the point at issue is laid down by the English Court of Appeal in Alexander Mountain & Co. v. Rumere Ltd. . In this case, one Alexander Mountain carried business in the name of "Alexander Mountain & Co." and during his life time entered into a contract under this name. After his death, his executrix brought an action but she sued in the name of Alexander Mountain & Co., which was only a trade name of a sole proprietor who was already dead. It was contended that the action brought by the executrix was bad as the person in whose name the action was brought was already dead. But the Court of Appeal held that the mistake was of misnomer only and allowed the executrix to be substituted as plaintiff Thus, I find no weight in the objections raised with regard to limitation. These two issues, namely issue Nos, 1 and 3, are, therefore, decided against defendants.
10. Issue No, 4.--Next comes issue No, 4, under which Messrs Fazal Brothers Ltd. have claimed that they were in their own right entitled to receive the amounts of the two disputed pay orders from the plaintiffs. In the evidence given on their behalf by Mr. Fazalur Rehman it was maintained that the amount represented by the two pay orders was due and payable by the plaintiffs to these defendants and, therefore, it was appropriated by them. But this contention was repudiated by the plaintiffs and these defendants failed to bring any account on record or any other material to show that any amount at all was due and payable by the plaintiffs to Fazal Brothers Ltd. Messrs Fazal Brothers Ltd.'s learned Advocate, Mr. S. A. Qadri, took an entirely different stand in his arguments, which was to the effect that since these two pay orders were not specifically ear-marked for payment to the Collector of Customs, it was open to Messrs Fazal Brothers Ltd. to appropriate these amounts towards their own dues. I would only say that the learned Advocate appears to have ignored the material words in the Pay Orders by which the Collector of Customs was described as the Payee. Ex facie, the two pay orders were ear-marked for payment to the Collector of Customs and had to be paid to him. Mr. Qadri's argument, to say the least, is very unconvincing. Therefore,9 10 11 12 13 14 15 under this issues I would hold that the defendants, Messrs Fazal Brothers Ltd., failed to prove that any amount was due and payable to them by the plaintiffs or that they were entitled to appropriate the amount of these two Pay Orders to their own use. This issue is, therefore, decided against Messrs Fazal Brothers Ltd.
11.Issue No, 5.--The last but one issue is issue No, 5, under which the question is whether Habib Bank Ltd. are entitled to be indemnified by Messrs Fazal Brothers Ltd. and by the Sind Provincial Co- operative Wink Ltd. and the National Co-operative Bank Ltd. I have already held that the payee of the two pay orders was the Collector of Customs and that Messrs Fazal Brothers Ltd , were not entitled to receive the amounts of these two pay orders without authority from the Collector of Customs or, after receipt, to appropriate the amount of the two pay orders to their own use. Since Fazal Brothers Ltd. procured the payment of the amounts of the two pay orders in their own account with the National Co-operative Bank Ltd., they are liable to indemnify the Habib Bank Lid.
Likewise, Habib Bank Ltd. is entitled to be indemnified by both the Sind Provincial Co-operative Bank Ltd. as well as the National Co-operative Bank Ltd., in that both these banks collected and received the amounts of the two pay orders in a capacity other than that of holders and without authority from the real payee, namely, the Collector of Customs. These two defendants have remained absent before me and, therefore, I have not had the benefit of arguments on their behalf which would pursuade me to take a contrary view. But the opinion which I have expressed, I think, is inconformity with the law and practice on this issue.
12.Issue No, 6.--Issue No, 6 is with regard to relief. In view of the detailed discussion on the various issues mentioned above, the plaintiffs are given a decree as prayed for in both the suits. Further, I hold that the Habib Bank Ltd. is entitled to be indemnified by Messrs Fazal Brothers Ltd., the Sind Provincial Co-operative Bank Ltd., and the National Co-operative Bank Ltd., and, therefore, a decree is given against these parties jointly and severally in favour of Habib Bank Ltd., in terms of rules 173 and 176 of the Sind Chief Court Rules (0. S.) in the same amount for which decree is given to the plaintiffs against Habib Bank Ltd. and it is further directed that Messrs Fazal Brothers Ltd., and the Sind Provincial Co-operative Bank Ltd., and the National Co-operative Bank Ltd. shall also jointly and severally pay costs to Habib Bank Ltd. L R 2KB 588 L R 1 K B 544 PLD 1953 Lab. 117 LR 2KB 465 LR IAC 1 AIR 1947 All. 52 AIR 1937 Pat. 100 AIR 1957 Pat. 380 PLD 1967 Dacca 426 AIR 1961 SC 325 AIR 1937 Pat. 526 AIR 1935 Rang. 240 AIR 1924 Sind 144 AIR 1931 Sind 63 (1948) 2 All B R 482 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15